Buying 40% of a Kuwait company: what approvals and due diligence do we need before signing?

Before proceeding, you should carry out financial and legal due diligence to identify any hidden debts, liabilities, regulatory issues, or consent requirements, and you should only move forward on the basis of a properly drafted Share Purchase Agreement that includes robust representations and warranties, indemnities, and conditions precedent to protect you against any undisclosed risks or threats arising before completion.

When acquiring a 40% stake in a Kuwaiti company, it is essential to conduct proper legal and financial due diligence before signing any agreement or paying a deposit. The key steps usually include: 1. Legal Due Diligence Review the company’s commercial license, articles of association, shareholder structure, and any amendments registered with the Ministry of Commerce. 2. Financial Due Diligence Examine financial statements, outstanding liabilities, bank facilities, and any hidden debts or guarantees. 3. Contractual Obligations Review existing contracts, leases, supplier agreements, and employment obligations that may affect the company. 4. Litigation Check Confirm whether the company is involved in any ongoing court cases or disputes. 5. Government Approvals Depending on the activity of the company, approvals may be required from regulatory authorities or existing shareholders. 6. Share Transfer Documentation Ensure the share transfer agreement clearly addresses liabilities, warranties, and indemnities. It is strongly recommended that the transaction be structured through a properly drafted Share Purchase Agreement (SPA) and completed only after full legal and financial verification. Alsubaie Legal Group – Lawyers & Legal Consultants regularly advises investors and companies on share acquisitions and corporate transactions in Kuwait