Types of Business Entities in Kuwait
Companies in Kuwait are established under the Commercial Companies Law (the CCL).The following business structures are available to non-Kuwaitis to undertake business / commercial activities in Kuwaitis.
- Limited Liability Companies
- Shareholding Company
- Branch Company
- Partnership Company
- Joint Venture Companies
Limited Liability Companies (WLL)
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. The key features are,
- WLL companies are not permitted to engage in banking, insurance or to act as a pure investment fund
- Maximum percentage of shareholding by a non- Kuwaiti in a WLL should be 49%(except if such WLL has obtained an approval from the KDIPA)
- Ownership interests are represented by shares of the WLL companies
- Minimum Capital requirement is 1,000 KWS
Joint Ventures
A joint venture is an entity formed by two or more natural or legal persons who are jointly and severally liable. The key aspects of the joint ventures are as follows:
- It does not have legal existence
- It does not need to be recorded in the commercial register of the Ministry of Commerce and Industry. However, the partners of the joint venture must be separately registered in their own names
- The contract defines the objects and terms of the joint Venture. This form of business structure is usually used to carry out construction projects (i.e. construction of power plants, roads, etc.)
- In the event the joint venture involves a foreign partner, then the entity conducts operations through the trade license of the Kuwaiti member of the joint venture
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). If the foreign corporate bodies do not wish to operate in Kuwait through a participation in a shareholding company or a limited liability company, it may engage in business in Kuwait only through a Kuwaiti commercial agent or a Kuwaiti service agent (as explained below).Under the CCL a branch is not a recognized legal form for foreign investors. It should be noted however that for the purpose of tax filing and certain other practical purposes, it is convenient to refer to Kuwait operations of foreign corporate bodies as “branch” operations.
Agent / Distributor
Agencies are governed by Law No. 36 of 1964, which regulates the following:
- Commercial agents which are engaged in promoting products for their principal or negotiate and conclude deals on behalf of their principal
- Distributors which are engaged in promotion, import and distribution of the products of their principal
- Service agents or sponsors who are appointed by foreign companies intending to engage in government contract works
Timeframe for Incorporation3 Months
| Type | Limited Liability Company (WLL) |
| Under Kuwait law, foreigners can own | 49% |
| Share Capital | KD 7,500 |
| Memorandum & Articles of Association | Yes |
| Shareholders | Minimum Two |
| Can the entity hire expatriate staff in Kuwait | Yes |
| Tax Registration Certificate Required | Yes |
| Kuwait Resident Secretary Required | Yes |
| Statutory Audit required | Yes |
| How long to open Corporate Bank Account? | 1 Day |
| Annual Return | Must be filed |
| Annual Tax | Must be filed |
| Access to Kuwait double tax treaties | Yes |
