Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
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. These challenges are not unique to Kuwait or GCC member states. Kuwait is an expensive market to do business. 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.
In the past, uncertainty about taxes owed has been a major deterrent to exporters, and 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. The World Bank ranks Kuwait last in the GCC and 83th out of 190 countries globally with regard to ease of doing business. 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.