New laws – Home Businesses, Food trucks, Indemnity on Termination

Attorney Fajer Ahmed

Although I usually receive questions from non-Kuwaitis (I have stopped using the word ‘expat’), I received many questions from Kuwaitis this week regarding new laws. There are a few positive changes this year towards small and medium enterprises (SMEs) and Kuwaiti entrepreneurship as part of the New Kuwait plan. The Kuwait National Development Plan sets the nation’s long-term development priorities. It is organized around five themes, or desired outcomes, and seven pillars, or areas of focus for investment and improvement. Although the changes will take a long time to be implemented, I am glad that we are seeing many positive changes already.

Termination indemnity
Question: There is a new law in Kuwait with regards to termination indemnity for Kuwaitis. Can you please explain more?
Fajer: Yes, but before I elaborate, I want to make one thing clear – Kuwaitis are entitled to termination indemnity too. Unfortunately, some Kuwaitis are of the idea that only non-nationals are entitled to end of service benefits and not Kuwaitis. Previously, companies deducted what they paid for Kuwaitis at the Public Institution For Social Security (PIFSS) from their indemnity. This has changed now – companies are no longer allowed to deduct any amounts paid towards PIFSS.

Food trucks
Question: My friend told me that food trucks are now legal in Kuwait – is this true? I have always seen food trucks in Kuwait though, so what is the difference?
Fajer: Yes, there are new bylaws that make licensing of food trucks legal. The biggest difference is now you do not need a physical location to operate a food truck. Although this will save rent for SMEs in the food and beverage industry, food trucks still need to pay some fees to operate.

Home businesses
Question: I read recently that now it is legal for home businesses to operate in Kuwait? Is this true?
Fajer: Yes, home businesses are now legal in Kuwait and will be issued a license to operate legally from houses/residential areas. The license will be issued from the Kuwait Business Center (KBC) after Eid (KBC is a one-stop center for issuing licenses). The center is located in Ashbiliya and the staff there are extremely friendly and useful (from experience).
The license will only be for Kuwaitis over 21 years of age. Homeowners will need to provide permission – obviously (there is talk of whether the police or Ministry of Social Affairs and Labor are allowed to do checkups of the house for safety reasons). The license is mostly for services like designers, calligraphists, illustrators, photographers, Web and app developers, watchmakers, gardeners, technicians, event planners, translators, museums, and so on.
This is a big step for Kuwait and is going to make a huge difference. One thing though – there are a lot of food businesses in Kuwait operating from homes that will not be able to operate for health and safety reasons. I know many young people worked hard for this law to be implemented and lobbied for this law to come to life, and one of these lovely people was my dear friend who recently passed away – Ahmed Al-Gharabally. This just gives you hope to keep working hard in Kuwait to bring a difference to society.

Question: With the new home business law, can we still be registered as employees working from home?
Fajer: Yes, the new law will allow you to be registered under the Public Institution for Social Security and still have a retirement plan.

If you have any legal questions, please email [email protected]

By Attorney Fajer Ahmed

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