Kuwait reforms real estate, tax and economic laws to boost investment

Kuwait’s institutional economic transformation is being anchored in a comprehensive update of its legislative framework amid rapid global challenges, shifting production and investment models, the move towards a digital economy, and intensifying regional competition for capital.

The modernisation drive has gained prominence as a central structural reform tool aimed at aligning the legal environment with global sustainable development goals for 2030 and Kuwait Vision 2035.

Kuwait legal reform

As part of efforts to support innovation and entrepreneurship, the cabinet in November approved a draft law regulating digital commerce.

The legislation establishes an enabling environment for digital business models and introduces regulatory sandboxes to allow innovators to safely test products and services before commercialisation.

It also sets an integrated protection framework covering privacy safeguards, clear terms and conditions and effective dispute resolution mechanisms, enhancing confidence in electronic transactions and promoting a safer, more transparent digital trade sector.

This draft law is described by officials as a milestone in legal modernisation, providing comprehensive digital commerce regulation while balancing economic freedom with necessary oversight to enhance investment attractiveness in the digital economy and support sustainable development objectives.

Financial regulations

In parallel, Decree-Law 60 of 2025 on financing and liquidity was issued in March to reinforce financial stability and support economic growth in line with Kuwait Vision 2035.

The law sets a public debt ceiling of KD30bn ($98bn) and allows the issuance of financial instruments with maturities of up to 50 years.

Remaining valid for 50 years, the decree gives Kuwait increased fiscal flexibility to access local and international markets and improve liquidity management, according to the then Minister of Finance and Minister of State for Economic Affairs and Investment.

Officials describe it as an important step in building a more diversified and sustainable economy serving both the state and its citizens.

To enhance transparency in real estate transactions, Minister of Justice Counselor Nasser Al-Sumait issued Decision 194 of 2025, regulating payment values and cash considerations in official deeds, contracts, debt acknowledgements and mortgages issued by the Ministry of Justice.

The decision requires proof of payment through bank transfers or certified cheques, supporting anti-money laundering efforts, limiting fictitious mortgages and debt acknowledgements, closing legal loopholes previously exploited for unlawful transactions, protecting buyers and sellers from fraud and sham sales, and strengthening financial oversight.

Kuwait real estate laws

August saw Decree Law 89 of 2025 amend provisions of Law 118 of 2023, known as the real estate developer law, granting developers greater flexibility to offer diverse housing products tailored to different family needs, capacities and unit sizes, supporting market responsiveness and housing supply diversity.

In January 2025, the Ministry of Finance issued executive regulations for the decree law on the tax on multinational enterprise groups, clarifying legal provisions, defining procedures and implementation mechanisms, enhancing transparency, and providing clear guidance to stakeholders in line with international standards.

Preliminary estimates indicate the tax could generate KD250m ($815m) in annual revenues, strengthening the state’s capacity to build a resilient, sustainable economy capable of addressing future challenges.

To safeguard financial security and bolster anti-money laundering, the cabinet in December 2025 approved a draft decree law adding Article 12 bis to Law 111 of 2013 on commercial shop licensing, criminalising alternative remittance systems — practices deemed among the most dangerous illegal financial activities and serious threats to Kuwait’s financial stability.

Tax guidelines

Legal experts told the Kuwait News Agency that legislation is not just a regulatory framework but a decisive factor shaping the investment climate and guiding economic behaviour.

Dr Ali Al-Mutairi, Dean of the College of Administrative Sciences at Kuwait University, said reviewing existing legislation aims to create a modern legal environment aligned with comprehensive development needs, strengthens transparency and accountability in government institutions, achieves social justice and equality before the law, and ensures sustainable stability.

Dr Al-Mutairi noted that economic laws supporting sustainable growth — particularly in investment, trade, taxation, labour and small and medium enterprises — reduce legal and procedural risks for investors, enhance entrepreneurship and innovation, improve market efficiency through fair competition and curb monopolistic practices.

He added that academic studies emphasise the urgent need for continuous updates to economic legislation to respond to digital transformation and economic globalisation, with legislative amendments acting as a key driver of growth rates, job creation and productivity.

Meanwhile, Ahmad Al-Tuhaih, Vice Chairman of the Kuwait Economic Society, highlighted the importance of updating the legislative structure to keep pace with global economic developments.

Economic reform

He described the government’s approach as signalling a new phase of institutional reform aligned with global trends and Kuwait’s development vision, stressing that balancing social, criminal and economic pillars reflects a comprehensive strategy.

Al-Tuhaih expressed hope for further economic legislation, including establishing an economic court and reviewing pivotal laws such as the Commercial Companies Law, the Direct Investment Promotion Law and the Public-Private Partnership Law — laws he said form the backbone of Kuwait’s business environment.

He emphasised that simplifying procedures, expanding governance and transparency, updating competition and anti-monopoly laws, and aligning labour market legislation with market needs would secure sustainable revenues without undermining economic attractiveness.