Kuwait has passed a significant amendment to its real estate ownership laws. It provides non-Kuwaitis the right to inherit property and own real estate under certain conditions. Law No. 7 of 2025, published in Kuwait Today, amends Decree-Law No. 74 of 1979. The previous law restricted non-Kuwaitis from owning property in Kuwait, including full ownership, usufruct rights, and public ownership.
The key changes introduced by Law No. 7 of 2025 are as follows:
- Inheritance Rights for Non-Kuwaiti Heirs:
Non-Kuwaiti heirs, specifically those who inherit property from a Kuwaiti mother, are now allowed to inherit full ownership of the property. This change marks a shift in the law, which was previously restrictive in terms of property inheritance by non-Kuwaitis. - Mandatory Sale of Inherited Property:
While non-Kuwaitis can now inherit property, the law mandates that any inherited property must be sold within two years. This is unless the heir is granted a special decree allowing them to keep the property. If the property is not sold within the specified period, it will be forcibly sold. However, this does not apply to Arab nationals, diplomatic missions, or citizens of the Gulf Cooperation Council (GCC) countries, who are treated as Kuwaitis under certain legal conditions. - Restrictions on Commercial Companies:
The law prohibits commercial companies with non-Kuwaiti partners from owning real estate. Companies where a Kuwaiti partner’s share is transferred to a non-Kuwaiti must dispose of any real estate they own within one year. If the company fails to comply, the property will be forcibly sold. This restriction also applies to companies with non-Kuwaiti partners who intend to own property for real estate speculation. - Exceptions for Joint-Stock Companies:
Joint-stock companies with non-Kuwaiti participation may own real estate necessary for their operations. This is provided that their primary purpose does not include real estate transactions. This ownership is permitted only if a special decree is granted for the company to do so. The real estate must be directly related to its business activities. - Exemptions for Arab Nationals:
The new law introduces an exemption for individuals of Arab nationality, allowing them to retain inherited property from their Kuwaiti mother without the need to sell it. This exception is outlined in the amendment to Article 4 of Decree-Law No. 74 of 1979. - Investment Entities and Real Estate Funds:
The amendment also permits companies, real estate funds, and investment portfolios with non-Kuwaiti partners to own real estate. This is allowed provided that their primary purpose includes real estate dealings. The law mandates that non-Kuwaiti partners receive their share of the company’s assets in cash. In-kind shares must be exclusively distributed to Kuwaiti partners. - Regulations for Investment Entities:
Investment entities licensed under Kuwait’s Direct Investment Promotion Law are allowed to own real estate necessary for their operations. However, this is only if the real estate is not intended for speculation. Specific rules and regulations will govern these transactions. These will be determined by a future decree. - Public Order and Judicial Oversight:
The law categorizes any violations of its provisions as matters of public order. Transactions that violate the law will be deemed null and void. Courts are empowered to independently rule on such violations. Any interested party can request a judicial ruling to declare these transactions invalid.
The introduction of Law No. 7 of 2025 and the accompanying amendments marks a significant shift in Kuwait’s real estate ownership regulations, particularly in relation to non-Kuwaitis. By providing non-Kuwaiti heirs the right to inherit and own property, as well as offering exceptions for investment entities, the law aims to balance property ownership rights with national interest and public order considerations. Furthermore, the law establishes clearer guidelines for commercial companies and investment funds with non-Kuwaiti participation, reflecting Kuwait’s evolving legal landscape.
