Getting into the market
In general, doing business in Kuwait will necessitate an agent, distributor or commercial representative. Another alternative is to form a registered legal company in-country. Non-Kuwaitis are not permitted to carry out commercial activities without the partnership of a Kuwaiti majority stakeholder, though there are a few exceptions which allow foreign companies to have 100 per cent equity. Other options include applying for a licence under foreign investment law or setting up a joint venture agreement.
Before visiting Kuwait for business reasons, it is advisable to undertake as much forward planning and market research as possible in the UK.
Since family structures shape the business environment, personal relationships are paramount and UK firms need to take the time and effort to visit Kuwait, in order to develop close links with partner organisations.
Kuwait uses the Harmonised International System Code for classifying imports and exports. A customs duty of five per cent is levied on imported goods (including freight and insurance). Staple foods are exempt but tobacco attracts a 100 per cent duty. Foreign companies pay a flat rate of 15 per cent on profits. There is a 'double taxation agreement' between Kuwait and the UK. There is no personal income tax.
Most government tenders and contracts are handled by the Central Tenders Committee, an independent government agency, although the university, ports, housing and some government ministries are exempt. Foreign companies bidding for government contracts need to be registered in the country and have a Kuwaiti agent. All government tenders are published in Al Kuwait Al Youm, the official gazette. A bond of between 2.5 and 5 per cent of the value of the bid needs to be submitted.
If you do secure a public sector contract you will need to make sure that you comply with Kuwaiti employment law and ensure that the correct ratio of Kuwaiti nationals are employed in the venture. With Kuwait attempting to reduce the imbalance between foreign and domestic labour, it is recommended that local employees are hired wherever possible. Thorough training for local staff is vital.
Care needs to be taken with documentation. Arab-British Certificates of Origin are required for all goods. These should state: "We hereby certify that the goods enumerated in this invoice are not of Israeli origin nor do they contain Israeli materials and are not being exported from Israel." These certificates, which can be issued by Chamber International or other authorised chambers, must be certified by the Arab-British Chamber of Commerce (A-BCC) and legalised by the Kuwaiti Embassy. The same applies to invoices and agreements. Other documents need to be authenticated by the Foreign & Commonwealth Office and legalised by the Kuwaiti Embassy.
Certificates of health are required for animals. Foodstuffs require certificates issued by the Department for Environment, Food and Rural Affairs (DEFRA). A separate packing list is needed if the information is not contained in the invoice.
All export goods to Kuwait are subject to a pre-shipment inspection. The rules governing this change frequently so you will need to check with the customer or shipper. There are strict prohibitions on all goods from Israel as well as alcohol, goods for making alcoholic drinks such as wine kits, hops and malt extracts, arms and ammunition, unlicensed drugs and medicines, explosives, pornography, pork products and politically subversive materials.
Telephone David Attia on 0845 034 7200 or email for advice.
Exporting to the Arab World? Apply for Arab Certificates of Origin here
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