KUWAIT Law and Practice Contributed by: Michel Ghanem, Patrick Obeid and Michel Ata, Meysan
• real estate activities (excluding privately developed building projects); and • security, investigation, and defence services.
activities, including participating, may require disclo - sure or approval by the CMA or Boursa as applicable. 3.6 Transparency and Ownership Disclosure Pursuant to Resolution No 4 of 2023 issued by the MOCI, all companies (including joint ventures) regis - tered in Kuwait are required to disclose the ultimate beneficiary owner(s) (UBO). A UBO is defined under Article 5 of the aforementioned resolution, as any indi - vidual who directly or indirectly holds 25% or more of a company’s share capital, controls 25% or more of its voting rights, or otherwise exercises decisive influence (for example, by appointing or dismissing a majority of the board of directors), and must be recorded as a UBO. In compliance with Articles 8 and 10 of the Resolution, the joint venture must establish and maintain both an “actual beneficiary register” and a “partner/sharehold - er register”, documenting each UBO’s personal data, ownership or voting percentages, and the grounds, duration and circumstances of exercising control. Both registers must be submitted to the MOCI’s reg - istry within 60 days of incorporation of the company. The registrar also requires notification of any amend - ments within 15 days of their occurrence. These mandated disclosures are exempted for entities regulated by the CMA (listed companies), and wholly owned government entities. 4. Legal Developments 4.1 Notable Recent Decisions or Statutory Developments There have been no significant new laws or regula - tions specifically addressing joint-venture companies in Kuwait, but a few notable court decisions are worth highlighting. • In accordance with the Commercial Circuit Deci - sion on appeal by cassation No 1773 of 2021 dated 15 April 2025, the court confirmed that a contractual joint venture lacks legal personality and is governed by general contract principles, so it can be rescinded for breach like any binding con - tract. It held that seizing the business and diverting
3.4 Competition Law and Antitrust Competition Protection Law and CPA
The Competition Protection Law (Law No 72 of 2020), its Executive Regulations, and Resolution No 26 of 2021, provide an effective oversight to regulate eco - nomic concentrations, including transactions such as joint ventures. CPA approval must be obtained by the parties involved in the joint venture. The procedure includes an economic concentration application sub - mitted no less than 60 days before executing the draft agreement; however, approval is only required if the transaction satisfies the applicable thresholds. CPA Approval Thresholds The following thresholds are based on the most recent audited financial statements. As stipulated under Resolution No 26 of 2021, joint-venture partners must obtain CPA approval if any of the following thresholds are met in Kuwait: • any individual party’s annual sales exceed KWD500,000 (approximately USD1,639,000); • the combined annual sales of all parties exceed KWD750,000 (approximately USD2,459,400); or • the total registered assets of all parties exceed KWD2.5 million (approximately USD8,190,000). 3.5 Listed Companies and Market Disclosure Rules Any listed entity participating in a joint venture in Kuwait is governed primarily by the CMA and Boursa Kuwait. The regulatory framework is set out under Resolution No 72 of 2015, which introduced the executive by-laws for the CMA under Law No 7 of 2010. These executive by-laws are organised into 16 modules that dictate the conduct of listed companies, including any conflict of interest, corporate govern - ance, disclosures, and securities dealings. Further, the Companies Law requires a shareholding company listed on the Boursa to have a minimum capital of KWD25,000 which must be maintained. Pursuant to the above regulations, a listed company’s
75 CHAMBERS.COM
Powered by FlippingBook