The Kuwaiti government has prohibited local and commission agents from participating in all public contracting procedures under Decree-Law No. 94 of 2026, which was published in the Official Gazette on September 27 and will take effect three months later. This legislation amends the 2016 Public Tenders Law by revising Article 31 to bar such intermediaries, with the Council of Ministers tasked to issue detailed implementing regulations. Legal assessments indicate the ban extends an earlier prohibition that applied solely to Kuwait Petroleum Corporation contracts under a June decree, signaling a broader policy against intermediary structures that add to public expenditure.
The reform exempts foreign bidders from commercial registration mandates and restrictions on non-Kuwaiti trading activities that previously required local participation, according to the decree text. It also repeals any contradictory clauses in existing laws to ensure uniform application across government bodies. Additionally, the amendments increase the threshold for contracts that public entities can award without Central Agency for Public Tenders approval to one million Kuwaiti dinars, up significantly from the prior limit, allowing faster procurement for smaller projects.
Approval for the draft came from the Council of Ministers on September 9 under the chairmanship of the Deputy Prime Minister, with the changes intended to overcome practical difficulties encountered since the 2016 law’s introduction, a Deloitte review noted. By streamlining governance and abolishing the Technical Sector within the tenders agency, the updates seek to bring greater speed and flexibility to the system while maintaining oversight on larger deals. These measures align with parallel 2026 reforms that corporatised aspects of the petroleum sector and updated commercial concealment rules.
Kuwait first relaxed general local agent requirements for foreign companies in 2024 through amendments that permitted direct branch operations without a Kuwaiti partner in many commercial contexts. The public tenders domain had retained the practice longer, in part due to historical concerns over contract execution and national economic protection, but officials have since determined that such justifications no longer hold amid efforts to attract wider investment. The new ban specifically addresses commission-based arrangements where fees are tied to securing government work.
Analysts expect the changes to facilitate direct relationships between foreign suppliers and Kuwaiti government entities, potentially reducing costs and enhancing competition in key sectors including construction, services and oilfield operations. At the same time, the law imposes stricter local-content obligations, requiring contractors to procure at least 30 percent of specified products locally and to subcontract defined portions of work to Kuwaiti companies, including small and medium-sized enterprises. This balanced approach aims to support domestic industry while opening procurement to international expertise.
The explanatory materials accompanying the decree frame the agent prohibition as a means to eliminate unnecessary financial burdens on public budgets and to promote transparency in how contracts are awarded. Vendors previously reliant on local partners for market access will need to adjust their engagement models with KPC-group entities and other ministries to comply with the public-order rule that could render offending agreements void. Government bodies have been directed to prepare unified procedures for screening and implementation to avoid inconsistencies.
