Kuwait corporate banking options in 2023
Since 2003, Healy Consultants Group helps multi-national Clients open multi-currency corporate and sharia-compliant bank accounts in Kuwait for local and overseas companies.
Without bank signatory travel, our Dubai-based team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.
We recommend our multi-national Clients read this web page to avoid bank surprises later!
Kuwait banking problems and solutions
No Kuwait banking problem Solution 1.
Bank insists the signatory travels to Kuwait for a one-hour bank interview.
The bank insists that the bank signatory to the account be ordinarily resident in Kuwait.
Healy Consultants Group’s Client travel policy will apply. Our staff will organise the bank meeting in our Kuwait affiliate’s office and assist our Client during the bank interview(s).
Alternatively, where possible, Healy Consultants Group’s banking team negotiates with the Kuwaiti bank to have our Client visit the bank’s international branch in their country of residence.
Kuwait corporate bank account opening for a new company is difficult when shareholders, directors and bank signatories live overseas.Global banks continue to tighten corporate bank account opening procedures and their internal compliance departments are completing more thorough due diligence of Clients. Consequently, our Clients should expect Kuwait bank account approval to take up to four weeks.
Healy Consultants Group will prepare a quality business plan for the bank to raise the probability of account approval.If our Client requires a bank account at short notice, we recommend an immediate Kuwait company plus already-approved international corporate bank account.
Like most international banks, Kuwaiti banks often close corporate bank accounts without giving an open, transparent reason to their customers. To close a customer bank account without giving the bank signatory an opportunity to explain ‘unusual transactions activity in the account’ is unfair and unreasonable, and places our multi-national Clients’ businesses under stress.
We recommend our multi-national Clients open multiple multi-currency corporate bank accounts for their entity. It is unwise to open one corporate bank account and have your business be dependent on one bank.
The Kuwait banking sector
Healy Consultants Group summary view:
We believe Kuwait is a stable, reputable country in which to keep funds because:
- The banking and financial system is well regulated. The central bank is responsible for the stability of the local currency. Since 1991, the Kuwaiti dinar is pegged to the US dollar (currently at KD1: US$3.32).
- Kuwait has one of the world’s highest per capita incomes. Banks are liquid and stable, and they benefit from large, stable deposits from government agencies. It is highly unlikely that any Kuwaiti bank would fail (even though there is no government-backed deposit insurance scheme). Kuwaiti banks passed a central bank stress test in early 2021.
- After the country’s Kuwait Finance House (KFH) and Ahli United Bank (AUB)’s large-scale merger in 2019, there may be more consolidation in 2021. This will further strengthen bank balance sheets, liquidity and overall stability of the Kuwait banking system.
- Furthermore, the government is a major employer in Kuwait. As a result, public sector wages will remain stable in 2021 and demand for bank loans, mortgages and other wealth management services is likely to support bank revenues.
- Since 2020, the central bank also acts decisively to mitigate the impacts of the Covid pandemic on the Kuwaiti economy. In March 2020 it cut its discount lending rate to a record low 1.5%. Unfortunately, this step also hurts bank revenues.
- Despite the above, in 2021 Kuwaiti banks will be vulnerable to a global recession which will i) cause oil prices to fall sharply, eroding Kuwait’s public finances and forcing banks to restructure or even write off loans ii) accelerate a real estate market crash in Kuwait, where approximately one quarter of all bank loans are linked to real estate iii) trigger an exodus of foreign workers from Kuwait, leaving behind debts such as car loans etc and iv) force the central bank to cut interest rates, decimating bank margins.
- The World Economic Forum ranks Kuwait 85th globally in terms of the soundness of its banks, better than most Middle East countries.
- Standard & Poor’s (S&P) sovereign credit rating for Kuwait is AA- with a negative outlook. Moody’s is A1 with a stable outlook. Fitch’s rating is AA with a negative outlook. See more data on Kuwait here.
Key information on the Kuwait banking sector
- The Central Bank of Kuwait licences, regulates and supervises i) five local conventional banks ii) five local Islamic banks and iii) twelve international banks.
- We recommend our Clients open multicurrency bank accounts at one of the international banks with a presence in Kuwait. Doing so makes international transactions to overseas accounts easier, faster and with lower charges. Our preferred banks are HSBC or Citibank.
- Alternatively, the top local banks are i) National Bank Of Kuwait (NBK) ii) Kuwait Finance House (KFH) and iii) Gulf Bank. As well as Kuwaiti dinar accounts, local and international banks in Kuwait offer multicurrency accounts in US$, sterling, Euros and other currencies.
- On average, our team can secure Kuwait account numbers and online banking login details for our Client within four weeks.
- Kuwait corporate bank accounts typically feature the full range of conventional products and services including i) investment products (insurance and unit trusts) ii) financing products and services (trade and share financing) iii) trade and credit facilities (including revolving credit facilities) iv) remittances v) bank guarantee facilities and vi) vendor financing.
- It is difficult for a local company to get credit from a Kuwaiti bank. The process is inconvenient and time consuming and involves i) the company submitting a detailed business plan ii) the company providing some form of security iii) the business owners demonstrating that they have experience in the company’s line of activities iv) the company providing the bank with three years’ audited financial statements v) the company preparing a ‘realistic’ feasibility study related to the finance required and vi) the company preparing a project strength and weaknesses analysis (SWOT). Healy Consultants Group can assist our Client prepare the required documents. However, there is still no guarantee that the application for finance will be successful.
- Healy Consultants Group can assist Clients to secure trade finance products and services, including i) bank guarantees ii) letters of credit iii) finance against trust receipts and iv) documents against payment and acceptance. Our team will also help our Clients obtain corporate finance in the form of a loan, overdraft or preferential credit terms.
- As well as standard savings, deposit and checking account services, Kuwaiti banks also offer mortgages and personal loans.
- Islamic banks in the country offer similar retail services to their non-Islamic counterparts.
- Most Kuwait bank accounts do not levy account maintenance fees. However, depending on the bank, it may be necessary to keep a minimum balance in the account to avoid charges.
- Kuwait is a small country, and the bank branch and ATM network covers most areas outside Kuwait City. Every ATM in Kuwait accepts international debit and credit cards.
- Nearly all bank branch staff in Kuwait speak English, and correspondence and online banking in all banks is available in English and Arabic.
- Contactless payments are becoming more widely accepted in Kuwait, a trend accelerated by Covid-19. Taxi fares and small payments in grocery stores (usually up to about KD25) can often be completed by simply tapping a card terminal. The move to online banking is, however, likely to mean more bank branches closing in Kuwait in 2021 and beyond.
- Local retail banks offer better currency exchange rates than money changers. If you open a foreign currency account along with a KD account, transfers can easily be made between the two. In 2021, Kuwait banks pay up to 1.25% interest annually on KD currency fixed deposits, and an annual 0.25% on US dollar and an annual 0.125% on sterling deposits.
- Since 2016, Kuwait is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. As a result, Kuwait-based banks share information on accounts and account holders with tax authorities where the company/individual is tax-resident.
- Similarly, under the Foreign Account Tax Compliance Act (FATCA), Kuwait banks report information on US account holders to the US Inland Revenue Service (IRS).
Foreign exchange obligations in Kuwait
There are no foreign exchange controls in Kuwait. Non-residents can freely repatriate funds from the country. Resident companies can freely remit dividends to non-resident shareholders, and non-resident shareholders can freely repatriate sales proceeds of their stake in a Kuwaiti resident company.
Healy Consultants Group fees to help open a corporate bank account in Kuwait
Healy Consultants Group guarantees Kuwait company bank account approval. Our fees for different banking services include:
Kuwait banking task Our Client travels US$ Kuwait bank account for a foreign company No 5,950 Kuwait bank account for a Kuwaiti company No 4,950 Kuwait personal bank account No 4,950
Healy Consultants Group guarantees Kuwait company bank account approval. Our fees for different banking services include:.