Calls grow for modernized company, labor and tax laws to improve business environment
KUWAIT: Experts say Kuwait’s push to modernize its legislative framework could play a decisive role in reshaping the country’s business and investment environment, as authorities move to review some of its most influential economic laws.
The Ministry of Justice announced in September 2025 a national plan to update Kuwait’s legislative framework, targeting a review and development of 25 percent of existing laws by December 2026. At the time, Justice Minister Nasser Al-Sumait said the ministry was reviewing 983 laws, with 181 laws, or about 18 percent, reviewed in the first nine months of 2025.
The review is expected to include the Kuwait Companies Law, the Direct Investment Promotion Law and the public-private partnership framework, which specialists describe as the core rules governing economic activity in Kuwait.
They say the process should also extend to competition, labor, tax and financial laws to help build a more flexible, transparent and attractive environment for investors. The reform drive comes as Kuwait faces rapid global changes in production and investment models, the expansion of the digital economy and intensifying regional competition to attract capital.
The effort is anchored in the national plan to modernize the legislative framework, which the government has begun implementing as a structural reform aligned with sustainable development goals for 2030 and Kuwait Vision 2035. Several legal changes are already underway as part of this broader direction, covering areas such as digital commerce, public debt management, real estate transactions, taxation and financial integrity.
Experts say the quality and flexibility of legislation are closely linked to investor confidence, economic diversification and the economy’s ability to grow sustainably.
Ali Almutairi, dean of the College of Administrative Sciences at Kuwait University, said the comprehensive review of existing laws aims to create a modern legal environment aligned with Kuwait’s development needs. “The process of reconsidering and reviewing all applicable legislation in Kuwait aims to create a contemporary legal environment that is consistent with the requirements of comprehensive development,” he told KUNA. Almutairi said updating legislation strengthens transparency and accountability in government institutions, helping achieve social justice and equality before the law.
He added that academic expectations focus on better coordination between legal and economic frameworks through updated laws related to investment, trade, taxation, labor and small and medium-sized enterprises. Such reforms would reduce legal and procedural risks for investors, support entrepreneurship and innovation, and improve market efficiency through fair competition, he said.
Ahmad Altuhaih, vice chairman of the Kuwait Economic Society, said updating the legislative structure is essential to keep pace with global economic developments. “From an economic perspective, this government direction represents an announcement of a new phase of institutional reform in line with global developments and the requirements of Kuwait’s development vision,” he told KUNA.
Altuhaih said the review is expected to cover pivotal laws, including the Kuwait Companies Law, the Direct Investment Promotion Law and the public-private partnership law. “These legislations represent the basic rules governing the business and investment environment in Kuwait,” he said.
He stressed the need for the Companies Law to be updated through simplified procedures and expanded governance and transparency to allow greater flexibility in establishing and managing companies. Competition and anti-monopoly laws should also be prioritized, he said, given their role in protecting consumers, encouraging innovation and improving service quality. Altuhaih added that labor market laws should be reviewed to better align national skills with market needs, alongside updates to tax and financial systems to secure sustainable revenue without undermining the economy’s attractiveness. — KUNA
Key laws shaping
Kuwait’s economic reform
Digital trade law
Approved by the Cabinet in November 2025, the draft law regulates digital commerce and introduces a regulatory sandbox allowing companies to test products before commercial launch. It also sets out consumer protection measures covering privacy, clear terms and conditions and effective dispute resolution mechanisms to strengthen trust in electronic transactions.
Public debt law
Issued in March 2025, Decree Law No 60 of 2025 sets a public debt ceiling of KD 30 billion and allows financial instruments with maturities of up to 50 years. The law aims to enhance liquidity management and fiscal sustainability.
Real estate payment
Justice Ministry Decision No. 194 of 2025 requires payments under official real estate contracts to be made through bank transfers or certified cheques. The measure, which was issued in March 2025, targets money laundering and fictitious transactions.
Developer law amendments
Amendments that entered into force in August 2025 give real estate developers greater flexibility to offer housing units of varying sizes and types to meet different needs.
Multinational tax regulations
Issued in January 2025, the executive regulations clarify the application of the multinational enterprise group tax. Initial estimates suggest annual revenues of around KD 250 million.
Alternative remittance systems
Draft amendments approved in December 2025 criminalize informal alternative remittance systems, citing their threat to Kuwait’s financial and economic security.
