Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Kuwait. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | File with the Department of Partnerships (DOP) at the Ministry of Commerce (MOC) an application to set up the company, obtain background clearance | 1 day | no charge |
| 2 | Pick a name for the company and file an application with the Commercial Register | 1 day | no charge |
| 3 | Retrieve from the Department of Partnerships the notes addressed to the bank and to the municipality. | 1 day | no charge |
| 4 | Deposit the legally required initial capital in a bank and obtain deposit evidence | 1 day | no charge |
| 5 | The Municipality Inspects the company’s premises and issues a certificate | 5 days | no charge |
| 6 | Obtain a memorandum of association form from the Department of Partnership | 1 day | no charge |
| 7 | Sign and notarize the memorandum of association before a public notary | 2 days | KWD 15 for a 10 page Memorandum (KWD 1.5 per page) |
| 8 | Obtain from the Department of Partnerships a license to start activity | 2 days | KWD 37 |
| 9 | Register with the Commercial Registry | 1 day | no charge |
| 10 | Register with the Kuwait Chamber of Commerce and Industry | 1 day | KWD 82 initial registration, then yearly KWD 80 for renewal of membership |
| 11 | Register with the Civil Data Department | 15 days | KWD 5 |
| * 12 | Open a company’s labor file at the Ministry of Labor and Social Affairs | 15 days (simultaneous with procedure 11) | no charge |