Kuwait plans to revoke licenses unused for 6 months, expired for a year

• Beneficial owner registration continues, with nearly 60% of 226,938 eligible licenses complying. The Ministry of Commerce mandates all registered entities, including sole proprietorships and companies, to disclose ownership.

With a growing number of visitors at the Ministry of Commerce and Industry—ranging from those inquiring about “beneficial owner” disclosures to others seeking to cancel inactive licenses—Al-Rai newspaper has learned that officials are considering a legal proposal to automatically cancel licenses that expired over a year ago or remained unused for six consecutive months.

Demolishing commercial centers with suspended licenses

Sources revealed two differing legal opinions on the matter. The first, a conservative stance, argues that the Ministry of Commerce has no authority to automatically revoke licenses due to the absence of a clear legal basis. This raises concerns about the legal and financial implications for the affected licenses, preventing the ministry from taking unilateral action without a request from license holders and their explicit consent.

Experts warn that such measures could expose the ministry to liability for demolishing commercial centers with suspended licenses or those whose owners have failed to submit financial statements for years—without the owners’ or shareholders’ consent. As a result, procedural approval from the license holder is deemed a legal requirement for cancellation.

Legal opinion supports scrapping dormant business licenses

Conversely, an opposing legal opinion asserts that the Ministry of Commerce has the right to revoke licenses under specific conditions. Citing the Companies Law, it states that the ministry can cancel a license if the business has been inactive for six consecutive months without notifying authorities. Other grounds for cancellation include the expiration, dissolution, or liquidation of the company, failure to renew the license within one year of its expiry, or a formal request from the license holder.

Proponents of this view believe that the ministry’s cancellation of licenses within this scope aligns with the implementation of Article 11/3 of Law No. 111 of 2013 concerning commercial establishment licenses. It is also consistent with ministerial decisions, amendments to the Companies Law, its executive regulations, and commercial establishment licensing rules.

The measure addresses the surge of auditors flocking to the Ministry of Commerce, the Public Institution for Social Security, and the Public Authority for Manpower to complete the necessary requirements and documents for registering the “actual beneficiary.”

Thousands of unused business licenses fuel legal uncertainty

Sources stated that the ongoing legal debate arose after the discovery of a significant number of licenses that have remained inactive since their issuance—some for several years—and others whose owners have failed to submit financial statements for an extended period.

They noted that the surge in auditors handling these cases has caused widespread confusion within the Ministry of Commerce, coinciding with the ministry’s mandate for actual beneficiary registration.

Additionally, the ministry has imposed penalties on license holders who fail to disclose this information, ranging from 1,000 to 10,000 dinars, with fines reaching up to 500,000 dinars under the Anti-Money Laundering and Terrorism Financing Law.

Sources further indicated that Ministry of Commerce officials are reviewing both legal perspectives and will take action in accordance with the Companies Law, its regulations, and relevant ministerial decisions.

Beneficial owner registration progress

In a related development, sources revealed that commercial license holders are continuing to register their beneficial ownership data. Currently, nearly 60 percent of the 226,938 commercial licenses subject to disclosure requirements have complied. This figure was initially targeted for April, while the ministry aims to achieve a 90 percent disclosure rate by June, in line with the International Financial Action Task Force (FATF) recommendations for Kuwait to strengthen its anti-money laundering and counterterrorism financing measures.

Beneficial owner disclosure now available on ‘Sahel Business”

Confirming Al-Rai’s March 16 headline, “31,700 companies disclose their ‘actual beneficial owners’ in four days,” the Ministry of Commerce has now added the “Actual Beneficial Owner” service to the “Sahel Business” platform. This update streamlines the registration process, allowing users to complete it more efficiently through clear, step-by-step instructions.

The ministry has identified the categories required to register the identity of the beneficial owner. These include any entity registered with the Ministry of Commerce and holding a commercial register, whether a sole proprietorship or any type of company, including personal or joint-stock companies. Any entity engaged in commercial activity is also required to disclose and register in the beneficial owner system, in accordance with Ministerial Resolution No. 16 of 2025.

According to the resolution, companies listed on the Kuwait Stock Exchange or foreign stock markets, as well as government-owned companies, are exempt from registration.

Unilateral license cancellations spark legal debate

• The ministry’s unilateral cancellation of licenses lacks legal support.
• The presence of legal and financial centers increases the risks and responsibilities of the ministry.
• A license holder’s request for cancellation is a procedural requirement.

License cancellations backed by law, say supporters

• Cancellation aligns with the Companies and Commercial Licensing Laws.
• A significant number of covered licenses have not been procedurally renewed.
• Helps address the surge of reviewers registering the “actual beneficiary.”