Kuwait

Kuwait has entered a transformative phase in its public-health and compliance architecture with the issuance of Decree-Law No. 159 of 2025, effective December 14, 2025, a comprehensive overhaul of the narcotics, psychotropics, and chemical-precursor regime, repealing the four-decade-old 1983 and 1987 laws. The new framework modernizes Kuwait’s approach to substance control through a structured system of licensing, surveillance, treatment, data governance, and inter-agency coordination. Although the law’s immediate focus is public health and anti-trafficking enforcement, its implications extend into healthcare, pharmaceuticals, logistics, research, compliance, risk management, and corporate governance. This impacts pharmacies, manufacturers, technology providers, and supply-chain operators. This shift aligns with Kuwait’s broader objective of building institutional systems capable of supporting the next generation of economic and social reforms. At its core, the new regime establishes an integrated governance model, anchored in the Ministry of Health but coordinated with the Ministry of Interior, Customs, laboratories, treatment centers, and cross-border regulatory bodies. The forthcoming Executive Regulation is expected to unify these operational requirements through a detailed rulebook governing licensing, storage, electronic tracking, treatment protocols, and surveillance mechanisms. Institutional Architecture: Ministry of Health at the Center of a Cross-Sector Control Ecosystem The law repositions the Ministry of Health as the national authority responsible for the scientific, medical, regulatory, and oversight pillars of the framework. Under the law, the Ministry licenses all entities dealing with narcotic drugs, psychotropics, and chemical precursors; establishes central registers, quota systems, batch-tracking controls, and electronic monitoring platforms; and governs prescribing, dispensing, storage, destruction, and transport through detailed procedures to be formalized in the Executive Regulation. It further oversees rehabilitation and treatment centers, medical committees, and post-treatment monitoring systems. The Ministry of Interior plays a parallel enforcement role, particularly with respect to smuggling, trafficking networks, digital crime, and controlled deliveries, while Customs controls cross-border flows of substances and precursors. This alignment reflects a shift toward integrated compliance governance, where medical, enforcement, and data-governance mandates intersect. The structure is designed to create a controlled, traceable ecosystem capable of preventing diversion, ensuring public safety, and supporting evidence-based health interventions. From Policy to Implementation: Licensing, Electronic Tracking, and Supply-Chain Controls The law introduces a comprehensive licensing and control system applicable to hospitals, pharmacies, manufacturers, warehouses, research institutions, veterinary facilities, and transport operators. Its core pillars include electronic tracking systems covering import, storage, dispensing, return, and destruction of controlled substances; batch-tracking and serialization requirements for manufacturers and warehouses; supply-chain controls over qualified transport vehicles, secure containers, GPS-enabled routes, and mandatory reporting of delays or discrepancies; real-time, Ministry-linked electronic prescriptions to eliminate fraudulent or unauthorized dispensing; and inspection rights allowing regulators to access premises, records, samples, and audit trails. These measures mirror international best practices and reflect a deliberate move toward digital compliance, reducing diversion risk and strengthening Kuwait’s pharmaceutical and clinical governance environment. “For both healthcare providers and manufacturers, compliance will ultimately be expressed contractually. Agreements with vendors, logistics operators, and software providers must embed traceability tools, inspection cooperation, serialization obligations, and incident-reporting workflows aligned with regulatory expectations.” Treatment, Rehabilitation, and Medical Oversight: A Modern Public-Health Approach A core innovation in the law is the establishment of a medical-based model for addiction treatment. Under the articles, a specialized medical committee evaluates addiction cases and determines individualized treatment plans. Treatment may be voluntary or court-ordered, with strict confidentiality requirements; commitment periods count toward sentencing for eligible offenses; and release decisions are based on medical, not punitive, criteria. Rehabilitation programs involve coordinated social, psychological, and vocational support, anchored in clinical best practices. The law positions addiction as a medical condition, integrating treatment, rehabilitation, and post-care monitoring into the national health system. This public-health approach reduces stigma while strengthening institutional capacity to manage long-term addiction cycles and reintegration outcomes. Data Governance and Surveillance: A Controlled and Traceable Information System The law establishes sophisticated data-governance requirements comparable to those applied in Kuwait’s cyber and cloud sectors. It mandates centralized electronic databases covering licenses, imports, exports, prescriptions, dispensing records, inventories, and destruction logs; confidential medical records with limited access pathways for judicial and medical authorities; mandatory reporting of irregularities, losses, discrepancies, and adverse reactions; and digital integration between ministries, laboratories, customs authorities, and enforcement bodies. These systems create a unified surveillance environment in which every dose of controlled substance is traceable, and every treatment event is securely recorded. Enforcement and Regulatory Expectations: High Penalties, Clear Duties The law separates (i) criminal offenses (such as trafficking, manufacturing, distribution, and smuggling) from (ii) regulatory breaches by licensed or registrable entities. Criminal offenses carry severe custodial penalties up to life imprisonment when aggravating factors are present. Aggravating factors that can elevate penalties to the death penalty include exploiting or involving a minor or a person lacking capacity, abusing an official position, or acting on behalf of a criminal organization. Regulatory and administrative sanctions apply to non-compliance with licensing, storage, dispensing, transport, record-keeping, or destruction obligations by regulated entities. Authorities may order immediate confiscation of substances, equipment, vehicles, and proceeds; close facilities; suspend or revoke licenses; impose doubled fines and activity suspensions on legal persons; and, for non-Kuwaiti offenders convicted of relevant crimes, deportation. Inspectors are empowered to enter, search, and inspect premises; review and copy records; require destruction of stock; and mandate compliance remediation. “Supervisory expectations are rising. Entities that maintain documented standard operating procedures, conduct periodic control assessments, and implement compliance monitoring programs will face fewer corrective measures following inspection. Contracting and Operational Implications for Healthcare and Industry The new framework requires that operational relationships reflect regulatory controls through clear contractual alignment. Priority themes include inventory-management and serialization obligations; secure transport requirements tied to permit conditions; joint inspection and cooperation clauses; record-keeping commitments aligned to retention mandates; data-sharing and confidentiality frameworks that comply with health-records protection rules; and incident-reporting workflows consistent with statutory timelines. For pharmaceutical companies, hospitals, laboratories, and logistics operators, the completeness of these terms will increasingly determine regulatory resilience and audit readiness. A National Control Strategy: Future Trajectory The forthcoming Executive Regulation is expected to integrate technical storage standards; e-prescribing and e-tracking specifications; detailed licensing conditions; precursor-control requirements; laboratory and destruction protocols; and inter-agency coordination procedures. Once issued, these regulations will solidify Kuwait’s movement toward a more mature, compliance-driven public-health system to connect enforcement, treatment, and supply-chain governance within a unified national structure. Conclusion Law No. 159 of 2025 represents a generational modernization of Kuwait’s narcotics and psychotropics regime. Far beyond a criminal framework, it introduces a national compliance infrastructure spanning healthcare, supply chains, digital systems, treatment models, and cross-border coordination. As Kuwait moves from legislative reform to operational execution, entities that engage early, align their internal controls with the new regulatory requirements, and prepare for the forthcoming Executive Regulation will not only mitigate legal and operational risk but also contribute to a safer and more resilient public-health environment. Authors: Legal Director, Mohammed Al Awadhi, Senior Associate, May El Mahdy and Trainee Lawyer, Fahad Al Zouman    

Kuwait is taking a major step toward strengthening the integrity of its financial system with the announced establishment of a specialized Public Prosecution for Banking Affairs, which is expected to commence operations in 2026. The proposal, announced by the Public Prosecutor, shows Kuwait’s ongoing efforts to strengthen protection of the banking sector and respond to the rapid growth of financial crimes driven by digital transformation. The newly established prosecution will function as a specialized body dedicated to investigating and prosecuting banking related crimes. Its duty will cover a range of financial offenses, with particular focus on electronic fraud, forgery, and the issuance of cheques without sufficient funds. These offenses have become increasingly common alongside the growth of electronic banking and digital payment systems, the fact that makes specialized oversight and enforcement a regulatory necessity. The Public Prosecutor emphasized that accelerating financial developments have created an urgent need for an advanced institutional response capable of safeguarding confidence in banking transactions. The new prosecution is expected to contribute to this objective by strengthening enforcement mechanisms and improving the efficiency of legal procedures related to banking crimes. This development represents a shift toward more specialized prosecution functions within Kuwait’s criminal justice system. Selection of Prosecutors assigned to the Banking Affairs Prosecution will be based on objective criteria, including professional experience and technical competence. The goal is to establish a highly capable prosecuting framework equipped to address the nature of financial crimes with its continuous evolving in both scale and complexity. For the first time, the new prosecution will also assume responsibility for preparing analytical studies and periodic reports aimed at monitoring patterns and methods of banking related crimes. These reports are expected to support proactive crime prevention strategies and position the prosecution as a key reference for data and analysis in this field. In parallel, the prosecution will play a vital role in public legal awareness. Where necessary, it will launch legal awareness programs targeting institutions and individuals to enhance understanding of digital crime. Overall, the establishment of the Public Prosecution for Banking Affairs represents an important milestone in reinforcing Kuwait’s financial security framework through enhancing oversight, improving enforcement capabilities, and promoting preventive awareness. This initiative supports economic stability and contributes to a safer and more resilient financial environment to individuals and the national economy. Authors: Ashraf Hendi, Partner and Ahmed Al Buaijan, Trainee Lawyer

Kuwait has developed a structured and proportionate pathway for small and medium-sized enterprises “SMEs” to access public capital through the Emerging Companies Market “ECM” at the Kuwait Stock Exchange “KSE”. Established as a dedicated listing segment under the Capital Markets Authority’s “CMA” market-segmentation framework, the ECM balances reduced entry thresholds with clear governance, disclosure, and investor-protection standards. Designed for growth-stage companies, the ECM provides a regulated route to equity financing while avoiding the full complexity of the main market. Its architecture reflects Kuwait’s broader policy objective of strengthening capital-market depth, improving SME access to funding, and institutionalising governance across the private sector in line with international best practices. Although the ECM is primarily a capital-raising platform, its implications extend to corporate governance, valuation discipline, disclosure controls, shareholder structuring, and regulatory compliance. For SMEs seeking institutional credibility, diversified funding sources, and long-term scalability, ECM listing represents a strategic legal and commercial milestone. Market Architecture and Regulatory Authority The ECM operates within Kuwait’s statutory capital-markets framework, under which the KSE is authorized, subject to CMA approval, to segment the market and allocate securities to each segment based on published eligibility criteria. No company may list without a formal recommendation from the KSE and approval from the CMA following review of a complete application. Applications must be submitted using Exchange-prescribed forms and supported by documentation required under the Exchange Rulebook and the CMA Executive Bylaws. The CMA is required to decide on a complete application within thirty business days, providing applicants with procedural certainty. This gatekeeping structure ensures that ECM admission standards are enforceable, transparent, and aligned with broader market-integrity objectives. Admission Standards and Eligibility Thresholds While detailed ECM requirements are set out in the Exchange’s rules, the principal eligibility thresholds reflect SME operating realities. Issuers must demonstrate a minimum total fair market value of issued share capital of at least KWD 750,000; a free float of at least 20% of the company’s share capital; and a minimum of 20 shareholders, each holding shares valued at KWD 5,000 or more, except where the company is incorporated as a public joint stock company. The company must demonstrate continuity of activity for the last two financial years in one or more of the main purposes stated in its Articles of Association, with the majority of its revenues generated from those activities. It must also have audited financial statements approved by the General Assembly for the two financial years preceding the listing application. The issuer must be a shareholding company with freely transferable shares, subject only to limited statutory or contractual restrictions. Companies may list newly issued shares, existing shares, or a combination of both, provided that the applicable ECM requirements and CMA approvals are satisfied. Valuation, Offering Structure, and Prospectus Discipline Where ECM admission involves a public or private offering, Kuwait’s dealing-in-securities regime applies. This includes mandatory CMA approval of the prospectus, which must disclose business risks, financial history, governance structures, management details, related-party transactions, and use of proceeds. Where share premiums or fair value are relevant, a valuation report must be prepared by a CMA-licensed investment advisor or asset valuator, setting out the methodology and basis of valuation. In public offerings, allocation safeguards apply, including subscriber withdrawal rights where free-float or shareholder-dispersion thresholds are not met upon allocation. These mechanisms embed pricing discipline and investor confidence into ECM transactions and support orderly capital formation. Governance and Disclosure Obligations Post-Listing ECM issuers are listed companies and are therefore subject to ongoing governance and disclosure obligations. These include compliance with general assembly procedures covering advance notice, agenda disclosure, authenticated minutes, and shareholder participation; transparent board-nomination and election processes with advance disclosure of candidates and their executive or independent status; and the implementation of core governance controls, including board oversight of executive management, an Audit Committee reporting to the board, a risk-management framework, and the appointment of a Compliance Officer or outsourced equivalent. ECM issuers must also comply with periodic financial-reporting obligations, including the publication of annual and semi-annual financial statements audited by CMA-registered auditors, subject to rotation and notification requirements. Failure to meet reporting or governance obligations may trigger trading suspension, disciplinary action against the board, or, where deficiencies persist, delisting. Addressing Structural SME Challenges Through ECM Listing The ECM is designed to address recurring structural challenges faced by SMEs. From a financing perspective, it provides a regulated platform for equity fundraising and access to future capital-market instruments, reducing reliance on bilateral bank financing. From a human-capital perspective, ECM-listed companies are better positioned to implement employee equity and incentive plans within a defined legal and disclosure framework. From an operational standpoint, mandatory reporting cycles, audit oversight, and disclosure controls drive stronger internal controls, financial discipline, and risk management. Institutionally, baseline governance and transparency standards enhance credibility and engagement with investors, lenders, and strategic counterparties. Role of Licensed Market Participants ECM listings rely on coordinated input from licensed market participants. A Listing Advisor, licensed by the CMA to carry out investment-advisory activities for listing purposes, guides the issuer through eligibility assessment, documentation, governance uplift, and regulatory interfaces. Where valuation is required, a CMA-licensed investment advisor or asset valuator provides the valuation report supporting fair value or share premium. Issuers must appoint CMA-registered auditors to anchor financial reporting, and, where offerings are involved, subscription agents and underwriters may be engaged to manage allocation and book-building mechanics. The KSE manages the application intake and recommendation process, while the CMA exercises approval, supervision, and enforcement authority. Practical Legal Workstreams for ECM Readiness From a practical legal perspective, ECM readiness typically involves a structured work plan covering eligibility and free-float gap analysis; review of shareholder agreements and transfer restrictions; governance and committee structuring; coordination of prospectus and valuation documentation; capital-increase approvals and management of pre-emptive rights; audit readiness and IFRS alignment; and establishment of a post-listing compliance calendar covering reporting, disclosures, and general assemblies. Early legal and governance structuring significantly reduces execution risk and regulatory friction during the listing process. Conclusion The Emerging Companies Market represents a calibrated and credible entry point into Kuwait’s capital markets for SMEs with sustainable growth ambitions. By combining proportionate admission standards with enforceable governance and disclosure obligations, the ECM offers a legally robust platform for capital formation, valuation transparency, and institutional credibility. For companies considering ECM admission, early engagement with a Listing Advisor, disciplined governance preparation, and structured legal readiness are essential to achieving a smooth listing and sustaining long-term compliance as a public company. Authors: Mohammed Al Awadhi, Legal Director and Fahad Al Zouman, Trainee Lawyer

Kuwait has taken a significant leap toward modernizing its notarization system with the issuance of Decree Law No. 147 of 2025, which amends provisions of Law No. 10 of 2020 on notarization. The new law unveils structural reforms that impact how a power of attorney (POA) is granted, renewed, and authenticated in Kuwait. This legislative update doesn’t just strengthen but also shifts the country to align with global best practices in documentation and E-governance. The reform aims to reduce miss use of indefinite authorizations while ensuring periodic verification of representation rights and accelerating Kuwait’s transition toward digital legal services. The Key Changes Include A five-year limit on the validity of all new Powers of Attorney. The automatic expiration of pre-existing POAs within two years. The formal recognition of electronic signatures as legally binding and enforceable. The Decree applies to the following All new Power of attorneys Existing notarized powers executed before the decree’s issuance, which remain valid for only two years from the date the law takes effect. Electronic notarization systems approved by the Ministry of Justice and related government entities. After the expiry of the transitional two-year period, any old power of attorney not renewed in accordance with the new law will automatically lose validity. Key Legal additions under Article 2 of the Decree Article 2 of Decree Law No 147 of 2025 adds two new articles to Law 10 of 2020 which are Article 5 bis and Article 9 bis which represent the foundation of the reform. Article 5 bis states that “Except for commercial agencies and any agencies exempted by decision of the Minister of Justice, a power of attorney shall be valid for five (5) years unless a shorter term is agreed or the agency terminates for another reason. The notarization shall specify the expiry date. The expiration of the notarization period shall not affect the validity of the agency between the parties”. This addition is designated to prevent endless delegation of authority and ensure that representation rights are periodically renewed reducing outdated authorizations. While Article 9 states that “The concerned parties or their representatives may appear before the notary in person, through the accredited electronic system, or by visual connection using modern or electronic means. The implementing regulation shall prescribe the procedures for each case, determine when personal attendance is required or remote appearance permitted, and regulate the manner of recording and evidencing such notarizations in the official registers and all other related provisions”. This addition established legal infrastructure for full digital notarization, in line with Kuwait’s shift toward online government services and paperless documentation. Why legal practitioners should take note The reform closes loopholes created by issuing lifetime power of attorney. Clients can now sign and validate documents remotely through secure electronic systems. Lawyers and companies must review and renew all existing power of attorney before the two-year deadline. Firms that adapt early can guide clients through renewals, reducing risk exposure and maintaining validity of representation. Conclusion The introduction of Decree law No.147 of 2025 marks a pivotal moment in Kuwait’s notarization framework. By limiting the duration of Powers of Attorney, mandating renewal and embracing electronic and remote notarization, the law stabilizes legal certainty with technological progress. These amendments especially the additions to article 2 promote accountability and prevent misuse of indefinite authorizations and modernize how legal documents are executed and authenticated. Critically, these reforms are set to significantly streamline national projects across Kuwait by fostering greater efficiency and transparency in legal processes. This digital transformation directly supports the ambitious objectives of Kuwait Vision 2035, positioning the country as a leader in digital legal services and contributing to sustainable economic development. For practitioners the reform presents an opportunity to lead clients into an era of digital security and transparent documentation aligning with the nation’s strategic future. Authors: Asad Ahmad, Legal director and Ahmed Al Buaijan, Trainee Lawyer