As a commercial lawyer and the owner of a small business (Q8BookStore) I was pleased to attend a discussion panel held last week by the British Embassy on small and medium enterprises (SMEs). Even though it was great to hear Mohammed H. Alsahya and the Mayor of London Speak about SME’s, I was actually more interested to hear Dr. Mohammed Alzuhair, the executive chairman for Kuwait’s SME fund.
Dr. Mohammed Alzuhair spoke about the government’s new vision for encouraging business in Kuwait. The government of Kuwait has really been trying to develop business in Kuwait for locals and foreigners alike and new important laws have been issued with practical changes, such as:
1) New companies law 79/2013 – Now we can have non-profit companies in Kuwait.
2) New commercial permit’s law 111/2013 – Apparently you can get a commercial permit by applying online. I’ll be investigating this soon.
3) SME fund law 98/2013 – A 1 billion Kuwaiti Dinars fund to support SME’s in Kuwait and rumor has it that their permits will be separate
4) Promotion of direct investments in Kuwait 116/2013 – Kuwait Foreign Investment Bureau is turning into an authority, all sectors will be open to foreign investors, and foreign investors will be allowed an equity share of up to 100%.
The laws are changing and I am excited to understand these changes. If you have an SME or you’re considering launching a start-up soon and want to get an email with related information, email me on [email protected] with the following info: your name, job position (at your SME and/or daytime job), type of business.
If you have more information about the above laws and would like to share changes also email me at [email protected]
Post by Fajer Ahmed – Legal Counsel
The legal opinions expressed in this post are those of the author Fajer. Opinions expressed by Mark or any other writer on mark248am1.wpenginepowered.com are those of the individual’s and in no way reflect Fajer’s opinion.
22 replies on “Kuwait Law: SME’s and New Businesses in Kuwait”
Fajer, thank you for your post. Do you mind elaborating a bit more what your fourth point is? (About FDI’s towards a 100% equity share). Does that mean that foreigners will not have to partner up with a Kuwaiti citizen to own/operate a business in Kuwait anymore?
yes but it depends on the type of company and the sector. will get into more detail soon.
This will never happen. Kuwaitis will always have a majority shareholding. Too many risks with allowing 100% foreign ownership
Would you care to elaborate on the “risks” which you are referring to?
There is a risk all the profit will be grabbed by the foreign owners.
This is a ridiculous statement.
That’s exactly what the risk is though, how is the statement ridiculous? If 100% foreign ownership was allowed businesses wouldn’t need Kuwaiti partners, and instead of the money circulating back in to a Kuwaiti company it would just go straight out of the country. If the oil companies weren’t govt. owned the country would literally have no income.
There is no way a license can be applied for online in the near future. You might be able to the Min of Commerce portion online, but then there is baladiya checking and min of social affairs and labor checking which must physically check the address on the license….then there is a police check for some licenses, ministry of education paperwork for some licenses, etc etc etc NO WAY to get license online. no way.
1 billion fund – i doubt it is billion – has many conditions and strings attached. i had another law firm look into it and one is an age limit and the venture must be the first one by an individual.
in the past , many kuwaitis who work in the govt sector get licenses in their mother’s names (assuming they are not employed and not receiving certain state benefits that would prevent them from getting a business license)because govt workers cannot get a business license.
the fund whatever the amount is for under age 27 i think in their first business venture with limitations based on an approved business plan…..
this is not free money
my bad its 2 billion 🙂
Alshaya*
” Even though it was great to hear Mohammed H. Alsahya and the Mayor of London Speak … ”
Awesome.. good to know about the non-profit companies!
what is non-profit company.if there is no profit, what is the point of doing business :p by the way i have sent you and email miss.
PLUS
anyone has intention to be my business partner and get so rich in a few years? 🙂 i am serious about it btw. 🙂
It’s a misnomer to say a non-profit company makes no profit — in the USA at least many non-profits are among the most profitably run businesses. The non-profit status has more to do with how taxes are paid, or not paid — but in Kuwait it may mean something else, yet I hope it won’t actually mean “no profit.”
thanks for explanation doctor ^_^
i think that, as another friend mentioned, if the business is being for the favor of public; then they call it non-profit eventhough the one who runs the business profits.i was reading the law yesterday and got that from what i read.
I’ve heard of non-profit organizations, non-profit hospitals, but a non-profit company — sounds confusing. Even the private charity groups here are for profit — but i digress
actually my last idea regarding new business in kuwait was somehow related with public and actually it should be done by the municipality.in this case, can we name it non-profit business so i can do it without a business partner? i just need to add that i would have financial profit at the end but at the same time its for the good of ppl.
Beware of Kuwait Investment companies.
They steal your ideas then reject your proposal no matter how good it is.
Has happend to me twice. Never again will I ask for a loan from a bank or finance company in Kuwait..
Hey Khalid,
I feel you bro, had the same discussion with a friend of mine the other day. Trying to figure out how to protect a Business Idea from being stolen when pitching it to investors.
this is actually what i was worried about and unfortunately i gave the idea away already.to a kuwaiti lawyer :s ah i hate the system on earth 🙁
I think the only way to be fully protected is to pitch the idea in a way that throws them off guard.
So for example, you tell them you want to open up a regular car service station in shuwaikh and it will provide a washing service while the car is being fixed.
In reality, what you really plan on doing is to open it up in the Fahaheel area, and your getting a big name company from the United States to management and provide their other special services.
*The main point is to get the investment companies approval and loan, after that there is no rule or law that prevents you from “improving” your idea while it is in the process. They bound to a contract with you, which they can’t easily abandon.
i got the point
Hi,
Where can one learn more about the legal must-do’s when starting up a small online business in Kuwait. I mean REALLY small, like a one-person startup selling handmade stuff online?