Company Formation In Kuwait
WHAT IS THE IMPACT OF COMPANY FORMATION IN KUWAIT?
As the name suggests, company formation refers to the process of setting up or establishing a business within a confined space. Kuwait being a cosmopolitan country has a vibrant as well as positive outlook towards the establishment of new companies and enterprises. This has created a new era of development and industrialization in the region thereby creating newer opportunities for various people in different economic spheres.
Learn the best ways of starting a business 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.
Company Formation Steps 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 nation that has always been encouraging and supportive towards the use of Free Press. 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.
WHAT ARE THE DIFFERENT TYPES OF BUSINESS ENTITIES IN KUWAIT?
In order to establish a company or enterprise in Kuwait, there are certain business entities that are permissible by law within Kuwait. Some of those entities are as follows
- Limited Liability Company Formation (WLL)
- Branch Office
- Commercial Agencies
- Representative Trade Offices
- General Partnership Company
- Limited Share Partnership Company
- Holding Company
- Public Share Holding Company
- Joint Venture
One of the most popularly used form of business entities is Limited Liability Company (LLC). This form of business entity is most preferred by modern day entrepreneurs as it offers numerous benefits in terms of income tax and also allows completion of custom duties.
In this form of partnership, the local Kuwaiti partner is entitled to 51% of shares and the partner is liable only for the debts up to the extent of the shares.
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 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.
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.
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.
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 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.
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.
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.
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.
WHAT MAKES KUWAIT AN ATTRACTIVE BUSINESS LOCATION?
Kuwait, being an excellent global location has become one of the preferred spots for trade, tourism and business. Some of the prime reasons for establishment of new business/enterprises are as follows
Kuwait has a rapidly developing real estate which makes it suitable to get sufficient office space for various businesses and enterprises etc.
The tax system in Kuwait is extremely efficient and it allows complete exemption of taxes for GCC Citizens. In case of foreign entities, they are required to pay corporate tax which is calculated at the end of every financial year.
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.
Scope of Import System
There is a flexible system in place for the import of goods and services without creating any hassle. The smooth import of goods and services ensures that the productivity and economic activities in various industries takes place without any issues.
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
Our Qatar Office Address
Helpline Group W.L.L
1st Floor, Office No: 6, Street No.230
Building No: 153, Zone:42
P.O Box:30606, Nearby Gulf Times,
Opposite Doha Petrol Station,
C-Ring Road, Doha, Qatar