Προφίλ συναλλασσόμενης χώρας Κουβέιτ

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Legal business entities

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Maximum and/or minimum capital	Liabilities	Registration fees
The close shareholding company	Minimum 5 partners.	KWD 7,500 minimum capital.	Partners' liability is limited to the amount contributed.	About KWD 3,000.
Limited Liability Company (WLL's)	Minimum 2 partners. Maximum 30 partners.	KWD 7,500 minimum capital.	Partners' liability is limited to the amount contributed.	About KWD 1,500.
General Partnership	Minimum 2 partners.	No minimum capital.	Partners' liability is limited to the amount contributed.	About KWD 500.
Limited Partnership	Minimum 2 partners. Two types of partners: dormant partners and active partners.	No minimum capital.	Liability of active partners is unlimited. The liability of dormant partners is limited to the amount contributed.	About KWD 500.

Business setup procedures: According to the law No. 36 of 1964 amended by the commercial law No. 68 of 1980, all foreign companies wishing to establish an office, a business branch or a company in Kuwait, have to do it through a Kuwaiti agent or a citizen of one of the countries members of the Cooperation Council of the Gulf. The total capital participation of the foreign company cannot exceed 49%. In certain sectors, such as banking, finance and insurance, this participation cannot exceed 40%. In order to establish a company in Kuwait, the Kuwaiti partner must request a commercial license issued by the Ministry of Commerce. This request must be written in Arabic. For certain activities, considered 'sensitive', such as telecommunications, pharmaceuticals and health services, additional authorizations might be required from the ministries of each sector and their subsidiaries.
The competent organization: The Ministry of Commerce issues the commercial license required to perform any commercial activity. For certain activities, a license must be obtained from other ministry departments as well such as health, communications, etc.

FDI in figures

Foreign Direct Investment	2005	2006	2007
FDI of inward flow (millions USD)	234	122	123
FDI inward stock (millions USD)	645	773	940
Performance Index*, ranking on 141 economies	137/141	136/141	134/141
Potential Index**, ranking on 141 economies	37/141	29/141	-
Number of Greenfield investments***	11	21	8
FDI inwards (in % of GFCF****)	1.70905452726	0.843283952921	0.753813219353
FDI stock (in % of GDP)	0.798456842462	0.764358416565	0.8442684055

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.*** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Kuwait

Strong points: Kuwait presents several advantages. First, the country has a high quality of life, its oil reserves are consistent. The local population is young and a great consumer. They are very fond of foreign products, western brands and high technology. Their life and consuming style brings them closer to the western world. The cost of energy is very low. Kuwait is endowed with a good financial management and a solid banking system. The Kuwaiti government is willing to diversify its economy and has launched an open policy to foreign investments. To close it up, the country's infrastructures are of high quality, the labor force provided by immigrants is inexpensive and the absence of taxes are some of the undeniable advantages to foreign investors.
Weak points: Kuwait is a country that still depends largely on its oil sales. Its public administration is excessive since 90% of Kuwait's citizens are employed by the government and this constitutes 60% of its current expenses. The country remains too closed to foreign investment because of its laws restricting freedom of establishment to non-citizens. In addition, Kuwait does not insure sufficient protection to intellectual property.
Government measures to motivate or restrict FDI: Kuwait's government, with the goal of attracting foreign investments to the country, issued a law in 2001, renewed in 2003, regulating Foreign Direct Investments. The new law allows foreign investors to own majority capital holdings up to 100% equity if their business activities are in the sectors that the government wants to develop, such as the projects of new infrastructures (water, power energy, drainage and communications). It applies also to some investing companies such as insurance, information technologies, hospitals, hotels, construction of housing zones, freight transportation, etc. This new law provides the enterprises with tax exemptions that can last up to ten years. The law makes it easier to recruit foreign low cost labor. It also provides a guarantee against expropriation and ensures the right to repatriate their capital gains. New investors are also protected against changes in legislation. However, the right to benefit from this new law depends on the percentage of national labor force employed by the enterprise. The changes provided by this law do not benefit foreign investors that expose obstacles to its application and exclude investors in the upstream oil development sector even if they can have joint venture companies in the petrochemical industries.

Procedures relative to foreign investment

Freedom of establishment: The freedom to establish a company/enterprise is very limited and controlled. Non-Kuwaitis cannot hold more than 49% of the capital of a company. Establishing a new office, branch or creating a new company is subject to the existence of a citizen agent. All permits have to be established on his name.
Acquisition of holdings: Purchasing shares from the stock market has to be done through a broker authorized by the Kuwait Stock Exchange.
Obligation to declare: There are no special rules to declare if the acquisition is less than 5% of the capital holdings. If the acquisition is higher, a special procedure must be followed.
Competent organization for the declaration: Kuwait Stock Exchange
Requests for specific authorizations: Some sectors, such as pharmaceutical, telecommunications, medical equipment, etc. require authorizations from the ministries that control each specific activity.

Finding assistance for further information

Investment aid agency: Kuwait Investment Authority.
Kuwait Foreign Investment Bureau.
Other useful resources: Doing Business with Kuwait by M. Paul Kennedy.
U.S. Commercial Guide for Doing Business in Foreign Countries.
Chamber of Commerce of Kuwait.

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