The government published Decree-Law No. 78 of 2026 on combating commercial concealment in the official gazette Kuwait Al-Youm on Sunday, introducing a 14-article legal framework to regulate economic activities, promote fair competition and curb illegal business practices. The legislation explicitly bans individuals and companies from conducting business without a valid license, exceeding the terms of an existing one or assisting others in such violations either directly or indirectly. According to the decree-law, these rules apply to all economic activities in Kuwait.
Under Article Three of the new law, violators face a prison term of between one and three years together with a fine of KD10,000 to KD100,000 or the full amount of profits generated, whichever is greater, with the financial penalty multiplied for each additional offender or breach. The decree-law holds both the de facto owner and the legal entity accountable when violations occur due to awareness or administrative lapses. Courts will apply these sanctions upon conviction.
In addition to imprisonment and monetary penalties, the legislation requires judges to confiscate illicit gains, order the closure of implicated establishments, revoke licenses and deport expatriate participants while safeguarding rights of bona fide third parties. Repeat offenses within five years of a prior final conviction will result in doubled penalties, the decree-law stipulates. The decree-law increases the penalty in the event of a repeat offense within five years of the date of the final conviction.
First-time offenders may seek reconciliation prior to a final judgment by paying no less than half the maximum fine and correcting their legal position to eliminate the violation, although the option is closed to those with previous records. The law further provides financial rewards of up to 10 percent of recovered fines to informants who furnish credible evidence resulting in a conviction, excluding the perpetrators themselves. Such provisions are detailed in Articles Seven and Nine of the decree-law.
Judicial police powers are extended to ministry-designated staff under the decree-law, enabling them to investigate suspected cases effectively. Obstructing these officers, failing to produce documents or providing misleading information carries separate sanctions of up to six months in jail and a KD10,000 fine. The framework equips authorities with the tools needed for consistent oversight, the legislation states.
Ministry of Commerce and Industry figures from the second quarter of 2025 show the authorities performed 8,007 inspections that uncovered 230 suspected commercial concealment cases along with 19 other market violations.
These figures illustrate the scope of the issue the legislation is designed to address. The decree-law was signed at Seif Palace on August 2, 2026, and will become effective six months from its publication date.
