Guide to setting up a business in Kuwait

Are you interested in setting up a business in Kuwait? This country in the Arabian Gulf has been quite popular among ex-pats due to all its potential and opportunities. Not to mention, even though this country is quite small, its economy is strong. It is better to start a business in a country with a good and strong economy. In addition to this, Kuwait has a low corporate income rate, which is only 15% for foreign-owned businesses. There is no personal income tax for both nationals and ex-pats, so it’s no wonder people are hiring packers and movers in Kuwait to move here. For this reason, here is a guide for you since Kuwaiti corporate laws are not the easiest to understand.  

Setting up a business in Kuwait – all the types 

In order to establish a business here, you need to know what type you can set up. Here are all the options for you.  

  • WLL – a limited liability company 
  • KSC – a joint-stock company that also stands for Kuwait Shareholding Company 
  • A limited liability partnership  
  • Branch office  
  • An agreement with a local commercial agent 

You can see that every option requires a Kuwait national. The reason is simple. Kuwait does not allow foreigners to completely own a company. Since you want to establish a company here, you need to find a local partner that will have at least a 51% stake in the business. However, if you still want to move here with international movers Kuwait, you can apply for special approval, the Kuwait Direct Investment Promotion Authority (KDIPA) to be exact. Your local partner will have a minority stake.  

a desk next to the window
Before finding an office, see all the types of businesses you can open

Type of business explained 

You need to understand every option perfectly before setting up your office here in Kuwait. International shipping Kuwait, renting, fees, and all the taxes can be quite expensive. For this reason, here are more details. First of all, the WLL is a basic type of private company in Kuwait. It is quite easy to set, but you need to have a local partner since you cannot do anything related to banking or insurance. Likewise, you can only have 49% of shares in your company. The KSC also has a 49% limit but joint-stock company shares are freely transferable. Limited liability partnership has two types of partners, a general partner, and a limited liability partnership. Additionally, the branch office does not require a local partner but with permission. Lastly, you can choose the commercial agent to represent you in the country. 

Setting up a business in Kuwait with a corporate lawyer 

Registering your business in Kuwait can be a little bit tricky, especially if you are not there yet. For this reason, it would be better to hire a corporate lawyer. A corporate lawyer can help you to get all the necessary licenses in order to establish a company here. They can even help you find freight forwarders in Kuwait, international movers, and everything else you might need. Since you will need a local partner, you should find one. If you have never been to Kuwait or do not anyone there yet, this can be tricky. For this reason, hiring a commercial agent or a corporate lawyer to settle all agreements and complete all the tasks and formalities. How do hire a corporate lawyer or a commercial agent? For this, you can search on the Internet and contact a couple of lawyer firms.  

person holding a pen
Hiring a corporate lawyer can be helpful

Working culture 

If you want to succeed in business, you also need to know the working culture of Kuwait. You need to know local norms and cultural rules since they will have a huge effect on the success of your company. For this reason, make sure to find out everything you can before moving to Kuwait. The best way to do it is by talking to someone who has already been to Kuwait or even worked there. They can explain to you about Arab culture and their politeness. In addition to this, you should be ready to either learn basic Arabic or hire a translator. Even though English is commonly used in a business environment, official contracts, documents, as well communication with the government will be in Arabic. Furthermore, you might get documents in English or any language but only the Arabic version is legally binding. 

Setting up a business in Kuwait and knowing laws 

You also need to know the laws in Kuwait, especially since you’re planning to set up your business here. first of all, when it comes to labor laws, any business registered in Kuwait has to ensure that a certain number of employees are locals. This depends from industry to industry but it is usually over 60%. In addition to this, there is no minimum wage, but as an employer, you have to make social security contributions. Generally speaking, you will have to contribute a sum equal to 11,5% of the monthly salary. As mentioned before, a foreigner-run business has to pay corporate taxes of 15% but you do not have to pay income tax. If you want to import goods into Kuwait, you will have to pay for customs duty of 5%.  Make sure to check all the rates and financial responsibilities you will have to respect.

a pen next to a contract
You need to understand all the corporate laws

Applying to start your company 

Lastly, when you are setting up a business in Kuwait, your country’s embassy, Chambers of Commerce, and export promotion offices can help you and assist you with this business move. In order to apply for all the necessary licenses, you need to submit an application detailing your company’s capital, shareholding, and all the other information required. It will take at least 10 days to make an appointment to submit the official documents in person. Then, you will need to register your company’s name, deposit your company’s capital, arrange an inspection of your company’s premises, etc. As you can see, this is only the beginning so in order not to get lost, it would be better to hire a corporate lawyer.