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What Can Be Legally Owned? Valuable Property
Article 22 of the Kuwait Civil Code establishes a foundational principle: only 'mutaqawwam' (متقوم) assets — things that have legal value — can be the subject of property rights and financial claims.
In practice, this means:
- Not everything that has commercial value in everyday life automatically qualifies as a legal asset.
- Items that are prohibited under Islamic law (such as alcohol or certain substances) are generally not considered legally valuable property under Kuwaiti civil law and cannot be the basis of a legal financial claim.
Practical tip for expats: When entering commercial agreements, ensure the subject matter of the transaction is legally recognised as a valuable asset under Kuwaiti law.
Public Assets: What You Cannot Buy, Sell, or Claim
Article 23 draws a critical distinction for expats involved in real estate or business:
Publicly dedicated property — assets owned by the State or a public legal entity and dedicated to public use — cannot be:
- Bought or sold
- Seized or attached (even in debt enforcement)
- Occupied by a private party
Examples of publicly dedicated assets include:
- Public roads, parks, and beaches
- Government buildings in active use
- Public utilities infrastructure
This dedication to public use ends only through a formal legal or factual act of de-dedication.
Warning for expats: Be cautious about any deal involving land or property that may be publicly owned or dedicated. Conduct thorough due diligence through a Kuwaiti lawyer before purchasing or leasing any property.
Real Property vs. Movable Property
Kuwaiti civil law makes a clear distinction between real property (عقار) and movable property (منقول), which affects registration, sale, and legal claims.
Real Property (Immovable Assets) — Articles 24–26
Something is classified as real property if:
- It is fixed in place and cannot be moved without damage or alteration.
This includes:
- Land and buildings
- Property by allocation (عقار بالتخصيص): A movable item placed by its owner in real property they own to serve and exploit that property — for example, industrial machinery permanently installed in a factory.
- Real rights over immovable assets — such as mortgages, usufruct rights, or easements on land.
Important exception: If a part of a structure is about to be detached (for example, crops ready for harvest, or materials about to be removed from a building), it may be treated as movable property if viewed independently.
Movable Property — Article 27
Simply stated: everything that is not real property is movable property. This includes:
- Vehicles, equipment, and goods
- Cash and financial instruments
- Intellectual property rights (generally treated as movable)
Fungible vs. Non-Fungible Assets — Article 28
- Fungible (مثلي) assets: Items whose individual units are interchangeable — measured by count, weight, volume, or dimension. For example: a kilogram of rice, a litre of fuel, or a specific denomination of currency.
- Non-fungible (قيمي) assets: Items whose individual units differ significantly in quality or value — for example, unique artwork, a specific vehicle, or a custom-built machine.
Why this matters for expats: In contract disputes, whether an asset is fungible or non-fungible determines whether the court will order specific replacement or monetary compensation.
Consumable vs. Non-Consumable Assets — Article 29
- Consumable (استهلاكي) assets: Things that can only be used by consuming or spending them — such as food, fuel, or money. Goods stocked for sale in a shop are also treated as consumable.
- Non-consumable assets: Things you can use repeatedly without destroying them.
This distinction is critical in loan and lease agreements: you cannot borrow and return a consumable asset — you must return an equivalent item or its value.
Legal Entities: Companies and Organisations in Kuwait
Legal Personality of Companies — Articles 18–21
Kuwaiti civil law recognises that organisations and companies can hold rights and obligations just like individuals, provided the law grants them legal personality.
Key rules:
- Capacity of legal entities (Article 19): A company's legal capacity is limited to what its founding purpose and the law allow. A company cannot act beyond its stated objects.
- Domicile of companies (Article 20): A company's legal domicile is its main administrative centre. Branch offices can serve as domiciles for branch-related matters.
- Foreign companies in Kuwait (Article 21): If a foreign company has a branch or operations in Kuwait, its local management office is its legal domicile for Kuwait-related activities.
Practical implications for expats in business:
- When suing or being sued by a company, ensure you identify the correct legal domicile for service of process.
- Foreign companies operating in Kuwait can be sued in Kuwaiti courts for their local activities.
- Always verify a company's registered address and legal status before entering significant contracts.
Abuse of Rights: A Critical Concept for Expats
Article 30 introduces the doctrine of abuse of rights — a concept that limits how even legitimate legal rights can be exercised. A right is abused when:
- The only purpose is to harm another person
- The benefit gained is unlawful
- The benefit gained is grossly disproportionate to the harm caused
- The exercise causes excessive damage to others
Real-world examples for expats:
- A landlord who technically has the right to terminate a lease but does so solely to harm a tenant may be found to have abused that right.
- A business partner who exercises a contractual right purely to damage a competitor rather than serve a legitimate interest may face liability.
Quick Reference Checklist for Expats
- ✅ Verify any property is not publicly dedicated before purchasing or leasing.
- ✅ Understand whether your assets are movable or immovable — different rules and registration systems apply.
- ✅ Identify whether contract goods are fungible or non-fungible to understand your remedy if things go wrong.
- ✅ Confirm the legal capacity and domicile of any company you contract with in Kuwait.
- ✅ Exercise your legal rights in good faith — abusing them can expose you to claims.