Incorporation

There are several legal entitles to choose from in Kuwait including a:

1. With Limited Liability Company (WLL) which is the equivalent of a LLC in many jurisdictions
2. Closed Joint Stock Company (KSC Closed)
3. Public Joint Stock Company
4. Commercial Agency

Limited Liability Company

Both foreign individuals and corporate bodies may establish this type of entity, but a Kuwaiti must own at least 51% of the WLL shares. A WLL is simple to form and takes approximately three months or less to incorporate. The WLL provides the limited liability shield and is non-taxable since Kuwait has no individual income tax and its corporate tax applies only to non-Kuwaiti corporate bodies. GCC operates a 100% Kuwaiti owned WLL in Kuwait that will act as your corporate nominee sponsor to facilitate the legal requirements of operating a WLL within Kuwait. GCC’s 100% Kuwaiti owned WLL is solely owned and operated by Managing Partner Ahmed Wahedi and will act as your corporate nominee beneficiary for the 51% of the shares held.

Closed Joint Stock Company

A closed Kuwaiti joint stock company is the other type of company open to non-Kuwaiti entities. The general rule is that the shareholders of joint stock companies must be Kuwaiti nationals, but as an exception, foreigners may own 49% of the share capital of a KSC Closed after obtaining the approval of the concerned authorities. The company’s activities cannot be banking or insurance and the incorporation of a KSC Closed may take up to six months.The limitation in using this form of business is that, over and above the tax levied on the profits made by the foreign company as a shareholder in KSC Closed Company, the KSC Closed Company is itself subject to a 5% contribution to the Kuwait Foundation for the Advancement of Science.

Public Joint Stock Company

Non-Kuwaitis are now permitted to own shares in publicly traded shareholding companies. Pursuant to this law, the Minister of Commerce & Industry has implemented certain regulations setting forth the restrictions and conditions of this right, including the maximum amount of shares non-Kuwaitis may hold and the corresponding rights of the holder.

Commercial Agency

There are two types – a contracts agency, where the local agent, by contract, undertakes to promote the principal’s business on a continuous basis in the territory and to enter into transactions in the name of the principal in return for a fee, and a distributorship, under which the local agent is the distributor of the principal’s product in a defined territory in return for a percentage of the profit. Non-Kuwaitis may not act as commercial agents in Kuwait.

Taxation

Generally, individuals (Kuwaiti and foreign nationals) and Kuwaiti companies are not subject to taxes on income. However, a foreign corporate body engaged in commercial activities in Kuwait is subject to corporate tax of 15% of net income therein.

For more information on how we can help your company establish a presence in Kuwait please contact one of our local offices or one of our Global Account Directors to arrange a consultation by clicking here.