Registering and Starting a Company in Kuwait  (KDIPA LLC)

Registration and establishment of a fully 100% foreign-owned entity require the approval of the Kuwait Direct Investment Authority (KDIPA).

It might take 6 months or more to have the LLC registered in the State of Kuwait. In order to obtain such approval, you will need to submit a business plan indicating:

  1. The business model and activities;

  2. Projections on hiring local employees;

  3. Business experience and background information in doing business in other countries;

  4. Information on subsidiaries of the business (if any);

  5. Financial Projections;

  6. Size of the expected capital investment in Kuwait;

  7. The benefits of establishing the business to the economy of Kuwait;

 

After reviewing the business plan, the KDIPA officers will fix the paid-up capital which will need to be deposited to the company’s corporate bank account when registering the company. The amounts vary and directly depend on the size and nature of the company’s activities.

What are the guarantees and incentives under KDIPA?

 

Guarantees

  • No Investment Entity, licensed in accordance with the provisions of this Law, shall be confiscated pursuant to this Law nor be deprived of its property except in the public interest and only in accordance with the applicable laws and against compensation equivalent to the true economic value of the expropriated project at the time of expropriation, estimated in accordance with the economic situation prior to any threat of expropriation;

  • The merger of two or more Investment Entities can be carried out with the consent of the Board, following a joint request submitted to the Authority;

  • The Investor shall have the right to transfer abroad his/her profits, capital, or proceeds resulting from the disposal over his shares or participation in the Investment Entity or the compensation set forth in this Law. Moreover, employees in the Investment Entity shall have the right to transfer their savings and entitlements abroad;

  • By virtue of this law, the Investor shall be entitled to the basic principles of confidentiality in respect of the technical, economic and financial information relevant to his investment and to safeguard initiatives in accordance with the provisions of the laws and regulations in force in the country;

  • Unless there is a special provision in this Law, the laws and regulations applicable in the country shall govern Direct Investments falling within the purview of this Law, and all international conventions in force in the country related to investments and the avoidance of double taxation shall be observed.

 

Incentives

  • Exemption from income tax or any other taxes for a period not exceeding ten years from the date of the actual commencement of operations of the licensed investment entity;

  • Exemption of any expansion of an Investment Entity, licensed in accordance with the provisions of this Law, from the taxes set forth in the preceding paragraph, for a period of no less than the duration of the exemption granted to the original Investment Entity as of the date of commencement of production or actual operation of the expansion;

  • Without prejudice to the provisions of Law No. (10) of 2003 promulgating the Unified Customs Code for the Gulf Cooperation Council Countries, the following shall be wholly or partially exempted from taxes, customs duties or any other fees that may be payable on imports required for the purposes of Direct Investment:

 

a. Machinery, tools and equipment, and means of transport and other technological devices.

b. Spare parts and necessary maintenance supplies for what has been described in the previous subsection.

c. Merchandise, raw materials, partially manufactured goods, wrapping materials, and packaging.

  • The use of land and real estate allocated to the Authority or that is subject to its supervision or management, in accordance with the principles and rules established by the Board in this regard.

  • The employment of foreign labor required for the investment, in accordance with the principles and restrictions established by the decision of the Council of Ministers in respect of the minimum proportion of national employment that must be provided.

  • The Council of Ministers may decide to grant some cases and groups certain advantages and exemptions, which are not mentioned in this article.

  • Applicability of Incentives and Exemptions to Partnerships of the Public and Private Sectors The provisions of the previous article shall apply to all types of partnerships between the public and private sectors established for the purpose of Direct Investment, including companies and projects stipulated in Law No. (7) of 2008 and Law No. (37) of 2010 provided that the Board establishes the relevant rules and principles.

 

 

STEPS TO REGISTER KDIPA LLC:

The process of registration and establishment consists of several steps such as:

  1. Preparation of the business and investment plans and all the other documentation required for submission as per nature of the business;

  2. KDIPA consideration and pre-approval;

  3. Business registration;

  4. Opening of the corporate bank account;

  5. Deposit of paid-up share capital (the amount is fixed by KDIPA after reviewing the request);

  6. KDIPA issues a foreign investment license;

  7. Obtaining a Kuwait employment/residency visa for the Director

 

On February 8, 2015: Kuwait Direct Investment Promotion Authority (KDIPA) announced that the following business activities are closed for foreign investment:

1: Extraction of crude petroleum ( Class 0610)
2: Extraction of natural gas (Class  0620 )
3: Manufacture of coke oven products ( Class 1910)
4: Manufacture of fertilizers and nitrogen compounds ( Class 2012)
5: Manufacture of gas; distribution of gaseous fuels through mains
( Class 3520)
6: Real Estate (Level L), excluding privately operated  building development projects
7: Security and investigation activities (Division 80)
8: Public administration and defense; compulsory social security  (Level  O)
9: Activities of membership organizations (Division 94)

10. Activities of hiring labor including domestic labor.

 

 Source: http://e.kdipa.gov.kw/main/cmd752015.pdf

Source & Copyright: The source of the above KDIPA information and the copyright owner is the: Kuwait Direct Investment Promotion Authority - URL: https://www.kdipa.gov.kw/en/

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