Kuwait

Business Setup in Kuwait

Kuwait is ideally located to cater to the fast growing market with a large population in Asia. YourGlobalPro can assist in Kuwait for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval and Trademark Registration.

About the Country

The State of Kuwait (“Kuwait”) is a country located in Western Asia. Situated in the northern edge of Eastern Arabia at the tip of the Persian Gulf and sharing border with Iraq and Saudi Arabia. After the discovery of oil in 1938 the country underwent large-scale modernization. The below content will explain you in detail about the requirements for Kuwait company formation in Kuwait, know more about the process of trademark registration in Kuwait and understand the Kuwait Legal and Compliance requirements.

Kuwait

Doing Business Introduction

Kuwait has a high-income economy backed by the world’s sixth largest oil reserves and Kuwaiti dinar is the highest valued currency in the world. Also, as per world Bank report the country has the fourth highest per capita income in the world. As per Doing business report of The World Bank –Kuwait ranks 102 for 2017 survey.

YourGlobalPro professionals are able to assist its client with any type of company formation in Kuwait, trademark registration in Kuwait and other recurring services for your business in Kuwait.

Incorporation - Types of Business Entities

The Commercial Companies Law governs the incorporation of companies and related matter in Kuwait. There are different types of entities that can be incorporated in Kuwait are as mentioned below:

  • Limited liability companies (With Limited Liability – WLL)
  • Shareholding companies ((joint stock) company – KSC)
  • Partnerships
  • General partnership
  • Limited partnership
  • Joint Ventures
  • Branch
  • Commercial agents or Distributors
  • Free Trade Zones

Time Frame for Incorporation of Company in Kuwait varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. YourGlobalPro estimates the time required for the process of the company formation in Kuwait to be completed is 50-60 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Kuwait:

  • No foreign-exchange restrictions exist.
  • Equity capital, loan capital, interest, dividends, branch profits, royalties, management and technical services fees, and personal savings are freely remittable.
  • Wealthy country with savvy business people in the private sector.
  • Significant expansion in the building and construction industry
  • Strong import sectors of automotive, oil and gas, computers/ICT, telecommunications equipment, and construction equipment
  • Corporate tax exemption for up to 10 years.
  • Customs duties exemptions

Tax Registration and Filing

In Kuwait, tax year is basically the Calendar Year. Kuwaiti-registered companies wholly owned by Kuwaitis and companies incorporated in Gulf Cooperation Council (GCC) countries that are wholly owned by GCC citizens (GCC entities) are not currently subject to income tax.

Corporate Income Tax Rate 15%
Capital Gains Tax Rate 15%
Branch Tax Rate 15%
Dividends 15%
Interest 0%
Royalties 0%
Branch Remittance Tax 0%
Prescribed documents to be submitted with Tax Authorities. together with the tax declaration Trial balance, list of subcontractors, list of fixed assets and inventory register
Tax Declaration to be Filed On or before the 15th day of the 4th month following the end of the tax period.
Tax payments In 4 equal installments on the 15th day of the 4th, 6th, 9th and 12th months

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Kuwait has entered into double tax treaties with more than 60 countries.

Trademark registration

For trademark registration in Kuwait, an application needs to be made to the Kuwait Trademark Office. It takes approximately 10-12 months’ time frame to complete the process of trade mark registration in Kuwait. A Trademark Registration in Kuwait is valid for 10 years from the application date and can be renewed One year before the trademark right expires by payment of renewal fees for 10 years and also a 6-month grace period for late renewal of a trademark registration with fine is also allowed by the Authority.

YourGlobalPro is fully equipped to assist you with the Process of trade mark registration ion Kuwait for your business in Kuwait. For assistance or advice in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Kuwait:

  • Shares of KSC are freely transferable
  • The initial capital required for establishment of a KSC, KSC(c) or WLL varies depending on the company’s activities
  • No express provisions to protect minority shareholders
  • All companies need to submit a declaration audited by an audit firm approved by the Ministry of Finance on or before 15th day of the fourth month from the end of the fiscal period
  • Compliance with all applicable anti-bribery and corruption legalization required

Accounting Services

Kuwait law requires all business to maintain adequate financial records in Arabic. Accounting records should be kept in Kuwait and as the tax authorities may insist on inspecting the books of account (which may be in English) and supporting documentation before agreeing to the tax liability.

YourGlobalPro can assist you with the entire bookkeeping and accounting services for your Kuwait Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

In Kuwait, all companies are required to follow and adopt an accrual basis of accounting for financial accounting purposes and following the International Financial Reporting Standards (‘IFRS’). The Audit of Book of Accounts is a mandatory requirement for the business.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you auditing services for your business as required by your business.

Banking

The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.  The major banks in Kuwait are National Bank of Kuwait (K.S.C), Commercial Bank of Kuwait (K.S.C), Gulf Bank (K.S.C), Al Ahli Bank of Kuwait (K.S.C.P.), Al Ahli United Bank, Burgan Bank (K.S.C), Kuwait International Bank (K.S.C), The Industrial Bank of Kuwait (K.S.C), Kuwait Finance House, Boubyan Bank (K.S.C). All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Kuwait.

Legal and Compliance

In Kuwait, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Kuwait legal and compliance requirement to be followed by incorporated entities:

  • No foreign-exchange restrictions exist.
  • Equity capital, loan capital, interest, dividends, branch profits,
  • Royalties, management and technical services fees, and personal savings are freely remittable.
  • The Zakat is payable by both KSC and KSC(c) entities at a rate of 1% of the net profit of the company.
  • All the companies that need to pay Zakat are required to submit their declaration by 15th day of the fourth month from the end of the fiscal period.
  • The tax residency certificate (TRC) from the Kuwait tax authorities can be obtained by making application to Kuwait Ministry of Finance – Treaty Department
  • Foreign corporate is taxable even in relation to a beneficial interest held in a Kuwaiti company

YourGlobalPro professionals can assist you in Kuwait Legal and Compliance requirements.

HR and Employment Law and Immigration / VISA

In Kuwait expatriate Labour mainly from South Asians, South East Asians and Non-Kuwaiti Middle Easterners and Westerners constitute the workforce. Below are some of the important points in relation to HR & employment law in Kuwait:

  • Working week as six days with a maximum of eight hours a day or 48 hours per week and one rest day with pay per week.
  • Annual Leave minimum paid leave is 30 days
  • The maximum probation period in Kuwait is 100 days
  • The employment contracts can be terminated by either party to the contract by giving a notice period of three months.
  • Depending on business sector – private sector is obliged to employ a certain percentage of Kuwait Nationals.
  • Permanent residents in Kuwait must obtain an identity card (Civil ID)
  • There are three kinds of visa issued by the Kuwait immigration Authority:
  • Business Visa: Issued to employer-sponsored or business-sponsored applicants for travel to Kuwait for a limited time.
  • Work Permit: are issued for employment in Kuwait – Valid for three years and renewed for similar periods
  • Visit Visa for relatives or tourist visas.

Country Statistics

Capital Kuwait City
Largest City Kuwait City
Total Area 17,820 Sq. Km.
Population 4,348,395
Density 200.2 / Sq. Km.
Currency Kuwaiti Dinar (KWD)
Government Unitary Constitutional Monarchy
Official Language Arabic
Spoken Languages Arabic
Religion Islam
Government Office Hours Summer: 07:00-14:00 Sunday-Thursday Winter: 07:30-14:30 Sunday-Thursday Ramadan: 10:00-13:00
Business Office Hours 08:30-12:30 and 16:30-20:00 (Friday closed) or 08.00-/17.00 (Friday-Saturday closed) Office hours are reduced during the holy month of Ramadan.
Banks and Exchange Houses Hours 08:00-15:00 (closed Friday and Saturday)

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