Ministry of commerce and Industry
Ministerial resolution no. (205) for year 2000
Concerning regulating the participation of non-Kuwaitis
In the Kuwaiti shareholding companies
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Referring to the commercial companies law issued in the law no. 15 for year
1960 and all amended laws thereto;
And persual to the law no. 32 for year 1968 concerning the monetary and the
Central Bank and the monetary profession and all amended laws thereto;
And persual to the Amiree Decree no. 31 for year 1990 with regards to regulating
the trading in securities and the establishment of mutual funds;
And following the law no. 2 for year 1999 concerning the promulgation of interests
in securities in the shareholding companies.
And following the law no. 20 for year 2000 relevant to the approval for non-Kuwaitis
to own securities in Kuwaiti shareholding companies.
And persual to the Decree issued in August 14 1983 concerning organizing Kuwait
Stock Exchange.
And following the Decree issued on August 8, 1984 governing registration of
brokers and their assistants in Kuwait Stock Exchange.
And relating to the Decree issued on December 27 1986 with regards to organizing
the settlement of the trading activity and the Clearing Company in the Kuwait
Stock Exchange.
And following the internal bylaws of Kuwait Stock Exchange issued by the ministerial
resolution no. 25 for year 1983.
And after the ratification of the Council of Ministers. It has been decided
upon the following:
Article (1)
In implementing the jurisdiction of this resolution, the following terms and
expressions indicated will have the confronting meaning:
• Non-Kuwaitis: Any individual person or company (entity) not carrying
the Kuwaiti nationality and is investing his capital in Kuwait shareholding
companies.
• Shareholding Companies: Kuwaiti Shareholding Companies enlisted in Kuwait
Stock Exchange and which non-Kuwaitis own shares in or may attain approval to
participate in its establishment.
• Trading: Buying and selling shares of shareholding companies enlisted
in Kuwait Stock Exchange according to the provisions dealt with in the Exchange.
• Establishment: The right to establish shareholding companies through
participating in its establishment where subscription in its capital is considered
as establishment.
• Clearing and Settlement: Settling liabilities accrued on all procedures
undertaken in Kuwait Stock Exchange and specifying the position of parties through
the Clearing Chamber.
• Ownership and Consolidated Management: Any economic or juristic affiance
through ownership or management, and is considered as a kind of consolidated
ownership and management:
1 - Anything owned from shares in the shareholding companies by the investor
personally or being a guardian for his minors.
2 - Anything acquired by the individual establishment owned by the investor
and the companies that are affiliated partners in.
3 - Financial companies owned by the investor exceeding 50% percent of it’s
capital or those that are under his domination and that is according to what
is specified by the IAS.
4 - Any economic or juristic relation associated to the investor granting him
the right to dominate over and that is according to what is specified by the
IAS.
• Overlaping interests: Any interest that may permit one party to dominate
over or to excersice impressive influence over another party in the event of
taking financial and operative decisions. This will be according to the following:
1 - The relation-ship between the investing company’s Board of Directors
and the principal shareholders and owners, i.e., anyone that possess 5% or more
of the capital.
2 - Distinctive management parties in the investing company (manager of the
executive team and the deputy executive manager, his assistants and the executive
managers and all managers with corresponding degree).
3 - Subsidiary companies which the investor owns more than 50% of it’s
capital or dominates over.
4 – Associated companies which means companies that the investor owns
20% of its capital and has impressive influence (effect) over.
Article (2)
With consideration of the jurisdiction of article no. 3 of this resolution
it is permitted for non-Kuwaitis to own and trade shares of shareholding companies
listed in Kuwait Stock Exchange according to the regulation indicated in this
resolution. They will also be granted the permission to join in establishing
public shareholding companies according to the determined procedures in this
regards applied to Kuwaitis in this regards.
Article (3)
The non-Kuwaiti investor shall be permitted to own and to trade in bank share.
He will be conditioned to attain the approval of the Central Bank of Kuwait
if this investor wishes to own more than 5% of the capital of any bank. This
applies to any individual or group of investors connected by juristic or economic
means either by mutual ownership or by consolidated management or by joint interest
will be considered as a single investor entity. It is prohibited for non-Kuwaiti
investors to exceed the ownership of 49% in the capital of any individual bank,
except after attaining a preceding approval from the Council of Ministers, and
after consulting of the Central Bank of Kuwait.
Article (4)
Trading in shares which are allowed for non-Kuwaitis to own, will be through
the brokers registered at the Kuwait Stock Exchange according to the provisions
governed at the Exchange.
Article (5)
It is prohibited for non-Kuwaitis to buy or sell shares which are permitted
for them to own outside the premises of Kuwait Stock Exchange. It is also prohibited
for companies whose shares are sold and bought to register any trading action
outside the Exchange to registering transaction in its records, accordingly.
Article (6)
Companies which acts as portfolio managers will be required to provide the
Kuwait Stock Exchange with a monthly report comprising the selling and buying
activity it had undergone through for each non-Kuwaiti client. The Exchange
Administration will have the authority to investigate over the authenticity
of those reports if it sees necessary.
Article (7)
Non-Kuwaitis will have the privilege of voting and nominating rights in the
shares they own in the Kuwait shareholding companies in addition to the rights
guaranteed by law for shareholders in those companies.
Article (8)
Aside from what has been mentioned above all laws, Decrees, bylaws, resolutions,
regulations and provisions carried out at the Kuwait Stock Exchange with relation
to trading in securities, settling liabilities, transfer of ownership and announcements
of interest in shareholding Companies will be applied to non-Kuwaiti investors.
Article (9)
Kuwait Stock Exchange will handle within specialized area all operations conducted
for the account of non-Kuwaitis on shares listed in the Exchange as well as
analyzing and studying the effect of these operations on the performance of
the market.
Article (10)
This resolution will be published in the official bullet and should be enforced
from the date of its publication.
Minister of Commercial and Industrial
And Minister of Social Affairs and Labour
Adul wahab Al-Wazan
Issued on : 7 Jamady Alukhra 1421 H.
5 September 2000
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