Kuwait company formation is a tax-efficient way for international businessmen to legally conduct business in oil-rich Kuwait and throughout the Gulf Cooperation Council (GCC). The following information will help you determine whether Kuwait company formation is the optimum corporate structure to fulfill your international business objectives:

Advantages of Kuwait Company Formation

1. A Kuwaiti company is sometimes given preference when bidding for some government tenders.

2. A Kuwaiti company is legally tax-exempt if properly structured.

3. Kuwait company formation allows 100% foreign ownership. However, a minimum of two shareholders is required.

4. Kuwait is a key member of the Organization of the Petroleum Exporting Countries. Oil accounts for around 50% of Kuwait’s gross domestic product (GDP). Many investors choose Kuwait company formation to tap opportunities in the booming oil sector.

5. Some businessmen and contractors choose Kuwait company formation as the ideal gateway into neighbouring Iraq.

6. Healy Consultants can open a corporate bank account in Kuwait or internationally to support Kuwait company formation.

Disadvantages of Kuwait Company Formation

1. Kuwait company formation is challenging because of inconsistent regulations and slow-moving bureaucracy.

2. The minimum capital requirement for Kuwait company formation is US$26,000.

3. A 100% foreign-owned Kuwaiti company cannot import goods for commercial purposes.

4. According to the Heritage Foundation’s 2007 Index of Economic Freedom, Kuwait was ranked poorly as having the world’s 57th-freest economy

5. Kuwait is also negatively perceived as the 46th-least corrupt country in the world, according to the 2006 Corruption Perceptions Index by Transparency International.

In a state such as Kuwait, class based on private property and wealth becomes less important than the power of access to the state that distributes the large (oil) revenues. Although Kuwait is a wealthy country and poverty is almost non-existent, there are still important divisions within society. There are divisions between long-settled tribal families and those who only settled in the last 3 decades and do not benefit from long established ties to the powerful. Some of the latter have not even been granted Kuwaiti citizenship and are usually called Bidoon, meaning “without” (nationality) and thus face grave disadvantages. Another important determinant of proximity to the state apparatus is the sectarian division between Sunni Muslims and Shiites. The Shi’a community (immigrants from neighboring countries) has often been excluded from the government bureaucracy that provides Kuwaiti Sunnis with work and social security.

The provision of social services to Kuwaiti citizens, compared with most Western countries, is extensive. The state welfare system especially cares for the needy, providing direct transfers to widows and students, and aiding families in need because of divorce, old age, disability, parental death, illness, or financial difficulty. Educational and marital status are taken into account in granting aid.