Kuwait: Business Environment

Accounting Rules

Tax Year: From January 1st to December 31.
Accounting Standards: There is not a mandatory accounting system required in Kuwait. However, companies are asked to respect the International Financial Reporting Standards. Projects of harmonization and unification of an accounting system and its presentation are being discussed at the Gulf Cooperation Council.
Accounting Regulation Bodies: Public Authority for Industry.
Stock Exchange of Kuwait.
Accounting Reports: All commercial companies of Kuwait are required to keep several accounting books every year. These must be written in Arabic:
- Sales Journal
- Inventory
- General Ledger
- Expenditures Analysis Book
- Stock Shares Evolution Reports
In order to create a financial analysis, companies are required to generate a balance sheet and a profit and loss report, which have to be submitted to the Ministry of Commerce and Industry for its evaluation no later than three months after the end of the fiscal year.
Publication Requirements: The companies wishing to enter in the stock market of Kuwait are required to provide accounting publications. They must have published their audited accounting reports for the last two years prior to their introduction into the stock market. These financial statements must show their structure and their net profits. Still, the Council of Directors of the Stock Exchange of Kuwait can request other elements before giving its approval. All companies quoted on the Stock Market of Kuwait must publish their audited financial statements with their complete balance sheet and the profit and loss report no later than three months after the end of the fiscal year. They must also publish their periodical statements no later than two months after the end of their fiscal period.
Professional Accountancy Bodies: Association of Accountants and Auditors of Kuwait.
Directory of Accountants and Auditors in Kuwait.
Certification and Auditing: The certification and the control of accounts have to be made by an organization independent from the company, certified and registered at the Ministry of Commerce and Industry. The process of certification and control of accounts are ruled by the Law No. 5 of 1981. You can contact an external auditor: Deloitte, Ernst & Young, PricewaterhouseCoopers, KPMG.
Accounting News: IAS Plus
Association of Accountants and Auditors of Kuwait
Article describing the Accounting System in Kuwait.

Tax Rates

Consumption Taxes

Nature of the Tax: There is no VAT (value added tax) in Kuwait.

Learn more about Service Providers in Kuwait on Globaltrade.net, the Directory for International Trade Service Providers.

Corporate Taxes

Company Tax: Flat rate of 15%
Capital Gains Taxation: Capital gains obtained by a foreign shareholder are considered regular revenues and are subject to the current tax rate.
Main Allowable Deductions and Tax Credit: Deductions for depreciation, net operating losses, some custom duties, head office expenses.
Other Corporate Taxes: Social security contributions, Zakat, contributions to KFAS, National labor support tax (NLST).

Country Comparison For Corporate Taxation

	Kuwait	Middle East & North Africa	الولايات المتحدة	Germany
Number of Payments of Taxes per Year	15.0	21.6	11.0	16.0
Time Taken For Administrative Formalities (Hours)	118.0	194.1	187.0	215.0
Total Share of Taxes (% of Profit)	15.5	32.8	46.8	48.2

Source: Doing Business - Last Available Data.

Individual Taxes

Tax Rate

Individual Income Tax	As a rule, all individuals (residents, non-residents) do not pay income taxes in Kuwait, but a project of Tax Levy Act has been presented to the National Assembly.
From KWD 0 to 2,000	5%
From KWD 2,001 to 10,000	10%
From KWD 10,001 to 50,000	15%
From KWD 50,001 to 250,000	20%
From KWD 250,001 to 1,000,000	25%
More than KWD 1,000,000	30%

Allowable Deductions and Tax Credit: The fixed deductions foreseen within the framework of the project of the Tax Levy Act are as follows:
- Fixed deduction of 6,000 KD for singles.
- 7,000 KD for married individuals without dependent children.
- 8,400 KD for married couples with a dependent child.
- 600 KD for every additional dependent child.
Special Expatriate Tax Regime: As a rule, foreign individuals are not subject to pay income tax in Kuwait, but a new project of Tax Levy Act is being elaborated. It should provide a choice of place, in case that taxes have already been paid in their country of origin. Kuwait has signed several agreements against double taxing.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: List of countries having a fiscal agreement with Kuwait.
Withholding Taxes: Dividends: 0%, Interest: 0%, Royalties: 0%
These incomes are treated as ordinary business incomes.

Sources of Fiscal Information

Tax Authorities: Ministry of Finance of Kuwait
Other Domestic Resources: Guide to International Taxation.
Taxation for companies in Kuwait.

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Intellectual Property

National Organizations: In Kuwait, patents and trademarks must be registered in the Trademark Control and Patents Office in the Ministry of Trade and Industry (MCI). You can contact the Office by Email.
Regional Organizations: None.
International Membership: Member of the WIPO (World Intellectual Property Organization)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Law No. 4 concerning Patents, Designs and Industrial Models, May 15, 2005	15 years, renewable for a period limited to 5 years. 10 years for chemical discoveries, medications and pharmaceutical compositions.
Trademark Law No. 3 of 2001	10 years, renewable one time.
Design Law No. 4 concerning Patents, Designs and Industrial Models, May 15, 2005	5 years, renewable for two consecutive 5-year periods.
Copyright Law No. 3 of 2001	50 years after the death of the author.
Industrial Models Law No. 3 of 2001	10 to 15 years.

Legal Framework

Independence of Justice: Judicial Power in Kuwait is not really independent. The Emir appoints all judges and the Executive branch approves their promotions and renewals of their functions.
Equal Treatment of Nationals and Foreigners: The Judiciary System of the country does not always guarantee a fair trial to a foreigner.
The Language of Justice: The judicial language used in the country is Arabic.
Recourse to an Interpreter: It is possible to obtain the services of an interpreter.
Sources of the Law and Legal Similarities: The main source of the country's law is the Constitution of 1962. The legal system is based on a civil law system with the exception of personal status where Islamic law prevails. Kuwait has not accepted mandatory jurisdiction from The International Court of Justice.
Checking National Laws Online: Directory of different websites about Kuwait's Laws and its Judicial System.

Learn more about Lawyers and Legal in Kuwait on Globaltrade.net, the Directory for International Trade Service Providers.

Standards

National Standards Organizations: Standards and Regulations of the Public Authority for Industry, State of Kuwait.
Standarisation Organisation for the Gulf Cooperation Council.
Integration in the International Standards Network: All products must comply with the Kuwaiti standards (Kuwaiti Standard Specification, KSS). If there are no specific standards applicable in Kuwait, then the Gulf countries' standards must be applied (Gulf Standard Specifications, GSO). The countries that form the Gulf Cooperation Council have created an organization responsible for the standardization: The GCC Standardization Organization, of which Kuwait is a member. Its goal is to unify the standards of all the Gulf's countries in order to create a free-trade zone following the European Union's model. The Public Authority for Industry also represents Kuwait in the International Organization for Standardization (ISO), and the International Organization of Legal Metrology (OIML).
Classification of Standards: ISO, GSO or KSS followed by 5 digits, a hyphen, another digit, sometimes another hyphen and a digit.
Online Consultation of Standards: They are available for certain products on the site Industrial Public Authority or on the site Standardization Organization for the Cooperation Council for the Arab States of the Gulf (GSO).
Certification Organizations: The Public Authority for Industry (PAI) is charged to issue the certificates.

Business Practices

General Information: Kwintessential, Website with general information about culture, customs, etiquette and doing business in Kuwait.
Farnhamcastle, Website about business' etiquette in Kuwait.
Opening Hours and Days: Banks are open for customers from Sunday to Thursday from 8 AM to 1 PM.
Government offices are open from Saturday to Wednesday from 7:30 AM to 2:30 PM in winter and from 7:00 AM to 2:00 PM in summer.
Stores and shops are open from Saturday to Thursday morning from 8:30 AM to 12:30 PM and from 4:00 PM to 7:00 PM.

Public Holidays

New Year	January 1st
Islamic New Year	Variable
Kuwait's National Day	February 25
Liberation Day	February 26
Prophet's Birthday	Variable
Ascension of the Prophet	Variable
Aid el Fitr	Variable, at the end of Ramadan
Aid El Adha	Variable, in accordance to the Lunar Calendar, but always 70 days after the end of Ramadan

Holiday Compensation: If a holiday falls on a Friday (resting day of the week), it is carried forward to the following working day.

Periods When Companies Usually Close

Aid El Fitr	2 days
Aid El Adha	4 days

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