Kuwait’s complex business environment requires flexibility, patience, and persistence. Many U.S. exporters and investors in Kuwait face challenges that exist in other GCC countries, such as inconsistent and sometimes contradictory policies, lack of transparency in decision-making, reversal of tenders once awarded, and a judiciary that heavily favors the local population. Careful planning and personal relationships are crucial for success in Kuwait.
U.S. businesses frequently report concerns including less-than-transparent regulations pertaining to industrial standards, highly time-consuming bureaucratic procedures, insufficient intellectual property rights protection, and cumbersome public contracting and procurement procedures. Kuwait is an expensive market to do business in. The primary cost drivers include a requirement for most business entities to have a Kuwaiti agent, as well as sensitivity towards risk aversion. Additionally, widespread non-payment and claim issues are common across several industry sectors such as defense, energy, healthcare, and IT.
The hidden costs of delayed contracts and prolonged negotiations have added to the cost of doing business. Terms and conditions on tenders can also be onerous. Kuwait’s laws stipulate that Kuwaiti courts alone are responsible for adjudicating any disputes involving a foreign investor and other parties, although arbitration is permitted. Kuwait typically ranks in the mid-range for ease of doing business in the world. The Government of Kuwait has been taking steps to improve this ranking and ease business requirements. While Kuwait is generally a fairly comfortable place to live for most western expats, hindrances for western expat workers and families include excessive difficulties in obtaining driver’s licenses for some spouses or non-professional employees.