Kuwait

Starting a Business in

Kuwait

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Kuwait. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare Kuwait to 184 other economies.

YearNew business densityNumber of new limited liability companies
2011 1.122,391

  • Standardized Company

  • Legal Form: Limited Liability company (WLL)
  • Paid in Minimum Capital Requirement: KWD 7,500
  • City: Kuwait City

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No. Procedure Time to Complete Associated Costs
1 File with the Department of Partnerships (DOP) at the Ministry of Commerce (MOC) an application to set up the company, obtain background clearance

To set up the company, the founders must file an application with the Department of Partnerships (DOP) at the Ministry of Commerce and Industry (MOCI). The application form is obtained from the Companies’ Department at the Ministry. This application must indicate the name of the founding partners, the company capital, the percentage of ownership by each partner, the company business, the identity of company management, the company’s scope, duration and business objective. Then , the MOCI stamps the application and give it a number then the director at DOP signs it. As for the submitted documents, these include the Company's Memorandum of Incorporation, certificate of incorporation, any required resolutions as per the company's Memorandum of Incorporation requested for the establishment of a new company and any additional documents that might be requested in light of the type and nationality of the Company. In addition, a certificate issued by the social security institution is requested from the Kuwaiti partners in order to verify that they are not civil servants. The MOCI would electronically submit an inspection request to the Municipality at the relevant point of the incorporation process and the officials at the Municipality should proceed to inspect the premises whose details are provided in the request from the MOCI upon receipt of such request. An internal inter-ministerial request is sent to the Ministry of Interior, which receives and responds to requests for background clearance when entrepreneurs open their license application.
1 day no charge
2 Pick a name for the company and file an application with the Commercial Register

The founding shareholders must select a company name and file an application with the Commercial Register. If the name already exists or resembles an existing company name, the Commercial Register will inform the applicant and request an alternative name.
1 day no charge
3 Retrieve from the Department of Partnerships the notes addressed to the bank and to the municipality.

Upon successfully filing the application for company name with the Commercial Registrar and after having already filed the registration application with DOP, the applicant must go back to DOP to retrieve notes issued by DOP and addressed to the bank, and the Kuwaiti municipality.

Depending on the scope of the company’s activities, the Companies’ Department issues letters to the founders addressed to the relevant government agency: the municipality, and Commercial Bank chosen by the founders for the deposit of the capital. Depending on the scope of business, letters are issued in some cases to other governmental agencies or departments: for example, to the fire department for restaurants or cafes, to the Ministry of Health for food establishments, to the Ministry of Communication, to the Ministry of Oil and Energy for the oil industry, and so forth.
1 day no charge
4 Deposit the legally required initial capital in a bank and obtain deposit evidence

The note from DOP to the bank instructs it to accept the deposit of capital in an account opened in the company’s name. Once the capital is deposited, the bank issues a detailed bank statement on the amount deposited by each partner against his/her share in the company. When credited to the account, the capital stays frozen in the account opened with the bank in the company name, and the founders cannot withdraw from the money deposited in the account until they submit the commercial license to the bank.
1 day no charge
5 The Municipality Inspects the company’s premises and issues a certificate

The Municipality automatically receives notice that an entrepreneur has opened a license application along with the address listed on that application. The municipality then contacts the entrepreneur by telephone to schedule a site inspection. The note from the DOP to the municipality instructs it to inspect the company premises to check whether they comply with health and safety regulations. The founders must submit a lease contract for the company’s premises to the municipality and the Fire Department as well as a receipt for the payment of the rent and a certificate from the Public Authority for Civil Information stating that the premises are registered with the Authority are also requested. The Fire Department inspects the premises to check for fire regulation compliance and then issues a document which is a fire department license in the name of the company before the issuance of the certificate from the municipality. This process usually takes 5 to 7 days. Eventually, the municipality issues a certificate indicating that the offices conform to regulations.

5 days no charge
6 Obtain a memorandum of association form from the Department of Partnership


1 day no charge
7 Sign and notarize the memorandum of association before a public notary

Upon receiving a standard memorandum of association from the DOP, the founding partners or their representatives must go to the Public Notary Department at the Ministry of Justice and sign and notarize the document before a notary public. The founders’ lawyer must amend the memorandum of association if the partners wish to make changes to the standard document. This additional step can take more than a day, depending on the lawyer and the number of changes. When the memorandum of incorporation is signed and notarized, the Ministry of Justice issues three copies, one for the Ministry of Commerce and the other two for the founders (even if there are more than two).
2 days KWD 15 for a 10 page Memorandum (KWD 1.5 per page)
8 Obtain from the Department of Partnerships a license to start activity

After a public notary at the Ministry of Justice notarizes the memorandum of association, the applicant gives the Department of Partnerships at Ministry of Commerce a signed and notarized copy of the document, a copy of the lease contract for the company premises, and a receipt showing that the initial rent was paid. DOP issues the company a license to start activity.
2 days KWD 37
9 Register with the Commercial Registry

The applicant registers the company with the Commercial Registry in person. Once the company is registered, the Registry issues a certificate indicating the registration date and number.
1 day no charge
10 Register with the Kuwait Chamber of Commerce and Industry

Once registered, the company must first certify a signature specimen for the company representative with the Kuwait Chamber of Commerce and Industry, which provides a special form for this purpose. The chamber will require this certified specimen in its dealings with other governmental bodies and entities such as the banks. To this end, the company must register as a Chamber of Industry and Commerce member.
1 day KWD 82 initial registration, then yearly KWD 80 for renewal of membership
11 Register with the Civil Data Department

The company must register with the Public Authority for Civil Information' ("PACI") to obtain a “civil number,” which is required in dealings with other governmental bodies.
15 days KWD 5
* 12 Open a company’s labor file at the Ministry of Labor and Social Affairs

The Ministry of Labor may inspect the premises to determine whether the premise size and the business scope are commensurate with the number of employees registered with the Ministry and to identify the number of non-national employees.
15 days (simultaneous with procedure 11) no charge
* Takes place simultaneously with another procedure.
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