THE TIME IS NOW
The Gulf has a strong attraction for foreign investors wanting a solid base of operations for Middle Eastern endeavours, and Kuwait has worked hard to make itself stand out.
A variety of companies operate in the country, ranging from LLCs to branches to joint stock companies. It is possible for foreign businesspeople to set up their business through a properly licensed Kuwaiti agent. According to PwC, a six-month wait can be expected for businesses after a license is granted until incorporation. While LLCs require at least two Kuwaitis be shareholders, joint stock companies must have no less than five. Unless the business is located in a free trade zone, foreigners are allowed to own no more than 49% of share capital. As of 2015, PwC reported that the government was no longer issuing licenses for the establishment of an entity in Kuwait's FTZ.
Foreign Direct Investment
Toward the end of 2014, a new law on investment was enacted, with further new regulations expected to be introduced in the future, according to PwC. The law created the Kuwait Direct Investment Promotion Authority (KDIPA), which is in charge of administering investments in the country. With the enactment of the new law, foreign investors are allowed full ownership of subsidiaries, branches, or representative offices in the country, and have the potential to receive benefits such as 10-year tax exemption if the company meets certain requirements, and exemptions from customs duties. There are, however, certain requirements to be met in order to receive such advantages. These benefits include the company's contributions to Kuwaiti employment and advancement of national technology, and are limited to certain types of businesses; eligible business must also be able to prove their activity will benefit the economy in several ways.
Taxation
Kuwait will only tax Kuwait-sourced income. Though different from other residence models of taxation, certain activities that may elsewhere not be considered taxable may be liable in Kuwait. There is a flat, 15% income tax, down considerably from 55%, which ended nearly a decade ago. Taxes are normally calculated based on profits noted in audited financial statements. Foreign businesses working in Kuwait are subject to income tax, and there is a rather broad definition of doing business in the country—a foreign company may be subject to tax with as little as an agent working in Kuwait. Capital gains made upon selling an asset are considered a business profit and are thus unconsidered for capital gains taxes; there are also no withholding taxes. All business—both foreign and Kuwaiti—must hold 5% of every payment to a contractor, as well as all final payments until the Ministry of Finance has received a tax clearance certificate.
Business etiquette
While Arabic is the official language, English is widely spoken and near compulsory in business. However, despite most negotiation and in-person interactions being done in English, contracts and official documents are often written in Arabic. As is common in the region, Kuwaitis prefer to do business with people they know, so introductions and general getting to know one another may extend for some time before getting down to business. Being restricted to a six-hour workday, it is wise to plan meetings with government officials in the morning. Keep in mind any meeting may be interrupted by prayer times. Many companies are family owned and thus take a hierarchical decision-making structure, with many decisions being made at the top.
THE TIME IS NOW
TABLE OF CONTENTS
Guest Speaker
Dato’ Sri Haji Mohammad Najib bin Tun Haji Abdul Razak, Prime Minister , Malaysia
TBY talks to Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak, Prime Minister of Malaysia, on the growing contribution that Islamic countries are making to the global economy and how Islamic financing can offer new opportunities to industry and academia.
read articleInterview
HE Khaled Nasser Abdullah Al-Roudan, Minister, Commerce and Industry (MoCI)
TBY talks to HE Khaled Nasser Abdullah Al-Roudan, Minister of Commerce and Industry (MoCI), on tools and strategies for diversifying the economy, the role of international players in supporting a wider range of sectors, and the rapidly developing food industry.
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HE Yousef Al-Ebraheem, Advisor , Al-Diwan Al-Amiri
TBY talks to HE Yousef Al-Ebraheem, Economic Advisor to the Al-Diwan Al-Amiri, on the need for a rejuvenation of Kuwait's infrastructure to support an economy that has come a long way and the role education will play in delivering the expertise required by the society.
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Dr. Khaled A. Mahdi, Secretary-General , Supreme Council for Planning & Development (GSSCPD)
TBY talks to Dr. Khaled A. Mahdi, Secretary General of the Supreme Council for Planning & Development (GSSCPD), on the breakdown of Kuwait's long-term economic plan, the KPIs that will benchmark its success, and what Vision 2035 means for the nature of the economy.
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Sheikh Dr. Meshaal Jaber Al Ahmed Al Sabah, Director General, Kuwait Direct Investment Promotion Authority (KDIPA)
TBY talks to Sheikh Dr. Meshaal Jaber Al Ahmed Al Sabah, Director General of the Kuwait Direct Investment Promotion Authority (KDIPA), on launching an investment promotion conference, attracting the right partners for PPP, and expectations for the year ahead.
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HE Dr. Mohammad M. Al-Zuhair, Executive Chairman, Kuwait National Fund for Small and Medium Enterprise Development
TBY talks to HE Dr. Mohammad M. Al-Zuhair, Executive Chairman of the Kuwait National Fund for Small and Medium Enterprise Development, on empowering young Kuwaitis, IT and entrepreneurialism, and the growth of fintech.
read articleFocus: Still all in the family?
Merchant families in Kuwait
Family-owned businesses play a major role in the Kuwaiti economy. However, with many approaching the third generation of management, they are starting to come across unique problems that may pose issues for the greater economy.
read articleInterview
HE Sheikh Abdullah Ahmad Al-Humoud Al-Sabah, Director, Environmental Public Authority (EPA)
TBY talks to HE Sheikh Abdullah Ahmad Al-Humoud Al-Sabah, Director of Environmental Public Authority (EPA), on how oil companies can contribute to Kuwait's vision on sustainability and the various projects that are coming to fruition.
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Dr. Samira S. Omar Asem, Director General, Kuwait Institute for Scientific Research (KISR)
TBY talks to Dr. Samira S. Omar Asem, Director General of the Kuwait Institute for Scientific Research (KISR), on commercializing the green innovations coming from R&D initiatives, the role of collaboration across multiple sectors, and projects that we should expect to see more of in the future.
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Khaled Abdulrazzaq Al Khaled, Vice-Chairman and CEO, Boursa Kuwait Company
TBY talks to Khaled Abdulrazzaq Al Khaled, Vice-Chairman and CEO of Boursa Kuwait Company, on the takeover of the Kuwait Stock Exchange and the role the bourse plays in both the privatization of government entities and as a source of capital for family businesses.
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HE Essam Abdul Mohsen Al-Marzouq, Minister, Oil & Minister of Electricity and Water
TBY talks to HE Essam Abdul Mohsen Al-Marzouq, Minister of Oil & Minister of Electricity and Water, on cooperation with other ministries, the private sector's role in energy, and upcoming regulations.
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Ghalib Shlash Safouq, Assistant Undersecretary for the Construction Projects Sector, Ministry of Public Works
TBY talks to Ghalib Shlash Safouq, Assistant Undersecretary for the Construction Projects Sector at the Ministry of Public Works, on Kuwaiti companies, the country's healthcare facilities, and the role of international companies.
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Khaled K. Al Mashaan, Vice-Chairman & CEO, ALARGAN International Real Estate Company
TBY talks to Khaled K. Al Mashaan, Vice-Chairman & CEO of ALARGAN International Real Estate Company, on drivers of growth, operating throughout the region, and real estate prices in Kuwait.
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Tawfiq Ahmed Bin Sultan, Chairman, Middle East Telecommunications Company (METCO)
TBY talks to Tawfiq Ahmed Bin Sultan, Chairman of the Middle East Telecommunications Company (METCO), on e-government potential, the future of the economy, and the state of technology uptake in Kuwait.
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Sheikh Yousef Abdullah Sabah Al-Nasser Al-Sabah, Director General, Kuwait Ports Authority (KPA)
TBY talks to Sheikh Yousef Abdullah Sabah Al-Nasser Al-Sabah, Director General of Kuwait Ports Authority (KPA), on his operational plans for the near future and turning Kuwait into a regional logistics hub.
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HE Khaled Nasser Abdullah Al-Roudan, Acting Minister, State for Youth Affairs
TBY talks to HE Khaled Nasser Abdullah Al-Roudan, Acting Minister of State for Youth Affairs, on e-platforms and blended learning programs, developing ICT skills, and preparing young people for tomorrow.
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Eng. Ali Hussein Al Youha, Secretary-General, National Council for Culture, Arts and Letters
TBY talks to Eng. Ali Hussein Al Youha, Secretary-General of the National Council for Culture, Arts and Letters, on the activities of the Council and works to preserve and enhance Kuwait's cultural heritage.
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