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Kuwait

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About

Kuwait

Capital
Official languages
Population 
Currency

ISO 4217

Kuwait City

Arabic and English

4.2 million

Kuwaiti Dinar

KWD

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Process

Economy

Kuwait has a strong and diversified economy, with a GDP of $164.3 billion in 2019. The country is a major exporter of oil and gas, accounting for nearly half of its GDP and 90% of its export earnings. Kuwait also has a strong banking sector, with the Central Bank of Kuwait overseeing the country's financial system. The country has a low unemployment rate of 2.2%, and its inflation rate is relatively low at 2.7%. Kuwait has a strong investment climate, with foreign direct investment reaching $3.2 billion in 2019. The country also has a strong infrastructure, with the government investing heavily in roads, ports, and other infrastructure projects. Overall, Kuwait has a strong and diversified economy, with a strong banking sector, low unemployment, and a strong investment climate.

Taxation

Kuwait has a tax system that is mainly based on indirect taxation, with no personal income tax or corporate income tax for most businesses. However, there are some exceptions for certain types of businesses, as explained below:


Corporate Taxation:

- Most businesses in Kuwait are exempt from corporate income tax. However, foreign oil companies operating in Kuwait are subject to a 55% corporate income tax on their share of profits from oil production.

- Banks and financial institutions are subject to a corporate income tax rate of 15% on their net profits.

- Companies are required to file a tax return by the end of March each year, but no tax payment is required unless the company falls into one of the exceptions mentioned above.


Personal Taxation:

- There is no personal income tax in Kuwait.


Tax Payment Process:

- As mentioned above, most businesses in Kuwait are exempt from corporate income tax, and there is no personal income tax in Kuwait.

- However, there are some other taxes in Kuwait, such as customs duties, excise taxes, and value-added tax (VAT).

- VAT was introduced in Kuwait in 2021, with a standard rate of 5%. Businesses with an annual turnover of over KWD 500,000 are required to register for VAT, file regular VAT returns, and make VAT payments to the tax authorities.

- Customs duties and excise taxes are also collected by the Kuwaiti customs authority at the point of import or production, respectively.


In summary, Kuwait has a tax system that is mainly based on indirect taxation, with no personal income tax or corporate income tax for most businesses. However, foreign oil companies operating in Kuwait and banks and financial institutions are subject to corporate income tax, and there are other taxes such as customs duties, excise taxes, and VAT. Most businesses in Kuwait are exempt from tax, and tax payments are typically made at the point of import or production, rather than through a separate tax payment process.

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