The Ministry of Social Affairs has initiated a comprehensive examination of investment contracts tied to approximately 5,270 shops and branches operated by cooperative societies throughout the country. This review, handled by the ministry’s Financial and Administrative Affairs and Cooperative Affairs Sector, targets arrangements that could enable third-party involvement in commercial activities in ways that breach the new legislation. Sources within the ministry indicated that the process will pay particular attention to any indirect transfer of management responsibilities, especially to non-Kuwaiti parties, which might violate ownership and licensing rules.
The campaign focuses on preventing subletting practices and other maneuvers intended to circumvent legal requirements, according to ministry sources. Such actions could allow unauthorized individuals to derive benefits from cooperative assets reserved for specific operators under Kuwaiti law. Violators risk legal proceedings, although the ministry has outlined a general grace period extending to the natural end of existing contracts before any reclamation occurs.
Following contract expiry, the ministry will take back the affected shops and branches before re-tendering them according to cooperative regulations and broader legal standards. This structured approach aims to restore full oversight while allowing time for orderly transitions. The review draws on a detailed inventory of all locations, ownership details and contractual terms compiled earlier by the ministry to support sustained monitoring.
Decree Law No. 78 of 2026, promulgated on August 2 and published in the Official Gazette nine days later, establishes clear definitions and prohibitions around commercial concealment, the Ministry of Commerce and Industry has explained in related guidance. The statute criminalizes enabling any person to conduct economic activity they are barred from pursuing, including through circumvention of foreign ownership caps, and is scheduled to take effect six months after publication. It imposes penalties of one to three years in prison along with fines from KD10,000 to KD100,000 or the full value of illicit profits, whichever is higher.
Earlier inspection drives by the same ministry had already uncovered widespread subletting that deprived cooperative societies of millions of dinars in potential rental income, ministry findings from May 2026 showed. In some documented cases, investors paid cooperatives as little as KD1,500 monthly while subleasing the same spaces for between KD6,000 and KD10,000. Those campaigns, launched under directives from the minister and sector leadership, prompted tighter compliance checks and field audits that informed the current nationwide review.
The cooperative sector supplies essential goods and services to large segments of the population, making transparent management of its investment outlets a priority for authorities. The ministry’s compiled database now includes specifics on every branch, from tire repair and oil-change stations to other service activities, enabling more precise enforcement. Additional updates on the review’s findings and any resulting actions are expected once the initial assessment phase concludes.
