Kuwait Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in kuwait, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Trade Financing
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Methods of Payment

AnchorAnchorAnchorAnchorAnchorKuwaiti banks offer the full range of financial services needed to conduct commercial transactions or develop projects. Letters of Credit (LCs) are traditional instruments for private-sector transactions. LCs may be confirmed by a prime U.S. bank for additional exporter assurance. As U.S. exporters develop longer-term relationships and there is greater trust in the creditworthiness of all parties, companies may be willing to accept documents against payment (d/p) or documents against acceptance (d/a). Deferred payment schedules are not common except in cases of large transactions where supplier financing plays a role.

Companies bidding on government of Kuwait contracts should pay careful attention to the way proposals are prepared and should strictly follow the administrative specifications. Financing costs and foreign exchange rate risks, wherever applicable, should be factored into the bid price. Bids which do not comply with administrative specifications (including financial criteria) are generally rejected. Government tenders often require bid and performance bonds. Bid bonds must be issued by a local bank, and range between 2% and 5% of the value of the bid. The performance bond will replace the bid bond once the tender is awarded and is 10% of the value of the contract.

The local representative, sponsor or account executive will pay foreign companies involved in major government-tendered projects. The concerned ministry or department will issue a check in honor of the beneficiary to be drawn at a local bank. In turn, the beneficiary will remit the amount due to the foreign company (Sub-contractor).

Banking Systems

Banks are under the supervision of the Kuwait Central Bank. The banking sector is fundamentally sound. Kuwait has 11 local commercial banks, which include five Islamic banks. The largest bank is the National Bank of Kuwait (NBK). Following an amendment to the Banking Law of 1968, the National Assembly allowed foreign banks to establish operations in Kuwait. Currently, 12 foreign banks have branches in Kuwait. Well-known financial conglomerates such as Citi Bank, BNP-Paribas, and HSBC operate in Kuwait.

Two specialized government-owned banks provide medium and long-term financing. The Industrial Bank of Kuwait offers financing for industrial and agricultural-related projects. The Credit and Savings Bank facilitates the purchase of single-family or multi-family residential units.Anchor

Exchange Controls

AnchorAnchorAnchorAnchorAnchorThe Kuwaiti Dinar (KD) has been pegged to a basket of currencies since May 20, 2007. It is freely convertible and given strong foreign-currency earnings and foreign-currency reserves, its exchange rate vis-à-vis most major international currencies is stable.

US Banks & Local Correspondent Banks

Citi Bank is one of ten international banks currently maintaining operations in Kuwait. Other international banks include BNP-Paribas, HSBC, and regional banks from the UAE, Qatar, Saudi Arabia, and Oman. In 2013, the Kuwait Central Bank announced that foreign banks would be able to open multiple branches in Kuwait on a case-by-case basis.

For more information on the banking system please read the section Capital Markets and Portfolio Investment of the Investment Climate Statement.

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Global Business Navigator Chatbot Beta

Welcome to the Global Business Navigator, an artificial intelligence (AI) Chatbot from the International Trade Administration (ITA). This tool, currently in beta version testing, is designed to provide general information on the exporting process and the resources available to assist new and experienced U.S. exporters. The Chatbot, developed using Microsoft’s Azure AI services, is trained on ITA’s export-related content and aims to quickly get users the information they need. The Chatbot is intended to make the benefits of exporting more accessible by understanding non-expert language, idiomatic expressions, and foreign languages.

Limitations

As a beta product, the Chatbot is currently being tested and its responses may occasionally produce inaccurate or incomplete information. The Chatbot is trained to decline out of scope or inappropriate requests. The Chatbot’s knowledge is limited to the public information on the Export Solutions web pages of Trade.gov, which covers a wide range of topics on exporting. While it cannot provide responses specific to a company’s product or a specific foreign market, its reference pages will guide you to other relevant government resources and market research. Always double-check the Chatbot’s responses using the provided references or by visiting the Export Solutions web pages on Trade.gov. Do not use its responses as legal or professional advice. Inaccurate advice from the Chatbot would not be a defense to violating any export rules or regulations.

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The Chatbot does not collect information about users and does not use the contents of users’ chat history to learn new information. All feedback is anonymous. Please do not enter personally identifiable information (PII), sensitive, or proprietary information into the Chatbot. Your conversations will not be connected to other interactions or accounts with ITA. Conversations with the Chatbot may be reviewed to help ITA improve the tool and address harmful, illegal, or otherwise inappropriate questions.

Translation

The Chatbot supports a wide range of languages. Because the Chatbot is trained in English and responses are translated, you should verify the translation. For example, the Chatbot may have difficulty with acronyms, abbreviations, and nuances in a language other than English.

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