Company Formation in Kuwait
Updated on Wednesday 26th June 2024
Rate this article based on 2 reviews
With an economy primarily based on the petroleum industry, but also with a rather developed banking system, Kuwait is often the country where foreign investors decide to set up a company. For further information and assistance with the process, please refer to our company incorporation experts.
Kuwait's legal entities types
Foreign entrepreneurs should first choose which of the legal structures in Kuwait is the best one for their interests. In order to do this, we mention here some of the types that are most common: the limited liability company, the closed joint stock company, the public joint stock company, the joint venture etc.
However, the most popular way to start a business in this country is through one is the limited liability company. The demands that need to be met when opening a company in Kuwait are hereunder:
- minimum 2 directors;
- at least 2 shareholders (either individuals or corporate bodies);
- minimum capital share of KWD 1,000;
- 51% of the shares of the company must be owned by a Kuwaiti national, but there are situations in which 100% foreign-ownership is allowed, and they represent the exception, not the rule.
Restricted foreign ownership – main exemptions in Kuwait
The exemption where investors do not need a Kuwaiti partner is granted for cases when foreign businesses are located in economic free zones. In that situation, foreigners can open a company in Kuwait without a Kuwaiti partner, therefore they have the right to fully own the company.
Additionally, it must be noted that the legislation has recently been modified so that it can allow more freedom to foreign investors, with the ratification of Law 1 of 2024. Under this legislation, 2 other rules of law were amended. These are the Law of Commerce (Article 24) and the Tenders Law (Article 31).
If, up until 2024, foreign investors could only open a company in Kuwait with the participation of a Kuwaiti partner (with the exception of the free zones), now, Article 24 of the Law of Commerce allows foreign businessmen to establish a branch here.
The branch is a subdivision of a parent company, therefore fully controlled by the parent company, and this means that the entity operating in Kuwait will be fully owned by a foreign company. The new law (Law 1 of 2024) stipulates that foreign businesses do not need to appoint a Kuwaiti agent anymore.
However, this does not mean that the process of company formation in Kuwait can be conducted without a Kuwaiti partner in all cases (it applies specifically to the cases mentioned here). Another advantage of the new law is that foreign companies are now allowed to participate in government tenders without having a Kuwaiti partner/agent.
Other than this, the registration procedure has not been modified and the foreign partner must have appropriate visas, according to the Kuwait Government Online. The institution also mentions that a limited liability company can’t be set up by 2 partners who are wife and husband, unless the business will include a 3rd associate.
Steps for registering a company in Kuwait
The first step is registering at the Department of Companies where you need to submit a standardized application along with other documents. The second step is to reserve a name for the company, one that does not already exist. It needs to be approved and then a letter is issued stating the reservation of the name for three months.
Another important phase when you want to register a company in Kuwait is the depositing of the capital at the bank. A receipt is then received from the bank, where it is detailed what amount was deposited by each member of the company. Then the memorandum of association needs to be notarized after obtaining the approval from the Department of Companies.
Registering with the Commercial Registry is also a must; the certificate of registration will include the name of the company and the commercial registration number. You also need to acquire a commercial license. In order to complete these procedures as quickly as possible, you can address our specialists in company formation in Kuwait.
Lastly, you must register with the Chamber of Commerce and Industry in Kuwait and also with the Public Authority for Civil Information. For further assistance in forming a company in Kuwait or in other countries, please, do not hesitate to address our company registration agents who can make sure that you benefit from the quickest services and a personalized business plan.
Our consultants can provide full legal representation during the process of company formation in Kuwait, and you can rely on our team for business immigration. We can assist investors with all the necessary support during business relocation, and we can provide assistance to those who will relocate with their family.
We also invite you to address us if you need offshore company formation services. One of our services is the legal assistance during the set up of an offshore bank account, along with other basic services, such as business immigration, business licenses, etc. We remain at your service for information on any of the matters presented in this article.