SME crisis deepens: Over 3,000 Kuwaiti companies sought license cancellation in 2025”
Restaurants, salons, and delivery firms lead wave of SME closures; business owners warn without support, Kuwait’s small enterprises are ‘days away’ from collapse
A growing number of small and medium-sized enterprises in Kuwait are being pushed to the brink, with many already shutting down and others preparing to exit the market in the coming months or rather days.
Despite the diversity of their commercial activities, these businesses share a common struggle that includes intensified competition, shifting consumer behavior, declining purchasing power, reduced spending, and a persistent lack of support and incentives.
According to information obtained by Al-Qabas, the past few months have witnessed a significant wave of SME closures. Economic conditions have proven unfavorable for sustaining operations, prompting thousands of companies to seek the cancellation of their commercial licenses.
Sources warn that unless there is an improvement in the business climate, an even larger exodus from the market is expected.
Official figures reviewed by Al-Qabas show that since the beginning of the year, more than 3,000 companies have submitted requests to the Ministry of Commerce and Industry to cancel their commercial licenses and either dissolve or liquidate their entities.
In the past two months alone, the Ministry’s Companies Sector approved the dissolution and liquidation of more than 600 companies.
Most of these businesses fall under the SME category and operate as limited liability companies or single-person enterprises.
Many belong to sectors that are particularly sensitive to changes in consumer spending, such as restaurants and cafés, sweets and pastry shops, general trading companies, delivery service providers, building contracting firms, wholesale and retail businesses, women’s salons and tailoring services, as well as children’s clothing and small boutique stores. Sources note that these sectors have been among the most frequent applicants for license cancellations due to rising operational costs and stagnant revenues.
Entrepreneurs interviewed by the daily emphasize that the absence of meaningful incentives has made survival increasingly difficult.
Business owners registered under Chapter Five—a program designed to support entrepreneurs—say they receive minimal benefits, especially when it comes to securing accessible financing or loans to sustain their operations.
They also point to the high government fees associated with transactions and permits, strict regulatory oversight, and punitive fines that many describe as excessive or disproportionate. On top of these challenges, many SMEs are still burdened by the lingering effects of the COVID-19 pandemic, which drained financial reserves and weakened their ability to recover or absorb new economic shocks.
Sources indicate that several factors are driving the rise in business shutdowns, dissolutions, and liquidations among SMEs.
These include weak purchasing power and reduced consumer spending, intensifying market competition, the failure of many ventures to achieve their founding objectives, the lack of incentives and support—particularly for those registered under Chapter Five—the prolonged repercussions of the pandemic, and the combined impact of high fees, stringent regulatory measures, and punitive fines.
Stakeholders stress that without targeted intervention and a more supportive business environment, Kuwait risks losing a significant portion of its SME sector, which remains a key engine of economic diversity and a vital contributor to local employment.
