Starting a business in Kuwait

Ithink for many people starting their own business is a dream come true. To have that independence, to wake up every morning and do something that you love, to be your own boss and to make a difference for the community around you. I strongly believe in the benefits of having young and talented locals be creative and run their own businesses.

Ten years ago, having a small business in Kuwait was extremely difficult. The streets of Kuwait were run by western franchises then, but that is not the case today. Every day we hear about a new Kuwaiti business opening up. In fact, recently we have been hearing more and more words like entrepreneur, start-up, SMEs and franchises, and the terms can be very confusing, but I think it is important for us as a society to understand what is going on and what impact we have on ourselves by supporting local business. The success stories are inspiring; our local concepts have franchised to Doha, Dubai, Manama and Muscat, and even to London and Paris.

Today I will be answering common yet important questions for inspiring creative people who would like to establish SMEs. SME is an abbreviation that stands for a ‘small or medium enterprise.’ There are different definitions, and in Kuwait, we do not really have one standard definition. However, an easy way to define it is by the amount of employees a business has. Medium enterprises usually have under 50 employees in total.

Kuwaiti partner

Question: Can I own a business in Kuwait as an expatriate without a Kuwaiti partner?

Fajer: Theoretically and according to the companies law you will need a Kuwaiti partner, but recently a new law has passed for establishing Kuwait Direct Investment Promotion Authority (KDIPA). It is a governmental authority that aims to encourage foreign investment in Kuwait. You can visit their website at www.kdipa.gov.kw and apply online for a commercial license as an expat in Kuwait. They offer exemptions and have four different application types.

From home

Question: I have heard that in the near future we are going to have a law in Kuwait that allows people to run businesses from their houses. Is this true?

Fajer: The idea of having a business legally run from a private residence has been discussed widely in the legal field in the past few years and even more so in the past few weeks. It seems like the government would like to encourage the youth to start their own companies and this seems like a positive reform. I personally hope this becomes a reality because I know for a lot of people, renting a place to start a business can be very difficult. If you would like more information on the idea itself, please follow @legalizekw on Instagram for more information.

KD 10,000 deposit

Question: Is it true that you do not need KD 10,000 deposited in your bank account in order to get a license for my business?

Fajer: Yes. Previously, KD 10,000 or even KD 15,000 was required as a deposit in the bank account of the person that was obtaining the commercial license. But now for the majority of commercial license types, you only need KD 1,000 as a deposit. You can find the list of licenses and their requirements on the Kuwaiti government’s website. If not, please send me an email at ask@fajerthelawyer.com and my firm will forward you the information. If you have inquiries on the requirements for starting a business, please visit Kuwait business center www.kbc.gov.kw. The staff there are very knowledgeable and welcoming.

Non-profit

Question: The new commercial laws in Kuwait allows you to start a non-profit company. What is the difference between non-profit companies and nonprofit organizations?

Fajer: I think it is important for those in the field to understand the difference between non-profit organizations and non-profit companies under Kuwaiti law, which can be confusing because a different lingo is used to explain things. A non-profit company would be registered under the Kuwait Chamber of Commerce and Industry and can run commercial activity, whereas non-profit organizations in Kuwait are usually societies that have a very different internal structure compared to a company.

Should you be interested in more information about running a company in Kuwait, please email me at ask@fajerthekawyer.com and ask to be signed up to my weekly letter, or follow @sirdab_lab, @mefazec and/or @reyada_co that are offering many services as well as talks and workshops to encourage business creative individuals. Good luck in your newest endeavors and I will continue answering questions next week on the same topic.