Legal Requirements to start a business in Kuwait

Legal Requirements to start a business in Kuwait:

The fundamental legal basis for starting a business in Kuwait is stipulated in Articles (23) and (24) of the Kuwaiti Commercial law. Article (23) of the Code states that non-Kuwaiti citizens may not pursue any commercial activities in Kuwait, unless having a Kuwaiti partner. This partner’s share must not be less than (51%). Article (24) sets forth that any foreign company may not establish a branch in Kuwait and cannot pursue its commercial activities in Kuwait unless having a Kuwaiti agent.

It should be noted that Corporate Law no. 1/2016 and its Executive bylaw missed the enacting of the aforementioned percentage that a Kuwaiti partner must acquire in the establishment of the company. The Ministry of trade and commerce apply in this regard the aforementioned Articles (23) and (24) of the Kuwaiti Commercial law.

In attempt to attract foreign investors, the Kuwaiti parliament enacted law no. 116/2013 for the promotion of Direct Investment in the State of Kuwait by allowing foreign ownership up to (100%) of business entities in certain sectors that added value and contributes to the development of the Kuwaiti economy; This Law draws an exception to the general rules governing doing business in Kuwait by foreign investors.

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