Legal Disclaimer: This text is published for reference and convenience only. While due care has been taken in reproducing and reviewing it, we accept no liability for any error, omission or inaccuracy that may occur during its transcription or formatting, and it may not reflect subsequent amendments. In all cases, the official text published in the Official Gazette "Kuwait Al-Youm" shall prevail.

Furthermore, this English version is an unofficial translation. We make no representation or warranty as to its accuracy and accept no liability arising from any reliance on it. In the event of any discrepancy or difference in interpretation between the English and Arabic texts, the Arabic text shall prevail.

Law No. 26 of 1995
on Free Zones

Article 1

One or more free trade zones may be established by a resolution of the Council of Ministers, and the resolution issued shall specify the locations and boundaries of those zones.

Article 2

A licence may be granted in the free zones, by a resolution of the Minister of Commerce and Industry, for the following:
(a) The storage and display of goods of any kind, whatever their origin or source.
(b) The carrying out of operations that change the condition of the goods present in the free zones and prepare them in accordance with the requirements of trade movement and market demands.
(c) The practice of any profession needed for the activity and for the services needed by those working within the zones.

Article 3

The entry, storage and display of damaged or prohibited goods in the free zones shall be prohibited, and in the event of a violation the laws and regulations in force shall apply.

Article 4

The licence referred to in Article (2) shall include a statement of the place where the activity is to be carried out within the free zone, the purposes for which it was granted, its period of validity, and the amount of the financial guarantee to be paid by the licensee.

Article 5

The following shall be exempt from taxes and customs duties:
(a) The projects established in the free zones, and the profits they make from carrying out their activities within these zones.
(b) Goods imported into the free zones or exported from them.
(c) The tools and equipment necessary for work within the free zones, of whatever kind.
All of the foregoing shall be without prejudice to the provisions of this Law.

Article 6

Goods entering the free zones shall not be subject to any restriction as to the period of their stay, except in cases requiring their removal by reason of their nature, or the failure of their owners to perform their financial obligations, or their owners’ violation of the provisions of this Law.
Nor shall imports into the zone and exports from it be subject to import and export restrictions.

Article 7

The employees designated by a resolution of the Minister of Commerce and Industry shall have the right to enter the free zones and their facilities and to record violations of the provisions of this Law and its executive regulations, and they may seek the assistance of members of the police force.

Article 8

The licensee under the provisions of this Law shall insure the buildings, machinery and equipment against all accidents, and shall remove them at his own expense within the period specified by a resolution of the Minister of Commerce and Industry, starting from the date of expiry of his licence.

Article 9

Entry into the free zones or residence therein shall be in accordance with the conditions and procedures issued by a resolution of the Minister of Commerce and Industry, and such resolution shall also specify the fee for the occupation of the places in which goods are deposited.

Article 10

Funds invested in the free zones may not be attached, confiscated or placed under custodianship except by judicial process.

Article 11

The Ministry of Commerce and Industry shall supervise the free zones, and the Ministry may assign the management of said zones to specialised private-sector entities, after the approval of the Council of Ministers and on the conditions determined by the Council.

Article 12

The entity authorised to manage the free zones may, in carrying out its work and performing its duties and obligations, seek the assistance of all the concerned and specialised entities in the State, and these entities shall provide facilities within the limits determined by the Council of Ministers.

Article 13

The provisions of the laws relating to health and agricultural quarantine, environmental protection, and protection and prevention against pests and diseases shall apply to the free zones, and the provisions of Kuwaiti legislation shall also apply in respect of matters not specifically provided for in this Law.

Article 14

It may be agreed to settle by arbitration the disputes arising between the projects established in the free zones, or between them and the entity managing those zones or other authorities and administrative bodies connected with the activity in the zones.
The Arbitration Panel shall be composed of one member for each of the two parties to the dispute and a third member as umpire, chosen by agreement of the two said members. If they fail to agree on his selection within thirty days of the appointment of the later of them, the umpire shall be chosen, at the request of either party, by a resolution of the Minister of Commerce and Industry.
The Arbitration Panel shall set its own rules of procedure without being bound by the rules of the Civil and Commercial Procedure Law, except for those relating to the fundamental guarantees and principles of litigation. It shall issue its decisions by majority vote, and they shall be final, binding on both parties and enforceable in the same manner as final judgments.
The Panel shall determine the costs of arbitration and who shall bear them.

Article 15

Without prejudice to any more severe penalty provided for by another law, any person who violates any provision of this Law or of the regulations and resolutions implementing it shall be punished by a fine not exceeding five thousand dinars.
Settlement may be made in this offence. The person drawing up the report shall, after confronting the accused with it, offer him settlement and record this in his report. The accused who wishes to settle shall pay, within five days of the settlement being offered to him, half of the maximum fine prescribed for the offence attributed to him, not exceeding five hundred dinars. Settlement shall result in the extinction of the criminal action with all its effects. Settlement may not be made in the case of recidivism.

Article 16

The Minister of Commerce and Industry shall issue the regulatory resolutions and the executive procedures relating to the free zones.

Article 17

The Ministers, each within his competence, shall implement this Law.