Kuwait Business Guide
... a comprehensive guide to doing business in Kuwait
The Writer
Paul D Kennedy is a certified accountant with more than 20 years experience in consulting and writing in the Middle East.
pkennedy@consulting-services.eu
Foreword to the 2nd edition (2004)
I am delighted to have been asked to write the foreword for the new edition of Doing Business with Kuwait. I am sure that this version will continue the tradition of the title as a useful and important reference work for those with serious business intentions for the market.
At time of writing, March 2004, Kuwait is experiencing a business boom. Several factors are contributing to this. The ousting of the old regime in Iraq in 2003 stimulated confidence not experienced by the Kuwaiti business community for many years. There is greater assurance on the part of Kuwaiti companies that investments can be made and held here rather than overseas. As an entry point for the Iraqi market, Kuwait is hosting a tremendous number of new overseas business visitors. Many of these have taken a new look at the real business opportunities that exist in Kuwait and applied themselves to business here.
There are a great number of development projects on the table, some that were previously on hold. A recently compiled list of projects for the oil and gas sector alone showed that Kuwait's requirements over the next 10 years or so would be of the order of USD 17 billion. There is no reason why these favourable conditions for involvement by our companies should not last well into the future.
Kuwait and Britain enjoy a long-standing and warm association. This applies in many fields, not least our commercial relationship, where UK firms and their products carry a strong reputation for quality and reliability. Kuwait is the United Kingdom’s third largest market in the Gulf after Saudi Arabia and the UAE, and two-way trade is in good balance. Britain's direct exports to Kuwait are increasing and 2003 saw this rise to a value just falling short of GBP 400 million. Our trade in services is substantial and important.
Perhaps the most often heard plea from companies in Kuwait is for greater engagement by British firms. There is certainly scope for this in what is a challenging market but one that, ultimately, can be highly rewarding for those businesses that take the right approach. That must include many firms that have used the authoritative information and advice contained in this publication to good effect. I am sure that new readers will find Doing Business with Kuwait equally indispensable.
Christopher Wilton
CMG
HM Ambassador
Kuwait
The Kuwait Business Guide is a detailed manual on doing business in Kuwait.
Written in clear, direct English, it covers virtually everything an expatriate business person needs in order to do business successfully in Kuwait.
The Kuwait Business Guide was originally published in hard-copy in 1997 and 2004 under the title Doing Business with Kuwait. As it is no longer available in printed form, it is being reissued as a Kindle e-book.
The Bible on Doing Business in Kuwait
The objective of the Kuwait Business Guide is to illustrate Kuwaiti business culture and practices, and to indicate how commercial opportunities, of which there are many in the country, should be approached. The book is aimed at major international corporations, SMEs and independent entrepreneurs looking to exploit the commercial potential of Kuwait.
To a foreign business entity or entrepreneur contemplating the country for the first time, Kuwait seems a very attractive place to do business because:
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about 40% of its population of nearly 2.5 million enjoy some of the highest disposable incomes in the world;
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the economy has continuous requirements for imported goods, technical expertise and labour;
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there are plenty of opportunities for major contracts, especially in the oil and related industries;
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the government is actively pro-business;
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there is a stable legal framework of business laws;
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there are few controls over imports and exports;
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there are no exchange controls nor restrictions on the repatriation of funds;
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the country has excellent communications and a sophisticated trading infrastructure;
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it is possible for foreigner to have 100% ownership of a local business under the new direct foreign investment laws; and last, but not least,
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English is used fairly extensively as the second language of business.
Also, the simplicity of operating within a system where taxes are for the most part non-existent for individuals (but not companies) and everything is open to negotiation is a major enticement. In addition, resident senior executives will find that their life-style is almost as good as it could be anywhere else.
The competition however is intense and decision-making is notoriously slow. Kuwait also abounds with rules and regulations which can cause confusion and frustration. Generally speaking:
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foreign individuals and firms may not own real estate in Kuwait;
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foreign equity participation in local firms is limited to a minority interest of 49%;
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foreign individuals and corporations may not acquire commercial licences in their own name;
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a foreign individual or firm carrying on business in the country must be represented by a Kuwaiti person or firm;
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a branch of a foreign firm must be represented locally by a Kuwaiti service agent;
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a foreign firm may only bid for a public sector contract through a local representative; and, in addition,
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foreign corporations (but not individuals), unlike local companies, are taxed at some of the highest rates in the world.
The purpose of these restrictions is to ensure that control of domestic business is retained by locals. Nowadays, however, most of the restrictions can be circumvented.
Establishing a presence in Kuwait's Free Trade Zone allows a wholly-owned foreign business entity to be set up with a minimum of fuss and time. However, the KFTZ is really only suitable for SMEs.
Large international corporations intending to make a substantial investment in the country can do so under the Direct Foreign Investment law. But this will require the approval of the Council of Ministers, ie the government, and is likely to take some time.
In this writer's view the greatest impediments to doing business successfully in Kuwait are cultural and language barriers. The Kuwaiti people have a different way of looking at the world than do persons from the West or the Far East, a difference that is reflected in the State's social, political, economic and legal foundations. Unless Kuwaiti business culture is understood by overseas businessmen, and their approach modified accordingly, any success they achieve is likely to be due to luck rather than a planned effort.
This is the second edition of Doing Business with Kuwait. The first was issued in 1997. A third edition is under preparation but is unlikely to be issued in the near future as the necessary research has to take a back-seat to more pressing consulting matters. However, the original single volume tome has been divided into five parts and the updated parts will be published as they become available.
If there are any aspects of doing business in Kuwait that have not been included here but which readers wish to see in the next edition, they should contact the writer at the email address shown below.
PAUL D KENNEDY MA BBS FCCA
September 2011
Consulting Services EU
Website: www.consulting-services.eu
Email: pkennedy@consulting-services.eu
Kindle Reader
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Order the Kuwait Business Guide from Amazon Kindle
Kindle Reader
The Lid is Lifted is an eBook. To read it, you need a Kindle eReader, a unique portable device. A Kindle eReader can be purchased from Amazon
Free Kindle Software
Alternatively you can read a Kindle eBook on your PC, laptop, tablet, Mac, iPad, Blackberry, iPhone, Android, etc, etc, by downloading a free app from Amazon:
Part One
Business Background
... a comprehensive introduction to Kuwait – its topography, history, governance, and the effect of religion on business behaviour, as well as its population and economy. To access this essential information, click:
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Statistics – Kuwait Population
Part Two
Business Laws
... a review of the laws regulating business behaviour in Kuwait – business licences, contracts, loans and interest, and Kuwait's weird rules governing cheques. The book includes a detailed look at the legal entities that can be used to carry on business in the country, agency and service agreements, intellectual property rights, industrial laws, and labour laws, and concludes with a discussion of litigation and arbitration. Each chapter is interspersed with pertinent advice based on decades spent doing business in Kuwait. To access this essential reading click:
Part Three
Taxation & Finance
... an analysis of corporate income taxes, customs duties, conventional banking, and Islamic financing, with reliable advice on the most appropriate approaches to taxation and finance in Kuwait. To access this essential reading click:
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Part Four
Business Activities
... an overview of business opportunities in Kuwait and how to research them, the rules governing tendering for public contracts, the local offset programme, and Kuwait's import and export regulations and standards, with the aim of equipping the reader with the knowledge needed to find the best approach to doing business in Kuwait. Includes advice on marketing, advertising and promotions and the use of Kuwait as a centre for activities elsewhere in the region. To access this essential reading click:
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Part Five
Practical Aspects
.. an examination of the behavioural quirks that can make Kuwaiti business culture confusing, including the importance of face, the need to build personal relationships, decision-making (Kuwaiti style) and how to assess whether there is a genuine interest in a product or service. Part Five also contains a full range of practical points, such as local working hours, using networks to gain entry to decision-makers, commissions and gifts, dealing with ministries and choosing a Kuwaiti associate. The book concludes with advice on visas, work permits, residence permits, accommodation, driving licences, etc, etc. To access this essential reading click:
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KUWAIT – OFFICIAL HOLIDAYS ETC
Useful Contract Numbers
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