The Kuwaiti Public Authority for Industry (“PAI”) just issued Ministerial Decision No. 8 of 2026 setting out detailed rules and procedures governing the withdrawal of industrial plots under the PAI’s supervision. The Decision was issued on 5 May 2026 and published in the Official Gazette (Issue No. 1790, dated 10 May 2026).

The Decision applies to all categories of plots overseen by the PAI, including industrial, service, commercial, and craft plots, as well as sand quarry sites, gravel storage, and car scrap locations. It establishes a structured framework for how and when the Minister of Commerce and Industry (or their delegate) may order the withdrawal of an allocated plot.

The grounds for withdrawal, set out in Article 2, cover a wide range of scenarios. These include obtaining an industrial licence or plot allocation through false or misleading information, halting production for six months or more without the PAI’s approval, failing to register the project in the industrial register, using the plot for purposes other than those specified in the allocation decision, subletting the plot or granting third-party usage rights without authorisation, violating environmental protection or safety rules, and expiry of a temporary allocation period.

Once a withdrawal decision is published in the Official Gazette, the relevant department or committee has one month to begin enforcement proceedings, and the plot holder is then notified and given one month from the date of notification to vacate the plot and hand it over free of occupants. If the holder fails to comply, the PAI’s legal affairs department is instructed to initiate court proceedings for eviction and recovery of all outstanding amounts.

That said, the Decision includes a grievance mechanism under Article 6, whereby any affected party may file a grievance within 30 days of the publication or notification of the withdrawal decision. Filing a grievance within the statutory deadline suspends the enforcement of the withdrawal decision until the grievance is resolved. But if the grievance is rejected, the department resumes enforcement within two weeks of publication of the rejection decision, and the plot holder must vacate within one month.

There is also room for flexibility, as the Director General may, upon request, extend the evacuation period by up to six months from the date of publication of the withdrawal or grievance rejection decision, provided the plot holder pays all outstanding financial obligations upfront for the requested extension period.

As it pertains to penalties, late handover triggers a monthly penalty starting at 25% of the annual usage fee for the first month of delay, increasing to 50% in the second month, 75% in the third, and reaching 100% from the fourth month onwards. This applies to each subsequent month until full handover. In addition, a daily penalty of KD 100 applies from the day following the expiry of the specified deadline until handover is complete.

This Decision brings much-needed clarity and structure to an area that has historically been a source of disputes between the PAI and industrial plot holders. Businesses currently holding industrial allocations should review their compliance status carefully and ensure they are meeting all conditions of their allocation, particularly around production continuity, registration, and permitted use, to avoid triggering withdrawal proceedings.

For advice on how these new rules may affect your industrial plot allocation, contact Managing Partner, Alex Saleh and Partner, Asad Ahmad.

Authors: Asad Ahmad, Partner and Liana Rashid, Trainee Lawyer.