As part of Kuwait’s efforts to modernize economic legislation under Vision 2035, authorities are exploring the legal regulation of family business succession to ensure continuity and growth while protecting assets from intergenerational conflicts.
A proposal under discussion includes enacting a law that permits the establishment of “trust” companies — entities commonly used abroad by wealthy individuals or family groups to manage and preserve wealth and assets, reports Al-Rai daily.
These companies, typically established with a nominal capital of $1,000 divided into 1,000 shares (points), operate under specific purposes and are not subject to bankruptcy.
The law would allow for selecting a trustee — such as a bank, law or accounting firm, or investment company — to manage the trust based on directives outlined in a “Letter of Wishes” left by the founder.
These trustees may operate individually or as a board and manage business and financial matters posthumously. The plan also proposes the creation of subsidiary funds under these trusts to own and manage family-owned residential, commercial, and investment properties, potentially resolving disputes among heirs.
Kuwait’s Companies Law currently lacks provisions for trust entities, but the Capital Markets Authority’s regulations allow single-purpose companies to transfer assets for bond and sukuk issuance.
If approved, the new law could offer legal facilities such as exemption from registering a specific address and linkages to the trustee. This would eliminate the need to establish trusts abroad.
Regulating succession in this way would help avoid mismanagement, reduce family conflicts, and prevent the appointment of unqualified successors. It ensures defined roles, transparent processes, and oversight by a governing board, which are vital for the long-term stability and success of family businesses that play a key role in Kuwait’s economy.
