Kuwait considers 5-in-1 business license rule to attract investors

• The Ministry of Trade, Commerce and Industry’s proposal suggests permitting the consolidation of up to five licenses in one company’s headquarters, as long as the licenses are owned by a single entity or person with significant stakes in them.

• The proposal aims to support businesses and curb fake address fraud, while officials work to resolve legal issues—chiefly how to close a violating license without impacting the main office.

• Currently, each license has a separate civil number, making it challenging to assign unique identifiers when combining five licenses under one address for legal and communication purposes.

As part of a broader initiative to enhance Kuwait’s business environment and boost its competitiveness globally, officials from the Ministry of Trade, Commerce, and Industry, alongside other relevant government agencies, are reviewing a proposal that would allow a maximum of five commercial licenses to be held at a single office, provided they are owned by the same entity, reported Arabic daily Al Rai.

Sources indicated that the Ministry of Trade, Commerce, and Industry, in collaboration with leaders from the Municipality, the Public Authority for Manpower, and the Public Authority for Civil Information, is considering a proposal that would grant business owners with multiple commercial licenses an exception from the executive regulations of the Commercial Establishments Licensing Law, which currently governs the conditions for license locations.

The proposal suggests permitting the consolidation of up to five licenses in one company’s headquarters, as long as the licenses are owned by a single entity or person with significant stakes in them.

Combating the black market for fake addresses

The proposal aims to support businesses in Kuwait and combat the black market for fake addresses. Government agencies are still working to address legal and procedural issues, particularly how to handle violations in the case of combined licenses. One key concern is how to close the violating license without affecting the main office.

Sources explained that a different mechanism for closure could be implemented, ensuring the penalty is enforced while maintaining business operations. By linking government agencies, the plan allows for the closure of the licensing file and the freezing of related transactions across all relevant departments, such as the Ministry of Commerce, Ministry of Justice, and General Organization for Social Insurance. This approach will expedite violations processing and restore the effectiveness of the licensing file, ensuring smoother business transactions for the company involved.

Sources reported that discussions raised a legal concern by the Public Authority for Civil Information regarding the registration of addresses for bulk licenses. Under the current system, each license is assigned a civil number, posing a challenge when combining five licenses under one address. It is difficult to assign each license a unique civil number for litigation and communication purposes.

To address this issue, a proposal suggests granting the five licenses a combined civil number, with each one registered with a dedicated postal address within that number. This would ensure proper reporting, communication, and legal proceedings related to the licenses.

Unified ‘Labor file’ for combined business licenses

Regarding the ‘labor force,’ discussions focused on how to register workers for combined licenses at the same headquarters. Sources reported that it was proposed to create a “labor file” for combined licenses, where all workers under linked licenses would be registered.

A detailed graphic outlined the percentages of each license and the number of workers eligible for registration, along with a mechanism to regulate their movement within the file.

Sources stated that government agencies are exploring ways to implement this decision without violating existing laws and regulations, and a consensus is being reached on the best procedural formula.

Revitalizing Kuwait’s business landscape

Sources indicated that the Ministry of Commerce is advancing its efforts to enhance the local business environment, with regulatory initiatives underway at multiple levels to support this goal.

It was pointed out that the ministry had previously approved a list of licenses for special activities that do not require office space or commercial premises. This list includes 54 activities, and the Commercial, Professional, and Craft Activities Classification Committee is responsible for updating it as needed. Additionally, the decision allows entrepreneurs to add any new activity.

Article 1 of Ministerial Resolution No. 86 of 2023, amending Ministerial Resolution No. 82 of 2023, stipulates that these licenses must be issued under specific controls, with the requesting entity being a one-person company and the license holder being the company’s manager.