Decree-Law No. 78 of 2026 establishes a 14-article legal framework to regulate economic activities while promoting market transparency and curbing illegal business practices across Kuwait. The legislation prohibits any natural or legal person from conducting commercial, professional, industrial or service activities without the necessary licenses and approvals from competent authorities. It defines commercial concealment as arrangements that enable a foreigner to engage in such activities in violation of legal requirements or license conditions, including through the use of front persons or disguising operations as legitimate ones.
According to the decree-law, the term foreigner excludes individuals who are legally treated as Kuwaitis under applicable domestic laws or international agreements, in line with principles of reciprocity. The provisions bar violations from occurring directly, indirectly or by any means, with authorities targeting both the use of local commercial registrations and the disguising of unauthorized operations. Kuwait Times reported that the decree-law was issued on August 2, 2026, as part of ongoing measures to strengthen oversight and fair competition in the local market.
Violators of core provisions face imprisonment for one to three years and fines ranging from KD 10,000 to KD 100,000, or an amount equivalent to total profits generated if higher, the decree-law states. Courts may apply both penalties together or select one, with fines multiplied according to the number of individuals or separate activities involved in each case. Additional violations, such as obstructing inspectors, refusing to supply documents or submitting false information, carry up to six months in prison and fines up to KD 10,000, or either penalty, subject to the same multiplication rule.
The decree-law holds managers and responsible persons within establishments accountable when they knew of violations or neglected their oversight duties, while legal entities bear joint liability with involved employees. Upon conviction, courts must order confiscation of all related funds, profits, equipment and tools, in addition to possible business closure, license revocation and administrative deportation for non-Kuwaiti offenders. These enforcement tools form part of the comprehensive approach outlined in the legislation.
Repeat offenders within five years of a prior conviction will see all penalties doubled under the decree-law. Reconciliation remains available through the competent minister before criminal proceedings begin or prior to a final court judgment, requiring the offender to pay at least half the maximum applicable fine, rectify the violation and correct their legal status. The reconciliation option is unavailable for repeat cases, though administrative measures such as deportation may still be imposed.
The decree-law further establishes a reward mechanism for whistleblowers who are not perpetrators themselves and who provide credible evidence leading to a conviction, with payments reaching up to 10 percent of total fines collected as determined by the minister. Rewards are divided among multiple informants when several contribute to the same outcome. A legal analysis published by Wefaq Law noted that the decree-law builds on regional precedents by emphasizing beneficial ownership disclosure to address practices that undermine local business incentives.
