REPRESENTATION

No foreign company is allowed to participate in tenders in Kuwait without a local agent. This agency has to be registered with the Ministry of Commerce and Industry (MCI). Selecting your agent should only take place after a visit to Kuwait. It is vital to visit the prospective agent, look at the alternatives and take advice from the Commercial section of your Embassy, local expatriate management organisation and / or a registered consultancy firm.

To be acceptable to the Kuwait authorities, agency agreements must include the following:

  • Full range of products and services that the agent is representing.

  • Period of the agency agreement - best to make it 1 year with renewal / escape clause.

  • The agent's fees - usually a percentage of any contract awarded or a fixed amount.

The agreement should then be stamped by your local Chamber of Commerce and the Kuwait Embassy in your country, or other GCC country if Kuwait does not have an Embassy. Once this documentation has been completed the agreement is registered with the Ministry of Commerce and Industry, who issue a certificate.

Any agreement can only be registered after the production of a valid Boycott Certificate. All goods imported into Kuwait must have a certificate which indicates their country of origin. This 'Country of Origin' certificate is used to obtain a Boycott Certificate, which is a certificate indicating that the goods concerned do not come from a country such as Israel. Ensure your agent obtains this for you at the same time as he is registering your agency agreement.

Foreign Company with Kuwait Agent

Many Foreign companies appoint a Kuwait agent to represent them. There are many types of agency agreements in Kuwait but the agreement has to be registered with the Ministry of Commerce and Industry. When this is the case, a different sequence of events will take place with the assistance of the agent:

  1. He can deliver a covering letter and the brochure to the relevant Ministry - Under Secretary's department. This covering letter would be in Arabic explaining the product or service and confirming his agency appointment. The letterhead would normally be the agent's.

  2. This paperwork now follows the same sequence as described previously. Even though the Kuwait agent is locally available, it is not always the preferred method.

Agency & Service Agreements

Only Kuwaiti individuals or firms may act as commercial agents in Kuwait, while foreign individuals or firms, except for GCC nationals, are not allowed to carry on commercial activities in the country except through a commercial agent. All arrangements between a foreign entity and its local agent are governed by Articles 260 to 296 of the Commercial Code.

Agency Agreement terms

An agency agreement must be in writing and must be registered with the Ministry of Commerce and Industry. The terms must cover the activities to be undertaken, the scope of the agent's authority, the remuneration, and the duration of the agency (if limited). Generally speaking, the parties to an agency agreement have full freedom of contract, but a few provisions of the Code override what the parties might wish to agree and any terms, which contradict these provisions are void. If an agent is required to erect premises then the contract must be for at least five years. The principal is obliged to provide the agent with all that the agent requires for the promotion of the principal's products and services. The agent must preserve confidentiality even after the agreement is terminated. The agent is entitled to his remuneration (a) on all matters concluded by him, (b) on transactions which would have been concluded but for some act of his principal, and (c) on transactions concluded either directly by the principal or by others acting on behalf of the principal in the area of the agent's operations, unless otherwise agreed in writing.