«Commerce»: «Combating Commercial Concealment» and «Beneficial Owner» Enhance Transparency and Protect the National Economy - Sarmad
(KUNA) – Speakers at an awareness seminar organized by the Kuwait Chamber of Commerce and Industry on Monday emphasized that recent laws and decisions regarding the beneficial owner and the fight against commercial concealment aim to enhance transparency, fostering a fairer and clearer market while protecting the national economy from the misuse of entities and licenses as cover for illegal activities.
Speakers at the seminar, which was attended by business owners and individuals interested in economic and legal affairs, highlighted the importance of boosting transparency in the business environment and raising compliance with the provisions of Decree-Law No. 78 of 2026 on combating commercial concealment, alongside the beneficial ownership identification system. They described these two frameworks as complementary tools for safeguarding the market, uncovering actual ownership and control over economic activities, and promoting fair competition.
Acting Undersecretary of the Ministry of Commerce and Industry Marwa Al-Juaidan stated during the seminar that combating commercial concealment and the beneficial ownership system are directly linked to the integrity of Kuwait’s commercial and economic environment. She explained that the ministry views the system through three main pillars: transparency, compliance, and accountability.
Al-Juaidan noted that Kuwait has developed its beneficial ownership system over recent years, transitioning from a registration and disclosure phase to more advanced stages involving verification and auditing of data accuracy. This evolution aims to create a precise and up-to-date database that identifies the individual who actually owns, controls, or benefits from a legal entity.
In this context, she highlighted Kuwait’s tangible progress, noting that the beneficial ownership system has moved from limited registration levels at the outset of implementation to registration rates exceeding 98 percent among targeted entities. This achievement resulted from awareness campaigns and the development of electronic systems.
She added that clear beneficial ownership serves as a crucial tool in combating the misuse of companies and legal entities. It also complements national efforts to combat money laundering and terrorist financing, aligning with international transparency requirements.
Al-Juaidan clarified that the law on combating commercial concealment and the beneficial ownership system do not operate in isolation. The former addresses the legality of ownership, control, and economic practice, while the beneficial ownership system helps identify the real person behind the entity.
She pointed out that curbing commercial concealment benefits compliant merchants by eliminating unfair competition and restoring competition to its natural foundations, which are based on product and service quality and competence. Additionally, clear ownership and control roles enhance the ability of Kuwaiti companies to secure financing and enter into regional and international partnerships, especially as requirements for knowing the beneficial owner increase in commercial and financial transactions.
She stated that clear ownership and control underscore Kuwait’s commitment to strengthening its national framework for combating money laundering and terrorist financing in accordance with standards issued by the Financial Action Task Force (FATF).
For his part, Abdullah Al-Haraz, Director of the Kuwait Business Center, outlined the legislative and regulatory framework for combating commercial concealment during the seminar. He explained that addressing the phenomenon did not begin with the 2026 law; rather, it was preceded by provisions in the Commercial Law No. 68 of 1980, the Commercial Premises Licenses Law No. 111 of 2013, and the Companies Law No. 1 of 2016, before Decree-Law No. 78 of 2026 established a more direct framework for dealing with commercial concealment.
Al-Hariz explained that commercial concealment involves allowing an individual to engage in an economic activity they are not legally permitted to conduct, or circumventing prescribed ownership percentages by using another person, a trade name, a license, a commercial registration, or other means. He noted that the suspicion of concealment can be determined through several key questions: “Who is the person? What activity are they engaged in? Are they legally permitted to conduct this activity? Who enabled them? And by what means?”
Al-Hariz pointed out that the primary penalties for violating the law include imprisonment for one to three years and a fine ranging from 10,000 Kuwaiti dinars (approximately $33,000 USD) to 100,000 dinars (approximately $330,000 USD), or an amount equivalent to the profits obtained, whichever is greater, or either of these two penalties.
For his part, Emad Al-Zaid, Deputy General Manager of the Kuwait Chamber of Commerce and Industry, said at the seminar that the Anti-Commercial Concealment Law has received widespread and exceptional attention from economic and legal circles, reflecting the importance of the legislation and its direct impact on a broad segment of business owners. He noted that the Chamber conducted an initial study of the law to identify its key characteristics.
Al-Zaid clarified that the law responds to a gap that has accumulated over the years between declared ownership and the actual, stable ownership of economic enterprises. It has shifted the handling of commercial concealment from the realm of civil prohibition to that of criminalization and penalties, while simultaneously achieving the law’s main objective, which is to enhance the state’s capacity for oversight, financing, and revenue collection. (End) F.N.K./A.M.H.
