Company Formation in Kuwait
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Kuwait Company Formation
Registration in Kuwait has 13 stages. These are as follows:
- Submit an application with the Ministry of Commerce. This takes one day.
- Choose the company name and submit an application with the Commercial Register. This takes a day.
- Retrieve three notes from the Department of Partnerships (DOP) addressed to the bank, the Criminal Investigation Department and the Kuwaiti municipality. This takes a day.
- Deposit capital into the bank and obtain proof that this had been done. This takes one day.
- Criminal records of the partners are checked and a certificate is issued stating that the record is clear of crimes that prevent any individual from becoming a shareholder. This takes 2 days.
- Inspection of the company premises by the Municipality, which will issue a certificate. This takes 7 days.
- Obtain a memorandum of association form from the DOP. This takes 1 day.
- Sign and have the memorandum of association notarised. This takes a day and costs approximately 20 KWD.
- Obtain a licence to commence activity from the Department of Partnerships. This takes 2 days and costs approximately 40 KWD.
- Registration with the Commercial Registry. This takes a day.
- A signature sample is certified by the Chamber of Industry and Commerce. This takes a day and costs approximately 70 KWD for the initial registration, plus approximately 60 KWD for yearly membership.
- Register with the Civil Data Department to obtain a civil number. This takes 15 days and costs approximately 10 KWD.
- Open a labour file with the Ministry of Labour and Social Affairs. This takes 15 days and can be done at the same time as stage 12.
- Full range of products/services represented by the agent
- Nature of the agent's work and responsibilities of both parties
- The period of the agreement
- Agent's fees
Kuwaiti law permits foreign persons or entities to establish a permanent presence in Kuwait by forming and investing in the following companies:
A Limited Liability Company (WLL)
Foreign individuals and corporate entities may establish this type of company. However, the Companies Law states that a Kuwaiti national must own at least 51% of the WLL shareholding. This form of business is simple to set up, taking approximately three months to incorporate. A WLL provides the limited liability shield and is non-taxable. This is because Kuwait has no individual income tax, and its corporate tax applies only to non-Kuwaiti corporate entities. A WLL can be formed by applying for a Memorandum of Association to be entered into the Commercial Register.
A Closed Joint Stock Company (KSC Closed)
In a KSC Closed, shareholders must be Kuwaiti nationals. Foreign investors may own 49% of the share capital of a KSC Closed after obtaining approval of the relevant authorities. The company cannot be in the banking or insurance sector. Incorporation can prove time consuming, taking up to six months.
A foreign businessperson or entity may also establish a permanent business presence through a Public Joint Stock Company. Legislation concerning this structure is currently under review.
An overseas company wanting to establish an office to conduct business and commercial activities must act through a Kuwaiti agent under whose name and sponsorship the operation are conducted. British firms seeking an agent should contact the nearest Business Link International Trade Team. For registry with the Ministry of Commerce and Industry, agency agreements must include:
The agreement must be translated into Arabic.
By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.
The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:
- Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
- Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
- Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
- Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
Characteristics of an offshore company:
- Memorandum and Articles of Association
- Certificate of Incorporation
- Registered Office/Agent
- Shareholders / Members
- Directors / Managers
- Company secretary
- Statutory Register
Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.