How do you start a business in Kuwait? Learn the best ways by which you may register and start a business in Kuwait through Helpline Group.
- Provide assistance in choosing the best company structure in Kuwait
- Help you in setting -up the business in Kuwait as per your requirement
- Support in documentations and paper works required for start of a business in Kuwait
- Provide a helping hand in completing tax and licenses formalities for your newly started company.
Check out our comprehensive portfolio to learn how you can register a company in Kuwait.
Kuwait is one of the richest countries in the world. As an industrial hub in the Middle East, and an economy with the strongest currency in the world, it attracts numerous investments and business opportunities. In order to take full advantage of Kuwait as a business hub, you are required to set up a business in Kuwait. Helpline Group will guide through the various stages involved in the process of setting up a business in Kuwait. Apart from oil and gas, Kuwait is diversifying its business and industrial portfolio to balance its business sectors and focus on additional revenue generating activities.
Company Formation Steps in Kuwait
Finding A Partner
The first requirement in company formation is ensuring local partner or sponsor from Kuwait, which is essential to acquire registration, licenses and commencing activities in Kuwait.
Kuwait has different requirements and rules concerning business set and formation in various industries. Helpline Group can help you choose the most appropriate form and type.
Every company should have all the necessary licenses and registrations in Kuwait. Helpline Group is a specialist in offering such licensing and registration services in Kuwait.
Let us go through some important information on Kuwait
The geographical location:
The state of Kuwait is located in the extreme north part of the Eastern Arabia and it is at the tip of the Persian Gulf. The country is a group of nine closely located islands out of which the Failaka Island holds the maximum amount of its population. This island is spread over an area of about 860 square kilometers.
The Area occupied:
Kuwait has an area of about 17,818 square kilometers and most of the territories in this country are situated at lower heights from the sea level. The highest altitude is 306 meters from the sea level.
Various languages spoken:
The official language in Kuwait is Arabic. At the same time, English is also widely spoken and the language is taught mandatorily in the schools. Most of the business communication in Kuwait takes place in English as well. The other languages spoken by different communities are Urdu, Hindi, Farsi & Tagalog.
The climatic conditions:
The sandstorms caused by the northwestern wind storms are a major climatic challenge between June & July. However, the climate would be considerably warm and pleasant during spring and winter. The average recorded temperature in Kuwait during summer is 330C.
Presently, about 4.5 million people live in Kuwait, out of which 70% are expatriates.
Currency of Kuwait:
Kuwait Dinar (KD) is the currency of the country that has the exchange rate of about 1 US$ = 0.3 KD. This is among the important attractions for the expatriates as they can earn and save a considerable amounts working in Kuwait.
The governing authorities:
His Highness the Amir, Sheikh Sabah, Al-Ahmed Al-jaber Al-Sabah is the head of Kuwait state, as it is a constitutional Monarchy ruled by the Sabah Royal Family.
In March 2017, he has been awarded the Honorary Doctorate from Kuwait University for his Humanitarian and Global role.
Trade & Economy:
The natural resources such as oil, natural gas, fish and shrimp form the major parts of the exports from Kuwait. The exports of about $ 112 Billion were accounted in 2013. The important products that are exported would be refined products and fertilizers.
Food, apparels, construction materials and vehicles are imported to Kuwait and the total amount of import sums up to about $22.5 Billion.
The crude oil reserves in the country that contribute around 6% of the global reserves play the most important role in economic development of the country. This is the greatest source of revenue to the government, the product that is exported at the highest level and counts half of the GDP of the country as well.
The government emphasizes on the wage hikes for the public sector employees and Kuwait’s Future Generation Funds as well. The remarkable budget surpluses of 30% of GDP allow the Kuwaiti government to spend freely on the development projects. Similarly, the inflation rate is maintained at 3.5%.
The steady economic growth can be the major achievement of the government and in the last decade, they are focusing on attracting investments, encouraging private sector to contribute in the economy and implementing alternatives to the oil reserves as well.
The festive celebrations and national holidays:
Kuwait follows the Arabic calendar that consists of 12 months and the counting is done in accordance to the local sightings of the stages of the crescent moon. Apparently, some of the festivals are also celebrated according to Georgian calendar as well.
Some of the holidays are listed below (the dates are subject to change as per the Arabic calendar)
- National Day Kuwait: 25th February
- Liberation Day Kuwait: 26th February
- Birth of the Prophet – Milad Un Nabi
- The Prophet’s Ascension – Lailat Al Miraj
- Al Hijra : Islamic New Year
- Eid-Al-Fitr: The end of Ramadan Fasting Month
- Eid-Al-Adha: Feast of sacrifice in Islamic tradition – Qurban
About the massive bridge
Kuwait hosts the Sheikh Jaber Al-Ahmed Al-Sabah causeway; which is going to be the world’s longest bridge. Hyundai E&C and Combined Group Contracting are completed this massive $3 Billion Dollar Project, being the largest infrastructure project in the world. They have started the work in 2013 and successfully completed the project. This project is named after the 13th Emir of Kuwait to commemorate and pay tribute to his contribution in development of Kuwait.
This bridge spans over 30 miles and joins Kuwait City on the south of the bay with Subiya New Town situated in the north. This magnificent bridge spans the Bay of Kuwait in two directions. The first part of the project is the Main Link connecting Kuwait City with the proposed Madinat al-Hareer (Silk City) in Subiya. The other part of the bridge, Doha Link would connect Kuwait City with Doha and the Kuwait Entertainment City. This bridge would minimize the distance between Kuwait City and Subiya drastically.
Legal Structures of the Company
Kuwait has different company structures on offer. One must understand the basic difference between these structure models and types in Kuwait, and make the best decision based on the ownership needs, requirements and conditions. Helpline Group can guide you through this process and help you choose the most suitable company structure in Kuwait Company Formation.
- Limited Liability Company Formation (W.L.L)
- Branch Office
- Commercial Agencies
- Representative Trade Offices
- General Partnership Company
- Limited Share Partnership Company
- Holding Company
- Public Share Holding Company
- Joint Venture
Limited Liability Company Formation in Kuwait (WLL)
Limited Liability Company (LLC) is one of the most popular forms of business in Kuwait. LLCs usually have a minimum of two shareholders or partners. There must be a local partner with at least 51% shares in the business. It is not possible for foreign entities to own major shares in such business forms in Kuwait. There are different tax benefits available for LLCs in Kuwait. A minimum share capital of KWS 1000 is required for forming an LLC in Kuwait. There are certain industrial areas that LLCs are prohibited from entering. Contact Helpline Group to register your LLC in Kuwait and get a unique business name as per the legal requirements in Kuwait.
General Partnership Company in Kuwait
In a general partnership, a business should have at least two partners. Although this is the easiest and simplest business form to set up in Kuwait, it comes with major implications. For example, in a general partnership, partners of the business have unlimited liability to the business and its obligations. Partners are liable to deal with the business and its liabilities even with their personal assets and wealth. There is no maximum number of partners specified in the law.
- Shareholders: Minimum 2 shareholders
- Liability: Unlimited for all partners
- Naming Requirements: Must include the title of one or more partners in the name
- Foreign Investment: Foreign investors are allowed and can have 100% ownership
- Local Partners: Local partners are not mandatory
Limited Share Partnership Company in Kuwait
In a limited share partnership, there can be limited and general partners, and one of each type is mandatory to start a business. While a limited partner is only required for making investments, a general partner is tasked with handling business activities and have unlimited liability towards the business. Working conditions, profit and loss sharing and such depend on the agreement and contracts between the partners. The following conditions are applicable to a limited share partnership in Kuwait.
- Shareholders: Minimum 2 shareholders
- Liability: Limited to the extent of investments for limited partners, unlimited liability for general partners.
- Minimum Share Capital: Not specified
- Foreign Investment: Foreign investors are allowed
- Local Partners: Local partners are mandatory
- Tax Requirements: Individual Tax
Holding Company Formation in Kuwait
A Holding company in Kuwait is formed to manage and own other business in Kuwait. A Holding company in Kuwait may own any type of company in Kuwait, including Kuwait Share Holding companies and limited liability companies. It is possible for holding companies in Kuwait to own more than half of the shares in subsidiary companies and exercise superior control over other businesses. Contact Helpline Group for more information on setting up a holding company in Kuwait and understand how companies can strategically manage their assets.
Kuwait Shareholding Company (Public Shareholding Company)
Kuwait Shareholding Company (KSC) is a public shareholding company in Kuwait, which can issue public share offers for ownership. It must have a commercial registration in Kuwait and a KSC is a good option for those looking for enhanced and third-party investments required for large business projects and activities. Approval from the Ministry of Commerce and Industry in Kuwait is mandatory for setting up a Kuwait Shareholding Company, and there is a mandatory requirement for at least three board of directors in the business. Shareholder liability is limited to the extent of the investment they made to the business. It is possible for a shareholder to transfer their shares between others. Contact Helpline Group for more information in Kuwait Shareholding Companies.
Joint Venture Formation in Kuwait
Joint Ventures are formed between businesses in Kuwait and are called Association in Partnership. In Kuwait, a joint venture is a legally recognised form of a contract or agreement, but this does not ensure legal recognition as an entity. The roles and responsibilities of a joint venture are as good as mentioned in the contract or agreement, or the Memorandum of Association. It’s beginning, end and activities are dependent on the Memorandum of Association or the agreement between involved parties, including their duties and obligations. Speak to Helpline Group for more information on setting up joint ventures in Kuwait.
Representative Trade Offices in Kuwait
Foreign companies and investors may open representative trade offices in Kuwait to carry out their company activities. However, such offices are not allowed to make profit-making activities. A local person is needed to represent the company in Bahrain. Such form of a business is usually used or promoting parent company activities in Kuwait. Such businesses are more suitable for customer relationships and business support and so on. Helpline Group can help you set-up a representative trade office in Kuwait.
Commercial Agencies in Kuwait
Commercial agencies are used for representing a main or parent company in Kuwait. A commercial agent is mandatory for such businesses. A foreign business may appoint a local agent for distributing goods or engaging with local customers. The local commercial agent can be a Kuwaiti citizen or a Kuwaiti company. It is possible for commercial agents in Kuwait to negotiate contract or promote business activities and products in Kuwait. A signed agreement between the parent company and the commercial agent is mandatory in Kuwait. Contact Helpline group for more information on taxation requirements and income conditions for Commercial Agencies in Kuwait.
Branch Offices in Kuwait
Opening Branch Offices in Kuwait has tough requirements and regulations. Companies with Gulf Cooperation Council origin or companies owned by GCC citizen are the only allowed companies to open a branch office in Kuwait. Another way to achieve this goal is to gain approval from the Kuwait Investment Promotion Agency (KDIPA). There are complex requirements associated with achieving this permission, which may range from specifying capital requirements, expected benefits, business activities and ownership models and so on. Helpline Group can help yo obtain all these requirements and set-up a branch office in Kuwait.
Other Factors You Should Consider for Kuwait Business Formation
There are different rules of real estate businesses and brokerage companies in Kuwait, which can be extended towards ownership and management of such businesses and most importantly, the licensing requirements. Even though you are making huge investments towards real estate businesses in Kuwait, one must make sure adequate attention is paid towards registration and licensing requirements in the country to make sure their business is legally protected and recognised. As foreigners have certain restrictions and limitations in handling real estates, such as buying or selling, one must consult with Helpline Group to gain more insight into how to handle real estate requirements in Kuwait.
Different counties have different tax systems, especially for businesses and individuals. In Kuwait, there are strict rules concerning taxes for businesses. While residents of GCC or companies from GCC are exempted from paying taxes, foreign corporate entities are required to pay taxes in Kuwait. Tax is calculated on yearly basis and there are additional requirements involved with the payment of taxes. Corporate tax in Kuwait is a flat 15%. Contact Helpline Group for more information on corporate tax requirements in Kuwait.
Visa requirements change from country to country. When you are setting up a business in Kuwait, the first issue you need to consider is obtaining a suitable visa for your activities. For example, you are not permitted to carry out business activities on a visiting visa – you shall need a business or investor visa for such requirements in Kuwait. We can help you get your visa requirements carried out in Kuwait through Helpline Group. We handle all visa requirements, including entrepreneurs’ visa, employee visa and visa for managers and so on.
As a business, you may have different requirements for importing and exporting goods from and to Kuwait. You shall need different licensing and registration to engage in importing and exporting activities in Kuwait, even if you have appropriate licenses for carrying out business activities in Kuwait. There may be additional issues to consider in the type of products allowed to import or export, and business-related requirements or restrictions in importing and exporting goods. Helpline Group can guide you through these requirements in Kuwait.