Exchange companies practice businesses that have an impact on the volume of cash flows from and to outside the country, and the exchange profession is closely related to the banking profession. Therefore, the establishment of exchange companies is subject to the supervision of the Central Bank of Kuwait based on Article 55 of Law No. 32 of 1968 regarding cash, the Central Bank of Kuwait and the organization of the profession Banking and its amendments. The article stipulates that the opinion of the Central Bank must be taken regarding the articles of incorporation and articles of association of financial companies or the amendments that occur to those contracts and systems, in order to ensure the economic feasibility of establishing these companies. The following are the foundations and controls for the establishment of exchange companies subject to the supervision of the Central Bank of Kuwait:

Applications for establishing exchange companies

Applications for establishing exchange companies shall be submitted to the Ministry of Commerce and Industry, accompanied by:

1. Feasibility study for establishing a new company.
2. Draft Memorandum of Association and Articles of Association of the company, provided that it includes the objectives of the company that it intends to practice, and the required amount of the company’s capital (not less than 2 million Kuwaiti dinars paid in full).
3. A recent criminal case sheet for each partner, as well as the persons intended to take over the management of the company, issued by the Ministry of Justice, the Criminal Execution Affairs and International Cooperation Prosecution, to verify that none of them has ever been convicted of a crime against honor and honesty. As well as documents that support the existence of professional competence and previous experience of all or some of the partners (managers) in the field of work in one of the institutions or companies of a banking and financial nature such as banks, investment companies, finance companies and exchange companies.

Verification of fulfillment of requests for establishing exchange companies

The Ministry of Commerce and Industry, after verifying that the applications for incorporation meet the required conditions, transfers the applications for the incorporation of these companies to the Central Bank of Kuwait, which studies the aforementioned attachments, taking into account the market’s need to establish a new exchange company, and the company’s objectives are consistent with what is stated in the ministerial decision regarding the subjection of companies Money exchange for the supervision of the Central Bank of Kuwait.

Approval of the application for incorporation

In the event that the application for incorporation is approved, a preliminary approval is issued by the Central Bank of Kuwait, valid for a period of six months from its date, for the partners of the company to be incorporated to proceed with the incorporation procedures. .

The company is obligated, before the end of the initial approval period, to submit to the Central Bank of Kuwait either an application for registration in its exchange companies register, which means that it has completed all the necessary procedures for this, or provide the Central Bank of Kuwait with the measures taken in this regard, in order to assess the extent of the seriousness of the company’s owners towards completing the incorporation procedures, and to verify whether there are measures already taken that are difficult to reverse or postpone due to the expiry of the initial approval period.

In this last case, and if the company’s owners are serious about completing the incorporation procedures, the company’s owners can be allowed to proceed with the completion of all procedures after the initial approval period has expired for six months and to apply for registration with the Central Bank of Kuwait within a maximum period of three more months from the date of approval expiry principled.

Submitting detailed data to the Central Bank of Kuwait about the company’s leadership positions

During the initial approval period, the company shall submit to the Central Bank of Kuwait the detailed data of the leadership positions and their occupants, accompanied by certificates of qualifications and experience, and a recent criminal case sheet of the candidate.

Application for registration in the exchange companies registry

If the company has completed the preparation of the headquarters of the activity, the appointment of employees, the preparation of the opening budget, and obtained a license from the Ministry of Commerce and Industry, its founding contract has been documented, and the articles of association with the Ministry of Justice, it shall submit directly to the Central Bank of Kuwait an application for registration in the exchange companies registry according to a form obtained from a bank Central Kuwait, and the application for registration shall be accompanied by the following documents:

A – Memorandum of Association and Articles of Association after documentation.

b- A copy of the license granted to it by the Ministry of Commerce and Industry.

C- The opening budget is approved by the auditor.

d- A certificate from the concerned bank of the balance appearing in the balance sheet, which represents the net remainder of the capital after spending the establishment expenses and the expenses of preparing the company to practice the profession.

e- An undertaking from the partners not to withdraw any amounts of capital, in any form, at any time.

f- An express commitment from the partners to abide by the legislation, instructions and ministerial decisions related to the activities of exchange companies, including those specifically related to combating money laundering and terrorist financing operations.

After that, a decision is issued by the Governor of the Central Bank of Kuwait to register the company in the register of exchange companies and it will be published in the Official Gazette. The Ministry of Commerce and Industry and the concerned company are notified of the company’s registration and the possibility of starting the activity, and the Central Bank begins to conduct control procedures over the company’s activity.

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