Company Ownership Restricted for Foreigners Under Articles 20, 22, and 24

The Ministry of Commerce and Industry has decided to reactivate its automated systems, allowing expatriates with Article 18 residency to once again serve as partners or managing partners in companies or institutions and be registered in the commercial register.

However, the restriction imposed by the Ministry last month, which barred expatriates from owning companies unless they held Article 19 residency, remains in effect for those with residencies under Articles 20, 22, and 24. Specifically, domestic workers with these residencies must either divest their company shares or transfer to Article 19 residency.

Sources expect that the Ministry’s systems will resume processing requests for the exempted expatriates this week. Once reactivated, commercial entities with shareholders holding Article 18 or 19 residencies will be able to establish, renew, and amend their status as before the restriction. Additionally, new company establishment applications that include residents with Article 18 residency will be accepted under the prior regulations for non-Kuwaiti ownership.

Temporary Suspension of Partner Incompatibility Clause

A new directive has temporarily suspended the clause that restricts partners with Article 18 residency from holding existing or new licenses. This suspension will remain in place until further notice or until new regulatory controls are issued.

Coordination with the Public Authority for Manpower is ongoing to review regulations on non-Kuwaiti company ownership. Joint committees are being formed to develop final guidelines for re-establishing ownership conditions, including setting deadlines for compliance with upcoming regulations.

Regulatory Measures Under Review

According to the Public Authority for Manpower, approximately 10,000 expatriate workers with Article 18 work permits are currently partners or managing partners in around 45,000 company licenses. This situation underscores the need for updated regulatory measures to protect the rights of all parties, including current shareholders.

The government, including the Ministry of Commerce and the Public Authority for Manpower, is committed to revising commercial licensing controls and ensuring compliance with labor and foreign investment laws. New regulations for expatriates with Article 18 residency will be introduced with appropriate mechanisms in the near future.