KUWAIT Law and Practice Contributed by: Michel Ghanem, Patrick Obeid and Michel Ata, Meysan
and all other terms and conditions of the joint-venture company, provided that the terms of their agreement are consistent with applicable public policy principles. However, there is no statutory framework to resolve any disputes between participants except under the Companies Law, governing general contractual mat - ters unless the company contract provides otherwise. Limited liability company A WLL is managed by one or more managers, who are appointed either through the company’s articles of association or by resolution of the partners at a general meeting. The company is also required to appoint a statutory auditor to examine and provide an independent report on its accounts and financial statements. The partners make decisions during gen - eral meetings, which are usually divided into two types depending on what needs to be discussed. • Ordinary general meetings, which handle rou - tine matters such as approving annual accounts, distributing profits, and appointing or removing managers. • Extraordinary general meetings, which consider more fundamental changes such as amending the company’s articles of association, increasing or reducing capital, or dissolving the company. Neither meeting may validly transact business unless the statutory quorum is present; while the company’s articles of association may increase this threshold, it may never set it below the legal minimum. Profit sharing Under the Companies Law, entities are allowed to determine profit-and-loss allocations that differ from each shareholder’s or partner’s capital contribution; however, no partner or shareholder may be wholly exempted from sharing in profits or losses, and any clause seeking such exemption is void under Article 18 of the Companies Law. Tax provisions Kuwait does not impose any tax on wholly owned companies by Kuwaiti or GCC (Gulf Cooperation Council) nationals. However, the introduction of the Domestic Minimum Top-Up Tax (DMTT) Law No 157 of
2024, imposes a 15% tax rate on all companies, sub - sidiaries or joint ventures that are part of multinational groups (presence in Kuwait and another country) and that declare over EUR750 million in global revenue in consolidated financial statements. Under Kuwait Tax Law No 2 of 2008, Kuwaiti enti - ties that engage foreign companies or contractors for services must withhold 5% of the payment until the foreign entity obtains a tax clearance certificate from the Kuwait Tax Authority. This is primarily applied as a compliance and enforcement mechanism to ensure that foreign companies operating in Kuwait fulfil their income tax obligations. The 5% retention may be released upon issuance of a No Objection Certificate by the Kuwait Tax Authority confirming tax compli - ance. For most joint-venture purposes in Kuwait, an incor - porated vehicle, such as a WLL, is preferable: it limits each partner’s liability to their share of capital, pro - vides clear governance through statutory managers, and offers built-in dispute-resolution mechanisms. 3. JV Regulation 3.1 Legal Framework and Regulatory Bodies Several regulatory authorities oversee joint ventures in Kuwait, depending on the objectives, structure, and parties involved. Although a contractual joint venture in Kuwait does not trigger separate incorporation requirements, it remains subject to a comprehensive regulatory framework that governs the activities and compliance obligations of the participating entities. Competition Protection Authority The main authority overseeing this area is the Compe - tition Protection Authority (CPA), which enforces com - pliance with the Competition Protection Law (Law No 72 of 2020), including provisions governing economic concentrations that also apply to joint ventures, when triggering certain thresholds. Subject to certain thresholds being met as provided under Resolution No 26 of 2021, a joint venture clas - sifies as an economic concentration under Article 10 (c) of the Competition Protection Law and requires
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