Company Formation in Kuwait
Learn the best ways of setting up a company in Kuwait, different types of business structures in Kuwait, and what is required to start a business in Kuwait.
- We will help you register your company in Kuwait
- We will help you look for and choose a suitable partner or sponsor from Kuwait
- We will help you set-up your business and associated requirements
- We will help you register for tax and licenses
Find out how to register a company/business in Kuwait in very easy steps. Our comprehensive list of services is here to help you.
Kuwait is a Middle East country, officially popular as the ‘State of Kuwait’. Kuwait is located in the Western region of the Asian Continent. Kuwait shares its regional boundaries with Iran and Saudi Arabia. Its natives use Arabic as their primary and official language. Kuwait is primarily subjugated by migrants of other nations. The Kuwaiti dinar is considered a highly valued currency throughout the world.
Although the process of ‘Company Setup in Kuwait’ is not easy, it is generally considered a centre of commerce by many for their business because of economic benefits. Oil and Gas are the major sectors that contribute in its economic growth. Other sectors including Agro allied business sector, financial business sector, real estate business sector and many others are also strong pillars of economic growth in Kuwait.
Finding A Partner
You need partnership and support from a Kuwaiti to get the fundamental licenses to work in the country. Helpline Group can guide you and help you gain a Kuwaiti partner.
Business set-up activities in Kuwait may change depending on the industry and type of company. Helpline Group can guide you and help you apply for business set-up.
You may need to apply for additional licenses to begin operations of your business in Kuwait. Helpline Group can guide you and help you get these licenses in Kuwait.
Kuwait is known for its press freedom in the entire Middle East region. It allows its press media to express its views without any pressure. This gained the country with the title “Freest Press” among all the GCC countries. This gives a positive signal to the people dreaming to start a Media Company in Kuwait. Another business area that’s growing well in Kuwait is ‘Stock Exchange’; this business captures the second place in the entire Middle East region.
The government of this robust economy are continuously working towards developing and diversifying the economy by attracting investment in infrastructure development and other non-oil sectors. Kuwait is a strong economy with high-income earners that offers an attractive business opportunity with low tax rate to foreign business. There are abundant business prospects and opportunities in the area of business consultancy, imports, real estate, medical, agriculture and many more.
Promise on Quality and Reliability
Our highest priority is in ensuring our commitments are met, and we deliver our promises on time. Hence, you can be assured that your company formation activities will be completed on time, as per your requirements.
Legal Structures of the Company
A legal business structure is the first decision that should be taken before initiating any business in Kuwait. Every business requires a special business structure for its proper growth. Company formation in Kuwait can be done in several ways but the most common and suitable business structure used by the foreigners is “Limited Liability Company”. Except for this business form, there are several legal business structures through which a business can be started in Kuwait.
- Limited Liability Company Formation
- 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 also known as “With Limited Liability” (WLL). Limited Liability Company is a form of business of two directors and two shareholders with a local business partner with a 51% share in the business. In spite of deregulations, a foreign entity can still not own major shares. Kuwaiti partner can serve the company as a secretary as well as the manager or both. Limited Liability Company (LLC) is the most simple and convenient business form which can be formed and completed within 3 months.
This business form also has the tax benefit as LLC is non- taxable because of the involvement of Kuwaiti partner. In Kuwait corporate tax is only taken applicable to foreign business. In Kuwait LLC with a foreign partner is considered as a Kuwaiti business because of the majority of shares is with the local partner. An individual need minimum of 1,000 KWS as share capital for establishing a Limited Liability Company in Kuwait.
A Limited Liability Company is not permitted to deal in the business related with insurance, banking or investment business. In LLC form of business structure, there are some relaxations provided to those who are following FDI Law of 2013. An individual can have 100% control on LLC (full ownership) after getting approval via the Kuwaiti Investment Promotion Agency (KDIPA). Companies registered under KDIPA have different regulations depending on the nature of the business.
In Kuwait, it is mandatory for all LLC to get registered under the law with a unique name. LLC’s are supposed to pay yearly tax returns and it is essential for them to submit audited annual financial statements. However, a company registered under KDIPA might avail the corporate tax waving benefit granted during the registration process.
General Partnership Company Formation in Kuwait
General Partnership Company is governed by the laws mentioned in Articles 33 to 55 of the Companies Law. General Partnership Company is a legal business form where partners bear unlimited liability that can be extended to the full extent including their personal wealth. Minimum two Board of Directors and Promoters are required to operate a General Partnership Company. However, there is no limit in terms of the maximum number of partners.
Company formation in Kuwait under this business structure needs a proper name, which should cover the title of a partner(s). There is no specific capital limit defined to start a partnership business. This business form is not recommended for initiating insurance, investment and banking businesses in Kuwait. Foreign investors can have 100% ownership in this type of partnership business without hiring an agent or a local sponsor. Helpline Group can assist you in properly formulating and documenting everything related to general partnership company formation in Kuwait.
Limited Share Partnership Company Formation in Kuwait
Kuwaiti laws allow foreigners to register a Limited Share Partnership Company. This business form needs two or more partners to establish a company, and a local citizen should be included as a business partner (unless special approval is granted from KDIPA). A partnership deed is signed and registered with the mutual agreement of both or all partners working together in the business. It contains all information related to partnership business including profit/ loss share, responsibilities of partners, capital investment etc.
If nothing is specified under partnership deed, then the directors or shareholders share equal rights and responsibilities. In addition to this, the tax is supposed to be paid on the basis of shareholders’ individual financial status. This makes this business a tax transparent entity. Helpline Group can assist you and guide you through limited share partnership company formation in Kuwait.
Holding Company Formation in Kuwait
Incorporation of a holding company is done in Kuwait with the aim of investing in foreign or Kuwaiti business through purchasing shares, units or stakes; or contributing in the business incorporation, and funding companies. A holding company can be established in the form of Single Proprietorship Company or Closed Shareholding Company, or Limited Liability Company.
We, the Helpline Group can guide you about the process of Holding Company setup in Kuwait. However, we recommend a consultation with Helpline Group to determine the best possible structure that would benefit you in a strategic and financial manner. Holding Company is governed under the articles 274 to 280 of the Kuwaiti Companies Laws. A holding company may have more than half company shares and posses high control level on subsidiary companies.
Kuwait Shareholding Company (Public Shareholding Company)
Public Shareholding Company in Kuwait is known as Kuwait Shareholding Company (KSC). A Public Shareholding Company is supposed to have commercial registration in Kuwait for starting a business. It is a good business option for those looking ahead to get third-party investment in business via IPO (Initial Public Offering). This business form is suitable for running large projects, as KSC needs a large amount of capital investment and require a long period to gain adequate profit margins from the market.
It requires minimum three members as Board of Directors. For establishing a company set up in Kuwait, approval from the Kuwait Ministry of Commerce and Industry is required. Shares in this business form are divided into small shares holding equal value. Every shareholder is liable only to the amount of contribution done by then in the term of shares purchased. Shares of KSC are traded publicly in a local stock exchange house of Kuwait. Shares can be freely transferred from one person to another person.
Joint Venture Formation in Kuwait
Joint Venture is also called as Association in Participation. Joint Ventures are quite simple contracts by nature that does not need any formal business establishment process. It is governed under the Kuwait Companies Law by the Article 57. According to Article 59 of Kuwait Companies Law, a Joint Venture is not a legal entity and cannot operate a business in its own name. Thus, it can transact with the third party only with the single venture which can be held liable for the deed performed.
As a business form, it does not enjoy the special feature of separate business identity, as a Joint venture is the result of a contract established between two bodies working together to fulfil common business objectives. Hence, a Joint Venture may get dissolved once the target goal is achieved. There are several other conditions under which a Joint Venture can be dissolved like disagreement or incompetency of one or more company, contract expiry, legal complications, etc. In Joint Venture, the transacting body is held liable to the full extent, whereas, the liability of the non-transacting company is limited to the extent of share owned by them.
Representative Trade Offices in Kuwait
In Kuwait, Foreign Direct Investment Law of 2013 permits foreign companies to establish and get commercial registration in Kuwait for their Representative Office. Helpline Group can assist in establishing this business form in Kuwait. This type of business structure is not suitable for those looking for monetary gain or making a profit in Kuwait, as a Representative Trade Office is not allowed to engage itself in any profit-generating activity.
Through a Representative Trade Office, the parent company can only promote its business in Kuwait. A local resident of Kuwait is required to be appointed as manager of RTO. In case, the parent company is looking forward to furthering FDI investment, prior permission is required to be taken from KDIPA. Helpline Group can help you set up your Representative Trade Office in Kuwait and take care of all regulatory and legal requirements.
Commercial Agencies in Kuwait
A commercial agency is the best alternative to make a legal presence in Kuwait. In Kuwait, Law No. 36 of 1964 governs and tells how to do business in Kuwait via a Commercial Agency setup. This Business form is suitable for those who do not want to have Kuwaiti shareholding in their business or make further business investments. In Kuwait, a commercial agent is required to represent its parent company or foreign company and works on behalf of it. A Commercial Agent can deal with promoting products of a parent company in Kuwait and can also negotiate on their behalf.
Under this business form, there must be a signed agreement with the commercial agent who should be registered with the Kuwaiti Ministry of Commerce and Industry. In the agreement, the mode of payment to an agent (fixed salary or commission) should be clearly mentioned by the parent company. Commercial Agency in Kuwait is supposed to submit yearly tax returns and pay an annual tax on their corporate income earned in Kuwait. Helpline Group can help you register your Commercial Agency in Kuwait and take care of all regulatory and legal requirements.
Branch Offices in Kuwait
For a foreign business, it is often necessary to have a Branch Office in Kuwait. This form of business structure is suitable for those dealing in financial or engineering business. In Kuwait a foreign company can register its Branch Office only if the company is incorporated with another ‘Gulf Co-operation Council’ or it is owned by a native GCC person. Another way to open a Branch Office in Kuwait is to gain approval from the Kuwaiti Investment Promotion Agency (KDIPA).
For attaining such approval, one is required to submit detail information about its business by highlighting is the business model, specifying capital investment, and the expected benefits from the business to the society. A Branch Office not owned by a GCC national has to file yearly tax returns and submit annual audited financial statements. However, a non–GCC owned Branch Office might get 10 years tax benefit. Helpline Group can help you register your branch office in Kuwait and take care of all regulatory and legal requirements.
Other Factors You Should Consider for Kuwait Business Formation
Helpline team is ready to help you at all the stages of commercial registration in Kuwait to properly establish your real estate business. Real Estate business requires a good amount of investment for running this business, apart from legal compliances. In Kuwait, real estate business is developing at a rapid rate and has a good business opportunity. The Kuwaiti government is also promoting business for expats by relaxing its business policies.
For a foreign business, it is essential to pay taxes in the country, depending on the industry and type of business. While businesses registered under Gulf Cooperation Council (GCC) nation or owned by a Kuwaiti citizen or by a GCC citizen are not entitled to pay any tax, foreign corporate entities are required to pay corporate income tax in Kuwait. Tax is calculated on a yearly basis and is supposed to be paid by the end of taxable period (within three and half month), but an extension of 60 days can be granted to a foreign entity. Flat corporate tax is charged in Kuwait at 15%; this amount is applicable to the monetary benefit earned in Kuwait including profits and capital gains. Speak to us to gain more understanding of the corporate tax system in the country.
Starting a business and getting a visa might be a difficult task for an individual for an entirely new business setup. At Helpline Group, we have our own VISA processing and management department that can support and guide you through any visa related requirements and applications. Talk to us for more details.
Foreign entities are allowed to import raw material and goods to Kuwait. Major products imported by Kuwait are foodstuff, automobile and raw material required for oil, gas and refinery industry. In Kuwait, food needs are satisfied via import from Australia and similar countries. Cheese and meat are in high demand and is imported at a large rate in Kuwait. Importers have to pay 5% as a standard import levy on the total value of goods imported. Kuwaiti government provide protection to some local industries from high duty rates on imports made by them. In Kuwait, export goods are also taxed at 5% except those that are imported to export elsewhere. Importing can fetch a good amount of profit to you in Kuwait. Helpline Group can guide you and solve all your queries related to how to business in Kuwait and gain profit via import/export business models and structures.
We are an Expert Consultant to get the following licenses:
- Industrial License
- Auditing Company License
- School and Institute License
- Travel and Tourism Agency License
- Shipping Agency License
- Engineering Consultancy License
- Tourism Company License
- Trading Companies
- Contracting Companies License
- Clinic License
- Restaurant License
- Clearing and forwarding license
- Trademark registration
- Product registration
- Classification certificate
- Import Code
Get in touch with Helpline Group today to take your goals further.
Our Company Formation Services are available in many countries. To know more about our services, please leave a message, stating your requirements on the left. Alternatively, you may contact us through either of the following methods. Helpline Group associates will contact you as soon as possible. We are also available in WhatsApp (Use the following numbers).