Freelance business restricted to Kuwaiti citizens, says ministry

• The ministry set conditions for obtaining a freelance license: the business must be a single-person company; the founder must also be the manager, a Kuwaiti of legal capacity with no disqualifying convictions; the holder must be at least 21; the license must specify a registered address; property owner approval is required for private residences; the official pledge must be signed; the business must avoid harmful materials; and any other ministerial requirements must be met.

The Minister of Commerce and Industry, Khalifa Al-Ajeel, issued a ministerial decision regulating freelance businesses in Kuwait. The decision defines freelance businesses as those operated by owners without a dedicated shop or office and specifies 120 eligible activities.

It prohibits expatriates and Gulf nationals from acting as “founders,” “partners,” or “managers,” making freelance work exclusive to Kuwaiti nationals. The decision also extends freelance business licenses from one year to four years, reported Al Qabas newspaper.

The ministry outlined the following conditions for obtaining a license to practice freelance activities:

• The business must be a single-person company.
• The founder must also serve as the company manager, be a Kuwaiti national of full legal capacity, and have no final conviction for crimes affecting honor or trust, unless reputation has been restored.
• The license holder must be at least 21 years old, unless authorized by the court to practice commerce.
• The license must specify a registered address, post office box, or email according to the Public Authority for Civil Information.
• Approval from the property owner is required if using a private residence as the business address.
• The license holder must sign the official pledge prepared for this purpose.
• The business must not handle materials harmful to the environment or public health and safety, as defined by competent authorities.
• Any other documents or conditions issued by the minister or his delegate must be provided.
• This decision aims to streamline freelance business operations, ensure compliance with national regulations, and promote the participation of Kuwaiti citizens in the growing self-employment sector.

License issuance period

The Ministry of Commerce and Industry has set the duration of freelance business licenses at four years and allows the addition of multiple freelance business activities under the same license, provided the following conditions are met:

• The added activity must qualify as a self-employment activity.
• The added activity must be similar, supplementary, necessary, or related to the originally granted license.

The ministry stated that the issuance of licenses for the companies mentioned above shall be conducted through the Single Window Administration, the Sahel or Sahel Business applications, or any other method approved by a ministerial decision.

License holders benefiting from Cabinet Resolution No. 391 of 2001 and its amendments, regarding the disbursement of social allowances, children’s allowances, and support for national labor in the private sector, are required to submit the following documents to the Ministry of Commerce and Industry annually:

• Bank statements of the licensed company.
• Annual financial statements.
• Electronic platform accounts and social media accounts of the licensed company.
• Any additional documents specified by a decision of the minister or his delegate.

The first fiscal year begins on the date of registration of the company in the commercial register and ends on the date specified for the conclusion of the following fiscal year.

Electronic payment

The decision emphasizes that license holders must disclose their commercial registration number in all official company accounts and transactions and adhere to all applicable correspondence and settlement conditions, as outlined in Article 22 of Companies Law No. 1 of 2016. It mandates that all commercial transactions be conducted exclusively via electronic payment methods.

The Commercial, Professional, and Craft Activities Classification Committee at the Ministry of Commerce and Industry is tasked with defining freelance business activities. The committee may add, amend, or cancel activities, with ministerial approval.

The decision clarified that, without prejudice to existing licenses, its provisions apply to companies established both before and after the issuance of this decision.

Capital

The decision reduces the capital required to practice freelance business activities licensed under this regulation to half the capital required for similar company activities. Where no specific provision exists, the rules of Ministerial Resolution No. 411 of 2013 shall apply. Accordingly, the minimum capital for freelance companies is now 50 dinars, down from the previous minimum of 100 dinars.

The Ministry of Commerce and Industry will submit periodic reports to the Public Authority for Manpower to monitor the extent to which license holders comply with the provisions of Cabinet Resolution No. 391 of 2001 and its amendments.

Required documents

The decision emphasizes that license holders benefiting from Cabinet Resolution No. 391 of 2001 and its amendments must submit the following documents annually to the Ministry of Commerce and Industry:

• Bank statement of the licensed company.
• Annual financial statements.
• Accounts of electronic platforms and social media platforms associated with the licensed company.
• Any additional documents specified by a decision of the Minister or his delegate.

The first fiscal year begins from the date of registration of the company in the commercial register and concludes on the date specified for the end of the following fiscal year.