New law grants non-Kuwaiti heirs right to inherit and own property

• The law mandates that inherited property be sold within two years unless a special decree permits ownership; otherwise, it will be forcibly sold, with exemptions for Arab nationals, diplomatic missions, and GCC citizens treated as Kuwaitis under specific conditions.

Law No. 7 of 2025, published in the Kuwait Today newspaper, amended Decree-Law No. 74 of 1979, permitting non-Kuwaitis to inherit full property ownership from their Kuwaiti mother, Al Rai newspaper reported.

The explanatory memorandum of the law stated that Decree-Law No. 74 of 1979, which regulates non-Kuwaitis’ ownership of real estate in Kuwait, was designed to limit property ownership to Kuwaitis. This includes full ownership, usufruct rights, and public ownership. The law requires anyone who inherits property after its issuance to sell it within two years unless granted a special decree allowing ownership. Otherwise, the property will be forcibly sold. However, exemptions apply to nationals of Arab countries under specific legal conditions, diplomatic missions under certain terms, and citizens of Gulf Cooperation Council (GCC) countries, who are treated as Kuwaitis under Law No. 1 of 2004, as amended by Law No. 18 of 2009.

The memorandum further explained that the law prohibits commercial companies from owning real estate, as stated in Article 8. Companies with non-Kuwaiti partners are barred from owning property and must dispose of any owned real estate within one year of the law’s implementation; otherwise, it will be forcibly sold.

Similarly, companies where a Kuwaiti partner’s share is transferred to a non-Kuwaiti must comply with the provisions of the banking law and dispose of the real estate within a year, failing which the property will be forcibly sold.

As an exception to these restrictions, the law permits joint-stock companies with non-Kuwaiti participation—provided their purpose does not include real estate transactions—to own property necessary for their operations if a special decree grants them this right, subject to Article 5.

Additionally, the law stipulates that any violations of its provisions will result in nullity, prohibits the registration of transactions that contradict its regulations, and classifies these provisions as matters of public order. Courts must rule on violations independently, and any interested party may request a judgment declaring such transactions void.

The issuance of Law No. 20 of 2000 allowed non-Kuwaitis to own and trade shares of joint stock companies listed on the stock exchange. Given the dynamic, fast-paced nature of stock trading, which relies on complex automated systems, it became impractical to monitor the entry and exit of non-Kuwaitis in listed company shares to subject them to Article 8 of Decree-Law No. 74 of 1979.

An Amiri Order was issued on 10/5/2024, with Article 4 stipulating that laws shall be enacted through decrees with the force of law. Accordingly, a draft decree-law was prepared, with Article 1 amending the second paragraph of Article 4 of Decree-Law No. 74 of 1979.

The amendment introduces a provision exempting individuals of Arab nationality from the requirement to dispose of inherited property or a portion thereof if ownership is transferred from their Kuwaiti mother.

Article Two of the draft decree-law adds two new paragraphs to Article (8) of Decree-Law No. (74) of 1979. The first permits companies, real estate funds, and investment portfolios with non-Kuwaiti partners to own real estate, provided that their purpose includes real estate dealings. It also requires in-kind shares to be distributed exclusively to Kuwaiti partners, while non-Kuwaiti partners receive their share in cash, subject to regulations set by a decree.

The second paragraph allows investment entities licensed under the Direct Investment Promotion Law to own real estate necessary for their operations, provided it is not for real estate speculation. A decree will establish the rules and regulations governing this permission.