How to start a business in Kuwait

Kuwait can be the right country for business. But, like any other country, there are some rules you need to follow. Especially if you are a foreigner. If you want to move there and start a new life probably you should hire international movers Kuwait. It is not easy to make the first step, of course. You must learn, explore and pay attention to it. What do you need to know to start a business in Kuwait? These rules are for foreigners.

  1. Knowledge of the region – Be prepared and research. It is a smart idea to have a counselor. Kuwait is not a large country, but you have to know almost everything about the region you will move or start a business in Kuwait. First, make a business plan. That also includes a study of the market conditions at that time and in the future, the competition, and your forecast results.
  2. A local partner – The law requires you need to have a local partner, and he will have the majority interest and can, therefore, control the business. But, on the other hand, he/she doesn’t need to contribute to the start-up investment or participate financially. A partner must hold a stake of at least 51% in the business.
  3.  After the business is registered – you have to show that you have a substantial sum of money to invest, to the Ministry of Commerce. It is between $8,765/2,650 KWD and $50,000/15,120 KWD in most cases. Sum varies between the regions and states.

Things to know to start a business in Kuwait

Trade laws in Kuwait have made a big leap in the last four years and it will continue to change. If you want to move your business, then you should search for freight forwarding companies in Kuwait. They can help you arrange storage and ship your goods. Starting your own business in Kuwait is risky, as in any other country. But, it is worth it definitely. Corporate law in Kuwait is similar to the corporate law in western countries.

Drawing an idea for business
Make a business plan. The good idea is already half of the job

Our advice is to get a lawyer. A really good one. You can set up such a business in a free trade zone, there are several of them. You can get exemptions from import and export duties, building and property license fees and commercial taxes. Also, restrictions on the transfer of capital invested in the zone. That’s why the best solution is to hire a lawyer. They have the knowledge about these important things.

Working with Arabs

There are prejudices about the Arabs when we talk about the job. But, when doing business with Arabs, you will probably meet Arabs with hard bargaining. Do not be scared because of that. They are experts at negotiating. You need to be confident about your business. They appreciate the work and honesty. If they feel you are lying to them, they will leave immediately. In the end, the experience of doing business with them is likely to be pleasant and very friendly. A powerful sponsor or a good and smart employer is a great weapon with officialdom. If you are polite and patient your business will be successful and easier. If you are moving to a new job, adapting to a new workplace is the most important thing to learn.

Types of business

You need to know what kind of entity you want to establish. And also to know the costs of living in Kuwait. Kuwait has some options for those looking to do business in their country.

  • A limited liability company (WLL)
  • A joint stock company (KSC)
  • A limited liability partnership
  • An agreement with a local commercial agent
  • A branch office
A person researching for a new business
You have to research. Get all information you need. Be prepared

A limited liability company

This is the basic form of a private company. If you are searching for the easiest way to start a business in Kuwait and the most common type to start your business this is it. But, there are some limitations. This type of corporation does not allow to conduct business in banking or insurance.

A joint stock company

A joint stock company type is a good option if you intend to eventually go in for an initial public offering, and also if you are looking for investments from third parties. The shares of a joint stock company are freely transferable (49% limit on foreign holdings, the same as WLLs). You can set up a closed KSC, and the shares will not be publicly traded.

Limited liability partnership

When we talk about partnership, you can choose between general partners and limited liability partners. Partnership’s earnings are considered to be passed on to the partners.

An agreement with a local commercial agent

This is a great choice if you don’t want to set up a local company in Kuwait. You can engage a registered agent who will represent you. For example, they can promote your services or products. A commercial agent will take a percentage of the profits. So, both of you will have earnings.

The branch office

This type of business allows a company to circumvent the need for a local partner. But, the con of this type is that law only allows nationals of member states of the Cooperation Council for the Arab States of the Gulf. If you are a foreigner you need to receive permission from the KDIPA.

car-number from Kuwait
Kuwait is one of the best choices to start a business

After all these tips and information we gave to you to start a business in Kuwait, it will be much easier to start it. Every beginning is difficult and hard, but with the right business plan and team, it could be good. Take a chance, open your company and be brave. There are more and more investors and expats. Good luck with your business and do not forget to prepare everything you need. And after you move, learn how to pack your office like a pro.