MCI considers allowing up to 5 commercial licenses to operate from ‘under one roof’

The proposal under review will allow business owners to consolidate no more than five licenses at one headquarters, on the condition that the licenses are owned entirely by the same person or entity with significant ownership stakes in each license.

As part of a broader regulatory initiative to enhance Kuwait’s business environment and improve its ranking on global competitiveness indicators, the Ministry of Commerce and Industry, in coordination with relevant government bodies, is studying a proposal to permit up to five commercial licenses to be operated from a single office—provided all licenses are owned by the same entity or individual.

According to informed sources speaking to Al-Rai, representatives from the Ministry of Commerce and Industry, Kuwait Municipality, the Public Authority for Manpower, and the Public Authority for Civil Information are evaluating a procedural exemption from the current executive regulations of the Commercial Establishments Licensing Law. These regulations govern the physical and legal conditions of license headquarters.

The proposal under review would allow business owners to consolidate no more than five licenses at one headquarters, on the condition that the licenses are owned entirely by the same person or entity with significant ownership stakes in each license.

Objective: Streamlining Business and Curbing Abuse

The sources stated that the initiative aims to support entrepreneurship in Kuwait by facilitating easier management of business operations and to curb the misuse of fake addresses in commercial licensing. They noted that government agencies are currently assessing the legal and procedural challenges raised by this proposal, particularly regarding how violations will be handled under this new structure.

A key concern is how enforcement will proceed if one of the combined licenses incurs a violation. Under current practices, a license violation may require the closure of the physical office. However, if multiple licenses share a single headquarters, it raises the question of whether the entire office should be shut down, impacting all other licenses operating from the same location.

Alternative enforcement mechanism proposed

To address this concern, sources indicated that an alternative enforcement mechanism is being discussed. Thanks to improved inter-agency digital connectivity, authorities could enforce penalties by freezing the licensing file of the violating license alone, without physically closing the entire office. During the closure period, all associated transactions across government bodies—including the Ministry of Commerce, the Ministry of Justice, the Public Institution for Social Security, and others—would be suspended, thereby achieving the same regulatory intent while maintaining operational continuity for compliant licenses.

Legal considerations on address registration

A legal challenge raised by the Public Authority for Civil Information relates to the issue of assigning civil numbers to licenses. Under the current system, each license is issued a unique civil number, which is critical for official communication, litigation, and regulatory compliance. The proposed grouping of licenses raises the question of how to maintain individual accountability.

One suggested solution is to issue a single civil number for the shared headquarters, while assigning each license a distinct official postal sub-address under that number. This would preserve the legal identity of each license for notification, compliance, and judicial purposes.

Labor file integration

Another area under consideration is labor registration. Discussions focused on how to manage the labor files of multiple licenses sharing the same address. A proposal was put forward to create a unified “mother labor file,” which would centralize all labor data for the licenses grouped under one headquarters. This file would include a detailed breakdown of the number of workers allocated to each license and the permissible labor percentages. A mechanism would also be implemented to manage labor transfers within the file.

Coordinated regulatory reform

The sources emphasized that inter-agency discussions are ongoing to find a consensus on a unified procedural approach that complies with the laws and executive regulations of all relevant authorities.

This proposal is part of a larger effort by the Ministry of Commerce to modernize and simplify Kuwait’s commercial licensing framework. In parallel with this initiative, the Ministry has also taken steps to support low-overhead businesses. It previously approved a list of 54 “special activity” licenses that do not require a physical office or commercial premises. These licenses are updated regularly by the Commercial, Professional, and Craft Activities Classification Committee, and entrepreneurs are allowed to propose additional activities.

Licensing for one-person companies

The ongoing reforms are also aligned with Ministerial Resolution No. 86 of 2023, which amended Resolution No. 82 of 2023. This resolution specifies that licenses for certain special activities can be issued to one-person companies. In such cases, the license holder must also serve as the manager of the company, and all licensing controls stipulated in the resolution must be adhered to.