Kuwait introduces sweeping cooperative sector reforms
. . . with new regulatory framework to enhance governance, transparency, and operational efficiency while safeguarding public and shareholders’ funds through digital controls
Kuwait has launched a major overhaul of its cooperative sector with the issuance of Ministerial Resolution No. (196) of 2026, introducing a new regulatory framework aimed at strengthening governance, transparency, efficiency and protection of shareholders’ and public funds.
Minister of Social Affairs, Family and Childhood Affairs Dr. Amthal Al-Huwaila said the new regulation replaces the previous 2021 framework and represents a comprehensive modernization of cooperative work, designed to address past challenges and prepare the sector for future growth.
The new rules introduce a unified electronic platform to manage all cooperative procedures, including transactions, tenders, contracts and supplier services. The system aims to speed up processes, standardize procedures and improve transparency through digital links with government entities.
The regulation places stronger controls on the management of cooperative societies, including tighter oversight of appointments, mandatory approval for certain positions, and requiring competitive tendering for investment, facilities, security, cleaning and other contracts to ensure fairness and transparency.
Investment regulations have also been revised, allowing clearer procedures for leasing cooperative assets, branches and land. Investment contracts can now extend up to 10 years, renewable for five-year periods, with a fixed annual increase of 5 percent in investment value to support stable revenues.
Supplier relations will be managed through a new electronic system allowing suppliers to monitor sales, inventory and transactions. The regulations also prevent cooperatives from rejecting suppliers for purely commercial reasons or forcing them to provide discounts or participate in promotions without consent.
To improve financial discipline, the new rules require stronger purchasing and inventory management policies, linking procurement decisions to sales turnover to prevent excessive stockpiling. Cooperatives must also prepare annual social service plans approved by the Ministry.
The regulation introduces new safeguards to protect shareholders’ money, including stricter documentation of supplier-provided free goods and subsidies, mandatory reconciliation of financial records, improved inventory controls and audits by firms approved by the Capital Markets Authority.
A new points-based reward system for non-shareholder customers will also be introduced, offering non-cash benefits based on purchasing activity to increase customer engagement, boost sales and strengthen cooperative revenues.
The Ministry also increased the maximum annual return on shareholders’ purchases from 12 percent to 15 percent, providing greater financial benefits to cooperative members and enhancing the attractiveness of the cooperative model.
The new framework, consisting of 122 articles, also introduces stricter rules for board members. Cooperative officials are prohibited from using association funds for personal purposes, financing election campaigns, travelling at cooperative expense without approval, receiving unauthorized benefits, or approving their own financial transactions.
The Ministry confirmed that board meetings will be video-recorded to enhance accountability, while cooperative buildings will be required to undergo renovation according to approved standards to improve services for consumers.
The new regulation is part of a broader government plan to modernize Kuwait’s cooperative sector and strengthen its role as a pillar of food security, consumer protection and economic development.
