KUWAIT Law and Practice Contributed by: Sam Habbas, Luis Cunha, Hisham Al-Quraan and Mustafa Sayed, ASAR – Al Ruwayeh & Partners
The standard customs duty rate in Kuwait is 5% of the cost, insurance, and freight value of the imported goods. However, certain categories of products are subject to different duty rates or exemptions depend - ing on their nature, purpose or country of origin. For example: • Kuwait applies unified customs duties with other GCC countries and there are certain preferen - tial agreements with other Arab countries which impact the applicable customs duties; • tobacco and its derivatives, amongst other prod - ucts, are subject to higher customs duties; • items imported for official use by government insti - tutions may be exempt; and • raw materials and machinery used in industrial production by Kuwaiti entities may be eligible for exemptions or reduced rates. Personal belongings and items accompanying a per - son moving to Kuwait are often exempt. Kuwait has recently overhauled its competition regu - latory regime, with a new Competition Law (No 72 of 2020) promulgated during November 2020. The Com - petition Protection Authority (CPA) has been tasked with implementing the Competition Law and regu - lating competition matters generally in Kuwait. The CPA issued implementing regulations, which were published during July 2021 (under CPA Resolution 14 of 2021) and which have since been supplemented; these regulations give further effect to the Competi - tion Law. The Competition Law and its implementing regulations have brought about a number of signifi - cant changes to M&A, which should be accounted for going forward. When acquiring or merging with another business, certain reporting obligations and approval require - ments arise in the context of what is considered to be an “economic concentration”. Such economic con - centration is defined under the Competition Law to include “a permanent change of control in the relevant market, arising by way of merger or acquisition”. Such 6. Competition Law 6.1 Merger Control Notification
control may also be exercised in concert with other persons, whether directly or indirectly. Article 10 of the Competition Law provides that such economic concentration is deemed to be present in the following instances: • the merger of two or more persons or parts of their businesses that results in control or an increase of control; • the acquisition of direct or indirect control over another one or more persons through acquiring, amongst other things, assets, equities, usufruct and/or shares; or • the existence of a partnership between two or more persons that leads to a permanent and inde - pendent economic or commercial activity, whatever the legal form or activity that is practised. Article 10 of the Competition Law has been drafted in broad terms and is largely duplicated in the imple - menting regulations. However, the definition of what is to be considered an economic concentration pro - vides that there should also be a change of control of a particular market. Of particular significance is the fact that, while the previous and now repealed Competition Law (No 10 of 2007) provided that con - trol would be established where a person (or group of persons), directly or indirectly, controls 35% or more of a particular market, this has not been carried over into the current Competition Law or its implementing regulations. However, Article 12 of the Competition Law does provide that such reporting obligations are triggered where the value of the underlying regis - tered assets or annual sales in Kuwait subject to the economic concentration exceeds certain thresholds. These thresholds are set out in CPA Resolution No 26 of 2021 on Controls of Aggregate and Individual Thresholds, as amended by Resolution No 32 of 2026. 6.2 Merger Control Procedure As indicated in 6.1 Merger Control Notification , the Competition Law provides that the participants of an economic concentration situation are required to obtain the approval of the CPA before completing such economic concentration. A CPA application is required only if the relevant registered assets or annual sales in Kuwait exceed the applicable thresholds.
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