Foreign Businessmen in Kuwait
There is excellent potential for export to Kuwait as it imports almost all of its requirements. Also, there is a growing need for consultancy firms in a variety of disciplines from Human Resources to Environmental Controls. The usual starting point for new businessmen to Kuwait is participation in one of the many trade missions organized by various Chambers of Commerce or Trade Association abroad. Commercial sections of local foreign embassies are highly effective in promoting and facilitating these visits. They are also the places to obtain up-to-date legal and tax information as well as introductions to the many law and accounting firms which employ a number of foreign nationals.
In order to be effective in obtaining business in Kuwait, it is best to have a local agent. An agent's business and Government connections and his knowledge of the local market are essential ingredients for success and a list of reliable and well established ones can be obtained from the commercial sections of the various embassies. Also, shrewd foreign business persons will make sure that their agent has no conflicting products or services.
It is important that both the prospective business person and his agent identify the decision makers in those organizations with which potential business is likely. The agent should thoroughly understand the pre-qualification and tendering process governing business with the Ministries, Government Departments and the Oil Companies. The Central Tenders Committee is responsible for issuing and evaluating tenders on behalf of the Government Ministries or Departments. Tenders are usually awarded on a price basis once technical compliance has been established.
It is most unlikely that an agent will have up-to-date economic and demographic information, which could affect the decision to conduct business with Kuwait. The Ministry of Planning publishes current and projected statistical data. Also, the Institute of Banking Studies publishes a number of excellent publications on an annual basis e.g. Economic and Financial Database for Bankers which covers all demographic information as well as most of the economic and financial statistics; Financial Operating Report which specifically covers banks, investment companies and insurance companies; Financial Indicators of the Kuwait Stock Exchange Listed Companies. All these should be available at the commercial sections of the various embassies.
Customs duty has not been changed for a number of years and is currently four per cent. Also, it is best to check with the commercial sections of the embassies as to whether there are any tax implications on conducting business with Kuwait. For example, some of the oil companies deduct and retain 5% of the contract value until a certificate has been produced from the Ministry of Finance stating that all local taxes have been paid.