International Business Guides

Kuwait
HSBC International Business Guides | Kuwait 02

02 Welcome to Kuwait

03 Kuwait: Jewel of the

Welcome to Kuwait
Persian Gulf
For a long time, Kuwait has caught the attention of businesses around the globe. The country
04 Country profile
has a relatively high GDP, low taxes and a business-friendly environment. Now, as it pushes
06 Society and culture to diversify its economy and implements ever-stronger incentives for foreign investment, that
attention will only increase.
10 Working practices and values

11 Business etiquette The Kuwait Vision 2035, focussing on HSBC’s presence in the Middle East dates
transforming the small but powerful back to 1889 with the bank known as ‘The
14 Economy nation into a regional and international Imperial Bank of Persia’. After a 34-year
financial and trading hub, encourages far absence, the bank formally re-established
17 Sustainability greater participation by the private sector a presence in Kuwait in October 2005. Our
and newly relaxed rules around foreign dedicated team of professionals is well
21 Labour and business ownership. It’s a bold plan that requires equipped to support your trading needs in
Samer AlAbed great levels of public-private partnerships, this market.
24 Taxes and wages Chief Executive Officer innovative business behaviours and
HSBC Bank Middle East complete digital transformations. I look forward to offering my personal
27 Investment and trade Limited - Kuwait service as we discuss how we can support
your business growth in Kuwait.
32 Infrastructure Contact
Al Hamra Tower,
36 Cost of living Floor 37,
Abdulaziz Al Sager Street,
39 HSBC in Kuwait Sharq Area,
Kuwait City
HSBC International Business Guides | Kuwait 03

Essentials Kuwait: Jewel of the

Persian Gulf
Capital city Time zone Desert Oasis Gulf fortress
Bubiyan
Kuwait City Abdali Island GMT + 3 hours Kuwait is located in one of the Only slightly larger than the island
harshest deserts on Earth and, state of Hawaii, the nation lies
with the exception of the Al-Jahra between Iraq and Saudi Arabia.
Other major cities Kuwait City Typical office hours oasis on the western tip of Kuwait Taking advantage of its deep
Al Asimah, Al Ahmadi, Hawalli, Government – 07:30 to 14:30 Bay and small fertile areas in the harbour on the Persian Gulf, the
Al Jahra
Al Farwaniyah, Jahra, Mubarak Private sector – 08:00 to 16:00 south-eastern and coastal parts country’s name means ‘fortress.’
Al Kabeer (Sunday to Thursday) of the country, is incredibly dry.
Al Ahmadi Additionally, with most of the Leadership
population residing in Kuwait Kuwait is a constitutional emirate
Population Unemployment rate City, it is one of the world’s most with a semi-democratic political
Al Khiran
4.2 million1 2.1%6 urbanised countries. system or ‘hybrid regime.’ The
Currency nation is ruled by a hereditary
Kuwaiti Dinar (KWD) Oil reserves emir (prince) who appoints the
Size Corporation tax In April 2024, Kuwait’s oil prime minister and is permitted to
17,820 square km 15%7 production was 2.4 million barrels decree laws when parliament is
(6,880 square miles)2 Top exports per day, making it one of the not in session.
Crude petroleum, refined leading oil producers in the world.
petroleum, petroleum gas, Dialling code
GDP sulfonated, nitrated or +965
USD41,079.5 per capita3 nitrosated hydrocarbons, and
acyclic alcohols4
Emergency numbers
Main languages 112 (police, ambulance,
Arabic and English Top imports fire services)
Cars, gold, jewellery,
packaged medicaments, and
broadcasting equipment5

1. World Bank Group, 2023

2. World Bank Group, 2023 4. OEC, 2023 6. World Bank Group, 2023

3. World Bank Group, 2023 5. OEC, 2023 7. PwC, 2024

HSBC International Business Guides | Kuwait 04

Country profile
Kuwait’s fortunes were guaranteed when oil was Kuwait was ruled by the Ottoman Empire between the 16th and 19th
centuries until a treaty signed in 1899 with the United Kingdom made the
discovered in the 1930s.
nation an autonomous British protectorate. This gave Britain control over
its foreign affairs. Until the end of World War 2, Kuwait was a poor and
The emirate of Kuwait lies on the Arabian Peninsula. Bordered by Iraq and underdeveloped sheikdom. Its economic, technological, and educational
Saudi Arabia, the nation also shares maritime borders with Iran. Kuwait sectors all lagged far behind the rest of the world. Then oil was discovered,
is one of the six members of the Gulf Cooperation Council (GCC) and is and everything changed.
also a member of the League of Arab States. The nation’s foreign policy is
founded on Gulf unity and a long-standing alliance with the United States. Although oil was found in the 1930s, the vast potential of Kuwait’s reserves
was not fully recognised until the end of the Second World War. By 2023,
Of its 4.2 million people, two-thirds are foreigners and expatriates, hailing Kuwait was ranked the 36th richest country in the world.
mainly from South East Asia and the Middle East. Despite residing in
Kuwait for decades, naturalisation is difficult to achieve for most non- In 1963, Kuwait was the first member of the GCC to establish a directly
Kuwaitis. Citizenship is forbidden to those without a Kuwaiti father and elected parliament. While political parties are banned, blocs are permitted
to non-Muslims. to exist. However, the government impedes their activities.

Oil production has seen Kuwait develop one of the most established and
Arabic is the official language of healthy economic sectors in the Middle East, boasting a stock exchange
the country, but English is also that is more than 55 years old. Kuwait allows 100% foreign ownership of
inward foreign investments in most non-oil and gas sectors.
widely spoken.
HSBC International Business Guides | Kuwait 05

5 reasons to do business 5 key challenges when doing

in Kuwait1 business in Kuwait2
01 Strong and respected banking system 01 Foreign restrictions
Due to the scale of business that takes place in Kuwait, the banking Though restrictions on foreign ownership of businesses are easing
sector has developed into a stable and reliable one. somewhat, and companies can petition for 100 per cent foreign
ownership under certain circumstances, generally foreign ownership
02 Direct Investment Promotion Law of businesses is restricted to 49 per cent.
This law was introduced to make it easier for foreigners to do business
in Kuwait. If certain specific criteria are met, a foreigner can own 02 High costs
100% of a company in Kuwait. Due to the time-consuming bureaucratic process, delayed contracts
and lengthy negotiations, the cost of doing business in Kuwait can
03 Tax incentives quickly grow. The requirement for foreigners to work with a Kuwaiti
Corporate tax does not exist on Kuwaiti corporate entities that are agent adds to the cost.
incorporated in GCC member countries. Other foreign entities are
liable for 15 percent ICT. However, businesses can benefit from a 03 Diversification needed
tax exemption lasting up to 10 years, partial or full customs duties Kuwait’s economy is dominated by oil and gas – and virtually all of the
exemptions, allocation of land, employment of foreign labour, country’s wealth is derived from this sector in one way or another.
and guarantees including protection against nationalisation or
expropriation without compensation. 04 Climate risk
Kuwait’s scorching climate means it is regularly counted among the
04 Infrastructure push hottest places on earth – and is increasingly vulnerable as climate
Kuwait has earmarked more than $103 billion for infrastructure change makes extreme weather more common.
development in sectors including power, water and transportation.
Kuwait is the first country in the region to adopt a Public-Private 05 Visas
Partnership (PPP) framework to attract foreign developers. Before doing business in Kuwait, a business visa must be obtained.
However, before a foreigner can apply, they must secure the
05 Vision of the future sponsorship of a local Kuwaiti company.
With Vision 2035, a long-term economic strategy, Kuwait hopes
to attract $230 billion of foreign direct investment with the goal of
transforming the nation into a commercial and financial hub.

1. Global Finance Magazine, 2022 2. US International Trade Administration, 2022

HSBC International Business Guides | Kuwait 06

Society and culture

In this section

• Language

• Religion

• Food

• Values

• Customs and celebrations

HSBC International Business Guides | Kuwait Society and culture 07

Kuwaiti tends towards the conservative, with Islam guiding The diwãniyyah – where men gather informally to talk, eat or play games
most aspects of daily life. Kuwaiti people are required to or more formally to discuss business and politics – is at the heart of
cultural life. The word also refers to the room where these activities take
pray five times daily, for example, and Friday is a holy day place. Modern diwãniyyahs are equipped with televisions, computers and
when some offices are closed. For many, the weekend is web connections.
observed on Friday and Saturday.
There is a high proportion of females in the workforce and suffrage was
Life seems to slow during the holy month of Ramadan. Working hours are granted in 2005.
cut back to five hours per day and stores shorten opening times. During
this time, Muslims must fast between sunrise and sunset. Besides eating Despite tradition being the bedrock of society, contemporary consumer
and drinking, Muslims are also prohibited from chewing gum and smoking. culture has grown over recent decades. Nicknamed ‘Pearl of the Gulf,’
However, each evening when the sun sets, families and friends gather to Kuwait has seen the rise of shopping malls housing international brands.
break their fast with iftar. Kuwaitis have a high disposable income, and they enjoy showing their
status by purchasing luxury items.

Family is the basis of the social structure

in Kuwait and the foundations of an
individual’s identity.
Language
The official language of Kuwait is Arabic. The variant of the language
Families tend to be multigenerational, where emphasis is placed on the used in Kuwait is Gulf Arabic or Kuwaiti Arabic, which draws on English
reputation of the whole, rather than the individual. and Persian. Most Kuwaitis speak English, as it is compulsory in the
nation’s schools.
Tradition is important in Kuwait. This can be seen in the way people dress.
For men, this is an ankle-length dress called a dishdasha. A keffiyeh (skull
cap) and a white cloth (ghutra) are worn on the head. An agal, a black
cord, secures the headwear. Some women still dress in a traditional full-
length abaya that covers their entire body. You will also see many women
Religion
covering their hair with a hijab. It is common for some women to don a
black veil as well, to conceal their entire face. Even young children wear While Islam is the main religion in Kuwait, followers of other religions
traditional clothing. are welcome.
HSBC International Business Guides | Kuwait Society and culture 08

Food Values
Kuwaiti cuisine is a fusion of many culinary influences. India, Iran and the Muslims make up the majority of the population in Kuwait, meaning that
Mediterranean have all had a hand in the colourful and vibrant food of many of the country’s values are directed by Islam. Rituals surrounding the
the country. Islamic faith are important. While the impact of the West has left its mark,
much of the population still adheres to traditional values.
The national staple food is rice, and this ingredient features in many Kuwaiti
dishes such as Machboos, a generously spiced union of tandoori roasted
lamb or chicken, basmati rice, vegetables and spices. Kuwaitis wear traditional dress
Due to the nation’s proximity to the waters of the Gulf, seafood features
and expect visitors to the country
heavily in Kuwaiti cuisine. Mutabbaq samak is a fish fried and served on a to dress conservatively.
bed of rice, flavoured with sautéed onions, turmeric, garlic and sumac.

Two cooking techniques are used to prepare food in Kuwait. Tabeekh is a Despite the nation’s devotion to Islam, Kuwait is extremely tolerant of other
style of cooking where all the ingredients are cooked together in a single cultures and religions.
pot. Marag is a technique that sees the main ingredients, such as the meat,
fired first before being cooked further over a low heat. Socialising is typically carried out in a traditional manner, too. Men and
women tend not to socialise together, and the most dominant feature of
Kuwaitis also enjoy hardy soup-like dishes such as harees. Like porridge in male social life is the diwãniyas. This reception room is not only the social
its consistency, harees is made from cracked wheat, meat and seasonings centre of a man’s world, but also the place where men meet business
– usually cinnamon and sugar. As Kuwaiti cuisine is quite heavy, a popular associates. For centuries, diwãniyas have been at the core of Kuwait’s
way to end the meal is with gers ogaily, a light sponge cake flavoured with social, business and political life.
cardamom, saffron, rosewater and sesame.
Hospitality is a value Kuwaitis take pride in. Guests are often served the
Kuwaitis also appreciate strong most special meals (or the most prized and delicious part of the animal).
In fact, guests are given priority in everything. When visiting, guests are
Arabic coffee, which is flavoured with always served tea and a coffee called gahwa.
cardamom and cloves as well as tea. The arts are highly valued in Kuwait. Television, radio and music industries
Hot drinks are usually served with nuts have thrived, with Kuwaiti soap operas wildly popular and watched by
millions in the Arab world.
or dates.
During Ramadan, a special beverage called Vimto is consumed. Non-
alcoholic and deriving from the United Kingdom, the berry cordial has
become a favourite among Kuwaitis during the holy month.
HSBC International Business Guides | Kuwait Society and culture 09

Customs and celebrations

Family, friends and neighbours celebrate together in Kuwait. Celebrations On the thirteenth, fourteenth and fifteenth nights of Ramadan, children
are very much a time of shared joy and unity. As a Muslim nation, many wander the neighbourhood while singing and praying to Allah. Like the
of the holidays and festivities are religious, but this does not stop Kuwaitis Western tradition of trick or treat, Al-Qarqiaan sees children visiting homes,
from coming together to carry out the customs associated with the day. For where they are offered sweets and nuts.
instance, during Daq Al-Harees, which occurs in the lead-up to Ramadan,
local women come together to grind wheat into flour. The process is But it’s not just the religious customs Kuwaitis celebrate together. Families,
accompanied by music played by female musicians. friends and neighbours take part in observing all the significant stages
of life. The time a child takes their first steps is called Al-Noon. The local
On religious holidays some businesses close and family and friends neighbourhood gathers in the courtyard of the child’s home and the
exchange gifts. mother rains down candy and nuts from above for the children to collect.
Likewise, wedding preparations are a joint activity, with friends and family
playing a part in the arrangements.
Al-Mawled Al-Nabawy celebrates
Muhammad’s birthday. During the day,
people chant, sing and read the Quran.
Offerings are also made to the poor.
HSBC International Business Guides | Kuwait 10

Working practices and values

Kuwait is one of the wealthiest countries in the world and
doing business there can be lucrative. An understanding
of the culture and values of the business world can be an
important ingredient of success.
As with other aspects of the country, business reflects the nation’s
traditional values, at the heart of which is Islam. Meetings will be
organised around prayer times and business hours are reduced during the
month of Ramadan.

The strong family values of the Kuwaiti people cross over into the business
world, too. It is not unusual for many members of the same family to work
at a company.

As Kuwaitis pride themselves on their hospitality, meetings can be drawn-

out affairs as they involve a great deal of small talk and a lengthy ‘getting
to know you’ period. This process should not be rushed, as it is essential to
building trust. Gifts are not expected at the first meeting, but small tokens
are appreciated.

The official language used by Kuwaiti business is Arabic. Although English

is widely spoken in the corporate and business worlds, documents and
contracts will be written in Arabic.

The use of titles – professional

and honorific – is important.
HSBC International Business Guides | Kuwait 11

Business etiquette
In this section

• Greetings

• Dress code

• Negotiations

• Business cards

• Sealing the deal

• Entertaining

• Golden rules
HSBC International Business Guides | Kuwait Business etiquette 12

Since hiring close relatives or associates is accepted in the

family-driven Kuwait business community, it is important to Dress code
spend time building a personal relationship with potential
business partners. This can make the beginnings of the Business attire is conservative. Men should wear lightweight business
business process fairly lengthy but will pay dividends in the suits appropriate to the climate. Women should dress modestly and avoid
wearing anything see-through or tight fitting. Although a hijab is not
long run. It’s crucial to build trust and respect.
required, it is respectful to dress formally.

Kuwaitis dress conservatively. They respect education, especially at a high

level. It would not be untoward to mention the university one attended if it
is prestigious.
Negotiations
Avoid trying to do business in July and
August. These are the hottest months in Negotiations will only commence once trust has been established
between parties. This can take some time, but it is important to remember
Kuwait, and people tend to leave Kuwaitis are not driven by deadlines. Likewise, the disruption of meetings

the country. can often frustrate Westerners. These factors contribute to a slow-
moving negotiation process, with decisions only being reached once all
stakeholders have been consulted. Demands and high-pressure tactics will
not be successful with Kuwaitis.

Greetings Due to the importance of honour in

The handshake is the common form of greeting.
society and business, Kuwaitis will avoid
giving bad news during a meeting.
Greetings only occur between members
of the same sex. Words and terms such as ‘we’ll try’ or ‘perhaps’ will be used, rather than
‘no.’ It is important to persevere with the process. If the negotiating parties
change during the proceedings, it is accepted negotiations will have to
Kuwaitis also take time during the greeting process to discuss other begin again.
matters besides business – health, family and mutual friends, for example.
The use of titles is important in the greeting process.
HSBC International Business Guides | Kuwait Business etiquette 13

Business cards Golden rules

Business cards should be printed in Arabic and English and always offered 01 Respect
with the right hand. They should be given to everyone at a meeting. Show respect for Islamic laws and practices as they govern every
aspect of Kuwaiti society, culture and business.

02 Gift giving

Sealing the deal When gift giving, offer a small token as a way of forming a closer
business relationship. Gold pens, cigarette lighters and business card
holders are suitable. If socialising at your host’s home, a plant or
chocolates are appropriate. Likewise, accept any gifts with gratitude.
Although all stakeholders will be consulted, the final decision in business
will always come from the top. Contracts should be kept simple and 03 Hospitality
written in Arabic. It is acceptable to provide English translations, too. The Kuwaitis are proud of their hospitality. Enjoy it and show
appreciation and gratitude for their generosity.

Entertaining
Hospitality is a pillar of Kuwaiti culture. If the entertaining is to take place at
a person’s home, be sure to bring a small, wrapped gift.

On arrival, remove shoes and do not

refuse any offer of food or drink.
Allow the host and the most senior people in attendance to sit first. As
alcohol is illegal, you will be offered only juice, tea or water. Food is served
‘family style’ and guests are always served first. If cutlery is not provided,
use the right hand to eat and use pita bread as a utensil. When you’re
finished, leave a small amount of food on the plate as a sign you have
eaten your fill. Once the host stands, the meal is over. At a restaurant,
when the host pays the bill, show your appreciation and gratitude. If there
is time during the business trip, it is polite to reciprocate.
HSBC International Business Guides | Kuwait 14

Economy
In this section

• Highlights

• Regional economies

• Exports and imports

HSBC International Business Guides | Kuwait Economy 15

Highlights Bordered by Iraq and Saudi Arabia, Kuwait is a small

nation of 17,818 square kilometres that, as OPEC’s fourth
largest producer, plays a powerful role on the global
• The oil and government sectors dominate the Kuwaiti economy. It is oil stage. Kuwait is a constitutional monarchy with a
estimated oil reserves have reached 101.5 billion barrels. Oil accounts parliamentary government. The Amir (chosen from the
for a little less than half of GDP.
ruling family) can appoint the Prime Minister and dissolve
• Kuwait is the fourth largest oil producer in OPEC and the tenth largest the directly elected parliament.
oil producing country in the world.

• In 2023, a USD21 billion budget surplus ended nine years of budget

Kuwaiti nationals enjoy a very high per
deficits. capita income and unemployment is
typically extremely low.
GDP (Current USD) Economic Structure5
USD175.36 billion1 Recent reforms in Kuwait allow the 100% foreign ownership of investments
Services (% of GDP) 69.06%
in most non-oil and gas sectors as a general move toward encouraging
Industry (% of GDP) 45.43% greater foreign investment. Special government approval must be granted
Real GDP Growth Agriculture (% of GDP) 0.46% for this. Kuwait is extremely dependent on foreign trade – it represents
8.9%2 100% of GDP – and relies heavily on imports for food and consumer goods.

Main sectors outside of oil and gas include real estate, financial services,
GDP Per Capita Exports Imports shipping, construction and water desalination.
USD41,079.53 Global
42 55
Ranking6
USD101 USD64.6
Inflation Rate Value7
billion billion
3.17%4
% of GDP8 53.3% 44.9%

1. Trading Economics, 2023 5. Statista, 2023

2. World Bank Group, 2023 6. OEC, 2023

3. World Bank Group, 2023 7. OEC, 2023

4. Trading Economics, 2024 8. World Bank Group, 2023

HSBC International Business Guides | Kuwait Economy 16

Regional economies Exports and imports

There are six governorates in Kuwait – see a description of each below. In 2022, the value of goods shipped from Kuwait was USD101 billion, while
Each governorate is split up into ‘areas’ that are also sometimes referred to the value of imports came in at USD64.6 billion.
as ‘towns’. Areas are split into blocks, and blocks into streets. Areas that
don’t often cover more than five square kilometres have their own co-op Kuwait’s top five trading partners:
society, governed by people elected by residents of that area who manage
supermarkets and the maintenance of public areas. 01 Mainland China

• Al-Asimah: this includes Kuwait City, which is the capital and the 02 USA
seat of government. This is the financial and business core of Kuwait.
Population 568,567. 03 UAE

• Jahra: this is the largest governorate by land area. Jahra contains 04 Japan
most of Kuwait’s agricultural regions. Population 540,910.
05 Saudi Arabia
• Hawalli: the smallest governorate by area, with just 85 square
kilometres, and most densely populated, with almost 940,000 people While mainland China is Kuwait’s biggest trading partner, the list of export
in its small footprint, Hawalli represents the coastal region of the destinations varies significantly from import partners. Iraq is placed
residential area. number two on the export list, mainland China at three, India at four and
Saudi Arabia at five. First place is held by unspecified oil supplies that are
• Farwaniyah: the most populated governorate with almost 1.17 million sold through the OPEC group.
people, this encompasses Kuwait’s most densely populated
residential area. Kuwait’s top five imports: Kuwait’s top five exports:

• Mubarak Al-Kabeer: this is the newest (founded in 1999) and also 01 Cars 01 Crude petroleum
least populated governorate, with just 254,999 people.
02 Gold 02 Refined petroleum
• Al-Ahmadi: the second largest governorate by land area, with 5,120
square kilometres, Al-Ahmadi has a population of almost one million. 03 Jewellery 03 Petroleum gas

04 Packaged medicaments 04 Sulfonated, nitrated or

nitrosated hydrocarbons
05 Broadcasting equipment
05 Acyclic alcohols
HSBC International Business Guides | Kuwait 17

Sustainability
In this section

• Highlights

• Business opportunities

• Future developments
HSBC International Business Guides | Kuwait Sustainability 18

Highlights While Kuwait is responsible for only a tiny fraction of the

world’s carbon emissions, it will feel the negative effects
of global warming more keenly than many other nations.
• Kuwait ranks 108th in the Global Sustainability Index. Earth.org says Kuwait will suffer higher temperatures,
more sandstorms, more limited water resources, a lack of
• As part of its Paris Agreement commitment, Kuwait has announced
seasonal rain and a decline in vegetation cover. So, as a
its intention to move to a low-carbon economy by producing
clean fuels and replacing ageing refinery infrastructure with nation, Kuwait is motivated to make a difference.
low-emitting refineries.
The ultimate aim of the SDGs is to end poverty, protect the planet and
• Kuwait’s annual per capita CO2 emissions stand at around 21.6 tonnes, ensure prosperity for everyone. Each goal has specific targets that need to
which is higher than the EU and other Middle Eastern Countries. be met by 2030 to create a sustainable global economy.

12 Responsible
06 Clean water and consumption and
sanitation production

07 Affordable and
01 No poverty clean energy 13 Climate action

02 Zero hunger 08 Decent work and 14 Life below water

economic growth

03 Good health and 09 Industry, innovation 15 Life on land

wellbeing and infrastructure

04 Quality education 10 Reduced inequalities 16 Peace, justice and

strong institutions

05 Gender equality 11 Sustainable cities 17 Partnerships for

and communities the goals
HSBC International Business Guides | Kuwait Sustainability 19

An arid state, Kuwait sees temperatures above 45 degrees Celsius in

summer. Because of a lack of water and arable land, Kuwait relies heavily
With abundant resources in terms of solar
on food imports. and wind, the desert regions that once
Kuwait ranks 108th out of 166 countries in the UN’s Sustainable
represented a hindrance to development
Development Goal Global Ranking 2023. According to the UN’s current are now, in the age of renewable energy,
assessment, Kuwait is making good progress towards:
an opportunity.
• Clean water and sanitation
Around $100 billion has been earmarked to invest, over the next 20 years,
Kuwait’s overall Sustainable Development Report score is 64.43 out of 100. in renewable energy projects. That includes 4,500MW of solar and wind
That score can be interpreted, the UN says, as a percentage of capacity by 2030.
SDG achievement.
This will not only reduce carbon emissions but will also help Kuwait to reduce
local demand for imported LNG. Partner businesses assisting in developing
solar facilities have included companies from Spain and Germany.
HSBC International Business Guides | Kuwait Sustainability 20

Business opportunities Future developments

There is no shortage of construction activity in Kuwait, with more than There are numerous long-term programs for sustainability in Kuwait.
$100 billion being spent on roads, hospitals, electricity generation, a They include:
university campus, an airport terminal, residential developments, an oil
refinery and more. • The manager of Kuwait’s $700 billion wealth fund, the Kuwait Investment
Authority, has announced that it is investing in green initiatives launched
With most foodstuffs imported, this will always be a vital and growing area by other members of the Gulf states, including Saudi Arabia.
of interest for Kuwait. Cars, technological equipment, healthcare devices
and construction machinery are similar, all requiring imports. Of course, • Kuwait’s vision program, known as Kuwait Vision 2035, has ‘sustainable
building materials and supplies are also in high demand. living environment’ as one of its key pillars. Some projects have launched
as a result, including the 4GW solar energy project known as the Shagaya
Renewable Energy Park.
HSBC is committed to helping businesses
transition to a more sustainable future. • With the Stockholm Environment Institute, the Kuwait Institute for
Scientific Research has developed a long-range energy alternatives
Our network, financial expertise, tools planning system that analyses in detail issues around transportation,

and connections are supporting clients desalination, electricity generation, residential and more. It has now
“captured the attention of policymakers in the State of Kuwait,” said Dr
across the world to achieve their Yousef Al-Abdullah from the Kuwait Institute for Scientific Research.

sustainability goals.
HSBC International Business Guides | Kuwait 21

Labour and business

In this section

• Highlights

• Workforce

• Productivity

• Bankruptcy

• Audit and accounts

HSBC International Business Guides | Kuwait Labour and business 22

Highlights There is a single national trade union authority in Kuwait,

the Kuwait Trade Union Federation. Founded in 1968, it
has around 60,000 members and is the only trade union
• In 2020, Kuwait’s economy contracted sharply as a result of the Covid federation allowed to exist at a national level. Small trade
pandemic and oil production cuts. This brought unemployment levels unions are permitted to form at a grassroots level.
to historic highs.
The average salary in Kuwait is KWD22,831 per year, but a more typical
• In mid 2023, Kuwait recorded a USD21 billion budget surplus, due salary is KWD12,905. “In terms of workforce distribution, 57% are from
largely to oil prices. Asia, 35% from Arab countries, 4% from the Gulf region and 1% from
Africa”, a study by the Public Authority for Manpower report noted.
• The labour participation rate of females in 2023 was 48%. Peak female
labour force participation occurred in 2014, with a rate of 50%.
There is some political pressure for
Population Minimum Wage
more job opportunities to be created for
4.2 million1 (Per Month) Kuwaitis rather than expats.
KWD75.000

Workforce Employees are entitled to 30 days of annual leave and this can be
2.46 million2 Maternity Leave (Days) accumulated until it adds up to two years of leave.
70

Unemployment Rate
(as % of Labour Force)
2.1%3

1. World Bank Group, 2023

2. World Bank Group, 2023

3. World Bank Group, 2023

HSBC International Business Guides | Kuwait Labour and business 23

Workforce The Central Bank of Kuwait and the Capital Markets Authority can help
manage the settlement process. A committee can be formed to oversee
processes, such as restructuring agreements and employment of specialist
insolvency experts.
According to the latest figures, 69.06% of Kuwait’s labour force was
employed in services, 45.43% in industry and 0.46% in agriculture. However, there are various technicalities that are important to understand,
so it is prudent to seek specialist advice on these matters.
Oil production cuts and the pandemic saw the unemployment rate in
Kuwait rise to 3.3% in 2020. It has since returned to more typical levels, at
2.1% in 2023.

Kuwaiti nationals account for less than 20% of the workforce and are
mostly employed in government and public-sector work.
Audit and accounts
Membership to the Kuwait Association of Accountants and Auditors
(KAAA) is mandatory for accountancy professionals. The KAAA is a

Productivity member of the International Federation of Accountants and the GCC

Accounting and Auditing Organization.

Companies and institutions of all legal types are expected to prepare

From 1992 to 2019, labour productivity in Kuwait decreased at an average financial statements in accordance with International Financial Reporting
annual rate of -1.25%, with maximum growth of 16.07% in 2003 and Standards. This includes listed and unlisted entities. All types of
minimum of -14.59% in 2009. companies must also have their financial statements audited by a certified,
independent auditor.

The corporate tax rate in Kuwait is 15%,

Bankruptcy with no personal income tax for Kuwaiti
or non-Kuwaiti employees.
In 2021 Kuwait set up a new court to handle bankruptcy disputes. It means
failure to meet debt obligations is no longer a criminal offence (in the
recent past, debtors unable to make repayments could be arrested), unless
it involves fraud.

Restructure and settlement with creditors

are now available as options before
declaration of bankruptcy.
HSBC International Business Guides | Kuwait 24

Taxes and wages

In this section

• Highlights

• Corporate taxes

• Individual tax

• Fiscal residence rules

HSBC International Business Guides | Kuwait Taxes and wages 25

Highlights As a zero-tax state for individual income, Kuwait removes

a great deal of the tax administration. However, corporate
tax is still payable at the rate of 15%.
• Kuwait is a zero-tax state for income earned by individuals via their
employment in Kuwait. There is also no inheritance taxes, gift taxes, Average hours per year spent on compliance, for a company in Kuwait, has
net wealth or estate duty. been measured as 98. This compares to an average of 202.6 hours across
MENA nations and 158.8 hours across OECD high-income territories.
• Corporates in Kuwait are taxed at the rate of 15%.

• Entities that are owned 100% by Kuwait nationals, or nationals of

other Gulf Cooperation Council countries, do not have corporate
income tax imposed.
Corporate taxes
Net income derived from foreign-owned business interests in Kuwait
Corporate Income Value Added Tax (Rate) is taxed at 15%. Entities that are owned 100% by Kuwait nationals,
Tax (Rate) 0%3 or nationals of other Gulf Cooperation Council countries, do not have
15%1 corporate income tax imposed.

Personal Income Tax (Rate)

0%2
Individual tax
There is no personal income tax in Kuwait.

1. PWC, 2024

2. PWC, 2024 3. PwC, 2024

HSBC International Business Guides | Kuwait Taxes and wages 26

Fiscal residence rules

As Kuwait’s tax law doesn’t cover individual tax, it also doesn’t define fiscal Investment income
residence rules for individuals. Capital gains and investment income, when it adds to the company’s
bottom line, are taxed at 15%.
What makes a resident?
To reside as an expat in Kuwait, a Kuwait Residence Visa is required, Double-tax treaties
with Kuwait nationals and nationals from Gulf Cooperation Council Being deeply reliant on both export and import, and having a workforce
countries excepted. that is mostly foreign, Kuwait has set up double-tax treaties around
the globe, with more than 70 countries. These treaties include: Austria,
Tax holiday Belarus, Belgium, Bulgaria, Canada, mainland China, Croatia, Cyprus,
Various types of organisations owned and run by foreign investors may Czech Republic, France, Germany, Georgia, Hong Kong, Hungary,
attract tax holiday status on corporate income tax, as well as customs Indonesia, Italy, India, Jordan, Japan, Republic of Korea, Lebanon, Malta,
duties exemptions on relevant materials and equipment, for five to Mauritius, Morocco, Netherlands, Pakistan, Philippines, Poland, Romania,
10 years. Russia, Singapore, Spain, Sri Lanka, Sudan, Switzerland, Syria, Tunisia,
Turkey, Serbia, Ukraine and UK.
Non-resident individuals
As with Kuwait nationals, non-resident individuals do not pay income tax.

Tax exemptions
Capital gains are taxed as corporate income at 15%. Dividend income
from companies on the Kuwait Stock Exchange is tax exempt. Most other
corporate income, such as interest, royalties, and realised foreign exchange
gains, is taxable as corporate income at 15%. Treatment of foreign income
is not clearly defined and will be treated case by case.
HSBC International Business Guides | Kuwait 27

Investment and trade

In this section

• Highlights

• Ease of doing business

• Foreign investment

• Investment incentives

• Visa details

• Capital markets and banking

• Intellectual property rights

HSBC International Business Guides | Kuwait Investment and trade 28

Highlights With a relatively small population and great oil wealth,

Kuwait has spent several decades as a high-income nation
without the need for income tax structures. The state has
• Kuwait is a member of the Gulf Cooperation Council (GCC), a powerful provided what its people have required. However, the last
economic agreement also including Saudi Arabia, Bahrain, Qatar, few years have been a challenge as barrel prices for oil
Oman and the United Arab Emirates.
have been slashed and the Covid-19 pandemic disrupted
• GCC states have eliminated all customs duties and trade restrictions businesses large and small.
between the member states.

• Total foreign direct investment stock in Kuwait is equivalent to about

As a result, Kuwait is busy diversifying
10.9% of the state’s GDP. away from oil and gas, which represents
almost half of its GDP and 90% of
FDI Net Inflows IMD World export revenues.
(Current USD) Competitiveness Ranking
USD 752. 3 million1 382
Kuwait’s annual export value is USD101 billion, with total imports of almost
USD64.6 billion. Trade growth is currently negative, at -18.92%, at a time
when world growth averages -3.91%.

1. World Bank Group, 2023 2. IMD, 2023

HSBC International Business Guides | Kuwait Investment and trade 29

Ease of doing business The new allowance of 100% foreign

ownership of a business entity
Factors that affect how easy it is to do business in Kuwait include involves that business being approved
getting credit, trading across borders and resolving insolvency issues.
However, the issue of insolvency is being addressed with a bankruptcy
by the Kuwait Direct Investment
law that came into effect in 2020. This aims to increase protection for Promotion Authority.
troubled businesses.
If approval is not forthcoming, the old rules around ownership still apply –
a Kuwaiti or a GCC national must own at least 51% of the enterprise.

Foreign investment
A top 10 oil exporter that holds 6% of the world’s oil reserves, Kuwait
has long been a wealthy and attractive business market. As it continues
Investment incentives
to diversify away from oil and gas, it only becomes more so. That
diversification, and the economic reforms that help to drive it, includes Various incentives are being offered to foreign investors. First is the simple
an increase in foreign direct investment in the oil-rich state. One of these fact that Kuwait is a tax-free state. In terms of corporate income tax, tax
reforms allows 100% foreign ownership of businesses in most non-oil and holidays of up to 10 years, as well as customs duties exemptions, are
gas sectors. available for certain organisations.

These reforms also include the development of the private sector in a once The Kuwait Authority for Partnership Projects was established to
largely public economy. Making the private sector attractive is not just collaborate with private and public entities to assist relationships and
about bringing in foreign interests, but also about convincing the Kuwaiti facilitate development of any Public-Private Partnership program.
working population to seek jobs in the private sector.
HSBC International Business Guides | Kuwait Investment and trade 30

Visa details Capital markets and banking

All work visa applications for Kuwait Kuwait’s stock exchange dates back more than 55 years and its banking
require a passport with two years’ validity, system is well developed and well respected.

or one year for a commercial visa. The state-owned Central Bank of Kuwait (CBK) regulates and oversees
the currency system and stock market. It sets and implements monetary
policy, issues currency, regulates and supervises all banking activities in the
Once the entry visa has been issued, the applicant can enter and begin state and helps the Kuwait economy keep pace with various developments,
working in Kuwait but must also, within 30 days of entry, apply for a internationally and domestically.
work permit.
The CBK lists its core objectives as:
Following this, a process will begin that involves medical testing,
fingerprinting and document approval. Once complete, the residency • Issue the national currency on behalf of the State
application can begin.
• Maintain the relative stability of the Kuwaiti Dinar, and secure its free
Nationals from many countries, including GCC states, UK, USA, most of convertibility into foreign currencies
Europe, Australia and more, can enter for a maximum of 90 days as a non-
visa national. • Direct the credit policy with the aim to contribute to social and
economic progress and enhance the national income
There are various other important details, including:
• Supervise the State’s banking system
• restrictions on who can work on specific types of visas
• Serve as a banker to the government
• maximum stay of 30 days on a commercial visa
• Serve as a financial adviser to the government
• longest validity of first-time working visa is three years
The local Kuwait Stock Exchange is operated by Boursa Kuwait, established
Please check details with a specialist as part of planning to visit Kuwait. in 2014 to drive engagement and innovation in the Kuwaiti capital market.
Boursa Kuwait is the only stock exchange in the Middle East that is owned
by the private sector. The Kuwait Stock Exchange itself has a history
stretching back as far as 1962.
HSBC International Business Guides | Kuwait Investment and trade 31

Intellectual property rights

A patent granted in Kuwait provides
protection across all GCC states.
With a global ranking of 51 out of 129 nations in the International Property
Rights Index 2022, and a regional ranking of 8 out of 15 MENA countries,
Kuwait scores average overall for IP protection, copyright protection and
patent protection.

Applications must be made via the local GCC Patent Office. Patent Law
then applies throughout the GCC states, and there are bodies in each state
that adjudicate disputes around violation of patent rights.

Kuwait is a member of the World Intellectual Property Organisation and the

World Trade Organisation (WTO), meaning it has signed up to the WTO’s
Agreement on Trade-Related Aspects of Intellectual Property Rights.

With the passing of the 2019 Copyright and Related Rights Law,
Kuwait has been increasingly active in reforming and enforcing its
copyright regime.
HSBC International Business Guides | Kuwait 32

Infrastructure
In this section

• Highlights

• Transport infrastructure

• Digital infrastructure

• Infrastructure investment
HSBC International Business Guides | Kuwait Infrastructure 33

Highlights The more conservative approach to government

spending resulting from the effects of the pandemic and
• The main international airport is Kuwait International Airport at the OPEC production cuts have dampened excitement
Farwaniyah, 16km south of Kuwait City. In 2022, the airport processed around infrastructure development in Kuwait, however
more than 12.5 million passengers. there is still a great deal going on with more than
$100 billion being spent on roads, hospitals, electricity
• Kuwait has two national airlines. Kuwait Airways launched in 1954.
Jazeera Airways began operations more recently, in 2004. generation, a university campus, an airport terminal,
residential developments, an oil refinery and more.
• Kuwait occupies round 18,000 square kilometres of land, so only has
four airports. Just one has a paved runway over 3,047 metres, which The budgetary challenges have also convinced Kuwaiti authorities to
is the length required to accommodate the requirements of the world’s look for new and advanced solutions, including partnerships with private
heaviest aircraft, the Antonov An-225 Mriya. and foreign firms and digital transformations that will add to efficiencies
of many more processes down the track.

Road Network
5,749km These all point to new opportunities in
(4,887km paved)1 Kuwait as the nation looks to keep up
with infrastructure leaders such as the
UAE and Qatar.

1. The Central Intelligence

Agency, 2023
HSBC International Business Guides | Kuwait Infrastructure 34

Transport infrastructure Digital infrastructure

Cars are the number one choice of transport in Kuwait, and are one of its Much has been said about the fact that ICT is at the core of the national
most imported products. transformation outlined in the government’s Kuwait Vision 2035 strategy.

In terms of mass public transport, After all, if the government is to

the only choice is buses. collaborate better with the private
sector, it will absolutely need to be able
Metro rail has been discussed and feasibility studies conducted, but
there are currently no railways of any kind in Kuwait. However, a rail
to meet that sector in its new, natural
network connecting all Gulf states has been discussed as a vital inclusion environment – the digital realm.
in the Kuwait 2035 vision. It will increase trade and reduce reliance on
road transport. A 160-kilometre, 68-station Kuwait metro has also been
designed and will likely be implemented as a public-private partnership. Kuwait is a mature market as far as digital infrastructure goes.

As Kuwait is located on the Persian Gulf, ports are vital for trade. The new Also, while mobile broadband has experienced high market saturation,
Mubarak Al Kabeer Port is currently under construction in partnership with fixed broadband has not. Fixed broadband is important for the growth of
mainland China, as part of the nation’s Belt and Road project. There are smart infrastructure (including smart cities) and ecommerce, so better fixed
three other main ports in Kuwait, and several smaller ones. infrastructure is also a focus for the Kuwaiti government.
HSBC International Business Guides | Kuwait Infrastructure 35

Infrastructure investment
Alongside the nation’s aforementioned digital infrastructure plans and
goals, Kuwait has also been working on transport, water, energy and other
construction projects. The UAE and Qatar are the region’s models of best
practice in terms of infrastructure, with nations such as Kuwait and Oman
keen to catch up.

Mass public transport is a known area of

focus that has been missing for a while.
There is no rail system, for example.

Sustainable buildings, ones that represent future value around energy

consumption, have also been identified as a future focus.

The economy was hit hard by the combined effects of the fluctuation
in oil prices and the Covid pandemic, meaning public spending had to
be cut. Potential solutions include public-private partnerships as well as
engineering, procurement, construction and finance contracts.

Kuwait has also announced a $1.8 billion spend on five major

infrastructure projects:

• expansion of Kuwait International Airport’s Terminal 2

• a new maternity hospital

• expansion of the Umm Al Haiman power station

• development of the Adbdali Expressway

• various roads, bridges and sanitation works on Kuwait City’s

Cairo Street
HSBC International Business Guides | Kuwait 36

Cost of living
In this section

• Highlights

• Quality of life

• Relocation

• Commercial real estate

HSBC International Business Guides | Kuwait Cost of living 37

Highlights Oil production began in Kuwait in the 1940s and has

represented a vital part of the geographically small
• Kuwait’s capital city of Kuwait City rates relatively high for Safety Index nation’s income since then, although the government
and low for Cost of Living Index. has been careful to begin diversifying away from
hydrocarbons over the last decade. Oil accounts
• Average life expectancy at birth in Kuwait is 79.
for around 95% of exports and 90% of government
• There are 239 people per square kilometre in Kuwait. revenues.

Roughly two-thirds of the population in Kuwait is made up of expat

Cost of Living Country workers, so the economy and infrastructure are very much set up to
Index (Rank) welcome foreign investment and businesses.
681
Voluntary standards and principles contained in the OECD Guidelines
for Multinational Enterprises are expected to be adhered to by any
Quality of Living City Index organisation doing business in, or with, Kuwait.
(Rank)
1282 (Kuwait City)

International Property
Rights Index (Rank)
Quality of life
543
The London-based think tank known as the Legatum Institute, in its
Prosperity Index, ranks Kuwait at number 60 of 167 countries, with
particularly high rankings for Living Conditions (42nd), Health (43rd),
Safety and Security (51st), and Economic Quality (51st). While it has
reliably strong and stable institutions that have created a good level
of prosperity, the nation’s overall score is drawn down by its Natural
Environment ranking of 137th.

1. Numbeo, 2024

2. Numbeo, 2024

3. Property Rights Alliance, 2023

HSBC International Business Guides | Kuwait Cost of living 38

Relocation Commercial real estate

Foreign workers in Kuwait must have the correct visa and work permit. The process of registering commercial real estate in Kuwait is
relatively simple. Kuwait’s 2035 Vision lists as one of its strategic goals
There are three relevant visa types: to ‘Improve access to land by establishing a central land authority.’ So it
is reasonable to expect that its already streamlined and excellent value
• Tourist Visa: allows entry and travel around Kuwait for up to 90 process of registering property will become even more impressive in the
days. Application is online and very quick. Processing time is up to coming years.
three days.

• Visit Visa: this visa is sponsored by a Kuwaiti business or a resident

relative. This requires a visit to the individual’s closest Kuwait embassy.
The Visit Visa for business requires a letter of invitation to the business,
as well as sponsorship from a resident company. Processing time is
typically two days.

• Residence Visa: most relevant for workers, this allows the individual
to live in Kuwait for a period of time for work, domestic or
dependent purposes.

Visa application requires an HIV/AIDS

test, a health certificate from a medical
professional, and police clearance
proving no criminal record.
HSBC International Business Guides | Kuwait 39

HSBC in Kuwait
In this section

• Highlights

• Profile

• Key products and solutions

• Next steps
HSBC International Business Guides | Kuwait HSBC in Kuwait 40

Highlights Key products and solutions

HSBC serves customers worldwide from offices in 62 countries and • Global Markets
territories. With assets of USD2,990bn at 31 March 2023, HSBC is one of
the world’s largest banking and financial services organisations. • Securities Services

• Investment Banking

Profile •

•
Credit & Lending

Global Trade Solutions

HSBC’s presence in the Middle East dates back to 1889 with the bank • Global Payments Solutions
known as ‘The Imperial Bank of Persia’. It changed its name to ‘The
Imperial Bank of Iran’ in 1935 then, in 1949, to ‘The British Bank of Iran and
the Middle East’ and subsequently ‘The British Bank of the Middle East’ in
1952, when operations in Iran were wound up.

The HongKong and Shanghai Banking Corporation Limited acquired The

Next steps
British Bank of the Middle East in 1959.
If you have any questions relating to our services or would like any
The Bank formally re-established a presence in Kuwait in October 2005, further information:
following a 34-year absence. Our wholesale banking proposition is to serve
large local corporates, multinationals and foreign institutional investors. We • Speak to your HSBC Relationship Manager
have an experienced team on the ground in Kuwait City, and partners in
different HSBC balance sheets across the globe. • Email kuwait.info@hsbc.com

• Visit https://www.business.hsbc.com.kw

This document was last updated in July 2024

HSBC International Business Guides | Kuwait 41

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