The ease of doing business in Kuwait has increased greatly over the past years. The reform program of Vision 2035 and New Kuwait brought improvements in numerous business fields. The vision of becoming a trading and financial hub in the region is coming to a realization more and more. Once your business in Kuwait is running smoothly, it’s understandable that you may wish to take your business abroad. If you are looking to expand your Kuwait-based business – you can take into consideration neighboring countries: Bahrain and Qatar. Without delay, let’s look into more detail at what has improved in Kuwait and keeps things so smooth. Following with a short insight into how easy it is to expand a business to Bahrein or Qatar.
What has improved in doing business in Kuwait
His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah’s Vision 2035 and New Kuwait introduced the improvements in doing business in Kuwait. Kuwait remodeled the local regulatory framework in the following sectors:
- starting a business is easier
- the process of getting construction permits is easier
- property registration is simpler
- getting electricity is simplified
- Kuwait improved access to credit information
- minority investor protections are strengthened
- Kuwait made trading across borders easier
Last but not least caption in this list points out that Kuwait made trading across borders more attainable. Thus, let’s see what has changed. They improved the customs risk management system. Moreover, they implemented a new electronic clearance system which accelerated the whole process of trading. Kuwait has also taken the initiative to help small and medium-sized businesses trade internationally.
Looking to expand your Kuwait-based business – to Bahrain and Qatar
With your Kuwait-based business secured by unchallenging regulations and a positive business climate, are you thinking about the next step? Why not expand your business and reach regional markets. If you have an interesting venture and wish to establish its presence, the locations of Bahrain or Qatar are good markets to choose from. Here are some general points which Bahrain and Qatar as investor-friendly countries and policies both have:
When considering demographics, you should think about how close your core business is to your new venture abroad. What means of transportation will you be using when shipping? Will you ship by land, sea, or air? After all, how accessible your new business generally is? What are the best shipping options to Bahrain? Having a distance in mind, transport costs might not be too high and the goods will be delivered to the market at competitive prices. Also, both countries have access to the sea which will be an advantage plus if you wish to expand from Kuwait to Bahrain or Qatar.
Good demographic characteristics mustn’t be underestimated when choosing a new location to expand your Kuwait-based business. The short distance transportation between the two countries will have competitive transportation fees as a result. Moreover, short distance implies fast shipping which in the end means even better transportation price. What ways of shipping to Qatar will best suit your business?
You will need a good lawyer or law firm to help you with your business expansion. Both Bahrain and Qatar have a long tradition of clear regulations. They are attractive destinations for companies in the financial sector.
Some businesses require a skilled workforce with high productivity. The population of Bahrain and Qatar offer a highly-skilled local and global workforce with the best human capital. The workforce is young, tech-savvy, talented, bilingual, educated, and they will offer you one of the best logistics in Kuwait.
Bahrain and Qatar offer an extensive and highly-developed infrastructure that has been built and developed with oil wealth since the 1950s. Several modern infrastructure projects are run in both countries by their governments. These include upgrading water and power stations and expanding waste-treatment facilities.
Alongside other trade agreements, Bahrain has successfully had a free trade agreement with the US since 2006. It is one of just 12 countries in the world to have a unilateral agreement with the US. While this has encouraged imports from the US, it also introduces an opportunity for companies to start a business in Bahrain and take the advantage of the arrangement. In contrast, Qatar has Free Trade Agreements with China, South Korea, Australia, the European Free Trade Association, New Zealand, India, Thailand, the European Union, Singapore, and the MERCOSUR.
There is no company tax, sales tax, withholding tax, and VAT tax in Bahrain, except for the oil industry. On the contrary, there is company taxation in Qatar. The tax rate is 10% and it is paid annually. The tax is only related to businesses not to personal incomes.
Other steps when preparing to expand your business
Regardless of the external factors mentioned above, some internal factors may be decisive whether or not to go abroad with your business. Those factors embody a well-structured business plan and market research. A good business plan is traditionally considered the key to success. A well-structured plan encompasses your goals, prognosis, and routes. It provides a clear strategy on how you intend to take your business from paper to profit. You can draw up the plan yourself or seek the professional assistance of international business-plan agencies out there. Other important steps are to plan market entry, analyze competitors, and research the market. Market entry strategy covers both your customers and your competition. Researching these domains will give a complete picture. Thus, you’ll know where you should put your efforts in the next stage of expanding your business.
Subtle challenges for foreign companies
Although having a reputation as a liberal and open Islamic countries both Bahrain and Qatar might still be challenging societies for foreign investors. Whether you are a resident or non-resident looking to expand your Kuwait-based business, some subtle cultural differences and customs need to be respected in these countries. Reasonably, non-residents will have to be more observant and try to learn fast in the processes of expanding a business. Kuwait citizens are largely familiar with all cultural and customs details as they are all similar among the countries in the Middle East. For the time of Ramadan, eating, drinking or smoking is prohibited in public during daylight hours. It is necessary to be aware of etiquette and business culture, particularly in meetings. However, with low corruption/crime and good infrastructure, Bahrain and Qatar are free of many of the problems one may encounter when investing and expanding to some other foreign economies.