KUWAIT Law and Practice Contributed by: Ezekiel Tuma, John Cunha and Luis Cunha, ASAR – Al Ruwayeh & Partners
services, establishing newspapers and magazines, and pilgrimage and Umra services. Additionally, as a matter of practice, any activities requiring the prior approval of the Ministry of Information are generally
Also of significance, a foreign worker who is permit - ted to work in Kuwait may not work for any entity other than the employer that sponsored such employ - ee, with very limited exceptions provided under the Kuwait Foreigners Residence Law (Law No. 17 of 1959) and its executive regulations (issued under Min - There is no current knowledge of any express national security review of acquisitions in Kuwait. It should be noted, however, that the Boycott Law (Law No. 21 of 1964) includes specific prohibitions against deal - ings with persons who are resident in and nationals of Israel. isterial Resolution 640 of 1987). 2.6 National Security Review 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments As a civil law jurisdiction, Kuwait does not have a binding precedent system and court decisions are made on a case-by-case basis, depending on their circumstances. Touched on above, in what is perhaps one of the most significant developments of the last decade regarding foreign parties doing business in Kuwait, Amendment Law No. 1 of 2024 (“Amendment Law”) was issued during 2024. Under the Amendment Law, a foreign entity may establish a branch in Kuwait. The Amend - ment Law represents an exception to the restrictions in Article 23 of the Commercial Law, where it is pro - vided that a foreigner may not do business in Kuwait save with a Kuwaiti partner that has a 51% interest in such business. In this regard, the Amendment Law amends Article 24 of the Commercial Law and Article 31 of the Tenders Law (Law No. 49 of 2016) to essen - tially provide as follows: • Amended Article 24 of the Commercial Law: A foreign party may now establish a Kuwaiti branch without the appointment of a Kuwaiti agent. • Amended Article 31 of the Tenders Law: A foreign party appropriately registered as a service provider/ contractor may participate in government tenders
restricted to Kuwaiti nationals. 2.4 Antitrust Regulations
The Competition Law also provides for certain thresh - olds which, if triggered, require the prior approval of the CPA, rather than mere notification. These thresh - olds were recently amended and increased. Under the revised regime, approval is required for an economic concentration where the value of the relevant par - ties’ registered assets or their relevant annual sales in Kuwait, as reflected in the audited financial state - ments for the last financial year preceding the eco - nomic concentration, exceeds the applicable thresh - olds, which range from KWD1.5 million to KWD7.5 million. The revised thresholds expressly require a prescribed minimum nexus to Kuwait in all cases. 2.5 Labour Law Regulations Under the Labour Law (Law No. 10 of 2010), if a trans - action involves the acquisition of assets or a business, as opposed to acquiring the shares of a target com - pany that is the sponsor/employer of the employees, there is a requirement to transfer the employees to the acquirer. This transfer is not automatic, and requires the consent of the affected employees. However, if the acquisition only relates to the shares of a target company that sponsors employees, no obligation or legal requirement arises, as there is no change to the sponsor/employer of the employees. Significantly, Kuwait law provides for local Kuwaiti manpower ratios (referred to as “Kuwaitisation”) under the Manpower Law (Law No. 19 of 2000). All private sector employers that employ more than 25 employees are required to employ a certain percent - age of Kuwaiti national employees, with such percent - age varying depending on the sector in which the employer operates. Any private sector employer that does not follow Kuwaitisation requirements is subject to sanctions, including disqualification from awards of contracts or tenders from government authorities, as well as monetary fines for work permits issued to non-Kuwaiti employees in excess of the applicable authorised non-Kuwaiti quota.
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