Kuwait bars Gulf company branch request over ownership dispute
A Gulf firm must be entirely owned by shareholders of its licensing country or by Gulf citizens to open a branch in Kuwait, according to the Ministry of Commerce and Industry.
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Gulf law and agreements grant the company the same rights as other Gulf entities and permit foreign companies to establish branches in Kuwait.
The Ministry of Commerce and Industry recently denied a Gulf company’s request to open a branch in Kuwait, citing that its ownership structure includes non-Gulf shareholders. According to Al Rai newspaper, a Gulf company must be wholly owned by shareholders of the company’s license nationality or by Gulf citizens to open a branch in Kuwait.
The sources indicated that the company submitted a letter to the ministry asserting that it holds a Gulf license and should be treated as an entity rather than based on its ownership structure, given that the majority of its shareholders are citizens of the licensing country.
They explained that according to Gulf law and agreements, the company should benefit from the same rights as other Gulf entities, including those associated with GCC affiliation. Additionally, the law generally and specifically permits foreign companies to establish branches in Kuwait.
While officials from the Ministry of Commerce and Industry maintained their stance, the applicants requested that the case be referred to the Fatwa and Legislation Department to seek its opinion on the emerging legal conflict.
They argued that denying their request violates the principle of reciprocity, especially since the country licensing the applicant company does not prevent Kuwaiti companies from entering its market.
The officials of the Ministry of Commerce and Industry have forwarded the company’s letter and legal documents to the relevant authorities within the ministry to seek their opinion on the ongoing dispute with the Gulf company.
