Expired licenses companies, face fines if actual beneficiary undisclosed until March

• Non-compliant companies will face penalties in line with FATF recommendations to enhance Kuwait’s anti-money laundering and counter-terrorism financing efforts.

• The Ministry of Commerce will penalize non-compliant companies, including unlisted joint-stock firms, sole proprietorships, and businesses with suspended or expired licenses.

• Canceling a commercial license takes around two to three weeks, as it involves reviews from multiple entities, including the Public Authority for Manpower.

• New commercial activities risk fines of up to 10,000 dinars for violations, and offending entities will be prohibited from renewing or obtaining commercial licenses.

The Ministry of Commerce and Industry is advancing the enforcement of “beneficial owner” penalties to maximize disclosure compliance among commercial license holders or impose penalties on violators.

Sources informed Al-Rai that the Ministry of Commerce aims for at least 60% of companies in the claimant database to disclose actual beneficiary data by April. Non-compliant entities will face penalties, aligning with Financial Action Task Force (FATF) recommendations for strengthening Kuwait’s anti-money laundering and counter-terrorism financing measures.

Stipulated Penalty

Sources stated that the Ministry of Commerce will enforce penalties on all non-compliant entities, including unlisted joint-stock companies, sole proprietorships, and suspended or expired-license businesses.

Initial fines will start at 1,000 dinars and increase every two to three weeks up to 10,000 dinars. Additionally, violators may face penalties under Law 106 on anti-money laundering and terrorism financing, reaching up to 500,000 dinars. The manager listed on the commercial license will be responsible for registering and disclosing the actual beneficiary’s identity.

The Ministry of Commerce has mandated the registration of the actual beneficiary’s identity for all entities with a commercial record, including sole proprietorships and companies. However, listed companies, whether on domestic or foreign stock exchanges, and government-owned entities are exempt from this requirement.

Cancel License

Sources stated that license holders who fail to disclose actual beneficiary data or cancel expired licenses by the end of March will face penalties. Canceling a commercial license takes approximately two to three weeks, as it requires reviews from various entities, including the Public Authority for Manpower.

To avoid fines, those wishing to cancel should submit requests promptly. The Ministry of Commerce has recently received a surge of inquiries and cancellation requests from individuals with inactive licenses seeking to avoid financial penalties.

Avoid Violation

The Sources clarified that the March deadline set by the Ministry of Commerce applies only to those whose licenses have already been revoked, not those still in the application process.

Non-compliant entities will face an escalating, non-refundable fine starting at 1,000 dinars, along with a 30-dinar license cancellation fee. Additionally, new commercial activities will face fines of up to 10,000 dinars if they violate regulations, and offending entities will be barred from renewing or obtaining commercial licenses.

Sources revealed that as the Ministry of Commerce intensifies administrative measures against non-compliant companies; the percentage of companies that have disclosed their actual beneficiaries has risen to approximately 44%, while around 56% have yet to comply within the specified period.

Forgotten Licenses with their Owners

Responsible sources told Al-Rai that reviews of actual beneficiary data revealed a large segment of license holders in the commercial registry have forgotten about their licenses. Some believe these licenses have already expired and see no need to visit the Ministry of Commerce to request their cancellation.

Sources indicated that the Ministry of Commerce currently lacks the authority to automatically cancel commercial licenses without a request from the license holder. This is due to the possibility of financial, legal, or labor-related obligations linked to the company, which the ministry cannot overlook. Therefore, license holders must personally submit a request for cancellation.

Moreover, the new measures are being planned for forgotten licenses, granting the ministry the authority to cancel them if they have been not renewed for a certain number of years, with work currently underway to implement this.

The Ministry of Commerce mandates the registration of all commercial licenses, including sole proprietorships and all types of companies, whether partnerships or joint-stock companies. Additionally, all legal entities engaged in commercial activities must disclose and register in the beneficial owner system, in compliance with Ministerial Resolution No. 16 of 2025.