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Client Alert: New measures to enforce compliance to KFAS

August 20, 2023 - Authors : Michel Ghanem

 

Earlier this year, the Ministry of Commerce and Industry (MOCI) issued a resolution amending the Companies Law thereby compelling Kuwait Shareholding Companies (KSC) to include in their budgets a clause that supports Kuwait Foundation for Advancement of Sciences (KFAS) with 1 percent of their annual net profits.

On 17 August 2023, MOCI issued the following instructions to KSCs:

1) The articles of association of a KSC should be amended to include an article providing for the mandatory deduction of 1% of the net profit of the KSC to be contributed towards KFAS. Failure to do so can result in MOCI rejecting any approval requests by a KSC to hold an extraordinary general assembly.

2) KSCs must submit an annual clearance certificate issued by KFAS, confirming the payment of the annual KFAS amount due.

This is one of several measures which continue to push KSCs to comply with their KFAS obligations.

For more information, please contact Michel G. Ghanem and Mohamed Abdulwahed.

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