Kuwait company formation is a tax efficient way for international businesses to legally conduct business in oil rich Kuwait and throughout the Gulf Cooperation Council (GCC).
Advantages of Kuwait company registration
- A Kuwaiti company is sometimes given preference when bidding for some government tenders;
- A Kuwaiti company is legally tax exempt if properly structured;
- Kuwait incorporation allows 100% foreign ownership. However, a minimum of two shareholders is required;
- Some businessmen and contractors choose to incorporate a company in Kuwait as the ideal gateway into neighbouring Iraq;
- Kuwait is a key member of the Organization of the Petroleum Exporting Countries (OPEC). Oil accounts for around 50% of Kuwait’s gross domestic product (GDP). Many investors choose Kuwait company incorporation to tap opportunities in the booming oil sector;
- Arabic is the official language of Kuwait, but English is widely spoken. It is used in business and is a compulsory second language in schools. Therefore, foreign investors find it easier in communicating with employees, customers and suppliers;
- Healy Consultants can open a corporate bank account in Kuwait with one of the world’s leading retail banks, including HSBC and Citibank, or internationally to support Kuwait incorporation.
Kuwait has a reputation for political stability and a relatively efficient, transparent government. Thus, relatively a better place to do the business.
Kuwait is exempt of taxes including: i) personal taxation; ii) interest; iii) royalties; iv) VAT; v) stamp and transfer duties and vi) property taxes.
Kuwait has a number of industrial areas, the largest being located in Shuwaikh, Sabhan and Shuaiba. Kuwait has its Free Trade Zone located at Shuwaikh port, under the supervision of Ministry of Commerce and Industry. The zone provides facilities for the storage and processing of goods, materials and other related activities, with companies operating there enjoying exemptions from all custom duties as well as streamlined visa procedures.
Disadvantages of Kuwait company registration
- Kuwait business incorporation is challenging because of inconsistent regulations and slow moving bureaucracy. Kuwait is the 69th least corrupt country in the world, according to the 2013 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians;
- The minimum capital requirement for Kuwait business incorporation is 7000 Kuwait Dinars (US$26,000). Kuwait is ranked as the world’s 76th freest economy by the Heritage Foundation’s 2014 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment, and labour markets;
- A 100% foreign owned Kuwaiti company cannot import goods for commercial purposes;
- According to the 2013 Doing Business Survey by the World Bank, Kuwait is the world’s 104th easiest place to do business. The survey measures factors including business start up procedures, time, cost, and minimum capital required to start a business;
- Kuwait is ranked as the world’s 36th most competitive economy in the World Economic Forum’s Global Competitiveness Report 2013 – 2014;
- During company registration and corporate bank account opening, the Kuwaiti Government frequently requests documents to be attested by the Kuwaiti Embassy in the country of origin of our Client. This is both a costly and time consuming exercise and complicates the company incorporation process. Examples of documents include i) passports copies of directors; ii) parent company certificate of incorporation and M&AA; iii) power of attorney issued by the parent company; iv) Bank reference letter and proof of address of directors. To overcome this problem, our Clients’ appoint Mr. Aidan Healy as the temporary nominee shareholder, director and bank signatory.
Though a large number of people speak English, business documents are written in Arabic, therefore foreign investors have to face the translation costs.