Ministry of Commerce and Industry Resolution No. 180 of 2020 Issuing the Regulation of Professional Companies for Accounting Services and Auditing

Ministry of Commerce and Industry Resolution No. 180 of 2020
Issuing the Regulation of Professional Companies for Accounting Services and Auditing

Chapter One – Definitions

Article 1

The following words, wherever they appear in this Regulation, shall have the meanings set out opposite each of them:
1- The Law: Companies Law No. (1) of 2016.
2- The Regulation: the Executive Regulations of Professional Companies for Accounting Services and Auditing.
3- The Minister: the Minister of Commerce and Industry.
4- The Ministry: the Ministry of Commerce and Industry.
5- The Association: the Kuwait Accountants and Auditors Association.
6- The Competent Department: the department in charge of auditing affairs at the Ministry.
7- The Profession: the profession of providing accounting services or auditing.
8- The Licence: the document issued by the Ministry, or by the Authority with respect to the activities of asset valuation and investment adviser, in accordance with the provisions of the Law, which entitles its holder to practise the profession of providing accounting services or auditing through a professional company.
9- Registration: the annotation in the register of the registration of accountants and auditors.
10- Accountant: the natural or juristic person registered in one of the registers and holding a valid licence to practise the Profession.
11- Auditor: the natural or juristic person registered in one of the registers and holding a valid licence to practise the Profession.
12- The Professional Register of Accountants: a register kept with the Kuwait Accountants and Auditors Association in which professional companies for accounting services are registered.
13- The Professional Register of Auditors: a register kept with the Kuwait Accountants and Auditors Association in which professional companies for auditing are registered.
14- Professional Company for Accounting Services: a company having an independent juristic personality, established by two or more persons – according to the form of the company – from among the persons legally licensed to practise the profession of providing accounting services, and whose object is to practise that profession.
15- Professional Company for Auditing: a company having an independent juristic personality, established by two or more persons – according to the form of the company – from among the persons legally licensed to practise the auditing profession, and whose object is to practise that profession.
16- The Authority: the Capital Markets Authority.
17- The Authority’s Law and its Executive Regulations: Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and the Regulation of Securities Activities, and the laws amending it, and its Executive Regulations.
18- Investment Adviser: a juristic person licensed by the Authority that provides investment advice relating to securities in return for a commission.
19- Asset Valuer: a juristic person licensed by the Authority to carry on the activity of valuing assets and contributions in kind, provided that one of its partners is an auditor registered in the special register kept with the Authority, and that it complies with the provisions of the Companies Law and its Executive Regulations.

* Clause (8) amended, and Clauses (16), (17), (18) and (19) added, by Ministerial Resolution No. 118 of 2021 (Kuwait Al-Youm, Issue No. 1540, 20 June 2021).

Chapter Two – General Provisions

Article 2

Kuwaiti accountants registered in the Register of Practitioners of the Profession at the Ministry may establish professional companies for accounting services in order to carry on the activities of bookkeeping and preparing financial statements, financial and accounting consultancy, stocktaking and inventory control, asset valuation, internal audit, and liquidation work, after submitting a certificate from the Association.
Kuwaiti auditors registered in the Register of Practitioners of the Profession at the Ministry may also establish professional companies for auditing in order to carry on the activities of reviewing and auditing accounts, review and audit for the preparation of financial disclosure statements for tax purposes, asset valuation, and liquidation work, after submitting the Association’s certificate.
The activities of asset valuation and investment adviser may not be carried on except after obtaining a licence from the Authority specifying the activity or activities licensed.
Only financial consultancy companies shall be exempted from the oversight of the Association and from the requirement to obtain its approval.
Commercial companies may not be established to provide accounting services, auditing work, or financial or accounting consultancy.

* Replaced by Ministerial Resolution No. 118 of 2021 (Kuwait Al-Youm, Issue No. 1540, 20 June 2021), and then by Ministerial Resolution No. 159 of 2025 (Kuwait Al-Youm, Issue No. 1752, 17 August 2025).

Article 3

The application for registration in the Register of Practitioners of the Profession at the Ministry for the Kuwaiti accountants referred to in the preceding Article shall be submitted on the form prepared for this purpose by the Competent Department, accompanied by the following:
1- A copy of the civil identity card or its equivalent.
2- The university degree certificate in the field of accounting from one of the universities recognised and accredited in the State.
3- That the applicant be of good conduct and reputation.
4- A criminal record certificate.
5- A certificate from the Competent Department that no disciplinary decisions have been issued against the applicant for registration within a period of not less than five years from the date of their entry into force.
6- A certificate of practical experience in the field of accounting and auditing of not less than five years after obtaining the degree.
7- A valid membership certificate of the Association.

Article 4

The application for registration in the Register of Practitioners of the Profession at the Ministry for the Kuwaiti auditors referred to in the preceding Article shall be submitted on the form prepared for this purpose by the Competent Department, accompanied by the following:
A- A certificate of registration of all partners in the Register of Practitioners of the Profession.
B- A professional risk insurance policy in accordance with the brackets referred to in Article (22) of this Regulation.

Article 5

The professional company for accounting services or the professional company for auditing shall take one of the following forms of company:
1- General partnership.
2- Closed shareholding company.
3- Limited partnership.
4- Limited liability company.

Article 6

The professional company for accounting services or the professional company for auditing shall be named after one or more of its partners, or shall adopt an invented name for carrying on its activity, according to the form of the company. In all cases, the name of the professional company shall be followed by the phrase “professional company for accounting services” or “professional company for auditing”, subject to submitting the Association’s certificate.

Article 7

The professional company for accounting services or the professional company for auditing shall be subject to the supervision of the Kuwait Accountants and Auditors Association, with which a special professional register shall be established in which professional companies for accounting services are registered, and a special professional register in which the professional companies for auditing established in accordance with the provisions of the Law, the aforementioned Executive Regulations and this Regulation are registered. The following particulars shall be entered therein:
1- The name and address of the company.
2- The names and domiciles of the partners.
3- The number and type of shares or interests owned by each partner, and the value paid for each share or interest.
4- The names of the managers or the board of directors, and their powers.
5- Any changes to the particulars recorded in the Register of Practitioners of the Profession.
The Kuwait Accountants and Auditors Association may issue certificates of the particulars entered in the register referred to in the preceding paragraph.

Article 8

The Ministry shall have competence to license the establishment of the professional company for accounting services or the professional company for auditing in accordance with the procedures and controls laid down in the Law, the aforementioned Executive Regulations and this Regulation.
The Authority shall have competence to license the establishment of the professional company for accounting services or the professional companies for auditing with respect to the activities of asset valuation and investment adviser, in accordance with the procedures and controls laid down in the Authority’s Law and its Executive Regulations.
The professional company shall be registered in a special register for it at the Ministry called the Professional Register of Accountants or the Professional Register of Auditors, and the professional company shall not acquire juristic personality or commence its business except after its registration in that register.
The professional company shall be registered in the Register of Practitioners of the Profession at the Association, and the professional company shall not acquire juristic personality or commence its business except after its registration in those registers.

* Replaced by Ministerial Resolution No. 118 of 2021 (Kuwait Al-Youm, Issue No. 1540, 20 June 2021).

Article 9

The company shall provide the Ministry with a copy of its memorandum of association, its financial statements, and the minutes of its general meetings or of the partners’ meeting, as the case may be.

Chapter Three – Conditions of Establishment

Article 10

The application for the establishment of the professional company for accounting services or the professional company for auditing shall be submitted to the Kuwait Business Centre (One-Stop Shop), accompanied by the certificate of the Kuwait Accountants and Auditors Association, the preliminary approval of the Authority with respect to the activities of asset valuation and investment adviser, and the registration certificate of the accountant or the auditor, as the case may be. The establishment of the professional company for accounting services or the professional company for auditing shall be subject to the same procedures prescribed for the form it takes.

* Replaced by Ministerial Resolution No. 118 of 2021 (Kuwait Al-Youm, Issue No. 1540, 20 June 2021).

Article 11

The company contract shall include the following particulars:
1- The name and address of the company.
2- The head office of the company.
3- The object of establishing the company.
4- The term of the company, if any.
5- The names, titles, nationalities and academic qualifications of the partners, and the place of residence of each of them.
6- The manner of managing the company, the persons responsible for management, and their powers.
7- The amount of the capital and the share of each partner, and a statement of each non-cash contribution, its nature, the value at which it was valued, the name of the person who contributed it, the conditions of its contribution, and the rights of pledge and lien attaching to it, if any.
8- The provisions on distributing the return among the partners.
9- The financial year of the company.
10- The provisions on the liquidation of the company and the division of its assets.
11- The conditions of appointing the manager, his powers, remuneration, the term of his management of the company, and the manner of his removal.
12- The manner of distributing profits and the returns of contracts.

Article 12

The memorandum of association of the professional company or its articles of association, publicised in accordance with the provisions of the Law, the aforementioned Executive Regulations and this Regulation, may not be invoked against third parties except after the company has been registered in the Register of Practitioners of the Profession at the Ministry and in the Professional Register of Accountants or of Auditors at the Association. However, if the lack of publicity is limited to one or more particulars of either of them, those particulars alone shall not be enforceable against third parties.

Article 13

Without prejudice to the provisions of Article (29) of this Regulation, the term of the licence of the professional company for accounting services or the professional company for auditing shall be (4) four years from the date of its issuance. This term shall be linked to the renewal of the partners’ registration in the Register of Practitioners of the Profession at the Ministry, and subject to the licensee submitting the financial statements within the legally prescribed time limits. In the event of breach of this obligation, the provisions of Article (11) of Law No. 111 of 2013 on Commercial Shop Licences shall apply.

Article 14

The capital of the professional company for accounting services or the professional company for auditing, whatever the form it takes, may not be less than KWD 10,000 (ten thousand Kuwaiti dinars).

Chapter Four – Management of the Professional Company for Accounting Services or the Professional Company for Auditing

Article 15

A professional shareholding company for accounting services or auditing shall be managed by a board of directors composed of a number of shareholders registered in the Register of Practitioners of the Profession at the Ministry. The company’s articles of association shall determine the powers of the board and the provisions relating to its formation.
The powers of the board of directors of the professional shareholding company may not include anything that prejudices the independence of the shareholders in practising the profession of providing accounting services or auditing.

Article 16

A general partnership, limited partnership or limited liability company shall be managed by one or more of the partners registered in the Register of Practitioners of the Profession at the Ministry. If there are several managers and the company contract does not provide for a specific rule, decisions shall be taken by an absolute majority of them. In the event of a tie, the managers shall refer the matter to the partners for decision, and approval shall be by a majority of the partners.
The powers of the manager – in professional general partnerships, limited partnerships and limited liability companies – may not include anything that prejudices the independence of the partners in practising the profession of providing accounting services or auditing.

Chapter Five – Rights and Duties of the Partners

Article 17

A partner or shareholder in a professional company for accounting services may not be a partner or shareholder in another company practising the profession of providing accounting services.
Nor may a partner or shareholder in a professional company for auditing be a partner or shareholder in another company practising the auditing profession.

Article 18

Each partner or shareholder in the professional company for accounting services or the professional company for auditing shall be personally liable for his professional errors towards the company and the other partners or shareholders, as the case may be, and the company shall be liable for the errors of the partners towards third parties, subject to the laws and executive regulations referred to.

Chapter Six – The Company’s Exercise of its Activity

Article 19

The professional company for accounting services or the professional company for auditing shall not carry on its activity except through its licensed partners or shareholders. However, the professional company may engage in its work persons licensed to practise the Profession, provided that they are subject in doing so to the supervision and responsibility of the company.

Article 20

The professional company for accounting services or the professional company for auditing shall be confined to practising the profession that is the subject of its activity only, and it may not carry on commercial business or participate through the establishment of commercial companies or other professional companies for accounting services or auditing. However, it may own financial and real estate assets to serve its objects.

Article 21

The professional company may engage employees, whether Kuwaitis or others, under the supervision and responsibility of the company, under employment contracts in accordance with the requirements of Law No. (6) of 2010 on Labour in the Private Sector.

Article 22

The professional company for accounting services or the professional company for auditing shall not be granted a licence to carry on the activity except after submitting an insurance policy concluded with local or international insurance companies having branches in the State of Kuwait to compensate for professional errors committed by the partners, shareholders or employees of the company, provided that the validity of this policy extends for a period of six months after the expiry of the company contract, and that it is renewed throughout the term of the company.
The professional risk insurance policy shall be in accordance with the following brackets:
KWD 250,000 (two hundred and fifty thousand Kuwaiti dinars).
KWD 500,000 (five hundred thousand Kuwaiti dinars).
KWD 750,000 (seven hundred and fifty thousand Kuwaiti dinars).
KWD 1,000,000 (one million Kuwaiti dinars).
Insurance against the professional risks of accounting services or auditing shall be taken out with licensed insurance companies. The professional company for accounting services or the professional company for auditing may choose among the insurance brackets set out in this Article, and shall be obliged to disclose the insurance policy to clients and to display it in a conspicuous place.
The insurance company shall notify the insured professional company for accounting services or professional company for auditing, and the Kuwait Accountants and Auditors Association, no later than two months before the expiry of the insurance policy.

Chapter Seven – Loss by a Partner of the Licence to Practise the Profession, or his Withdrawal or Death

Article 23

If a partner or shareholder in the professional company for accounting services or the professional company for auditing temporarily loses the licence to practise his profession, or a disciplinary or criminal judgment is issued against him barring him from work for a temporary period, he shall refrain from working in the company – immediately and completely – until he regains the licence or the period of the bar ends.
The professional company for accounting services or the professional company for auditing shall terminate if the company is reduced – for any reason whatsoever – to a single partner, unless that partner, within (6) six months from the date of the loss or the bar, takes steps to admit one or more other partners to practise the same activity.

Article 24

If a partner or shareholder in the professional company for accounting services or the professional company for auditing permanently loses the licence to practise his profession, he shall thereby be deemed to have withdrawn from the company, while retaining his percentage of the returns of the contracts concluded with the company’s clients until the issuance of the financial statements for the financial year following his loss of the licence.

Article 25

In the event of the withdrawal or death of the partner after whom the professional company is named or whose name appears in its name, the name of the company shall be amended within (6) six months from the date of the withdrawal or death. The company may continue to bear his name or include it in its name with his written consent or the written consent of his heirs, as the case may be.

Article 26

If one of the partners or shareholders in the professional company for accounting services or the professional company for auditing dies, the company shall continue among the remaining partners, and his share shall pass to his heirs after it has been valued in accordance with Article (11) of the aforementioned Companies Law as at the date of the partner’s death, unless otherwise agreed among the partners or shareholders.

Article 27

It may be provided in the memorandum of association of the professional company for accounting services or the professional company for auditing, or in a special agreement between one or all of the heirs of the deceased partner or shareholder and the remaining partners in the company, that one of the heirs of the deceased partner shall take the place of his predecessor’s share in the company if he is licensed to practise the profession of providing accounting services or auditing.

Chapter Eight – Withdrawal or Assignment of Interests, and the Right of Redemption

Article 28

Withdrawal, assignment, sale or pledge shall be effective against third parties after being annotated in the Register of Practitioners of the Profession at the Ministry and in the Professional Register of Accountants or of Auditors at the Association.

Article 29

Subject to the aforementioned Companies Law, a partner may assign, sell or pledge his interests or shares, provided that in all cases they pass to a practitioner of the same profession registered in the Register of Practitioners of the Profession at the Ministry and in the Professional Register of Accountants or of Auditors at the Association, even if they are sold compulsorily.

Article 30

A partner or shareholder who has lost the capacity to practise the profession of providing accounting services or auditing shall be granted a period of (6) six months to assign his interests or shares in the company, failing which the company or the partners shall redeem them, according to the form of the company.
In the event of redemption, the interests or shares shall be valued in accordance with Article (11) of the aforementioned Companies Law. The same rule shall apply to a deceased partner, unless there is among the heirs a person licensed to practise the Profession and the heirs agree that he shall take the place of their predecessor.

Chapter Nine – Conversion, Dissolution and Liquidation of the Professional Company for Accounting Services or the Professional Company for Auditing

Article 31

Subject to the provisions of the aforementioned Companies Law, any company may convert into any of the forms of company referred to in Article (4) of this Regulation, in accordance with the provisions and procedures prescribed for amending the company contract, and provided that at least two financial years have passed since its registration in the Register of Practitioners of the Profession at the Ministry and in the Professional Register of Accountants or of Auditors at the Association.
The conversion of the company shall not take place except after the certificate of the Kuwait Accountants and Auditors Association, the completion of the publicity procedures, and the preparation of a report valuing the company in accordance with Article (11) of the aforementioned Companies Law.

Article 32

The professional company for accounting services or the professional company for auditing shall be dissolved by a decision of the Minister of Commerce and Industry if all the partners lose the conditions for practising the Profession, after a certificate from the Kuwait Accountants and Auditors Association is submitted together with the supporting documents, and it shall be liquidated in accordance with the aforementioned Companies Law.

Article 33

The partners may not agree to dissolve or liquidate the professional company for accounting services or the professional company for auditing before the end of its term except after notifying its clients at least one year before commencing the dissolution and liquidation procedures. The decision of dissolution or liquidation shall not be annotated in the Register of Practitioners of the Profession at the Ministry and in the Professional Register of Accountants or of Auditors at the Association except after attaching proof that each client has been notified individually, together with a detailed statement of the names of the clients, the services provided to them and the work done on them.

Chapter Ten – Final Provisions

Article 34

The professional company for accounting services or the professional company for auditing shall be governed – in matters for which no provision is made, and insofar as this does not conflict with its nature – by the provisions of Companies Law No. (1) of 2016 and the laws amending it and its Executive Regulations, and by the provisions of Law No. (103) of 2019 on the Practice of the Auditing Profession, and shall comply with the Code of Ethics for Professional Accountants issued by the International Federation of Accountants, namely integrity, objectivity, professional competence and due care, confidentiality, and the other fundamental principles and international independence standards set out in the same Code according to the latest editions, insofar as they do not contravene Kuwaiti laws.
A partner or shareholder in the professional company, whatever its form, shall not acquire the capacity of a merchant by reason of his partnership or ownership of shares.

Article 35

A company that has ceased to carry on its activity shall be granted a period of (6) six months to regularise its status in conformity with the provisions of the Law, the aforementioned Executive Regulations and this Regulation. The Minister may extend this period for an equal or longer period if he considers it in the interest to do so. The company shall terminate upon the expiry of the period without regularising its status.

Article 36

Without prejudice to the aforementioned laws and executive regulations, the professional company for accounting services or the professional company for auditing shall not be entitled to obtain more than one licence to practise the Profession or to open branches within the State of Kuwait, and it shall not be entitled to carry on anything other than providing accounting services or auditing.

Article 37

Professional companies for accounting services or professional companies for auditing shall notify the Ministry and the Kuwait Accountants and Auditors Association within thirty days from the date of changing their address.

Article 38

Every decision contrary to the provisions of this Regulation is hereby repealed, and the regulations and decisions in force shall continue to apply insofar as they do not conflict with its provisions.

Article 39

This Regulation shall be published in the Official Gazette and its provisions shall come into force as of 1/1/2021, and the officials, each within his competence, shall implement it.

Issued on 23 November 2020 and published in the Official Gazette Kuwait Al-Youm on 29 November 2020.