Foreign investors in Kuwait can conduct their operations by setting up a WLL or KSC(c)s or through a Kuwaiti agent who has the necessary trade license. The time taken to incorporate an entity in Kuwait can be longer than investors may experience in other jurisdictions. Generally, WLL or KSC(c)s are the most appropriate business structures to operate in Kuwait for non-Kuwaiti’s. 

However non-Kuwaitis are permitted to hold only 49% of the share capital, unless the entity has obtained an approval from Kuwait Direct Investment Promotion Authority (KDIPA) under the new Investment Law.

The following business structures are available to non-Kuwaitis to undertake business / commercial activities in Kuwait:

Companies 

Companies in Kuwait are established under the Commercial Companies Law (the CCL). The CCL provides for the following forms of companies. The liability of the shareholder is limited to the extent of the capital invested by the shareholder in such companies.

Limited liability companies 

Limited liability companies, usually referred to as ‘With Limited Liability (WLL)’, are the most commonly used corporate form of entity in Kuwait and are considered equivalent to French SARLs, German GmbHs or private companies in the United Kingdom.

Shareholding companies 

A shareholding (joint stock) company (KSC) must be of Kuwaiti nationality (i.e. must be incorporated in Kuwait and should have its registered office in Kuwait).

Partnerships (applicable to non-corporate investors) 

The CCL provides for two types of partnerships in Kuwait: General partnership (An association of two or more persons who are jointly liable for partnership debts) and limited partnership. 

Joint Ventures 

A joint venture is an entity formed by two or more natural or legal persons who are jointly and severally liable. 

Branch 

Foreign corporate bodies are not permitted to set up a branch in Kuwait (except in cases where the foreign corporate body has obtained an approval from KDIPA).

Conducting business through an agent / distributor

Agencies in Kuwait are governed by Law No. 36 of 1964, enabling you to conduct business through an agent or distributor registered under CCL. 

New Foreign Direct Investment Law (Law No. 116 of 2013) 

The new Investment Law has been enacted in Kuwait and accompanied by Executive Regulations in late 2014. Further Executive Regulations are expected to be issued over time. As previously mentioned a new authority has been established, the KDIPA, to administer and operationalize the Investment Law.

Capital Markets Authority 

The Capital Markets Authority (CMA) was established through Law No. 7 of 2010, and its role is the establishment and monitoring of the capital markets in Kuwait.

Mergers and acquisitions 

Historically, there have been a relatively small number of company mergers; however, they are becoming more common amongst the larger business groups intending to have a global presence. For mergers of banks or investment companies, an approval is required to be obtained from Central Bank of Kuwait.

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