DOING BUSINESS IN KUWAIT IN 2023
Since 2003, Healy Consultants Group has been efficiently and effectively assisting our Clients with i) Kuwait business registration ii) business licensing iii) Kuwait business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.
| Compare different Kuwait entities | Joint venture (JV) WLL | Wholly foreign owned LLC | Fast solution LLC | Agency agreement | Representative office | Branch office |
|---|---|---|---|---|---|---|
| Also known as | 51% WLL | 100% LLC | Fast solution | Agency agreement | RO | Branch |
| Best use of company? | All products/ svcs | Big corporations | Close client deal now | All products/ svcs | Marketing/ research | Specific projects |
| How soon to invoice Clients? | 3 months | 6 months | 1 month | 2 months | No | 6 months |
| How soon can you hire staff? | 3 months | 6 months | 1 month | 2 months | 6 months | 6 months |
| How soon can you sign a lease agreement? | 1 month | 3 months | 1 week | 1 month | 3 months | 3 months |
| How long to supply corporate bank a/c? | 4 months | 7 months | 2 months | 2 months | 7 months | 7 months |
| How long to supply co. reg / tax numbers? | 3 months | 6 months | 1 month | 2 months | 6 months | 6 months |
| Corporate tax rate on annual net profits? | 15% | 15% | 15% | 15% | 0% | 15% |
| Limited liability entity? | Yes | Yes | Yes | Yes | No | No |
| Government grants available? | Yes | Yes | Yes | Yes | No | Yes |
| Govt approval required for foreign owners? | Yes | Yes | Yes | No | Yes | Yes |
| GCC resident director/manager required? | Yes | Yes | Yes | Yes | Yes | Yes |
| Minimum paid up share capital? | US$3,270 | US$75,000 | US$10,000 | 0 | N/A | N/A |
| Can bid for government contracts? | Yes | Yes | Yes | Yes | No | Yes |
| Recommended Bank | National Bank of Kuwait | Citibank Kuwait | ABK | KFH | KIB | Ahli UnitedBank |
| Can secure trade finance? | Yes | Yes | Yes | Yes | No | Yes |
| Average total business set up costs? | US$26,740 | US$76,390 | US$129,653 | US$15,200 | US$46,825 | US$46,825 |
| Average total engagement period? | 4 months | 7 months | 3 months | 3 months | 6 months | 6 months |
| Accounting and tax considerations | Joint venture (JV) WLL | Wholly foreign owned LLC | Fast solution LLC | Agency agreement | Representative office | Branch office |
|---|---|---|---|---|---|---|
| Statutory corporate tax payable? | 15% | 15% | 15% | 15% | 0% | 15% |
| Legally tax exempt if properly structured? | Yes | No | No | No | Yes | No |
| Group HQ tax incentives? | Yes | Yes | Yes | No | No | Yes |
| Must file an annual tax return? | No | Yes | Yes | Yes | No | Yes |
| Must file annual financial statements? | Yes | Yes | Yes | Yes | Yes | Yes |
| Must appoint an auditor? | No | Yes | Yes | Yes | Yes | Yes |
| Access to double taxation treaties? | Yes | Yes | Yes | No | No | Yes |
| Company Registration | WLL | Wholly foreign owned LLC | Fast solution LLC | Agency agreement | Representative office | Branch office |
| GCC resident director/manager required? | Yes | Yes | Yes | Yes | Yes | Yes |
| Min. number of shareholders/partners? | 2 | 1 | 1 | 0 | Parent company | Parent company |
| Maximum shareholding for foreigners? | 49% | 100% | 100% | 0 | 100% | 100% |
| Security deposit kept with government? | No | No | No | No | No | No |
| Time to incorporate/register a new entity? | 3 months | 6 months | 1 month | 2 months | 6 months | 6 months |
| Can easily convert to a PLC? | Yes | Yes | Yes | No | No | No |
| Public register of s/holders and directors? | Yes | Yes | Yes | Yes | Yes | Yes |
| Can have preference shareholders? | Yes | Yes | Yes | No | No | No |
| Business Considerations | WLL | Wholly foreign owned LLC | Fast solution LLC | Agency agreement | Representative office | Branch office |
| Can register for Trademark? | Yes | Yes | Yes | No | No | Yes |
| Can secure an import and export license? | Yes | Yes | Yes | Through the agent | No | Yes |
| Our Client must travel to Kuwait? | No |
| Temp. physical office solutions available? | Yes |
| You need a local resident as bank signatory? | Yes |
| WH tax on payments to foreign s/holders? | 0% |
| VAT payable on sales to local customers? | N/A |
| The entity will likely be regulated by? | Ministry of Commerce and Industry |
| Min. number of directors/managers? | 1 |
| Monthly VAT reporting to the government? | No |
| Sign office lease during incorporation? | Yes |
| S/holder/director docs attested/translated? | Yes |
| Foreign director needs personal tax no.? | No |
| Foreign director needs a residence visa? | Yes |
| Maximum number of staff allowed? | No maximum number for any entity |
| Expatriate to local staff ratio? | Yes, ratio depends on business sector |
| Residence visa for business owner? | Yes |
| Other useful information | |
| What will be included in my customer sales invoice? | Click link |
| Kuwait has signed free trade agreements? | Yes |
| Kuwait is a member of WIPO/TRIPS? | Yes, WIPO only |
| Kuwait is a member of the ICSID? | Yes |
| Average custom duties suffered? | 5% |
| Govt. foreign investment approval required? | Yes |
| Average monthly office rent? (US$/sq m) | 24 |
| Minimum statutory monthly salary? | US$216 |
| Average monthly US$ salary for local staff? | US$3,500 |
| US$ deposit interest rate (year average)? | 1.75% |
| Overseas remittance currency controls? | None |
| Banking considerations | |
| Multi-currency bank accounts available? | Yes |
| Corporate visa debit cards available? | Yes |
| Quality of e-banking platform? | Good |
| Crowd funding available in this country? | Yes |
Kuwait business setup summary
- In Kuwait, the most popular business entities for foreign investors are the LLC and branch;
- Kuwait business set up is expensive and time-consuming due to i) high paid-up capital and other regulatory requirements ii) red tape;
- A Kuwaiti national must own at least 51% of an LLC entity. The only exception to this is for foreign investments approved by Kuwaiti Direct Investment Promotion Authority (KDIPA);
- All corporate entities trading in Kuwait will be subject to annual corporate taxation of 15%;
- An option we offer our Clients is to simply negotiate an agreement with a local Kuwaiti agent to reduce their business setup costs. However, all income earned through an agency agreement is still subject to corporate income tax;
- There is no withholding tax levied on payments from Kuwaiti entities to their non-Kuwaiti shareholders.
