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Company Formation in Kuwait

Company Formation in Kuwait

As a foreign investor who wants to start the process for company formation in Kuwait, you will probably be interested in the types of companies that can be set up here, the conditions that have to be fulfilled as a foreign businessman (which can differ from the ones of local investors) or the main industries that are traditional to this country.



 Quick Facts  
Types of companies which can be started by foreigners

– Limited Liability Company,

– Closed Joint Stock Company,

–  Public Joint Stock Company

Minimum share capital for LTD company (if applicable) and paid-in requirement

 Min. 1,000 KWD must be paid for company formation in Kuwait.

Minimum number of shareholders for limited company

2

Time frame for the incorporation (approx.)

 It takes at least 3 months for company formation in Kuwait.

Corporate tax rate

15%

Dividend tax rate

15%

VAT rate

Currently, Kuwait does not impose VAT.

Number of double taxation treaties (approx.)

82

Do you supply a registered address (Yes/No)

 Yes

Local director required (Yes/No) No
Annual meeting required Yes 
Redomiciliation permitted

Yes 

Electronic signature 

 Yes

Is accounting/ annual return required?

 Yes

Foreign ownership allowed  Yes
Any tax exemption available? (offshore income, dividend income, etc.) Zero tax on income
Any tax incentives (if applicable) Foreign tax credit

In this article, our team of lawyers in Kuwait will present the basics of starting a business in this country; since we address to foreign investors, our team will also provide the necessary legal assistance on immigration to Kuwait for foreigners interested in company formation in Kuwait and here, our lawyers can help you apply for the required visas as well as to complete any immigration procedure that is imposed under the local law.


What are the main company types available in Kuwait?


The legal entities local and foreign investors can set up in this country are prescribed by the Kuwait company law, through which one can register any of the following: limited liability company, branch office, shareholding company, partnership or joint ventures. A common way to start the process for company registration in Kuwait is by incorporating a limited liability company, which has the same characteristics as the European limited liability companies.

However, it must be noted that this entity can be used for most of the commercial activities that can be developed in this country, with the exception of banking activities or other related operations, such as other financial activities, and here we mention insurance. In order to start a business in Kuwait, the following conditions must be fulfilled:

  • according to the State of Kuwait, the company must be registered by at least 2 shareholders;
  • there are also shareholding requirements to comply with – the foreign investor can only own 49% of the shares;
  • there is the obligation to have a Kuwaiti partner, who will be the main shareholder of the company, owning 51% of the shares;
  • the registration is bound by the payment of a fee of KWD 30;
  • for those who want to start the process of company incorporation in Kuwait for a limited liability company, there are also capital requirements, as this legal entity must have a capital of KWD 1,000.

You can count on our immigration lawyers in Kuwait for assistance in moving here.

What does the registration process in Kuwait entail?


According to the Kuwait company law, the investor has to comply with a complex set of rules. As a foreigner, the investor is legally required to obtain a designated visa before arriving here for business purposes and complete any other immigration formalities.

Such documents will be required as evidence upon the registration of the company and here, our law firm in Kuwait can help you with in-depth advice on any obligation foreigners can have once they relocate to this country on a short-term or long-term basis. Our immigration lawyers in Kuwait can also offer advice on investment in Kuwait for expats.

Since the foreign investor will need to associate with a local person in order to start the process of company formation in Kuwait, one has to know that the Kuwaiti associate must also comply with certain rules. Being a citizen will not be enough, as the local should be a person who does not work in any governmental agency.

In order to be able to start the process of company formation in Kuwait, both shareholders have to present clean criminal records and the obligation, in this case, is to have a clean criminal record, without any type of previous convictions. Please mind that the local law does not allow two spouses to become the shareholders of a business. If two spouses want to start their own business, the company must be formed with the participation of a third shareholder.


How can one start a business in Kuwait operating as a branch office?


One can easily start the company incorporation in Kuwait for a branch office, which is recognized here, if few basic requirements are met. One of them is to appoint a local Kuwaiti agent. This is a rule that is very common for the registration of a branch in most of the countries across the world, not only in the Middle Eastern area.

However, the right to register a branch office is limited to specific regions, for instance, the countries that are in the Gulf Cooperation Council. The entity can also be registered with the approval from the Kuwaiti Investment Promotion Agency. Given that the country is situated in the Middle Eastern region, different rules can appear that may not be very familiar for investors from other regions.

This is why our team can offer services on investment in Kuwait for expats and you can rely on our team for any other matter that can be of interest; the law applicable here, commercial law, immigration to Kuwait, and the rules applicable to investors interested in the process of company registration in Kuwait, the tax system or the accounting procedures for business. For all these, our law firm in Kuwait remains at your service.