258,000 'actual beneficiaries' from active entities... 82% Kuwaitis

“Commerce” and “Chamber” Launch Awareness Campaign on Combating Commercial Concealment

Al-Zaid: Legislation received exceptional attention and addressed a gap that had persisted for years

Al-Juaidan: Commitment to strengthening the national system for combating money laundering and terrorist financing

Al-Haraz: 97% registered as beneficial owners... Penalties include imprisonment of up to 9 years

The Ministry of Commerce and Industry and the Kuwait Chamber of Commerce and Industry have emphasized the importance of enhancing transparency in the business environment and raising compliance levels with the provisions of Law-Decree No. 78 of 2026 on Combating Commercial Concealment. This effort runs parallel to the beneficial ownership identification system, as both are considered integrated tools to protect the market, reveal actual ownership and control over economic activities, and promote fair competition.

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This statement came during an awareness seminar organized yesterday by the Kuwait Chamber of Commerce and Industry at its headquarters to introduce the procedures for identifying beneficial owners and the provisions of the law on combating commercial concealment. The event featured the participation of Acting Deputy Minister of Commerce and Industry Marwa Badah Al-Juaidan and Abdullah Abdulwahab Al-Haraz, Director of the Kuwait Business Center’s Management Department, alongside a number of business owners and individuals interested in economic and legal affairs. Speakers revealed that the total number of beneficial owners registered stands at 258,395 individuals, including 212,186 Kuwaitis (82.1%) and 46,209 non-Kuwaitis (17.9%).

Emad Al-Zaid, Deputy General Manager of the Kuwait Chamber of Commerce and Industry, stated that the law on combating commercial concealment has received widespread and exceptional attention from economic and legal circles, entrepreneurs, citizens, and residents, through studies, articles, seminars, and social media.

He explained that this attention reflects the significance of the legislation and its direct impact on a broad segment of business owners, while simultaneously necessitating a thorough understanding of all dimensions of commercial concealment and its economic and social repercussions. He confirmed that the seminar aimed to provide a platform for Ministry of Commerce representatives to interpret the law’s articles, clarify its mechanisms, and answer growing practical questions.

Al-Zaid added that the Chamber conducted a preliminary study of the law prior to the seminar to extract its key features, noting that the dialogue during the event largely confirmed the study’s findings.

He pointed out that the law responds to a gap that had accumulated over years between declared ownership and the stable, actual ownership of economic enterprises. It has shifted the handling of commercial concealment from the realm of civil prohibition to criminalization and penalties, while simultaneously achieving the main objective announced by the law itself: enhancing the state’s capacity for supervision, financing, and collection.

Conversely, Al-Zaid expressed the need for considerable insight into the economic and social impacts of the law, particularly on certain professional activities and craft services, highlighting the importance of considering the circumstances of those running these activities during the transition to the implementation and enforcement phase.

For her part, Acting Deputy Minister of Commerce and Industry Marwa Al-Juaidan emphasized that the issue of combating commercial concealment and the beneficial ownership system is directly linked to the integrity of Kuwait’s commercial and economic environment. She clarified that the Ministry views the system through three main pillars: transparency, compliance, and responsibility.

She clarified that Kuwait has developed, over the past years, a beneficial ownership system that has evolved from the registration and disclosure stage to more advanced stages involving verification and auditing of data accuracy. This aims to create an accurate and updated database that identifies the individual who actually owns, controls, or benefits from a legal entity. She noted that Kuwait has achieved tangible progress in this regard, as the beneficial ownership system has moved from limited registration levels at the outset of implementation to registration rates exceeding 98% among targeted entities, thanks to awareness campaigns and the development of electronic systems.

She emphasized that beneficial ownership transparency represents a crucial tool in combating the misuse of companies and legal entities. It also complements national efforts in combating money laundering and terrorist financing, as well as international requirements related to transparency. She stressed that the law combating commercial concealment and the beneficial ownership system do not operate in isolation; the former examines 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 cracking down on commercial concealment serves the interest of compliant merchants, as it helps eliminate unfair competition and restores competition to its natural foundations, which are based on product and service quality and efficiency.

She further emphasized that transparency in ownership and control can enhance the ability of Kuwaiti companies to secure financing and enter into regional and international partnerships, given the increasing requirements for beneficial ownership knowledge in commercial and financial transactions. Additionally, she highlighted its importance in affirming Kuwait’s commitment to strengthening its national framework for combating money laundering and terrorist financing in line with standards issued by the Financial Action Task Force (FATF).

During the presentation, Abdullah Abdulwahab Al-Haraz, Director of the Kuwait Business Center’s Department, outlined the legislative and regulatory framework for combating commercial concealment. He explained that addressing the phenomenon did not begin with the 2026 Law, but was preceded by provisions in the Commercial Law No. 68 of 1980, the Law on Commercial Premises Licenses No. 111 of 2013, and the Companies Law No. 1 of 2016, before the Decree-Law No. 78 of 2026 established a more direct framework for dealing with commercial concealment.

Al-Haraz explained that, according to the presentation, concealment involves enabling a person to conduct an economic activity they are not legally permitted to perform, or circumventing prescribed ownership percentages, by using another person, a trade name, a license, a commercial register, or other means.

He clarified that identifying a suspicion of concealment can start from four fundamental questions: Who is the person? What are they doing? Are they legally permitted to conduct the activity? And who enabled them and by what means? He noted that the combination of committing an offense and enabling it serves as the starting point for suspecting concealment. The presentation also addressed the difference between legitimate partnership and concealment, affirming that a partnership is legitimate when ownership is genuine, partners are known, agreements do not circumvent the law, the activity is licensed, and the person conducting it has the legal right to do so.

Al-Haraz indicated that the primary penalties covered in the presentation include imprisonment for one to three years, and a fine ranging from 10,000 to 100,000 Kuwaiti dinars, or the equivalent of the profits obtained, whichever is higher, or one of these two penalties. Fines are multiplied based on the number of individuals or activities involved in the violation.

The Beneficial Ownership Journey... A Major Leap in Compliance

Al-Hariz reviewed the evolution of the beneficial ownership system, noting that it began with a basic framework under Ministerial Decision No. 4 of 2023, was then reinforced by awareness campaigns in 2024 and 2025, and transitioned to an enforcement phase with financial penalties under Decision No. 16 of 2025, culminating in regulatory decisions and procedures in 2026 to enhance due diligence, data accuracy, and disclosure speed.

Presentation data revealed a significant rise in registration rates, from 4.3% at the start of the assessment phase in 2023 to 42.81% by the end of December 2024, then 76.92% by the end of March 2025, and 93.38% by the end of April, reaching 97.8% of active entities by June 2025.

Key points of the presentation:

● The total number of beneficial owners reached 258,395 individuals, including 212,186 Kuwaitis (82.1%) and 46,209 non-Kuwaitis (17.9%).

● Disclosing a beneficial owner does not rectify a violation; a person legally prohibited from conducting business activities does not gain the right to do so merely by being disclosed as a beneficial owner.

● Disclosure does not constitute a license, nor does it lift bans or alter ownership conditions; rather, it reveals the actual reality of ownership or control.

"Commercial Concealment": Protecting the Market

The seminar concluded by emphasizing that the beneficial ownership system enhances transparency, while the law combating commercial concealment aims to protect the market from entities and licenses being used as cover for conducting activities in violation of the law, ultimately leading to a fairer, clearer, and more trustworthy market, and strengthening the protection of the national economy.