Servcorp News 2013 | 5 Tips to Start your Business in Kuwait :: Kuwait City, Kuwait

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5 Tips to Start your Business in Kuwait

July 2013 | Servcorp

Kuwait, the 4th prosperous country in the world per capita and home of the world's 5th largest oil reserve, has a rich and relatively open economy.

Petroleum and petroleum products account for nearly 80% of government income and the increasing price of oil has inflated the prospects of the Kuwaiti economy even further. With a string of inherent strengths and an ‘Ease of Doing Business' 2012 ranking of 67 out of 183 countries (Kuwait Foreign Investment Bureau), it is on the rise and the national government aims for it to become a regional trading and tourism hub.

This idea of ‘internationalizing' is relatively simple with today's multi-faceted business tools. To tap into this energy, technological developments such as the cloud or serviced and virtual offices are boons of the digital age, chiefly because they keep costs low and boast high convenience, resulting in strong potential for small or large but new players to break into established markets.

In Kuwait and elsewhere, labor, (foreign) investment laws, bureaucracy and even something as simple and subtle as local cultural details play a role in a new businesses forming its foothold, be it set up and expansion.

Regulations
According to The World Bank Group, there are 12 steps to establishing a commercial venture; one of the first things to do is to file an application with the Ministry of Commerce (MOC) to set up the company. This takes 1 day and is free of charge. Next, also complimentary, is registering with the Commercial Registry, then the Kuwait Chamber of Commerce and Industry, which charges an initial fee then annually and takes 1 day. It is also a good idea to open a company labor file at the Ministry of Labor and Social Affairs, a 15 day, free process.

Platform partnerships
As per the Kuwaiti Commercial Code (Article 23) non-Kuwaiti citizens cannot pursue commercial activities unless in partnership with a Kuwaiti (49% and 51% respectively) and foreign companies cannot establish a branch in Kuwait without a Kuwaiti agent, plan and take action accordingly (Kuwait Government Online Portal).

Location, location, location
Determine in advance what your company is all about, plan the products and services you offer. Export and manufacturing industries are well supported by government and simple to acquire land on which to build. As a rule of thumb, Kuwaitis, foreigners and Kuwaiti companies are not taxed on income, but foreign companies are, with rates ranging from 5% to 55% (Kuwait Government Online Portal). This is partly why it is ideal to start a business in a free trade zone, because it is approved for exemptions from import and export duties, commercial taxes, building and property license fees, land tax and restrictions on the transfer of capital invested in the zone and also, 100% foreign ownership of businesses is allowed ‘(JustLanded.com)                                   

Legalities
Hire an experienced lawyer to navigate the registration process, negotiate the system, provide linguistic assistant and overall protect your interests, whatever the size of your business.

Going digital
Consider the practical low-cost option of a serviced office such as Servcorp's, available in over 140 worldwide locations. To further enhance your business platform, choose a package which includes friendly essentials such as a short-term lease as well as a ready technology and human resources infrastructure, so that you can be operational right away. Make a hassle-free choice for your business' sake.