Kuwait News Agency reported the issuance of Decree-Law No 78 of 2026 on August 2 introducing a 14-article framework designed to regulate economic activities and eliminate unauthorized business practices. The law responds to the rising incidence of individuals conducting commerce without licenses which the explanatory memorandum described as a threat to market stability and fair competition. It explicitly bans any person from carrying out economic activities without the proper authorization from the competent authority or going beyond the limits of an approved license. The decree also outlaws commercial concealment in which one party allows another to use its licenses or trade names to conduct business illegally.
Penalties under the new law range from one to three years of imprisonment combined with fines from KD 10000 to KD 100000 or the full amount of profits generated by the violation if that sum is larger according to the decree text published by KUNA. Courts hold the discretion to apply either the jail term or the monetary penalty and both can be multiplied in proportion to the number of individuals involved or the count of infractions. Those who obstruct officials during inspections or investigations face separate sanctions of up to six months in prison and fines not exceeding KD 10000. The legislation makes managers liable for offenses if they had knowledge of them or neglected their duty to prevent them.
Legal persons share liability for violations performed in their name or for their advantage the law stipulates. Judges must order the seizure of all illicit gains and related assets the shutdown of offending premises the cancellation of licenses and the deportation of non-Kuwaiti perpetrators all while ensuring no prejudice to legitimate third-party rights. For individuals convicted of the same offense within five years of an earlier final judgment the penalties are doubled.
The decree-law offers a reconciliation pathway for offenders who choose to come forward before or during court action requiring payment of at least half the highest applicable fine along with full correction of their legal standing KUNA reported. This avenue is closed to those with prior convictions for similar breaches. The legislation further creates a reward program for informants allocating up to 10 percent of recovered fines to those whose verified tips result in successful prosecutions.
Officials designated under the law receive judicial authority to carry out its provisions including unhindered access for inspections the Kuwait News Agency dispatch indicated. Any attempt to impede these duties through document concealment or false statements is itself punishable under the decree. The comprehensive measure seeks to enhance the government’s regulatory reach and improve revenue collection from legitimate commercial operations across the country.
The phenomenon addressed by the new decree has been a recurring concern in Kuwaiti commercial policy for decades according to historical records from the Ministry of Commerce and Industry. Successive governments have introduced measures to promote genuine Kuwaiti ownership in businesses while preventing nominal sponsorships. The latest decree builds upon those foundations by adding stronger enforcement tools incentive structures for reporting and clear guidelines for reconciliation. The Ministry of Commerce and Industry has conducted multiple inspection campaigns in recent years targeting unlicensed operations in retail contracting and services.
