Kuwait is advancing Economic Reforms to attract foreign investment, diversify government revenues, and modernize its financial system. During the third quarter of 2026, the government introduced legislative changes and structural measures supporting its long-term development strategy. These initiatives align with Kuwait Vision 2035, which seeks a more sustainable economy and a stronger business environment.
Six major legislative measures address sovereign financing, investment disputes, commercial regulation, company formation, and public financial management. Together, they aim to improve market confidence while expanding opportunities for domestic and international investors. Moreover, the government intends to strengthen the private sector’s contribution to economic growth and reduce reliance on traditional revenue sources.
A key development is Law No. 90 of 2026, which establishes a framework for government sukuk. These Sharia-compliant financial instruments provide Kuwait with an additional option for raising funds alongside conventional borrowing. The law allows sukuk issuance against existing government assets, related operating rights and benefits, as well as assets planned for future provision.
Consequently, the framework could help diversify public financing, broaden the investor base, and support capital market development. The Ministry of Finance also plans to maintain a regular presence in domestic and international markets through an institutional approach to issuance. This strategy aims to strengthen Kuwait’s position as a sovereign issuer while improving the management of government financial obligations.
Another measure, Decree-Law No. 81 of 2026, permits the government to borrow from the Future Generations Reserve to support the State’s General Reserve. The framework allows the use of realized returns on a repayable basis while preserving the fund’s underlying capital. In addition, the government can issue domestic and international debt under the Financing and Liquidity Law, which permits borrowing of up to KD 30 billion.
Kuwait is also pursuing legal changes designed to make commercial and investment disputes easier to resolve. In mid-September, the Cabinet approved a draft decree-law on arbitration, proposing a unified framework informed by international best practices. The proposed system aims to improve neutrality, transparency, and confidentiality while providing greater flexibility for resolving disputes.
Furthermore, the draft allows electronic procedures, hearings, and document exchanges, potentially making arbitration more efficient. The Economic Circuits Law, issued in August, establishes specialized divisions within the Court of First Instance, Court of Appeal, and Court of Cassation. These divisions will handle designated economic, commercial, and investment disputes, with the aim of accelerating proceedings and expanding electronic services.
The government also introduced Decree-Law No. 78 of 2026 to combat commercial concealment. The measure prohibits individuals from enabling others to conduct unlawful economic activities, including through another person’s trade name or commercial licence. It seeks to promote fair competition, improve oversight, and strengthen transparency across commercial activities. However, the law includes safeguards for bona fide third parties and permits reconciliation in certain cases under specified conditions.
Separately, the Cabinet approved draft amendments to Companies Law No. 1 of 2016. The proposed changes seek to simplify company establishment and strengthen confidence in commercial transactions. They would remove the requirement to notarize every company-related legal procedure, allowing signed written documents instead. Registration in the Commercial Register would provide enforceability against third parties.
The amendments would also allow self-employed professionals to establish one-person professional companies. Existing offices and companies would receive one year to regularize their status under the proposed framework. Therefore, the changes could reduce administrative burdens for entrepreneurs and professionals seeking to establish or formalize businesses.
Alongside its legal agenda, Kuwait has launched a four-year program to improve integrity, transparency, and governance in public financial management. Running from April 1, 2026, to March 31, 2030, the program emphasizes institutional effectiveness and human capital development. It also promotes specialized financial knowledge, technological analysis, and better decision-making to support sustainable development.
Meanwhile, the government continues to use capital spending and development projects to stimulate economic activity. It also aims to expand private-sector participation and create additional business opportunities. These priorities form part of a broader effort to strengthen fiscal sustainability while supporting long-term economic diversification.
The draft budget for the 2026–2027 fiscal year includes 433 ongoing projects across ministries and government departments, alongside 101 new initiatives. Public authorities are undertaking approximately 122 additional projects, including 15 new initiatives and 107 ongoing projects. This investment pipeline demonstrates the scale of the government’s development agenda.
Overall, Economic Reforms remain central to Kuwait’s efforts to improve investment conditions, modernize financial governance, and support a more diversified economy. Their long-term impact will depend on implementation, regulatory clarity, and the ability to translate legislative changes into practical improvements for businesses. By combining financing options, streamlined procedures, and public investment, Kuwait aims to strengthen its economic foundations under Vision 2035.
