CHAPTER – ONE
SUPERVISION AND MANAGEMENT
OF FREE ZONES
The ministry of
commerce and industry shall supervise the free zones, set up their general
policies, and make the resolutions deemed necessary for achieving the objective
for which this zone is established. The ministry shall be particulary
establishing the new free zones and specify their locations, in coordination
with the concerned government authorities.
2/ determine how to
manage these zones, whether by the ministry itself or by assigning the
management to a private sector entity.
3/ coordinate with
other government authorities on the implementation of the free zones law.
4/ prepare the plans
and programs on the development and growth of the free zones.
5/ suggest the
facilities that may be offered to free zones by government authorities in
accordance with the provisions of the law.
The authority responsible
for the management of the free zones shall take all the necessary procedures
and decisions to manage these zones, particularly:
1/ to authorize the
occupancy of lands and real eatate and the investment of property owned by
others in free zone.
2/ to issue licenses
for practicing various activities within the zone.
3/ to conclude all necessary contracts with investors in the zone
following the approval of these contracts by the competent supervisory body.
4/ to strive to develop international commercial trading and transit
commerce and to undertake promotional and marketing activities locally,
regionally, and internationally.
5/ to provide the installations necessary for the operation of the zone
in accordance with its master plan.
6/ to facilitate the availability of labor necessary for investors to
carry out their activity according to need and to job requirements.
7/ to prepare promotions plans attracting investors to the free zone and
to contract others for carrying out the same on its behalf.
8/ to propose by laws for the organization of the work within the free
9/ to issue permits for the entry and exit of goods in accordance with
the provisions stipulated in the applicable laws and regulations.
10/ to obtain residency and visit and work entry permits for employees
and investors within the zone by coordinating with the government authorities
in accordance with the provisions stipulated in the applicable laws and
11/ periodic monitoring and inspection and detection of all violations
in accordance with the laws and executive regulations.
12/ to obtain a certificate of origin for the goods and to attest it
from respective authority.
13/ to obtain the necessary approvals for setting up processing,
industrial, and commercial projects.
The zone administration shall undertake the following obligations:
1/ to carry out its
work in accordance with the law and executive regulations.
2/ to keep regular
books and accounts.
3/ to undertake all security procedures, measures, and precautions within
4/ to adhere to the conditions of the contract with the supervisory
body, if the management of the zone is assigned to a private sector entity.
5/ to offer all the facilities to the competent government authorities
in order for them to carry on their work.
AND PROCEDURES FOR PROJECTS IN THE FREE ZONE.
No projects shall
hold any activity within the free zone except after obtaining on occupancy
license from the zone administration in accordance with the conditions and
situations stipulated in these regulations.
The application for
the occupancy license shall be submitted to the zone administration according
to the designated from which shall include the following data:
1/ the applicant`s
name, nationality, address and selected domicile.
2/ the data of the
project requested to be established in the zone and its duration.
3/ the area
requested to be occupied and a statement as to whether the land is set for
construction or for a ready building.
installations, equipment, and machinery necessary for the project.
5/ the capital – the
funding sources, and the legal form of association with foreign companies, if
6/ a statement of
expected consumption of water and electricity.
7/ number of
laborers, their nationalities, specializations, wages, and the number of
8/ the amount of
administration shall issue the license within two months from the date of
submission of application complete with all data and documents stipulated in
the preceding article. In the event a decision is made by the zone
administration refusing or not responding within the mentioned deadline, the
applicant may submit a grievance against the decision within sixty days from
the date he is notified of the decision , or from the date of the lapse of the
mentioned deadline, provided the grievance is made before the supervisory body.
In the event an approval decision is made, the applicant is notified to sign
the contract within one month from the date the decision is made and to pay the
financial guarantee. If he fails to do so, his application is considered
waived, the contract shall include the reciprocal rights and obligations of the
applicant and the zone administration.
carrying out more than one activity within the zone may be obtained.
The supervisory body
shall be notified of all occupancy licenses that were issued and contracts
which were concluded with investors, also of all information and data on the
licensed projects. Neither the supervisory body nor the zone administration may
cancel the license unless it is in violation of the law or the executive
regulations, or if the licensee has committed a violation of the same or has
breached his contractual obligations.
The license for
operation within the zone must include the project data, its legal
constitution, nationality, capital, the boundaries of the location it occupies,
the objectives of its operation, the value of the financial guarantee paid by
the licensee, and the license validity period. The license may be assigned
under its same conditions following the approval by the zone administration and
by the authority concerned with the issuance of the license. The assignment
shall be valid only following the payment of the determined fee.
administration shall determine, upon agreement with the investor, the period
required to begin carrying out the activity, effective the date of issuance of
the license decision, take into account the investor`s circumstances and the
nature of his activity. However, as to the investor who has concluded a
contract to occupy a land prepared for construction, he shall complete building
his facility during the period specified by the zone administration, effective
the date the land is delivered to him and the building plans are approved,
unless the zone administration agrees to extend this period in light of work
conditions, in the event the investor does not carry out his activity following
the specified period, or if the period specified for the construction of the
facility expires, the zone administration may terminate the contract with the
investor. It may also terminate the contract of the investor who ceases his
activity for a continuous period of one year without an acceptable excuse.
ENTRY VISAS AND RESIDENCY PERMITS SYSTEM
FOR WORKERS AT THE FREE ZONE PROJECTS AND THOSE WISHING TO VISIT THEM.
The zone administration shall undertake, in
coordinating with the government authorities, to obtain entry visas for the workers
in the zone and those wishing ti visit it, in accordance with the applicable
laws and regulations.
A visit visa shall be obtained for VIP`s
accordance with the following:
1/ In case of the zone administration`s
prior knowledge of the visit, the zone administration shall forward a letter to
immigration office at airport, in order to grant accordingly to the visitor a
temporary visit upon his arrival.
2/ In the event of the visitor`s arrival
without the zone administration`s prior knowledge, the visitor shall contact
those in charge at the immigration office and shall fill out the data of the
temporary visit visa application, the authorized ministry of interior`s
employee at the immigration office shall contact the zone in order to forward
to them a statement to the effect of accepting the visitor`s visit to the zone.
The zone administration shall then forward a statement of acceptance of the
visit and the authorized employee at the immigrating office shall grant a
temporary entry visa at the responsibility of the free zone, in accordance with
the provisions stipulated in the applicable laws and regulations.
The zone administration, in coordination
with the authorities concerned, shall obtain the visas and residency permits
for the owners of licensed projects or their representatives and for their
foreign workers, immediately upon acceptance of the applications submitted by
them. The duration of the permit shall be specified according to the applicable
rules and regulations.
The zone administration shall issue work
identity cards for the workers inside the zone. The validity period of these
cards shall be the same as the validity period of the residency permit in the
The zone administration shall issue housing
permits within the zone. The use of these permits shall be restricted to the
workers in the zone without their
families, provided that the nature of their work necessitates their stay in the
zone at times other than working hours and that specified places are designated
for their residence.
The provisions of the labor law in the
private sector and its executive regulations and resolutions shall apply to the
workers in the projects licensed in the zone, without prejudice to the better
benefits established by the internal bylaws of the licensed projects for their
workers, the licensed projects undertake the provide health insurance to their
workers within the zone.
Employment contracts concluded between the
licensed project owners and their workers shall be drawn in four copies, of
which one copy is retained by each party, one copy is filed with the zone
administration, and another copy with the ministry of social affairs and labor.
The contract shall comprise the data stipulated by the applicable laws and regulations.
IMPORT AND EXPORT IN THE FREE ZONE
The zone administration shall have the
authority to monitor the movement of goods from and to the zone and to review
the books and documents of the licensed projects. It shall also have the
authority to monitor the stocks at the projects within the zone and , in doing
so, it shall be entitled to access any area within the zone in order to verify
the correctness of the data and the documents submitted to it for these goods.
Goods shall enter the zone via the port to
which it is connected, following the submission by the concerned party of the required documents to the zone
administration. As to the goods that enter the zone other than via the port to
which the zone`s affiliated, the following shall apply:
1/ the importer shall submit to required
documents to the zone.
2/ the shipping agent shall separate on the
manifest the goods entering from abroad to the free zone, and shall mark each
3/ the customs shall seal the free zone
goods in accordance with the provisions stipulated in the applicable laws and
4/ goods shall be transported to the
location of the free zone at the reposibility of the zone administration.
5/ the customs shall inspect the sealing of
the goods upon arrival at the free zone gate.
The goods incoming to the free zone from
within the country shall be treated likewise the goods exported outside the
state of Kuwait . such goods shall be admitted following the submission of
documents indicating their ownership. Thae same goods may be exported into the
country without collecting customs fees or taxes thereon.
The licensed projects shall not be obliged
to export a certain percentage of their products abroad, not to sell a
specified percentage therof within the local market. The zone administration
shall be responsible for obtaining a certificate of origin for the goods
exported from the zone.
Goods shall be exported abroad through the
port to which the free zone is connected, according to the following
1/ the export application shall be
submitted by the zone administration to the authorities concerned and it shall
enclose the required documents.
2/ goods shall be loaded for shipment
following the review and approval of the documents by the free zone
All, without prejudice to the procedures,
rules, and provisions stipulated in the concerned laws and regulations.
Goods shall enter from the free zone to the
state of Kuwait in accordance with the following procedures:
1/ the party concerned shall prepare the
entry documents required by the Kuwaiti customs officials.
2/ the goods shall be inspected, matched
with the documents and evaluated; the releases by the government authorities,
the customs and the zone administration shall be verified prior to their
Goods shall be exported abroad from the
free zone by air, land, and sea other than through the port to which the zone
is connected, or any other port in which there is a free zone, according to the
1/ the free zone administration shall
prepare the required export documents.
2/ the goods shall be sealed by the free
3/ the goods shall be sealed with the
customs seal upon their exit from the free zone.
4/ the goods shall be transported from the
free zone at the responsibility of the zone administration.
All, without prejudice to the procedures,
rules and provisions stipulated in the relevant laws and regulations.
PROCEDURES FOR ADMISSION, EXIT, AND TRADING
OF GOODS WITHIN THE ZONE AND BUILDING …. THEREIN.
Goods and products may be traded from one
project to another within the zone following notification of the zone
administration as to the kind of these products and goods and their quantities.
Goods and products may also be traded between one free zone and another within Kuwait,
in which event the provisions stated in article (22) of these regulations shall
Licensed projects may not dispose of tools,
equipment, machinery, and transportation they use within the zone unless the
necessary procedures are completed, the approval of the zone administration is
obtained and the customs taxes and fees are paid.
A license for construction or addition to buildings
at sites of the free zone shall be obtained in accordance with the following
1/ the building or addition application
shall be submitted on the designated form, along with the required documents,
to the zone administration.
2/ the application and the documents shall
be examined by the zone administration, and so shall the extent of the
compliance of their specifications with the laws of the concerned government authorities
and as per the list of the specifications agreed upon with the zone
administration and the supervisory body.
The zone administration shall obtain the
license in accordance with the provisions stipulated in the applicable laws and
regulations, under notification to the supervisory body.
Machinery, vehicles, and equipment included
in the project`s assets shall be transported and to the free zone in accordance
with the following procedures:
1/ the transport application shall be
submitted to the zone administration. It must comprise the reason for entry or
exit the specified times of their exit and return, and whether the permit is requested
for one time or several times during a specified time period.
2/ the zone administration shall be handed
a description of these vehicles and equipment, along with copies of their
ownership and registration forms.
3/ the zone administration shall issue a
temporary permit for exit or entry.
4/ the customs administration and the
ministry of interior shall be notified by the zone administration.
5/ the zone administration shall be
notified by the applicant upon the returns of these vehicles or equipment to
their original places.
PERMISSION PROHIBITION, AND EXEMPTIONS IN
Without prejudice to the provisions
stipulated in the relevant laws and regulations, the following shall be
permitted in free zones:
1/ to store and display any kind of goods
of any origin or source.
2/ sorting and inspection operations of
goods upon their unloading to warehouses.
3/ sorting, cleaning, combining, and mixing
operations even for local products, as well as refilling and the like of
operations that change the state of goods available at free zones, in
accordance with the requirements of commercial trading and market demands.
4/ to practice any profession required by
the activity and the services needed by workers within the zone, such as hanks,
post office, telephone, insurance, shipping, unloading, transport, trading, and
In free zones, the admission, storage, and
display of the following goods shall be prohibited:
1/ goods of origin or source which is
forbidden to deal in locally or internationally.
2/ drugs and alcohol, with the exception of
what is necessary for the manufacture of medication and pharmaceutical
products, in accordance with what is specified by the ministery of health and
without prejudice to the provisions stipulated in the concerned laws and codes.
3/ weapons, ammunitions, and explosives,
with the exception of what is approved by the authorities concerned with
security and defense within the limits of the applicable laws and regulations.
4/ perishable, highly flammable, and
radioactive goods, in accordance with what is specified by the supervisory body
and the authorities concerned.
Taking into confederation the provisions of
the laws and regulations with regard to prohibiting the trading in some goods
and materials, all tools, equipment, machinery, and means of transport
necessary for the facilities licensed in this zone shall be exempt from taxes
and customs fees in accordance with the laws of free zone.
The fee zone supervisory body may allow
local goods into the zone on temporary basis for their repair, or may allow the
exit of goods from the free zone and admission into the country on the
temporary basis for their repair without customs fees or taxes.
CHAPTER – SEVEN
Projects licensed in free zones shall bear
the charges for administrative services in accordance with the rules and
definitions determined by the supervisory body and which are deemed an integral
part of these regulations and as having the same binding effect. The free zone administration shall
collect charges for the following services:
1/ porterage and handling
7/ other administrative services and use of
equipment and machinery
The services charge stipulated in the
proceding article shall be calculated based on the value of the goods entering
into the free zone with the purpose of storage for re-exportation, also on the
basis of the value of other goods exiting at the account on the projects.
Free zone goods which are allowed into the
free zone on a temporary basis for repair, shall not be subject to the service
charge stipulated in article (31) of these regulations, and it shall also not
apply to local goods entering the free zone on a temporary basis for the same
In the event documents clarifying the value
of goods are not submitted or if their shown value does not truly represent
them, the service charge shall be estimated on the basis of the current value
of these goods.
A service charge shall be due on the value
of imported or exported goods upon their mere entry or exit.
The zone administration shall carry out
porterage and handling operations and shall collect from the owner of the
merchandise the charge based on the weight per package or the actual weight, as
applicable, according to what is determined by the supervisory body.
The zone administration shall insure the
zone in accordance with the provisions stipulated in the applicable laws and
regulations and it shall collect from the beneficiaries the insurance on the
basis of area and type of insurance, as applicable, according to what is
determined by the supervisory body.
The zone administration shall collect a
storage charge on all goods placed in the free zone warehouses throughout the
duration of their storage at the warehouses, without any exemption period. The storage
charge shall be calculated on the basis of gross weight, number, or volume as
determined by the supervisory body.
It shall also collect a charge for the
occupancy of the special places
specified in the contracts concluded with the concerned parties,
assignment charge every time goods, commercial occupancy contracts, and means
of transportation are assigned, and a charge for the provided materials,
services, certificates, copies of documents and fees for use of tools and
A charge be due on all the services
stipulated in article (31) of these regulations. Upon the concerned parties
defaulting on payment of this charge after its due date, the free zone
administration may collect its entitlements from the financial guarantee
provided for the project and may undertake the appropriate procedure for preserving
auction in accordance with the procedures stipulated in the applicable laws.
FREE ZONE ADMINISTRATION FINANCIAL SYSTEMS
& SECURITY & SAFTEY PROCEDURES
The zone administration shall submit to the supervisory body the
applied accounting system and any amendments that were incorporated therein,
for the supervisory body`s review and endorsement within thirty days from the
date the activity is begun or the amendment is made. The zone administration shall
place all records and documents at the disposal of the supervisory body at the
times specified by the latter. The zone administration shall undertake to
provide the supervisory body with a copy of its balance sheet and closing
accounts endorsed by a Kuwaiti auditor within three months following the end or
its fiscal year. The supervisory body shall have the right to examine and
review the clauses of the balance sheet and closing accounts in the presence of
the zone administration representatives.
Occupants and projects licensed in the free
zone shall observe fire and explosion measures, and shall inure against them. The
insurance shall comprise the civil liability within the limits estimated by the
zone administration and with insurance companies it approves. This insurance
shall be compulsory and at the expense of the occupants & projects.
Occupants and owners of licensed projects
shall be liable for all the damages incurred because of them, their representatives,
or their subordinates or because of their projects, merchandise, or buildings
they erect within the free zone. Their adherence to the precantionay rules
imposed upon them does not exempt them from this liability.
The zone administration shall carry our
periodic inspections of the projects within the free zone to ensure the
adherence to the health and housing safety of the buildings, facilities,
electromagnetic equipment, machines, general conditions, and building maintenance
in accordance with the specifications agreed upon with the concerned
authorities. The person in charge of the project in the free zone shall undertake to repair any observed damage,
failure, or violations within a reasonable period determined by the zone
administration. This obligation shall appear in the contracts concluded with
The zone administration shall insure its
private property in the free zone and all its used assents of machinery,
buildings, and electronic equipment. It shall also insure at its expense its
manpower working in the free zone. Every project owner shall also insure at his
expense his assets, equipment, and building.
The zone administration shall coordinate
with various authorities the following procedures:
1/ to organize general internal or external
guards in the free zones in order to prevent smuggling and theft crimes.
2/ to take security, civil defense, and
3/ to set up regulations for licensed
private guards at the expense of the facilities or the navigational agencies.
PROVISIONS AND PENALTIES
supervisory body shall set up the procedures necessary for monitoring the
enforcement of the law and the regulations by the zone administration and, in
doing so, it shall have the right to review records, registers, entry permits,
expenditure, and invoices submitted for the goods.
produced within the free zone, shall be marked with printed statement as to
their manufacture within the free zone in Kuwait.
authorities may, by coordinating with the zone administration, enter the zone
to carry out their work.
licensed in free zones shall undertake, when wishing to liquidate their
activities, to announce the same in accordance with the method determined by
the zone administration, at least three months prior to beginning the
liquidation process, and they shall submit evidence substantiating their
fulfillment of their due local obligations in addition to clearance from the
ministry of interior (public administration for penal institutions and judgement
enforcement) prior to authorizing them to liquidate assets.
occupants and owners of projects licensed in the free zone violate the
provisions of the law of free zones, the provisions of these regulations, or
the conditions of occupancy contracts concluded with them, the zone
administration shall forward to them a notice for removal of the violation in
period specified therein. If they fail to do so during the specified period,
the zone administration shall have the right, following notification of the
supervisory body, to annul the contracts concluded with them and to specify a
reasonable period for evacuation, following which the zone administration shall
make use of the buildings and warehouses at no charge. In event the project
owners fail to evacuate the leasehold within the specified period, the zone
administration shall have the right to do the same at their expense and to place
their assets in storage in warehouses at their account.
(15) of law no. 26 for 1995 concerning the free zones shall apply especially to
the following violations:
to submit the manifest, its unavailability, multiplicity, or delay in
submission on the deadlines stipulated in these regulations.
to submit any document stipulated in these regulations, or the submission of
documents comprising untrue data.
omission of data which must be included in the manifest, storage or withdrawal
applications, or storage records.
shipment of goods, their unloading, or their transport from one means to another,
regardless of their kind, without the authorization from the zone
administration and the presence of its representatives.
or placement of goods in places not allocated for the same.
allowing the zone administration employees to carry out their duties, nor to
use their right to inspect, to review, and to request documents or records.
violation by the projects representatives or employees of the regulations and
guidelines that determine their duties.
observing safe storage rules nor keeping the necessary records.
observing the seals placed on packages or means of transport even it this does
not lead to a shortage or change in goods.
possession or transport of goods within the free zones contrary to the
procedures stipulated in these regulations
administration shall in all cases have the right to remove the causes of the
violation, if possible, at the expense of the violator.
regulations shall be effective from the data of their publication in the official
THE MINISTRY OF COMMERCE AND INDUSTRY
HESHAM SULEIMAN AL-OTAIBI