<p>A new companies law has been passed in Kuwait which provides a more  realistic and practical perspective than the previous companies law. The  issuance of such new companies law can be regarded as progress as it  reforms the outdated practices and offers investors a more attractive  investment environment, which will positively affect the economy in  Kuwait. Law No. 25 of 2012 Promulgating the Companies Law was published  in the official gazette &ndash; (Al Kuwait Al Youm) on 29 November 2012 (the  &ldquo;Companies Law&rdquo;).&nbsp;</p>
<p>A high level review of the Companies Law demonstrates that such new  law provides more details and clarity than the previous one. Further, it  provides guidance in relation to certain matters, as the previous law  was silent on various areas (i.e. shareholders&rsquo; agreement) and such non  codification often resulted in investors facing uncertainty and thereby  triggering their hesitance to invest in Kuwait.&nbsp;</p>
<p>The Companies Law provides more types of companies that can be  established in Kuwait, such as the incorporation of non-profit  companies. Non profit companies are now permissible under the Companies  Law in order to undertake a social role, along side the commercial  companies, which is going to benefit the social function of Kuwait.  Moreover, new forms of companies have been introduced in the Companies  Law, such as a sole person company and the professional companies.  Professional companies may take the form of a closed shareholding  company, limited partnership or a company with limited liability.&nbsp;</p>
<p>Further, the Companies Law also has changed some provisions with  respect to holding companies, as under the Companies Law holding  companies may take the form of a closed shareholding company, a limited  liability company or a sole person company.&nbsp;</p>
<p>With respect to the incorporation procedures of companies, it is  acknowledged that the process for starting a business in Kuwait is  lengthy and complicated thereby hindering commerce and the establishment  of new companies. To address this issue, the Companies Law has adopted  what is known as the one window system for finalizing the procedures of  incorporating companies. Procedures of incorporating companies shall be  completed through a special department for this purpose at the Ministry  of Commerce and Industry, which comprises representatives of the  concerned government bodies to ensure prompt finalization of the  incorporation procedures. The aim of the Companies Law is to facilitate  the entire process, while encouraging more investors to establish  companies in Kuwait.</p>
<p>In light of the above, the Companies Law is a welcomed reform that  should have a positive impact on investments in Kuwait and the Kuwaiti  economy overall.</p>