Information on Kuwait

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1. Introduction

Airport & Sea Ports

Kuwait International Airport is in Farwaniyah, about 17km from the centre of Kuwait City, having two terminals. The Terminal-1 for short-haul passenger flights and freight, and has nearby cargo handling and storage facilities. Just east of this is Terminal-2, the main passenger terminal. All long distance flights depart from and arrive at Terminal-2, which is built in the shape of an aeroplane, its arrival and departure areas forming the wings of a long fuselage containing the aircraft access gates. Kuwait Airport is installed with the latest and most sophisticated equipment and exclusive facilities and services like flight information monitors, banks, restaurants, mosque, shops, airline offices, call taxi & car rental services, mobile telephone hiring service, hotel reservation, duty free shopping and a transit airport hotel. With recent development, the country's only international airport has doubled its capacity to six million passengers a year. In addition, there are 3 main Sea Ports, namely Al-Shuwaikh, Al-Shuaiba and Doha, the first is the largest and oldest and was established in 1960.

Broadcasting

The Ministry of Information runs the government press and the radio and television broadcasting stations. It has also undertaken the task of reviving some of the outstanding literary works in Arabic. Every literature, audio, video and any other media coming to Kuwait from abroad has to pass through the Censorship department of the Ministry of Information.

Civil Law

Issued in 1980, this law deals with generalities about the law and its applications; it stipulates that if the law does not cover a certain area the judge must resort to the established customs and traditions of the country, and if this does not help the judge, he must resort to the Islamic Sharia and his own juristic reasoning depending upon the case and its elements.

RIGHTS

Two types of rights are mentioned in the law they are moveable and immoveable rights.

  • Moveable rights are: monies in all forms, products, machineries, and personal properties.

  • Immoveable rights are: real estate property like buildings and land.

OWNER OF RIGHTS

Owners of rights are of two kinds:

1.Person: The life of a person starts in the mother's womb and ends with death. A foetus is considered a natural human being having all the rights enjoyed by an adult if born alive.The domicle of a natural person is the place he lives in or works in, and for the mentally incompetent or the long-absent person his domicile is the place of his legal representative or guardian. He who is in the womb is regarded as already born whenever a question arises for his benefit. A person who is not completely capable of conducting his own affairs can be allowed by the judge to handle those affairs within his capacity.

2. Corporation: (companies, associations etc.) The law defines the corporation as a representative of persons or monies acknowledged by law to have legal rights and obligations towards its members and others and by the purpose for which it was established.

For foreign companies operating in Kuwait, the legal addresses are the office of its branch in Kuwait.

EXERCISE OF RIGHTS

Unreasonable exercise of rights is considered unlawful and infringing upon the rights of others. Exercise of rights as prescribed by the law and specifically in the following cases:

1. If the benefit arising from the exercise of rights is unlawful, such as a creditor enforcing his debtor to work in an illegal job to generate money to pay the debt.

2. If it was meant to harm the debtor (a creditor who got his money from the debtor goes again to the court to issue restriction orders on the debtor).

3. If the benefit of owner rights is far less than possible damage incurred on debtor if the right is exercised. (Selling a collateral that far outvalues the debt for a very low price).

4. If the exercising of the rights causes unrealistic damage.

OBLIGATION OF THE CONTRACT

The civil law defines the contract in general terms as "an offer that receives acceptance from another party". Contracts are formulated between two or more persons for the accomplishment of a lawful object or action. For a contract to be legal it must have the following elements:

1-Offer: The offer is an act by which a thing or project presented to a person for the purpose of entering into contract.

There are cases where the offer requires a certain response not necessarily explicit, in such instances silence, (no - response) is considered a consent.

Consent to an offer is annulled if the offer or the accepting party loses his mental capacity, or dies before making his consent known.

Contracting through mail, or telephone, or any similar method is possible if offer and consent are affected during transaction, or within a specified time agreed upon by the parties to the contract. Article 51 of the law dwells on the contract forms where the other party fills in the blanks. These contract forms are considered binding by law unless proven that one of the parties did not have the chance to review the contract where major stipulation are unacceptable. But if the clauses of the contract are insignificant then the judge will resort to common sense, justice and customary practices.

The parties of the contract can postpone certain insignificant elements of the contract to be formulated later, and this action does not abrogate the contract. In case of disagreement and the case ends up in court, then the judge has the right to decide in accordance with customary practice and what he believes to be just.

2-Acceptance: Acceptance is an act of free will expressed verbally, or in written form or with an explicit sign language if one of the parties is unable to speak or write. The expression should be clear without any vagueness that could be interpreted otherwise. This free expression of consent shall be effective after being known by the offering party. Vagueness in expressing real intent of a party to a contract is a source of possible conflict which may or may not be hard to prove in a court of law.

3-Contracts representation: Contracts can be affected through legal representation; that is, one person can authorize another person to act on his behalf, unless the law requires that a person himself must agree to the contract. Legal representation is binding for the principal (The person who authorizes someone to act on his behalf ) within the legal limits of conduct stipulated in the authorizing document.

4- Mental competence: Any person who reaches the age of 21 is considered capable of signing contracts and conducting his life, unless the law prescribes otherwise. The law considers mentally deficient persons of different kinds like: an insane person, a madman, a child, a minor, a careless spendthrift, as mentally incompetent to conclude and sign a contract.

The judicial assistant and the guardian must submit statements of accounts showing details of expenses and other transactions. Only the parents are not asked by the court for handling the money of their minors unless they commit grave and costly mistakes.

A child of seven years is considered able to distinguish between what is good and what is bad. His appointed guardian must handle his monies carefully and manage them for his benefit only, however a court ruling is needed to get guardianship over a child.

A person eighteen years of age can get a court ruling allowing him to run certain aspects of his life, in other words he can get permission to conclude certain contracts.

If a mentally incompetent person signs a contract of whatever kind, this contract can be legally annulled, but if he, with malicious intent, enters into a contract with somebody, then his mental incompetence will not be taken into consideration by the court and the contract he signs will be considered effective. In this case the mentally incompetent is supposed to compensate the other party for whatever damage he might have caused.

SUBJECT MATTER OF CONTRACTS

Contract should have a reasonable, realistic subject matter, and should be humanly possible to execute. Contracting for future performance is possible if the subject matter is real and does not depend on chance, and is not related to what a man leaves after his death except what the law allows.

The subject matter of the contract should be stated clearly without ambiguities, otherwise the contract will be considered void. If the subject matter of the contract is a certain thing, its specifications must be stated clearly, and if stated with ambiguities, then the party responsible should provide the thing with average specifications.

Any contract regarding an unlawful subject matter and contrary to the public order is considered null and void. If the contract is to pay a certain amount of money, then the number of the amount is what counts and not the value.

Any monies, the subject of debt, must be paid in Kuwaiti Dinars, but the law allows agreement to be fulfilled in foreign currency if stipulated in the contract.

Terms of the contract should not contradict the public order. If any condition or term in a contract is found counteract to public order, then this term or condition shall be annulled and the rest of the contract will be upheld.

Any contract must have a legitimate clause known to the contracting parties, or to at least one of them, otherwise the contract is considered null.

The clause indicated clearly or implicitly in the contract is considered the real contracted clause upon which the contract stands; any illusory clause must be proved by the one claiming so.

EFFECTS OF CONTRACTS

Interpreting the contract - If the wording of the contract is clear, transparent, unambiguous, logical and balanced, one should not resort to an alternative interpretation of the contract, but if it were ambiguous with unclear sentences and words that could be understood in more than one way, then the judge resorts to the real meaning of the contract through scrutinizing the intent of the customary practices, and the facts pointing to a definite meaning. Sometimes it happens that ambiguity is so entrenched in a contract that one cannot fairly unravel the real intended meaning, in such a case the ambiguity and doubt about the real meaning of the contract is interpreted to the favor of the weak party, the one who will bear the brunt of debt.

The conditions and terms stated in the contract are not the only elements binding in the contract. Traditional and customary practices, good will of the parties and honesty in dealings all constitute complimentary elements in the contract that are taken into consideration by the court.

A contract is the law to the parties, any of them cannot terminate a contract or amend it without the approval of the other unless the contract indicates that clearly and the law allows it.

Fulfilling the contract is a must for its parties in the light of its terms, customs and traditional practices, good will and honesty of the parties. Yet in some cases, after entering into a contract, Illusory contracts are formed to conceal real contracts, they can be binding if they have the legal elements of a contract, and if they are not disapproved by a third party.

Disproving an illusory contract requires proof that the illusory contract hides behind a real contract whose object or intent differs from the illusory one. If contestation erupts between contractual parties and a concerned third party about which contract should be upheld, those who uphold the illusory contract, without their knowing about it being illusory, will be favored.

A contract binds its signatories (the parties) only, yet the effect of the contract extends to the particular successors and universal successors of the indebted party. If the debt results from performing the contract, and the indebted party passes away, his debt should be settled from what monies and properties he leaves behind.

ABROGATION OF CONTRACTS

Voidable contracts: A voidable contract is considered legal till one of the parties demands its annulment based on the illegal elements found in it. When contracts are deemed void, the positions of the parties go back to the initial stage prior to entering into contract.

The right to annul or abrogate the contract is legally upheld for three years from the date the clause for abrogation is discovered or has disappeared. The following cases clarify this point further:

1. A contract with a minor or mentally incompetent person can be annulled within three years from the date the minor reaches legal age or the mentally incompetent gains mental capacity.

2. If malicious cheating was the reason behind annulment, the annulment can be legally effected within three years from the discovery of malicious cheating.

3. If a contract is enforced on a party the annulment of this contract can be effected within three years from the day enforcing is terminated.

As a general rule fifteen years is the prescription period within which the unknowing affected party to a defective contract can file a case to abrogate the contract. Defects in a contract may not be discovered for several years from date of entering into it, but once discovered the affected party has three years during which he can file for abrogation of contract, or adjustment and redress, and can demand compensation.

Illegal contracts are void by law and cannot be upheld. The court will pass a judgment about their illegality once they come to its attention.

Parties entering into a contract must abide by its terms; if one of the parties does not fulfill his part, while the other is fulfilling his, then the abiding party can notify the delinquent that he intends to abrogate the contract in court and demand compensation (a certain period of time must be given for other party to comply, say one week).

Parties entering into a contract can mutually agree to include a stipulation in the contract that makes the contract null and void if one of them falls short on his commitments without a need to notify before abrogation. This stipulation must be stated clearly without the slightest ambiguity, and with express consent of all parties, but if the clear mutual consent to this stipulation is nonexistent, then a contract can only be abrogated in a court of law, and after a due process of litigation.

In commercial matters it is not necessary to inform breaching party once this stipulation is in the commercial contract. In abrogated contracts the status of parties goes back to pre-contract stage and compensation to the wronged party is enforced by law.

Any particular successor to the parties of the contract who benefits in good will from the contract before it is abrogated, is not affected by a void contract. Unilateral contracts are dissolved and considered null and void when a force majeure intervenes to make fulfillment of contract impossible but if some of the commitments can still be executed, then the obligated party must fulfill them.

In bilateral contracts (where both parties are supposed to fulfill their commitments towards each other) a force majeure rendering execution impossible will make the contract null and void; if parts of the contract can be fulfilled then those parts only need to be fulfilled.

In bilateral contracts where mutual obligations are equal, it is possible for one party to refrain from performing his part till the other performs his. It is legally not acceptable for one party to terminate the contract, or amend it, without the explicit approval of the other party.

EFFECTS OF ABROGATED CONTRACT

If the contract is abrogated for certain legal reasons, the wronged party must be compensated by the other party that benefited from the contract, either monetarily or in kind; if the benefiting party was mentally incompetent, then the compensation he is liable for is equivalent to the benefit resulting from the contract of their principals taken legitimately and in good faith.

EFFECTS OF OBLIGATION

A debtor must pay his debt when due; if he does not pay, he may be forced by law to pay. If the debt is a material object of a kind, and clearing the debt can cause harm and loss to the debtor, then the debtor can ask a judge to allow him to pay a reasonable compensation for that object.

DEBT SETTLEMENT DELAY COMPENSATION

If a debtor fails to pay his debt on time, he is liable to compensate the creditor for damage incurred due to delay in settlement of debt; except in cases where the debtor can prove at court that not paying in time was beyond his capacity and will.

When a creditor and his debtor contribute some error that makes the debtor unable to pay in time, then both parties bear responsibility for the delay and compensation to creditor will be lessened in proportion to the error

An article in the civil law allows an agreement between parties that holds the debtor liable to pay his debt even in circumstances of force majeure, or a sudden debilitating accident. It is also contractually possible to agree otherwise, provided the debtor has not cheated, or defrauded his creditor, or committed a grave error affecting the creditor.

If the debtor is a company of a sort, or person who utilizes the services of employees to fulfill his obligations, then it is possible to relieve him of liability due to fraud or grave error committed by his employees.

In civil law, the debt is due to the creditor after the creditor officially notifies the debtor that the debt is due or such a date unless the law states otherwise.

Not paying the debt on time may cause damage to the creditor; if this happens without the creditor being able to evade the damage, then the creditor has the right to claim compensation in addition to his debt (damage can be material loss or loss of chance of benefit), in such a case the burden of proof of damage falls on the shoulder of creditor.

If the debtor proves that the creditor did not bear any losses whatsoever, then he is relieved from compensation beyond the nominal debt.

The creditor cannot be compensated more than the sum agreed upon in the contract, even if the damage and harm done to him exceed that. In case the debtor resorted to fraud and cheating, the judge's ruling may exceed the limit of compensation stated in the contract.

DEBTS

All the monies and properties of the debtor guarantee his debt, and his creditors are treated equally except those who have legal priority to his monies (banks, insurance companies, workers, and what the law specifies).

His creditors can execute on his money without prior notice, if they feel that his conduct and business dealings can jeopardize his financial abilities to pay his debts back. In this case they will assume the capacity of a legal representative of the debtor (resorting to court of law is a must).

If the debtor acts in such a way as to jeopardize his commitments to creditors, the creditors can file a case against both, the beneficiary of the debtor's act and the debtor that benefited a third party.

The debtor is not allowed to favor one creditor to the detriment of others in paying his debts.

If the debtor pays one of his debts to a creditor before the debt is due, it is possible for the other creditors to contest that in court and demand its abrogation ( to get a ruling from court, saying this payment is not legal and money should be returned). But if the debtor pays one of his debts after the maturity date, the rest of creditors must prove in court that the debtor is in collusion with one of the creditors to keep others away from his money.

The right to have a case reviewed by the court against a debtor committing unacceptable acts affecting his creditors falls after three years from date of knowing about the act or fifteen years from the day the act was done, whichever period passes first.

CONDITIONAL OBLIGATION

An agreement that has specified conditional terms cannot be effective till the conditions are met, though it is rightful for the creditor to take precautionary steps to secure his debt (temporary procedures to secure his rights).

Obligations that are tied up with a future date (term obligations) can be acted upon only on or after the date is due; but the creditor has the right to resort to temporary protective measures like demanding bank guarantee, or a well-to- do guarantor, or any other security, if he feels that the debtor might declare bankruptcy or develop inability to pay

A debt becomes due upon the death of debtor regardless of payment date. But the inheritors can offer a guarantee or some kind of security to stop any legal action on the monies of the deceased debtor.

Sometimes it happens that a debtor will affirm to his creditor that he will pay the debt when able to do so; this is decided in court as a reasonable time depending on the financial status of debtor.

JOINT CREDITORS

(Several persons that share the burden of a certain debt).

The creditor has the right to claim his dues from any one of the joint debtors. If one of the joint debtors pays the debt, then all the joint debtors are cleared of the debt. Also if one of the joint debtors transfers the debt by agreement with an able well to do person, then this transfer will relieve all the joint debtors if they accept the transfer of debt. If a debt is renewed with new conditions, by one of the debtors with the creditor, then this act relieves the other debtors from the burden of debt unless the creditor insists on his rights against the rest of debtors and reserves his rights to claim the debt from them. A creditor has the right to relieve any one of the joint debtors from the debt, or his share of it, and claim the rest of the money from the others; but the rest of the debtors can demand from the relieved debtor that he pay his share in the debt.

If the creditor relieves one of the joint debtors from the debt, then he will be held responsible to bear the burden of paying the share of the relieved debtor.

If one of the joint debtors pays the debt, or part of it, he can claim what he paid from the rest of the joint debtors in accordance with their shares in the debt. In case there is no agreement between the joint debtors to allot their respective shares of the debt, then the law considers their shares in the debt to be equal. If one of the joint debtors has the sole benefit from the borrowed money, then he himself bears the responsibility to pay back the joint debtor who pays the debt first.

Any court ruling against one of the joint debtors will not effect the rest of joint debtors; and any benefit that one of the debtors can get will be legally considered as benefit to the other joint debtors and they can use it in the court, if the need arises. And any detriment caused by one of the joint debtors will not affect the rest of the joint debtors unless they explicitly accept it. An obligation is indivisible If:

  • It was an object that cannot be divided.
  • The parties to the contract agreed not to divide it.

Parties to an indivisible obligation are severally (individually) obligated by law to perform their indivisible obligations, and if one performs his obligations he can claim from the rest their shares in the obligation.

TRANSFER OF DEBT

The law defines transfer of debt as a transaction through which a debt is transferred from a debtor to a third party who effectually becomes the debtor willing to pay the debt.

An agreement of transfer of debt comprises at least three: the debtor, the creditor, and a third party. It is necessary that the creditor accepts the transfer of debt, otherwise the transfer of debt is considered null. Notifying the creditor of a transfer of debt must be done by a court clerk.

Sometimes it happens that a creditor agrees with a third party, who accepts to bear the burden of debt without getting the express consent of debtor, in this event, if the third party pays the debt to relieve the debtor from liability to creditor, he cannot reclaim his money from the debtor.

Once the legal document of transfer of debt to a third party is done, the debtor is relieved completely from the burden of debt towards the creditor. As a consequence the third party becomes a new creditor to the relieved debtor, at the same time he will be responsible to pay the debt to original creditor of the relieved debtor. In this situation the third party will have the right to claim what he pays to the original creditor of the relieved debtor unless the creditor specifies in the agreement with the debtor and the third party that if the third party defaults for whatever reason, he can still execute on the original debtor. In this agreement of transfer of debt the creditor can put down any reasonable conditions to secure his money. The third party as well can demand from the debtor to keep attached securities to debt as creditor, or ask for other guarantees from the debtor to secure the debt.

>It is must that the creditor accepts the transfer agreement, otherwise it does not hold. If a third party agrees with a creditor to pay a certain debt on behalf of a certain debtor, this debtor must be informed of the act in order for the money paid by the third party to be reclaimable from the debtor.

DISSOLUTION OF OBLIGATION

An obligation is dissolved if the debtor pays the debt back within the prescribed period, or if someone other than the debtor pays the debt with or without the debtor knowing about it. In this event it is possible that the creditor refuses payment of debt by a third party; it is also legally possible for the debtor to notify the creditor not to accept the payment from anybody other than the debtor himself.

If the third party pays the debt to the creditor, he can reclaim his money from the debtor, but if the debtor objects to paying of debt by a third party for whatever legal reason he may have against the creditor, then the debtor can decline paying any money to the third party with legal impunity, and the third party who pays the creditor will lose his money.

In several instances, the third party that pays the debt assumes the position of a new creditor to debtor, which are as follows:

1. If the payer of the debt is jointly indebted with the debtor, or obligated to pay on his behalf.

2. If the payer of debt is a creditor to the debtor, and pays a different debt incurred on that debtor.

3. If the payer of debt comes to own a thing attached as security to the debt.

4. If there is a condition in the terms of obligation stating that if a third party pays the debt he assumes the creditor's position.

For this to happen and be legally binding it must be clearly indicated in a legal document specifying the amount paid on behalf of the debtor and having the same date as the maturity date of the debt. A debtor can borrow money from a third party to pay his debt, and can demand from the creditor to place the lender as a new creditor to debtor; but this has to be done legally on a dated document showing how the original debt was cleared and the how debt came to be; once the debt is cleared from borrowed money, the creditor must supply a clearing statement to debtor showing how the debt was paid.

A debtor must pay the debt to a creditor, or his legal representative, and not to others who might assume the position of creditor.

Sometimes it is necessary to pay a debt through official means, like presenting the money to the creditor after officially notifying him, and depositing the money in the execution department of the court; or just depositing the money in the execution department in the name of the creditor without the need to notify him. This process takes place in the following cases:

1. If the creditor is not known to debtor.

2. If the creditor was mentally incompetent and without a guardian.

3. If the debt was under contestation among several persons.

4. If it was difficult to present the money to the creditor.

If the money to pay the debt was offered to the creditor through a legal process and was eventually deposited in the execution department, and the creditor refused to collect the money, then the debtor can withdraw his money; but if the debtor withdrew his offer after the creditor accepted it, and the creditor did not object to this withdrawal, then the creditor will lose any guarantees or securities attached to the debt.

The judge has the right to portion payments of debt into installments and give more time for payments provided this action does not harm the creditor. Paying the debt back must be in the place agreed upon, or in the legal domicile of the debtor.

STATUTE OF LIMITATIONS

(This means the legal period of time after which any claim of rights in the courts will be rejected upon request by defendant)

In civil and commercial matters, the civil law specifies a certain period of time that ranges from one year to fifteen years, depending on the type of case after which one cannot claim a right in the court on the grounds of passing of time.

The statute of limitations is 15 years unless there exists an explicit stipulation otherwise, such as: If the rights due are periodic, that is, should be collected every certain period of time.

Climate

The climate is desert, temperate somewhat in the coastal regions by the warm waters of the gulf. If there is enough rainfall, the desert turns green from the middle of March to the end of April. But during the dry season, between April and September, the heat is severe - the temperature ordinarily reaching 44 C (111 F) during the day and on occasion going as high as 54 C (130 F). The winter is more agreeable (even frost can occasionally occur in the interior, though never at the sea coast). Annual rainfall averages only from 1 to 7 inches (25 to 180 millimetres), chiefly between October and April, though cloudbursts can bring more than two inches of rain in a day. On 11th November 1997, heavy rainfall alongwith hail stones literally sunk Kuwait.

The frequent winds from the northwest are cool in winter and spring but hot in summer. Southeasterly winds, usually hot and damp, spring up between July and October; hot and dry south winds prevail in spring and early summer. The shamal, a northwesterly wind, causes dramatic sandstorms.

Consumption Boom

With 14 financing companies providing easy credit and convenient payment plans, Kuwait has witnessed a consumer boom like never before. Spending on automobiles, electronics, household goods, real estate and tourism has graphed up. But the most driving factor to this unprecedented growth is not the easy installment or improved loan services rather the fall of the Saddam regime in 2003

Currency

Currency is the Kuwaiti Dinar (KD), and there are 1000 Fils to the Dinar. The Dinar is freely convertible. The rates are quoted daily in the local newspapers and is available from some of the banks over an automated telephone answering system.

The Governor of the Central Bank announced in December 1993, that the bank would issue new KD bank notes to coincide with the Liberation and the National Day anniversaries in February 1994. The announcement was followed by the discovery of forged notes in circulation. The new notes are now in circulation. The old banknotes were withdrawn from circulation by Thursday, February 16, 1995. The Central Bank of Kuwait has issued a KD 1 commemorative bank note on the occasion of the country's celebration of the 10th anniversary of the liberation. A common currency for the GCC countries has been decided upon and was expected to come into effect by 2010, but is still in the pipeline.

Economy

Trade has always been the main factor for the existence of Kuwait. Before the Suez Canal was opened in 1868, Kuwait Bay was one of the natural harbours in the Gulf. Due to this geographical advantage, early Kuwait became the centre of much transit from Africa, China and India to Europe. Since the discovery of oil in Kuwait in the 1930s and the development of the petroleum industry in the years after World War II, oil has dominated the economy, accounting for more than 90 percent of export revenues until the 1980s. During the 1980s Kuwait began to earn more money from its now vast overseas investments than from the direct sale of oil. It was this investment income that sustained Kuwait during the Iraqi occupation of 1990-91 and the subsequent period when oil exports ceased.

Historically Kuwait has been one of the largest oil producers in the world and has had one of the largest oil reserves of any producing country. This income gives Kuwait one of the highest per capita incomes in the world. Although the downturn in the world oil market in 1986 substantially reduced the income from oil exports, Kuwait's economy did not suffer greatly. In part this was because the return on foreign investments had begun to exceed the income from oil. Kuwait's foreign investments are mostly in the United States and include a variety of holdings. The Kuwait Fund for Arab Economic Development, established in 1961, extends generous loan assistance to governments of Muslim and Third World countries, although no longer at the levels achieved in the 1970s, when aid disbursements reached as much as 15 percent of the gross national product. In 2001, the National Assembly passed certain bills to jump start the sluggish economy. One such law passed was aimed at empowering the private sector through setting up of a favourable atmosphere conducive to free competition, higher quality service and products. According to the bill, the state should maintain unilateral rights to dictate financial policies in privatised projects of strategic importance or services that can be monopolised in the light of public interest.

The most dramatic aspect of Kuwait's economic development since the 1970s has been the expansion of its oil industry. By the mid-1980s, Kuwait was refining 80 percent of its oil at home and marketing 250,000 barrels a day to its own European retail outlets under the logo "Q8." Domestically, Kuwait has invested its revenues in social services, including health and education (giving it one of the most literate populations in the region), in infrastructure, and only marginally in local industry.

Employment generated directly by oil production and export accounts for only a small percentage of the labour force. More than half of all employed Kuwaitis work for the state, most of these in public administration, defense, and services sectors; about one-fifth of all jobs are in construction; and trade, manufacturing, transportation and communication, finance, and agricultural sectors all employ more than the oil sector. In both the public and private sectors, Kuwait remains heavily dependent on foreign labour, although after the invasion, the government reiterated more forcefully its formal goal of reducing this dependence.

Kuwait's proven, recoverable oil reserves are thought to be enough to sustain pre-invasion levels of production for more than 150 years. Kuwait also has considerable reserves of natural gas, almost all of it in the form of associated gas - i.e., gas that is produced together with oil. There are no other important minerals. Naturally occurring fresh water is scarce (and, until desalination plants were built after World War II, water had to be imported)

The possibilities of agricultural development are severely limited. Only a very small percentage of the land is arable, and because of the scarcity of water, deficiencies of soil, and lack of manpower trained in agricultural skills, an even smaller percentage of the land area is under actual cultivation. Agriculture's contribution to the output of the economy is insignificant. Fish are plentiful in the Arabian Gulf, and, before the discovery of oil, fishing in Kuwait was a leading industry. Shrimp was one of the few commodities besides oil that Kuwait continued to export after World War II. Shrimp production, however, was devastated by the environmental havoc wreaked in the Gulf by the 1991 war.

In an effort to curb economic stagnation, the annual festival, popularly known as "Hala February" is widely celebrated in the country marked by major slashing of prices and other shopping extravaganzas. This attracts nearly 150, 000 visitors from the neighbouring Gulf states leading to tight hotel reservations and busy flight schedules.

Education

General education in Kuwait is compulsory for native Kuwaitis between the ages of 6 and 14. It is entirely free and also includes school meals, books, uniforms, transportation, and medical attention. Non-Kuwaiti students attend government schools as space permits or attend private schools. Kuwait University was founded in 1962. About three-fourths of the university students are Kuwaitis, and more than half are women. Several thousand Kuwaiti students attend colleges and universities overseas, usually on state scholarship.

Electricity & Water

For fresh water in earlier days people depended on a few artisan wells and on rainwater collected from the roofs of houses or from cisterns at ground level. Dhows manned by Kuwaiti seamen also brought fresh water from the Shatt-Al Arab near Basra, Iraq. With the rapid growth of population, however, the government of Kuwait built desalination plants near Kuwait city, Shuaibah, and several other locations. Sources of fresh water were discovered at Rawdatain and Shaqaya, but desalination still provides the great majority of Kuwait's daily consumption of potable water. Most areas of Kuwait have mains water supply, though in a few places water is still delivered by tankers to tanks on roof tops. The expansion of electric facilities has also been remarkable. Production is concentrated in several natural-gas-fired power stations, including Shuwaikh and Al Shuaibah. Kuwait owes thanks to Sheikha Amthal AlSabah for initiating a new underground concrete pipeline network which has replaced the old Asbestos system.

Flora

There are some 400 species of plants and flowers growing in Kuwait. In spring the desert is transformed into amazingly green meadows, particularly at Wadi Al Batin which is landscaped with a spectacular carpet of yellow camomile.

In the northern part of the country and at Jal Al Zor, there are numerous plants to be seen, particularly Arfaj (phanterium epapposum) with its salty taste, and Al Awsaj (lycium arbicum Al Shawi) a strong thorny plant with small leaves and raspberry shaped red flowers. Both plants are eaten by camels. Another plant to be found in the same area is the heliotropium ramosissimum whose dry leaves are used by the bedouins to make a tea-like drink, and a poultice to cure venomous snake bites. The most spectacular species and the most impressive plant in Kuwait is the cistanche lutea with its large showy flowers.

In addition, several common plants grow in the wadis where there is a reasonable quantity of water. Of these the anogllis femina with its blue crimson flower and the senecio desfontainei with its golden yellow flowers are most frequently to be found.

As the plants in Kuwait are subject to excessive heat and scarcity of water, the part of the plants appearing above ground is far shorter than the length of its root which needs to reach down to a permanent water source without reliance on new rainfall. The best months to see and study Kuwait's flora are January, February and March when the desert comes alive with colourful plants.

Fund for Future Generation

Prior to the invasion, over 90% of Kuwait income was derived from oil. During this time, while the country was running a surplus economy, a fund was established to prepare for when the oil would no longer be the prime source of income. This was called-Fund for Future Generation (Which at the time of the invasion stood at about $90 billion). This fund was managed by the Kuwait Investment Authority with its headquarters in the Ministries Complex in Kuwait City and the Kuwait Investment Office in London (well known for its swoop on the shares of British Petroleum when it was privatised).

Kuwait has had to use the Fund for Future Generations to pay the coalition for their efforts and to fund the post-war reconstruction. This fund has also been further depleted by a series of well publicised investment fiascos, the most notable being the loss of some $5 billion in a Spanish property company called Groupo Torros.

For the first time in its history, Kuwait had to go to the international money market, to cover its short-term liquidity. According to many estimates, Kuwait's fund is now worth approximately $250 billion

Government

Since independence from Britain in 1961, Kuwait has been a constitutional monarchy whose ruler, called the Emir, has episodically shared some power with a National Assembly elected by adult male Kuwaitis. The reopening of this parliamentary body, suspended once in 1976 and again in 1986, became the goal of the prodemocracy Constitutionalist Movement in 1989-90. A compromise National Council, partially elected and partially appointed and with more limited power, was convened by the Emir just prior to the Iraqi invasion in 1990 and reconvened following the liberation in 1991. This did not, however, placate the popular opposition, which prompted the Emir to schedule elections for October 1992.

THE LEGAL SYSTEM

Kuwait's Legal system is based upon a number of diverse sources. Most matters of civil and personal status law are governed by Shariah, the Islamic religious law based on the Quran and Hadith (Traditions & Sayings of the Prophet Muhammad PBUH). Commercial and criminal laws derive from Ottoman and several modern Arab sources and, though they reflect elements of the French legal code and the English common law. There are several courts of first instance and courts of appeal at two levels. The Emir acts as the final court of appeal. The independence of the judiciary and the right of recourse to the courts for all persons is guaranteed in the constitution. Kuwaiti Courts have the power to decide all cases, including commercial disputes with the government. The court system is divided into six main divisions: family, criminal, civil, commercial, leases and administrative. There are three levels of tribunal: The Courts of First Instance, The Higher Court of Appeal, and The Court of Cassation.

All cases are first tried in a court of first instance in the appropriate division - the Commercial Court, for example, considers commercial matters. The main courts of first instance are located in the Palace of Justice in Kuwait City, but there are also local courts in other areas for settling disputes between individuals where the value of a claim does not exceed KD.5000. There are also special courts of first instance, such as the labour court and the traffic court, for deciding particular types of cases. There are three ways in which a court judgement may be appealed: to the higher court of appeal, by cassation, and by a request for a rehearing. In the higher court of appeal, the whole case is tried again. In the court of cassation the case is not tried again but a petition is made to have the verdict set aside on the grounds that it was wrongly rendered or that the law was incorrectly applied. A request for a rehearing is a petition to have a case sent back to the court where it was originally heard so that mistakes of fact or law may be corrected.

Home for Every Family

The old town of Kuwait, although located in a harsh desert climate, opened onto an excellent sheltered harbour. Kuwait developed in the 18th and 19th centuries as a trading city, relying on the pearl banks of the gulf as well as on long-distance sea and caravan traffic. The old city-oriented toward the sea and bounded landward from 1918 to 1954 by a mud wall, with gates that led out only into the endless desert was compact, only five square miles in area; its typical dwelling was a courtyard house.

Following the discovery of oil in the 1930s, Kuwait city underwent a transformation. With the urban explosion of the years after 1951, the semicircular city wall was demolished (its gates were preserved as a reminder of the early years), and new suburbs were formally laid out. The government invested large portions of the oil revenues in infrastructure and urban development, creating in the process a modern, air-conditioned metropolis.

The housing problem of Kuwait lies in the desire of every citizen to own a private house. There are no homeless Kuwaitis and the country does not have a problem with immigration into the towns. By the beginning of 1985, some 60,000 housing units had been built and distributed. In addition around 40,000 housing units are still under construction at a cost of more than KD.900 million. These units will house over 600,000 citizens. Kuwaitis are now scattered at a relatively low density throughout the urban area, with minor concentrations in the suburbs of Dasmah, Shamiyah, and Adayliyah. Non-Kuwaitis, excluded from the restricted suburbs, live at higher densities in the old city and in the suburbs of Hawalli and Salmiyah, mostly in apartments. The Ministry of Housing announced in 2003 that the housing issue in the country will be solved within the next decade. The Ministry has also distributed plots to about 77, 000 individuals with development contracts to be handled by the private sector. Some 150 odd companies will bid for the projects under supervision of an International consulting firm.

International Calling Rates
Afghanistan ................... 0.270
Albania........................... 0.230
Algeria........................... 0.160
Andorra.......................... 0.230
Angola........................... 0.240
Argentina....................... 0.230
Armenia......................... 0.230
Australia......................... 0.200
Austria........................... 0.170
Azerbaijan...................... 0.210
Bahamas......................... 0.290
Bahrain.......................... 0.100
Bangladesh..................... 0.150
Barbados......................... 0.250
Belarus........................... 0.200
Belgium.......................... 0.170
Belize............................. 0.240
Benin............................. 0.240
Bhutan........................... 0.260
Bolivia........................... 0.260
Bosnia............................ 0.230
Botswana........................ 0.300
Brazil............................. 0.230
Brunei............................ 0.240
Bulgaria.......................... 0.240
Burkina Faso.................. 0.260
Burundi........................... 0.270
Cambodia....................... 0.330
Cameroon...................... 0.270
Canada........................... 0.150
Chad.............................. 0.310
Chile.............................. 0.210
China............................. 0.210
Colombia....................... 0.240
Congo............................ 0.400
Costa Rica...................... 0.210
Croatia........................... 0.230
Cuba............................... 0.340
Cyprus............................ 0.170
Czech Rep...................... 0.210
Denmark........................ 0.170
Djibouti.......................... 0.160
Dominican Rep.............. 0.300
Ecuador.......................... 0.350
Egypt............................. 0.150
El Salvador..................... 0.270
Eritrea............................ 0.260
Estonia........................... 0.220
Ethiopia......................... 0.230
Finland........................... 0.170
France............................ 0.170
Gabon............................ 0.280
Gambia........................... 0.260
Georgia.......................... 0.240
Germany........................ 0.170
Ghana............................ 0.270
Gibraltar....................... 0.250
Greece......................... 0.170
Greenland.................... 0.240
Grenada....................... 0.290
Guatemala.................... 0.240
Guyana........................ 0.340
Haiti............................ 0.300
Honduras..................... 0.240
Hong Kong.................. 0.180
Hungary........................ 0.200
Iceland......................... 0.240
India............................. 0.150
Indonesia..................... 0.170
Iran............................... 0.150
Iraq.............................. 0.160
Ireland........................ 0.170
Italy.............................. 0.170
Jamaica........................ 0.260
Japan............................ 0.190
Jordan.......................... 0.160
Kazakhstan.................. 0.230
Kenya.......................... 0.240
Kiribati........................ 0.310
Korea (North).............. 0.350
Korea (South).............. 0.200
Kyrgyztan................... 0.250
Laos............................ 0.240
Latvia.......................... 0.250
Lebanon....................... 0.150
Lesotho....................... 0.240
Liberia......................... 0.240
Libya........................... 0.160
Liechtenstein............... 0.170
Lithuania..................... 0.220
Luxembourg................. 0.170
Macedonia................... 0.230
Malagasy Rep.............. 0.230
Malawi......................... 0.240
Malaysia...................... 0.170
Maldives...................... 0.210
Mali............................. 0.270
Malta........................... 0.310
Mauritania................... 0.160
Mauritius..................... 0.190
Mexico......................... 0.200
Moldova...................... 0.260
Monaco........................ 0.210
Mongolia..................... 0.350
Morocco...................... 0.160
Mozambique................ 0.250
Myanmar..................... 0.350
Namibia....................... 0.270
Nepal........................... 0.250
Netherlands.................. 0.170
New Zealand............... 0.210
Nicaragua..................... 0.280
Niger............................... 0.260
Nigeria............................ 0.210
Norway.......................... 0.180
Oman............................. 0.100
Pakistan......................... 0.150
Palestine......................... 0.160
Panama.......................... 0.260
Papua New Guinea........... 0.360
Paraguay......................... 0.210
Peru................................ 0.270
Philippines..................... 0.170
Poland............................ 0.230
Portugal.......................... 0.180
Puerto Rico.................... 0.150
Qatar.............................. 0.100
Romania......................... 0.215
Russia.............................. 0.220
Rwanda........................... 0.280
Saudi Arabia..................... 0.100
Senegal............................ 0.200
Seychelles....................... 0.240
Sierra Leone.................... 0.290
Singapore....................... 0.190
Slovak Rep..................... 0.210
Slovenia.......................... 0.250
Somalia........................... 0.160
South Africa.................... 0.190
Spain.............................. 0.170
Sri Lanka........................ 0.170
Sudan.............................. 0.160
Sweden............................ 0.175
Switzerland...................... 0.170
Syria............................... 0.150
Taiwan............................ 0.180
Tajikistan....................... 0.230
Tanzania......................... 0.240
Thailand......................... 0.190
Togo............................... 0.230
Trinidad & Tobago......... 0.280
Tunisia........................... 0.160
Turkey............................ 0.180
Turkmenistan................. 0.240
UAE............................... 0.100
Uganda............................ 0.260
UK................................. 0.170
Ukraine........................... 0.200
Uruguay.......................... 0.280
USA................................ 0.120
Uzbekistan...................... 0.220
Vatican City.................... 0.170
Venezuela........................ 0.240
Vietnam.......................... 0.270
Yemen........................... 0.160
Zaire............................... 0.400
Zambia............................ 0.270
Zimbabwe........................ 0.250
International Dialing Codes
Afghanistan....................... +93
Albania............................ +355
Algeria............................ +213
Andorra.......................... +376
Angola............................ +244
Argentina.......................... +54
Armenia.......................... +374
Australia............................ +61
Austria.............................. +43
Azerbaijan....................... +994
Bahamas........................ +1242
Bahrain........................... +973
Bangladesh...................... +880
Barbados....................... +1246
Belarus ........................... +375
Belgium............................. +32
Belize.............................. +501
Benin.............................. +229
Bhutan............................ +975
Bolivia............................ +591
Bosnia ............................ +387
Botswana........................ +267
Brazil................................ +55
Brunei............................. +673
Bulgaria........................... +359
Burkina Faso................... +226
Burundi........................... +257
Cambodia........................ +855
Cameroon....................... +237
Canada.......................... +1905
Chad................................ +235
Chile................................. +56
China................................ +86
Colombia.......................... +57
Congo............................. +242
Costa Rica....................... +506
Croatia............................ +385
Cuba.................................. +53
Cyprus............................ +357
Czech Rep....................... +420
Denmark........................... +45
Djibouti........................... +253
Dominican Rep............. +1809
Ecuador........................... +593
Egypt................................ +20
El Salvador...................... +503
Eritrea............................. +291
Estonia............................ +372
Ethiopia.......................... +251
Finland............................ +358
France............................... +33
Gabon.............................. +241
Gambia............................ +220
Georgia............................ +995
Germany............................ +37
Ghana.............................. +233
Gibraltar.......................... +350
Greece............................ +30
Greenland..................... +299
Grenada...................... +1473
Guatemala..................... +502
Guyana......................... +592
Haiti............................. +509
Honduras...................... +504
Hong Kong................... +852
Hungary.......................... +36
Iceland......................... +354
India............................... +91
Indonesia........................ +62
Iran................................ +98
Iraq............................... +964
Ireland.......................... +353
Italy............................... +39
Jamaica...................... +1876
Japan.............................. +81
Jordan.......................... +962
Kazakhstan................ +7327
Kenya.......................... +254
Kiribati.......................... +686
Korea (North).............. +850
Korea (South)................. +82
Kuwait........................ +965
Kyrgyztan..................... +996
Laos............................. +856
Latvia........................... +371
Lebanon........................+961
Lesotho........................ +266
Liberia.......................... +231
Libya............................ +218
Liechtenstein.............. +4175
Lithuania...................... +370
Luxembourg.................. +352
Macedonia.................... +389
Malagasy Rep................ +261
Malawi.......................... +265
Malaysia......................... +60
Maldives....................... +960
Mali.............................. +223
Malta............................ +356
Mauritania.................... +222
Mauritius...................... +230
Mexico........................... +52
Moldova....................... +373
Monaco........................ +377
Mongolia...................... +976
Morocco....................... +212
Mozambique................. +258
Myanmar........................ +95
Namibia........................ +264
Nepal............................ +977
Netherlands..................... +31
New Zealand.................. +64
Nicaragua...................... +505
Niger................................ +227
Nigeria............................. +234
Norway.............................. +47
Oman.............................. +968
Pakistan............................ +92
Palestine.......................... +970
Panama........................... +507
Papua New Guinea............ +675
Paraguay.......................... +595
Peru................................... +51
Philippines......................... +63
Poland............................... +48
Portugal........................... +351
Puerto Rico................... +1787
Qatar................................ +974
Romania............................ +40
Russia.................................. +7
Rwanda............................ +250
Saudi Arabia..................... +966
Senegal............................. +221
Seychelles........................ +248
Sierra Leone..................... +232
Singapore........................... +65
Slovak Rep....................... +421
Slovenia........................... +386
Somalia............................ +252
South Africa....................... +27
Spain.................................. +34
Sri Lanka........................... +94
Sudan............................... +249
Sweden............................... +46
Switzerland......................... +41
Syria................................ +963
Taiwan............................. +886
Tajikistan........................ +992
Tanzania.......................... +255
Thailand............................ +66
Togo................................ +228
Trinidad & Tobago........ +1868
Tunisia............................ +216
Turkey............................... +90
Turkmenistan.................. +993
UAE................................ +971
Uganda............................ +256
UK.................................... +44
Ukraine........................... +380
Uruguay............................ +598
USA..................................... +1
Uzbekistan....................... +998
Vatican City............. +3919398
Venezuela........................... +58
Vietnam............................. +84
Yemen............................. +967
Zaire................................ +243
Zambia............................ +260
Zimbabwe......................... +263

For city codes not listed above,refer to our internet website // www.kuwait-toplist.com/dial

Kuwait's Islands

There are nine islands off the mainland coast which fall under its jurisdiction namely: Auhha, Bubyan, Failaka, Kubbar, Miskan, Qaruh,Umm Al-Maradim, Umm Al-Naml, Warba.

Auhha : Lies to the south of Failaka island.

Bubyan : Located in the north-east of the Arabian Gulf, it is the largest island, occupies an area of (863 square kilometres) and is linked to the mainland by a metal concrete bridge. Kuwait’s cabinet recently approved a project to build a seaport on the island of Bubyan, near the Iraqi border, as part of efforts to expand its economy. The port on the country’s largest island would “enhance the role of Kuwait’s ports in international transportation” and satisfy the needs of economic openness. Kuwait whose economy is dominated by oil revenues, hopes to become a commercial and financial centre in the region. Kuwait has four major ports on its gulf coast. Bubyan would be the first port on an island.

Kubbar, Qaruh, Umm Al Maradim : Lie at the southern side of the Gulf. Large flocks of sea birds used to live there, but regular visits to the island by people fond of shooting and swimming have caused a significant decrease in their number.

Miskan : Lies to the north of Failaka island.

Umm Al Naml : Located at the mouth of Kuwait bay. Many Islamic antiquities have been found there. Near to it was Akkaz island which has now been assimilated into Shuwaikh Port warehouses.

Warba : Located at the north extremity of the Gulf, occupies an area of 37 square kilometres

Failaka : The island of Failaka which is pronounced 'Failacha' in the local dialect, is the most beautiful and most known of Kuwait's island. It combines the ancient history of Kuwait, dating back to the early Stone Age, and the modern history of Kuwait when the 'Utubs' settled in after their long journey, prior to their settlement on Kuwait's mainland in the late seventeenth century.

The island of Failaka lies 20km north east of Kuwait. It is 12 km long, 6 km wide and is flat, apart from a small hill thirty feet high in the extreme western part, which contained 'Al Khader' shrine. The island is linked to Kuwait city by a submarine pipeline, 21 km long, that provides its 6000 inhabitants with more than 100 million gallons of sweet water every year. Parallel to the submarine water pipeline there are three submarine power cables from Kuwait city providing electrical energy to the island.

The island of Failaka is of special interest to Kuwaitis. Apart from its historical importance as a land of relics and ancient civilizations, it has become a modern tourist attraction, keeping abreast with all aspects of modern progress. Everyday visitors are carried from the mainland at Ras Al Ardh (Salmiya) to the island by ferry boats to relax and swim in its clear waters. Much of their leisure time is spent at its huge Touristic complex, located in the southern part of Failaka, which contains a good number of swimming pools, sports playgrounds and restaurants, as well as hundreds of conveniently furnished chalets with all amenities.

Language

Kuwait's official language is Arabic, although English is frequently used commercially and is widely understood. Street and many shop signs are written in both English and Arabic. Hindi, Urdu and other Indian dialects are widely used among the large South-East Asian expat population. There are two major English daily newspapers - Arab Times and Kuwait Times, but they are outsold by the seven main Arabic daily newspapers.

Legal System

Kuwait's Legal system is based upon a number of diverse sources. Most matters of civil and personal status law are governed by Shariah, the Islamic religious law based on the Quran and Hadith (Traditions & Sayings of the Prophet Muhammad PBUH). Commercial and criminal laws derive from Ottoman and several modern Arab sources and, though they reflect elements of the French legal code and the English common law. There are several courts of first instance and courts of appeal at two levels. The Emir acts as the final court of appeal. The independence of the judiciary and the right of recourse to the courts for all persons is guaranteed in the constitution. Kuwaiti Courts have the power to decide all cases, including commercial disputes with the government. The court system is divided into six main divisions: family, criminal, civil, commercial, leases and administrative. There are three levels of tribunal: The Courts of First Instance, The Higher Court of Appeal, and The Court of Cassation.

All cases are first tried in a court of first instance in the appropriate division - the Commercial Court, for example, considers commercial matters. The main courts of first instance are located in the Palace of Justice in Kuwait City, but there are also local courts in other areas for settling disputes between individuals where the value of a claim does not exceed KD.5000. There are also special courts of first instance, such as the labour court and the traffic court, for deciding particular types of cases. There are three ways in which a court judgement may be appealed: to the higher court of appeal, by cassation, and by a request for a rehearing. In the higher court of appeal, the whole case is tried again. In the court of cassation the case is not tried again but a petition is made to have the verdict set aside on the grounds that it was wrongly rendered or that the law was incorrectly applied. A request for a rehearing is a petition to have a case sent back to the court where it was originally heard so that mistakes of fact or law may be corrected.

National Carrier

In march 1954, the Kuwait National Airways Company was established with a capital of KD.150,000. By 1955, the airline was facing economic hardships which prompted the Government to extend financial help by acquiring a 50 percent interest for KD.100,000. As a result the company's capital was doubled and its name was changed to Kuwait Airways Corporation (KAC). In 1960, a second airline was formed which proved to be a tough competitor for KAC. In 1962, KAC shareholders sold all of their shares to the Government. By 1964, the Government bought the second airline and added its 4 aircrafts to the KAC fleet. Until August 1990, KAC was operating a fleet of 21 aircrafts, flying to 42 destinations in 35 countries worldwide. After the liberation of Kuwait in 1991 from Iraq, KAC was re-launched. At present KAC is equiped with a fleet of 18 aircrafts and has expanded its route network to cover 42 destinations worldwide.

In 2005 another private airline service was established under the name 'Jazeera', and operates to mainly Arab and South Asian destinations.

Oil

After the discovery of oil, British Petroleum and the Gulf Oil Corporation of America formed Kuwait Oil Company (KOC) in 1934, each holding 50 percent of the share capital and since then Kuwait's development has seen dramatic changes.

In 1938, a large oil field was discovered in the Burgan area which boosted Kuwait's oil revenues but World War II deferred development until 1946, thereafter, progress was spectacular. In 1953 the American Independent Oil Company and the Getty Oil Company, which jointly held concessions for the Neutral Zone, struck oil in commercial quantities; and in 1955 oil was discovered in northern Kuwait. By 1976 Kuwait had achieved 100 percent control of the KOC, with the former owners retaining the right to purchase at a discount. The government also achieved full ownership of the Kuwait National Petroleum Company (KNPC), which it had formed in 1960 with private Kuwaiti investors. The KNPC, designed to serve as an integrated oil company, controlled distribution and petroleum products supplies within the country and began marketing operations abroad.

In 1980 the government founded the Kuwait Petroleum Corporation (KPC) as an umbrella organization overseeing the KOC, KNPC as well as the Kuwait Oil Tanker Company(KOTC), the Petrochemicals Industries Company (PIC), and the Kuwait Foreign Petroleum Exploration Company (KUFPEC). By 1980, Kuwait's oil output was ranked 7th in the world and the World Bank estimated that the State has the highest per capita GNP in the world. The importance of oil to Kuwait can be clearly seen by the fact that oil revenues account for over 90 percent of the country's total income.

The relatively low cost of oil production in Kuwait stems from certain unique advantages. First, there are a number of highly productive wells, the output of which can be varied at short notice, thus eliminating the need for large numbers of storage tanks. Most of the storage tanks are placed on a ridge set back a few miles from the seacoast at a height of some 300 feet; this enables loading operations to be carried out by gravity and not through the use of pumps, with extensive refineries and bunkers for tankers.

While retreating from Kuwait at the end of the Gulf War, the Iraqis set fire to more than 700 of the country's 950 wells. By the fall of 1991, the fires, which had consumed 4 to 6 million barrels of oil per day, had been extinguished and limited production had returned, but recovery of the industry remained slow. In mid-1992 oil production stood at nearly 1 million barrels per day.

Massive volumes of natural gas are produced in association with crude oil. Although natural gas has great potential as a source of foreign exchange, its principal uses so far have been in reinjection in oil fields to maintain pressure, in the generation of electricity (as for water distillation), and in the production (as raw material) of petrochemicals and fertilizers. Kuwait Petroleum Corporation (KPC) has several strategic Natural gas projects in line for the upcoming years.

Kuwait is geographically close to both Qatar and Iran, who own the second and third largest gas reserves in the world, which gives Kuwait a strategic location from a geographical point of view.

Kuwait is planning to establish a fourth oil refinery here which is part and parcel of the same strategic outlook. The refinery would be beneficial in case of a halt or shortages in natural gas imports. It would take between four to five years after receiving the necessary approvals.

Another goal that will hopefully be achieved is tied to a recent study that forces construction companies that win new contracts, whether in the field of services or in construction, to spend approximately 20 per cent of the value of contract inside Kuwait , through the purchase of products or local services etc.

Population

The total population of Kuwait has reached 3.25 million as of December 2010. The balance of the population in Kuwait has changed. It is the Government's declared aim that the balance between Kuwaitis and expatriates should be maintained at a level that ensures that Kuwaitis should never form a minority in their own country.

Native Kuwaitis, who were only about one-quarter of Kuwait's residents before the Iraqi invasion, now make up slightly half of the country's total population. Until the Iraqi invasion of 1990, Palestinians, some of them third-generation residents of Kuwait, were the largest single expatriate group, numbering perhaps 400,000. By mid-1991 their number had fallen to 50,000. They have largely been replaced by Egyptians and nationals of other countries that supported Kuwait during the occupation. These non-nationals do not enjoy citizenship rights, which are reserved for "native" Kuwaitis - i.e., those who can prove Kuwaiti ancestry from before 1920. Naturalization is strictly limited. Historically, Kuwait had several important class divisions. After the discovery of oil, most of these vanished as the state became the primary employer. The one class that remains politically important is the old merchant oligarchy.

A large proportion of the Kuwaiti population is young, about 60% being under 21 years old. Large Kuwaiti families are actively encouraged. The bulk of the population lives in Deera (City). The other two major towns are Ahmadi and Jahra, which are 40 kilometers and 30 kilometers respectively from the centre of the Kuwait City. The City of Kuwait still retains its five original districts, namely, Sharq, Dasman, Mirqab, Salhiya and Qibla although it has spread beyond the old surrounding wall.

A comparative study by the Ministry of Planning indicated that the non Arab population was at par the Arab population in June 1993. At that time Kuwait's population was just 1.484 million, with Kuwaitis accounting for 43% (642,000) and the balance were non-Kuwaitis (842,000). Since then the population has increased to 3.25 million and in December 2010, the figures were - Kuwaitis (1,499,646) and the non-Kuwaitis (1,750,354).

Expatriates continue to dominate the private sector. Women constituted just over 30% of the total Kuwaiti workforce, while female expatriate employees form 20% of the total foreign workforce in the country. The statistics states that there are about 95,000 Kuwaiti families, forming 44% of the total number of families in Kuwait. The average size of a Kuwaiti family is 8.2 members.

Postal Rates & Charges

1.LETTERS (INCLUDING POSTCARDS)

Weight Category Within Kuwait To Arab To other
Countries Countries
KD Fils KD Fils KD Fils
1. Within 20 grammes 0 25 0 50 0 150
2. Over 20 up to 50 grammes 0 40 0 80 0 280
3. Over 50 up to 100 grammes 0 60 0 120 0 340
4. Over 100 up to 250 grammes 0 120 0 170 0 370
5. Over 250 up to 500 grammes 0 240 0 600 1 380
6. Over 500 up to 1 Kilogramme 0 400 1 180 2 400
7. Over 1 Kg. up to 2 Kilogrammes 0 650 2 200 4 000

2. PRINTED MATTER (INCLUDING GREETING CARDS)

1. Within 20 grammes 0 0 25 0 80
15
2. Over 20 up to 50 grammes 0 25 0 35 0 120
3. Over 50 up to 100 grammes 0 35 0 55 0 180
4. Over 100 up to 250 grammes 0 55 0 110 0 320
5. Over 250 up to 500 grammes 0 90 0 220 0 600
6. Over 500 up to 1 Kilogramme 0 160 0 440 1 000
7. Over 1 Kg. up to 2 Kilogrammes 0 220 0 780 1 300
8. Each Kg over 2 Kgs up to 5 Kgs 0 110 0 350 0 700

3. PRINTED MATTER AT REDUCED RATES

1. Within 20 grammes 0 0 20 0 60
10
2. Over 20 up to 50 grammes 0 20 0 25 0 90
3. Over 50 up to 100 grammes 0 30 0 40 0 140
4. Over 100 up to 250 grammes 0 40 0 80 0 240
5. Over 250 up to 500 grammes 0 60 0 160 0 450
6. Over 500 up to 1 Kilogramme 0 120 0 330 0 750
7. Over 1 Kg. up to 2 Kilogrammes 0 160 0 600 1 000
8. Each Kg over 2 Kgs up to 5 Kgs 0 80 0 250 0 500
Postal Services

Kuwait's postal charges are one of the cheapest in the world with over 40 working offices and run by a private company. It is worth noting that local and overseas mail can be delivered to any given address in Kuwait or to a P. O.Box Number which then has to be collected from the Post Office.

Relief

The relief of Kuwait is generally flat or gently undulating, broken only by occasional low hills and shallow depressions. The elevations range from sea level in the east to 951 feet (290 metres) at Al Shaqaya peak, in the western corner of the country. The Al Zawr Escarpment, one of the main topographic features, borders the north-western shore of Kuwait Bay and rises to a maximum height of 475 feet (145 meters) above sea level.

Elsewhere in coastal areas large patches of salty marshland have developed. Throughout the northern, western, and central sections of Kuwait there are desert basins, which fill with water after winter rains; historically these basins formed important watering places for the camel herds of the Bedouin.

Religion

Islam is the official religion of the State. Islam means total submission to the will of Allah. Islamic law (Shariah) is the major source of legislation. The basic tenet of Islam is that there is no deity worthy of worship besides Allah and Muhammad (PBUH) is the last messenger of Allah.

There are 5 basic pillars of Islam:
1 Shahada or Profession of faith (There is no deity worthy of worship besides Allah and Muhammad (PBUH) is the messenger of Allah).
2 Salat or Prayers (A muslim should pray 5 times a day at prescribed times).
3 Zakat or Almsgiving (A muslim has to pay 2.5% per annum on the annual savings).
4 Saum or Fasting (Total abstaining from food or drink from dawn to dusk for a period of one whole month during Ramadan).
5 Hajj or Pilgrimage (Every muslim should at least once in lifetime go for pilgrimage provided he or she is physically and financially capable).

6 pillars of faith (emaan) are:
1. To believe in Allah as the only Lord.
2. To believe in all the angels.
3. To believe in all the prophets from Adam to Muhamamd.
4. To believe in all the books revealed to the messengers.
5. To believe in the day of judgement.
6. To believe in destiny, good of it and bad of it.

Quran is the holy book of Islam (every verse of the Quran is explained in the Hadith or Sunnah). It not only provides a complete way of life and guidance for the whole of mankind but defines every aspect of life through social, commercial, political and judicial sets of rules.

Islam is the first religion to grant men and women equal rights and they have been specified with different duties to perform. Women in Islam are entitled to inherit, hold property in their own name and are permitted to work outside the house. Women for the first and only time got the right to divorce in case of any marital problems. Modesty of dress demands muslim women to cover from head to toe in public.

Though Muhammad (PBUH) is the final prophet of Allah, muslims believe in all the previous prophets. People such as the Jews and Christians to whom prior revelations were made are called the "People of the Book". Non-muslims living under Islamic Government are regarded as Ahl- Addimmah (Protected People) and are allowed to practice their own faiths. However it is strictly forbidden to propogate any other religion besides Islam.

Security Forces

Kuwait has an array of security forces. The Ministry of Defence is responsible for external security and its army, navy and airforce are among the most comprehensively equipped in the world. The Ministry of Interior is responsible for internal security. Other security forces include the National Guard which defends establishments of sensitive nature and provides assistance to the military and the security forces, and the Amiri Guard which is responsible for the safety of the Emir. Each area has a police station and the police is common for all purposes i.e. general patrolling, crime control and traffic control.

Social Customs

Kuwait , being part of the Arab World, is governed by the religious beliefs of the Islamic (Muslim) religion. The Ministry of Awqaf and Islamic Affairs arranges all Islamic matters such as the administration of religious and charitable properties. The muslim way of life is quite different to that of the western world. Dates are calculated from the lunar calender which is 11 days shorter than the solar year. The muslim day begins at sunrise and ends at sunset.

Despite the fact that many Arabs wear western dress and observe a number of western customs and business practices, there are a number of social customs which if not observed can cause offence; importation, sale or consumption of alcohol and pork is strictly forbidden and against the law; Coffee or tea is served during business and small meetings and it is impolite to refuse such refreshments. Non-muslims are permitted to enter a mosque at prayer times provided they behave with proper decorum and are dressed appropriately.

Social Services

Many establishments share the task of providing a number of free services : The Ministry of Public Health has one of the best and most developed health services in the world. The Ministry of Education provides education from kindergarten to university level and also scholarships abroad. The Ministry of Social Affairs & Labour through its various institutions cares for children, youth and the handicapped, besides its financial aid to families in need and its social care for labourers and elderly people. The Social Securities Authority is supported by all Government and Public institutions and deals with matters relating to pensions and compensation paid in cases of sickness and death. For example, funeral services are sponsored by the state irrespective of nationality and are absolutely free, very smooth, and organised as compared to heavy financial expenses in other countries.

Time

Kuwait has one time zone which is three hours ahead of Greenwich Mean Time. Time differences from GMT to other major countries are shown :

When it is 12:00 (noon) in London (GMT) and 3:00pm in Kuwait, the time in other Countries are : (Consider one hour difference for daylight saving countries)

Afghanistan.......... 04:30 pm
Albania................. 01:00 pm
Algeria.................. 01:00 pm
Angola.................. 01:00 pm
Argentina.............. 09:00 pm
Australia............... 10:00 pm
Austria................. 01:00 pm
Bahamas............... 07:00 am
Bahrain................. 03:00 pm
Bangladesh........... 06:00 pm
Belgium................ 01:00 pm
Belize................... 06:00 am
Bhutan................. 06:00 am
Bolivia.................. 08:00 am
Brazil.................... 09:00 am
Brunei................... 08:00 pm
Bulgaria................ 02:00 pm
Cambodia..............07:00 pm
Cameroon............. 01:00 pm
Canada.................. 04:00 am
Chad..................... 01:00 pm
Chile..................... 08:00 am
China.................... 08:00 pm
Colombia.............. 07:00 am
Congo................... 01:00 pm
Costa Rica............ 06:00 am
Cuba..................... 07:00 am
Cyprus................. 02:00 pm
Czech Rep............ 01:00 pm
Denmark............... 01:00 pm
Djibouti................ 03:00 pm
Dominican Rep..... 08:00 am
Ecuador................. 07:00 am
Egypt....................02:00 pm
El Salvador............ 06:00 am
Ethiopia................ 03:00 pm
Finland..................02:00 pm
France................... 01:00 pm
Gabon................... 01:00 pm
Germany............... 01:00 pm
Greece...................02:00 pm
Greenland............. 08:00 am
Guatemala........... 06:00 am
Guyana................09:00 am
Haiti.................... 07:00 am
Honduras............ 06:00 am
Hong Kong.......... 08:00 pm
Hungary.............. 01:00 pm
India.................... 05:30 pm
Indonesia............. 07:00 pm
Iran...................... 03:30 pm
Iraq...................... 03:00 pm
Ireland................. 12:00 pm
Italy..................... 01:00 pm
Ivory Coast......... 12:00 pm
Jamaica................ 07:00 am
Japan................... 09:00 pm
Jordan..................02:00 pm
Kenya..................03:00 pm
Korea...................09:00 pm
Kuwait............ 03:00 pm
Laos.....................07:00 pm
Lebanon...............02:00 pm
Lesotho............... 02:00 pm
Libya................... 01:00 pm
Luxembourg.........01:00 pm
Madagascar..........03:00 pm
Malaysia............. 08:00 pm
Maldives............. 05:00 pm
Mali.....................12:00 pm
Malta...................01:00 pm
Mauritania...........12:00 pm
Mauritius............ 04:00 pm
Mexico................ 06:00 am
Monaco............... 01:00 pm
Mongolia............. 08:00 pm
Morocco..............12:00 pm
Mozambique....... 02:00 pm
Nepal.................. 05:00 pm
Netherlands......... 01:00 pm
New Zealand....... 12:00 am
Nicaragua............ 06:00 am
Niger.................... 01:00 pm
Nigeria................. 01:00 pm
Norway................. 01:00 pm
Oman..................... 04:00 pm
Pakistan................. 05:00 pm
Panama...................07:00 am
Paraguay.................08:00 am
Peru........................07:00 am
Philippines.............08:00 pm
Poland....................01:00 pm
Portugal................. 11:00 am
Puerto Rico............08:00 am
Qatar...................... 03:00 pm
Romania.................02:00 pm
Russia.................... 03:00 pm
Saudi Arabia...........03:00 pm
Senegal................... 12:00 pm
Seychelles.............. 04:00 pm
Sierra Leone .......... 12:00 pm
Singapore............... 08:00 pm
Somalia.................. 03:00 pm
South Africa...........02:00 pm
Spain......................01:00 pm
Sri Lanka................05:30 pm
Sudan..................... 02:00 pm
Sweden...................01:00 pm
Switzerland............01:00 pm
Syria.......................02:00 pm
Tanzania.................03:00 pm
Thailand.................07:00 pm
Togo.......................12:00 pm
Tunisia...................01:00 pm
Turkey................... 03:00 pm
Uganda...................03:00 pm
UAE.......................04:00 pm
USA.......................07:00 am
Uruguay..................09:00 am
Venezuela...............08:00 am
Vietnam..................07:00 pm
Yemen.................... 03:00 pm
Yugoslavia..............01:00 pm
Zaire...................... 01:00 pm
Zambia...................02:00 pm
Zimbabwe..............02:00 pm
Tourism

Kuwait recently launched a forum to promote domestic tourism and attract foreigners, saying it was time to open up the states doors after the overthrow of evil Saddam regime. Kuwaiti government now intends to develop tourism and compensate the lost of the past.

Since Iraqi troops invaded Kuwait in august 1990, Kuwait has remained virtually closed to foreign visitors who needed to pass through painful bureaucratic procedures to obtain a visit visa, mainly due to security concerns. But the state has made an irreversible decision to make tourism a strategic option for development. Kuwait is pinning great hopes on the way for developing a tourism industry in a country that raises more than 90 per cent of its income from oil.

Kuwait needs to focus on building a strong infrastructure for a tourism industry that would encompass new hotels, condominiums, restaurants, amusement parks, shopping malls, and tourist help offices. Kuwait, with its strategic location in the north of the gulf between regional powers Iraq, Iran and Saudi Arabia, is banking on luring gulf tourists in the first phase of a long term tourism plan. Studies show that residents of Kuwait, 62 per cent of whom are foreigners, spend more than two billion dollars a year during 1.3 million tourist trips abroad.

About 79 per cent of Kuwait’s population make at least one touristic trip every year, of whom 73 per cent travel abroad. Kuwait has only 29 hotels of various grades with 4,000 rooms, in addition to 1,700 rooms in furnished apartments and 1,350 rooms in small tourist resorts. It has only 10 entertainment sites, 23 cinemas and theatres, and 23 modern shopping malls in addition to a long and well-developed seafront. About 17 major touristic sites and resorts are under construction.

Kuwait has also decided to transform failaka island, about 12 km (7.5 miles) off the Kuwaiti coast, into a touristic site with several mega entertainment projects planned. Discos and liquor are banned in Kuwait, and hotels cannot stage musical concerts without a prior permit from the government. Developers has given a progress report on ongoing works at three major projects on the islands of Bubyan, Failaka, and Khiran resort areas.

Jaid Cape is a very good spot around the island where the water is deep enough to serve not only as a port in Kuwait, but also an international one that would be capable of harbouring giant vessels with heavy cargo, particularly with the anticipated heavy marine traffic needed for the Iraq reconstruction process.

Another project concerns developing the 46-km-long Sulaibikhat coast, and will include tourist resorts, health centres, restaurants, hotels, and shopping malls.

The successful execution of these projects would constitute a gigantic leap in the development of Kuwait’s economy, since their main purpose is to promote the national economy through foreign investors and creation of employment opportunities.

Transportation

Kuwait has a well developed road system, but there are no trains and public transport is limited to buses and taxis. In the near future a rapid transit system serving the coastal corridor, with direct access into Kuwait City using fixed track vehicles or automated buses, may be created. A proposed GCC-Railway may have terminals in Shuaiba and Shuwaikh. Future plans also include passenger ferries linking the City to Failaka Island, and to mainland Subiya and Bubiyan Island, and a bridge linking Shuwaikh to Subiya.

Vegetation

The typical vegetation of Kuwait is that of desert with patches of shrub and spring grass. Due to the extremely low annual rainfall and the lack of surface water, plants and animals have adapted to the arid conditions. Spring grasses and flowers grow after the winter rains. True soils scarcely exist naturally in Kuwait except in the new green belt of Kuwait city and in a few desert oasis such as Al-Jahrah, where cultivation and irrigation is carried out, the vegetation consists of shrub and low bushes (and ephemeral grass in the spring). Halophytes (salt-loving plants) grow on the marshy stretches along the coast.

Only one percent of the land is cultivated, and that only with intensive irrigation. Currently, a great deal of effort is being made towards making Kuwait greener and shrubs and trees are being planted. The Government has sponsored experimental farms where plants are cultivated on a gravel bed and are nurtured with special fertilizers and water. Tomatoes, radishes, melons and cucumbers are the main crops of Kuwait. There are successful dairy and poultry farms. More importantly, the entire demand for fresh fish is met locally.

Welfare

Kuwait has a comprehensive scheme of social welfare. For the needy there is financial assistance; for the handicapped there are loans to start a profitable business; for the disabled there are treatment and training; and for adult illiterates there is education. A huge program called the Limited Income Housing Scheme, which provides adequate houses fully equipped with modern facilities for native Kuwaiti families with limited incomes, has been one of the chief projects of the Ministry of Social Affairs and Labour. Kuwait has a comprehensive and highly developed free national health-care system. The life expectancy in Kuwait is 73.4 years. Kuwait has established a Reserve Fund for Future Generations to provide for the welfare of its people. The fund receives 10 percent of the state's revenues annually, and both principal and interest were originally scheduled to remain untouched until the year 2001. The government found it necessary, however, to tap this fund during the Iraqi occupation. However this is back on schedule now.

Wild Life

Animal life in Kuwait is sparse even more so after the devastation caused by the Gulf war. There have been infrequent sightings of gazelles, foxes and the very rare Civet Cat. Small mammals such as hares, rabbits, jerboa, rats and mice are a more usual sight. The bird life in Kuwait includes the Desert and Hoopoe Larks, the Flamingo and the rare Brown Necked Raven. The ever popular birds of prey such as the Marsh Harrier, Imperial Eagle, Ring Ouzel and the Peregrine Falcon are extremely rare while the Hubara Bustard is now reckoned to be extinct.

Cultivated land in Kuwait is increasing, with the result those migrating species of birds such as the House Sparrow, Rose-ringed Parakeet and the Golden Oriole have become regular visitors. Kuwait has two rare species of venomous snakes - the Sand viper and the nocturnal viper. Also some 5 species of sea snakes are documented so far. Turtles can be seen along the seashore while further inland, the Monitor and the vegetarian Dabb Lizard are desert inhabitants. Stray dogs are uncommon while it is normal to see stray cats, often in considerable numbers.

2. Doing Business in Kuwait

Privatisation

The decline in oil prices had an adverse effect on the economy. A recent World Bank study has strongly recommended that the Kuwait Government should consider the privatisation of many of its agencies. Among the more likely targets for such a programme are:

  • Over 90 petrol filling stations owned and operated by Kuwait National Petroleum Company (KNPC).
  • Some services provided by the Ministry of Communication (MOC).
  • Ministry of Electricity and Water (MEW) facilities.

The Kuwait Government faces a number of hurdles in implementing privatisation as:

  • Many of the above services are subsidised by the Government and are provided at very low cost.
  • Many Kuwaitis are employed in the target industries and it is almost inevitable that privatisation will bring job losses
Setting Up Business in Kuwait
SETTING UP BUSINESS IN KUWAIT

Kuwait is an attractive business venue for most businesses because there are:

  • Opportunities for major contracts, particularly in the oil industry.
  • Requirement for imported goods, labour and technical expertise.
  • Excellent communication and sophisticated trade infrastructure.
  • The benefits that rise from having an actively pro-business Government.
  • Advantages in the extensive use of English as the language of business.

For many companies the simplicity of operating within a system where taxes are for the most part non-existent, and everything is open negotiations, will have major attraction. Kuwait's modern economic history began with the discovery of oil in 1938, and soon after the Second World War, Kuwait became a major oil exporter.

When the oil prices rose in 1973, Kuwait experienced a construction boom that lasted until the early 1980's. This provided opportunities for foreign contractors and investors. Despite the setbacks caused by the Iraqi invasion in 1990, Kuwait has:

  • Commercial and Industrial Ports
  • Desalination plants which provide a continuous water supply
  • Electric Power Generation and Distribution
  • An International Airport
  • Roads and Freeways
  • Merchant Shipping Fleet
  • National Airline
  • General and Specialist Hospitals and Clinics
  • Schools and Universities
  • Public Administration Buildings
  • Public and Private Sector Housing
  • Shopping Complexes and Office Buildings
  • International and Local Communication Network, Television and Radio Network and Internet Services

Kuwait is currently concentrating on several important economic goals, all of which are aimed at decreasing dependence on oil revenues, these include:

  • Encouraging the private sector to assume responsibility for the economic development of the country. This includes the privatisation of certain Government operations
  • Introduction of a Counter Trade Offset Programme
  • Overseas Investment

For almost two centuries Kuwaitis have been traders, and because of this trading background and the presence of an active merchant community in Kuwait. There is a marked tendency to give business preference to Kuwaitis and economy is dominated by locally owned companies.

There are, however, business opportunities for foreign companies, as it is recognised that a major foreign contribution is necessary to meet the Government's objectives. While the intention is undoubtedly to retain Kuwaiti control of ventures in which foreign companies are involved, this should not prevent such companies from having profitable operations in Kuwait.

3.Business Sectors

Bank Cheques

A Cheque should have the following information:

  • The word cheque should be written on the paper.
  • The date of the cheque and where it was issued.
  • Name of person to be paid.
  • Name of the bank.
  • An unconditional order to pay the amount of cheque.
  • Place of paying the cheque.
  • The signature of drawer.

All cheques issued in Kuwait must be drawn on a bank, and it is possible to issue a cheque "pay to bearer" that can be cashed in the bank and a cheque without the name of a person to be paid is considered a cheque 'pay to bearer'. A drawer of a cheque guarantees its payment, and any condition counter to that is considered null. A cheque given in payment for a debt will not clear the debt till it is paid by the bank.

The bank will bear responsibility for any cheque that has its signature, or any other information on it, forged without any negligence in the part of drawer if he does not take good care of cheque books, and does not immediately inform the bank about lost cheques.

It is possible for a cheque to have several copies, but all copies must have the same number in order to be considered as one cheque, otherwise each copy is considered a separate cheque payable by the bank.

Cheques can be endorsed by the beneficiary to the favor of a third person, or even to the drawer himself; and in these cases the endorser will be jointly liable for paying the cheque. Cheques with the phrase written "only for beneficiary", cannot be endorsed to the favor of others. An endorser can indicate on the cheque that nobody should further endorse the cheque after him, in such a case he will not be responsible to pay the value of the cheque to any new endorser; but he is held jointly responsible to pay the original beneficiary and those who endorsed the cheque before he did.

Any deleted endorsement is considered effective if proved by bearer of cheque to be in his favor. If a person loses his cheque, whether the cheque is endorsable or issued to bearer (cheques to bearer - without a named person cannot be endorsed) the one holding the check has the right not to give it up, if he proves it is rightfully his (i.e. transferred to him through endorsement). But if he possessed the cheque through malicious conduct or committed a grave error when getting it, then he must return it to its rightful owner. A cheque should not be tampered with, any endorsement with a date should not have its date changed to a prior date; this will be considered forgery.

A cheque drawn in Kuwait and payable in Kuwait must be submitted for payment within 6 months from its date; but if drawn outside of Kuwait and due in Kuwait then it should be cashed within a period of three months from its date. A cheque presented to the bank should be paid regardless of its date, and even if the date indicated on it has passed, any protest from the drawer of the cheque will not be heard unless it is related to loss of cheque, or the bankruptcy of the bearer of cheque.

The death of the drawer of a cheque or loss of his mental competence, or his bankruptcy, does not affect the legal rules concerning the cheque. If several cheques were issued and presented at the same time, but not enough funds for them exists in the bank, the one with earlier date shall be paid first. And if they were drawn from one cheque book with the same date on them, then the one preceding the others will be paid first.

A cheque in foreign currency issued in Kuwait can be paid with its equivalent amount in Kuwaiti Dinars in accordance with the exchange rate at the time the cheque is cashed. The drawer has the right to state the rate of exchange that should be applied when the cheque is to be cashed.

The prescription period for filing a case regarding an unsettled cheque concerning the drawer, the bank, endorsers, and others obligated jointly to pay the cheque, is six months from the date the cheque is due for payment. Lawsuits regarding jointly obligated parties to pay between themselves, is six months from the date one of the them pays the cheque, or is taken to the court for that matter.

If the bearer of cheque gets a court ruling against his debtor (the drawer of cheque) then the prescription period does not affect any civil court proceedings regarding the debt indicated on the cheque (unjust enrichment of drawer). This also applies to those who are obligated to pay the cheque vis-a-vis the drawer.

Banking & Finance Sector
CENTRAL BANK

The Central Bank of Kuwait is the Government's sole agent for control over the country's monetary policy and for supervising the commercial banks and investment companies, It also channels relations with international financial institutions, functions as a banker for the Government and all other banks, prints and issues the currency.

Since January 2003, the Central Bank of Kuwait pegged the exhcange rate of the Kuwaiti Dinar to the US Dollar at 299.63 Fils to US$1. This was implemented to stabilise the exchange rate of the Kuwaiti Dinar against other world currencies and to facilitate with the planned and eventual single currency policy of the member countries of the Gulf Cooperation Council. This standard was revoked in 2007 when the Central Bank switched to multi currency.

The Central Bank of Kuwait issued a provisional license in 2003 for establishing new Islamic Banks in Kuwait. The Kuwait Investment Authority will own 24% stake and the remaining shares will be traded at the Kuwait stock market. Out of the ten banks in Kuwait, only Kuwait Finance House and Boubyan Bank functions per Islamic principles.

Central Bank has also allowed an existing bank, Kuwait real estate bank (KRE), to operate in accordance with sharia, or islamic law, but KRE is still in the process of changing its status. Kuwait finance house (KFH) is the only bank that has been operating in the country since 1977 on Islamic principles.

The measure to allow two more Islamic banks follows the passing of legislation extending the Central bank’s supervision to Islamic banks. Under the legislation, ordinary banks are not allowed to have special units operating on Islamic principles. KFH is one of the largest islamic banks in the region with total assets reaching 8.5 billion dollars and has 27 branches in Kuwait.

To jumpstart the economy, the National Assembly approved the “Foreign Banks” law with a slight majority. The bill allows for the opening of branches of International banks in Kuwait which were previously not allowed. A prime condition for this bill governs that any new bank entering Kuwait must have KD 75 million as capital and KD 15 million for the branch. The most controversial stipulation is that Kuwaiti nationals must constitute a minimum of 38% of the workforce as per the National Manpower Law.

Central Bank

The Central Bank of Kuwait is the Government's sole agent for control over the country's monetary policy and for supervising the commercial banks and investment companies, It also channels relations with international financial institutions, functions as a banker for the Government and all other banks, prints and issues the currency.

Since January 2003, the Central Bank of Kuwait pegged the exhcange rate of the Kuwaiti Dinar to the US Dollar at 299.63 Fils to US$1. This was implemented to stabilise the exchange rate of the Kuwaiti Dinar against other world currencies and to facilitate with the planned and eventual single currency policy of the member countries of the Gulf Cooperation Council. This standard was revoked in 2007 when the Central Bank switched to multi currency.

The Central Bank of Kuwait issued a provisional license in 2003 for establishing new Islamic Banks in Kuwait. The Kuwait Investment Authority will own 24% stake and the remaining shares will be traded at the Kuwait stock market. Out of the ten banks in Kuwait, only Kuwait Finance House and Boubyan Bank functions per Islamic principles.

Central Bank has also allowed an existing bank, Kuwait real estate bank (KRE), to operate in accordance with sharia, or islamic law, but KRE is still in the process of changing its status. Kuwait finance house (KFH) is the only bank that has been operating in the country since 1977 on Islamic principles.

The measure to allow two more Islamic banks follows the passing of legislation extending the Central bank’s supervision to Islamic banks. Under the legislation, ordinary banks are not allowed to have special units operating on Islamic principles. KFH is one of the largest islamic banks in the region with total assets reaching 8.5 billion dollars and has 27 branches in Kuwait.

To jumpstart the economy, the National Assembly approved the “Foreign Banks” law with a slight majority. The bill allows for the opening of branches of International banks in Kuwait which were previously not allowed. A prime condition for this bill governs that any new bank entering Kuwait must have KD 75 million as capital and KD 15 million for the branch. The most controversial stipulation is that Kuwaiti nationals must constitute a minimum of 38% of the workforce as per the National Manpower Law.

Central Bank of Kuwait (CBK)

Acts as banker and financial advisor to the government, directs monetary and credit policies, supervises the banking system, as well as issuing and controlling the currency.

Commercial Banks

In addition to its Central Bank, Kuwait has specialized banks operating in the areas of savings and credit, industrial loans, and real estate. There are six domestic commercial banks, all of which are 100% Kuwaiti owned, with the exception of the Bank of Bahrain and Kuwait, based in Bahrain and owned equally by the two states.

Conducting With The Ministry Of Defense

Since the invasion, the accepted method of business dealings with the Ministry of Defence has followed a variety of routes. Regular procedures have been bypassed in particular cases where emergency requirement had to be met.

Several companies formed close ties with Kuwaiti sponsors to share business opportunities that emerged after the Gulf War. Prior to this, many companies operated directly with the Ministry and the general trend to return this method.

It should be made clear that any registered foreign company can offer goods or services to the Ministry of Defence without the need of a Kuwaiti agent. In fact, in many cases, this is preferred in the eyes of the Ministry. What could be an asset to the companies is to have representative party/ consultant based in Kuwait.

The following is the recognised method at this time :

1. Contact the Kuwait Embassy or Consulate in the country.
2. They will require full information on the product or service you wish to offer with brochures, etc. Do not provide any pricing structure at this time.
3. Through the Embassy channels, this will be forwarded to the Ministry of Defence - Under Secretary's office, Kuwait.
4. From there, it will be passed to a recently reorganised department under "Director of Purchasing & Contracting".
5. Within this department, the product / service will be assessed and passed on to the applicable force, i.e. Army, Navy, Air Force, etc.
6. The force concerned will pass it on the unit, department, regiment, etc. that has that particular requirement where it will be evaluated and reported on.
7. If the product/service is one they are interested in, the company will be contacted for further information and possibly a price indication.
8. This could culminate in the company or its representative being requested to provide sample and demonstration within Kuwait or to arrange for a visit to the country.
9. Ministry of Defence will provide the entry visas for personnel (of those countries not listed among the 40 countries) travelling to Kuwait when on official business.
10. At this point, a Kuwait contact would be helpful to assist in various arrangements, transport and accommodation can prove to be an expensive outlay if care is not taken.

Dealing With the Ministry of Interior

Initially, a manufacturer must, with the aid of his Kuwait agent, register the company with the Kuwait Embassy in his own country. Prior to registration at the Embassy the manufacturer must have the Chamber of Commerce attest the company registration.

The documents (originals) are then presented to the Ministry of Interior for registration.

The Do's

  • Do request your agent to set up meetings with the individual departments you wish to deal with.
  • Do inform your agent of any changes to your product or contractual details.
  • Do ensure that your agent is kept fully aware of delivery details, send him all copies of the Airway Bills (AWB) and Bills of Lading.
  • Do expect to extend your visit as appointments are often changed.

The Don'ts

  • Don't come to Kuwait unannounced.
  • Don't attempt to contact the Ministry of Interior or any one of the department heads without the agent's knowledge
  • Don't try to do business through a third party once you have set up documentation of registration. Your agent is exclusive within the Ministry of Interior and his name is on the file.
  • Don't deliver late.
  • Don't expect quick responses from the Ministry of Interior.
  • Don't include invoices with the delivered goods.
Government Audit Bureau

Is responsible for auditing the accounts of ministries and public establishments. The Bureau has wide powers of investigation and submits an annual report to the National Assembly and the Government.

Government Institutions

Kuwait is served by a variety of public authorities and there is also a wide range of public institutions which provide various services to citizens and residents.

CENTRAL BANK OF KUWAIT (CBK)

Acts as banker and financial advisor to the government, directs monetary and credit policies, supervises the banking system, as well as issuing and controlling the currency.

GOVERNMENT AUDIT BUREAU

Is responsible for auditing the accounts of ministries and public establishments. The Bureau has wide powers of investigation and submits an annual report to the National Assembly and the Government.

PUBLIC AUTHORITY FOR CIVIL INFORMATION (PACI)

Maintains a comprehensive database on citizens and expatriates alike. PACI issues the civil ID card which must be carried by all residents.

KUWAIT INSTITUTE FOR SCIENTIFIC RESEARCH (KISR)

Promotes applied research in areas closely connected with Kuwait's development needs. Includes the National Scientific & Technical Information Centre (NSTIC) which supplies scientific data to public and private clients.

KUWAIT FOUNDATION FOR ADVANCEMENT OF SCIENCES (KFAS)

The funding agency for the promotion and support of scientific research throughout the world. Sponsors research in pure and applied sciences, engineering, health, food and socio-economic sciences worldwide and awards prizes for scientific achievements beneficial to Kuwait.

KUWAIT INVESTMENT AUTHORITY (KIA)

The government's main investment agent both overseas and locally. Operates from the Ministries complex in Kuwait City but has several overseas offices, KIO (Kuwait Investment Office in London being its main centre abroad. At present, KIA is administering the privatisation programme.

KUWAIT  NEWS  AGENCY  (KUNA)

Transmits to local and foreign subscribers in Arabic and English and exchange news with 30 international and regional news agencies. Its news gathering centre in Vienna transmits the news of the Federation of Arab News Agencies (FANA) in English to European countries.

PUBLIC AUTHORITY FOR INDUSTRY (PAI)

Is responsible for promoting and developing local industry and issues industrial licenses and supervises industrial activities.

PUBLIC AUTHORITY FOR AGRICULTURAL AFFAIRS & FISH RESOURCES (PAAAFR)

Has overall responsibility for the development of ranching, agriculture, horticulture, and fisheries in Kuwait, and provides financial and technical assistance to private companies.

SHUAIBA AREA AUTHORITY (SAA)

Administers Shuaiba Industrial Area and leases plots to factories and companies at nominal annual rents. The SAA's functions are being taken over by PAI.

KUWAIT FUND FOR ARAB ECONOMIC DEVELOPMENT (KFAED)

Provides development loans to Arab and non-Arab lesser developed countries (LDCs) on a politically neutral basis, taking the social benefits of schemes into account. Loans are given without any linkage to exports from Kuwait or to opportunities for Kuwaiti contractors. KFAED also provides grants to enable LDCs to conduct feasibility studies for development projects and macro-economic planning and related activities, and contributes the Kuwaiti share of a number of multilateral institutions such as the Arab Fund for Economic Development and the African Development Bank.

Job Contract

A job contract is an obligation where one party, the contractor, is obliged to do work or service for another party, the owner against a certain sum of money, without the contract being the subject of the owner or his legal representative.

Civil law consists of rules concerning the following topics:

  • Supply of material by owner.
  • Obligation of contractor.
  • Obligation of owner.
  • Relinquishing the contract or sub-cobtract
  • Termination of contract.
Kuwait Chamber of Commerce & Industry (KCCI)

Kuwait Chamber of Commerce & Industry (KCCI) is the main business organisation in Kuwait. KCCI has several semi-governmental roles:

  • All Kuwaiti & non-Kuwaiti agents, firms and businesses operating in Kuwait must be registered with the KCCI,

  • only KCCI members may obtain import licenses,

  • only KCCI members may bid for government contracts, and

  • agency agreements must be registered with the KCCI before they can be registered with the Ministry of Commerce & Industry.

  • Two semi-judicial roles:

  • Maintains an official court of arbitration for resolving business disputes, and

  • Is involved in standard setting and defining customary practices in commercial matters.

  • The KCCI must, by law, be consulted when legislation concerning industry. commerce and finance is being considered, and the Chamber has been very successful in representing the business community views on matters affecting the economy. The KCCI publishes the Kuwaiti Economist, a widely read monthly magazine in Arabic, and pamphlets on local business regulations. It is active internationally and has strong links with Gulf, Arab, Islamic and International chambers of commerce.

Kuwait Foundation for the Advancement of Sciences (KFAS)

The funding agency for the promotion and support of scientific research throughout the world. Sponsors research in pure and applied sciences, engineering, health, food and socio-economic sciences worldwide and awards prizes for scientific achievements beneficial to Kuwait.

Kuwait Fund for Arab Economic Development (KFAED)

Provides development loans to Arab and non-Arab lesser developed countries (LDCs) on a politically neutral basis, taking the social benefits of schemes into account. Loans are given without any linkage to exports from Kuwait or to opportunities for Kuwaiti contractors. KFAED also provides grants to enable LDCs to conduct feasibility studies for development projects and macro-economic planning and related activities, and contributes the Kuwaiti share of a number of multilateral institutions such as the Arab Fund for Economic Development and the African Development Bank.

Kuwait Institute for Scientific Research (KISR)

Promotes applied research in areas closely connected with Kuwait's development needs. Includes the National Scientific & Technical Information Centre (NSTIC) which supplies scientific data to public and private clients.

Kuwait Investment Authority (KIA)

The government's main investment agent both overseas and locally. Operates from the Ministries complex in Kuwait City but has several overseas offices, KIO (Kuwait Investment Office in London being its main centre abroad. At present, KIA is administering the privatisation programme.

Kuwait News Agency (KUNA)

Transmits to local and foreign subscribers in Arabic and English and exchange news with 30 international and regional news agencies. Its news gathering centre in Vienna transmits the news of the Federation of Arab News Agencies (FANA) in English to European countries.

Kuwait Society of Engineers

Kuwait Society of Engineers (KSE) is a club for engineers and architects, its main functions are:

  • advising the government on urban planning and architecture.
  • providing an arbitration service in disputes of a technical nature under construction contracts,
  • providing expert witnesses on construction matters in court cases,
  • organising seminars on engineering and architectural topics, and
  • organising architectural competitions.

Membership of the KSE is restricted to those with engineering or similar degrees, but is mandatory for persons taking up certain government appointments.

Ministry of Defense (MOD)

The largest allocation of funds in the public sector is a budget of KD 3.5 billion ($10 billion) to be spent in the country's defence forces. In the past the Air Force had taken delivery of 40 McDonnel Douglas F/A-18's, an Early Warning Radar System from Hughes Aircraft Company was installed and letters of agreement reported to having been placed for 256 MI-A2 tanks from General Dynamics, 250 Warrior combat vehicles from GKN Defence and several fast patrol boats for the Kuwaiti Navy. It is also the MOD that will spearhead the decisions on the United Gulf Army; an ambitious program by the GCC states to form a 25,000 strong army based in Saudi Arabia armed with the most sophisticated weaponry to protect the borders from any aggression.

Its been reported that a number of other major orders notably for a Patriot Missile system from Raytheon, additional F/A-18 warplanes from McDonnel Douglas and for Mirage Jet F1 fighters from Dassault. In the year 2001, the Military Commander of Kuwait and five other Gulf States launched the first phase of an early warning Radar System setup by the six GCC States. This initial phase of US$ 160 million Project will link their Command and Central Systems.

Non-Government Official Organizations

There are several non-government organisations which greatly influence the country's political and business life. They advise the government on commercial matters, and have official and quasi-judicial roles in the organisation and control of business activities.

KUWAIT CHAMBER OF COMMERCE & INDUSTRY
Kuwait Chamber of Commerce & Industry (KCCI) is the main business organisation in Kuwait. KCCI has several semi-governmental roles:

  • All Kuwaiti & non-Kuwaiti agents, firms and businesses operating in Kuwait must be registered with the KCCI,
  • only KCCI members may obtain import licenses,
  • only KCCI members may bid for government contracts, and
  • agency agreements must be registered with the KCCI before they can be registered with the Ministry of Commerce & Industry.

Two semi-judicial roles:

  • Maintains an official court of arbitration for resolving business disputes, and
  • Is involved in standard setting and defining customary practices in commercial matters.

The KCCI must, by law, be consulted when legislation concerning industry. commerce and finance is being considered, and the Chamber has been very successful in representing the business community views on matters affecting the economy. The KCCI publishes the Kuwaiti Economist, a widely read monthly magazine in Arabic, and pamphlets on local business regulations. It is active internationally and has strong links with Gulf, Arab, Islamic and International chambers of commerce.

KUWAIT SOCIETY OF ENGINEERS Kuwait Society of Engineers (KSE) is a club for engineers and architects, its main functions are:

  • advising the government on urban planning and architecture.
  • providing an arbitration service in disputes of a technical nature under construction contracts,
  • providing expert witnesses on construction matters in court cases,
  • organising seminars on engineering and architectural topics, and
  • organising architectural competitions.

Membership of the KSE is restricted to those with engineering or similar degrees, but is mandatory for persons taking up certain government appointments.

Oil Sector

Kuwait is a major oil producer and the economy is dominated by this industry, provides more than 90% of the country's income. Oil was first discovered in 1938, in the Burgan Oilfield in the southern part of the country. This oilfield has now over 300 wells, proving to be one of the world's richest, contains about half of Kuwait's proven recoverable reserves. Commercial production of crude oil began in 1946 and peaked at 3.3 million barrels a day in 1972. The oilfields are concentrated in a small area and production costs are extremely low. The level of production at the time of Iraqi Invasion in August 1990 was about 2 million barrels a day (excluding divided zone output) against an installed capacity of 2.5 million barrels a day and local refining capacity was about 760,000 barrels a day.

The last of the oil fires, set alight by the retreating Iraqi army in February 1991, was extinguished in November of the same year. Since then substantial efforts have gone into reconstruction. In 1994, the Oil Minister announced that Kuwait has the capacity to pump 2 million barrels per day and is targeting a capacity of 2.5 million barrels a day. At these production rates, the proven oil reserves are estimated to be able to last for another two hundred years. The oil fires were widely reported in the world's media as one of the worst ever environmental disasters. Despite the huge damage caused by the smoke and the unburned oil it is estimated that only between 1% and 2% of the oil reserves were lost during this time.

The Kuwait Petroleum Corporation (KPC) was setup in 1975 and is wholly owned by the Government. The main components of this company are an upstream operation called the Kuwait Oil Company (KOC), a downstream operation called the Kuwait National Petroleum Company (KNPC), the Kuwait Oil Tanker Company (KOTC) and the Petrochemical Industries Corporation (PIC). There is also a division which manages Kuwait's Offshore Exploration Interests (KUFPEC). KPC is also, through another subsidiary company called Kuwait Petrochemical Industries (KPI), and owns several thousand petrol stations throughout the world selling Kuwaiti petroleum products under the `Q8' logo.

The Iraqi invasion and occupation interrupted ambitious plans to build a petrochemical complex to make use of Kuwait's cheap supplies of gas; this would represent Kuwait's largest industrial enterprise outside the oil industry. The budget year in the Public sector runs from July 1 to June 30 in the following year. All proposals for expenditure receive scrutiny from the Minister's staff, by the National Assembly and by the Council of Ministers.

Private Sector

This sector comprises mainly automotive importers, business equipment importers, construction, retail outlets and general trading companies. There are very few manufacturing industries in Kuwait. The bulk of the turnover in the private sector is controlled by a few major trading houses owned by prominent Kuwaiti families.

It is the aim of the Kuwaiti government to increase the number of citizens working in the private sector. Notably, a fund of KD.40 million has been allocated to encourage Kuwaitis to work in the private sector that will feature educational, vocational and specialized training. Though government jobs and generous salaries are a means of distributing oil wealth, a UN study concluded that Kuwait's civil service has 75000 employees it does not need.

A typical trading company operating in this area will have several divisions, each specialising in one of the above business areas. The largest of these 'mini conglomerates' has around 4000 employees. Immediately after liberation there was a surge in demand and a shortage in supply. Hence, huge quantities of goods were imported into the country in a few months.

Promissory Note (Combiala)

Elements of promissory note: For a monetary paper to be considered a promissory note, it must have the following elements:

1. The words "promissory note" written on the paper.
2. Date and place of promissory note when it was signed.
3. Name of bank, or financial institution, or person.
4. Name of person to be paid, or bearer.
5. Unconditional order to pay that certain amount of money.
6. Date of maturity (date due for payment).
7. Place at which the promissory note should be paid.
8. Signature of the one supposed to pay the primissory note.

The essential elements of the promissory note are 1,3,4,5 and 8; without them a promissory note will lose its legal power. Nevertheless a promissory note that lacks items 2, 6, 7 remains effectively a promissory note, as the missing information can be inferred, and in such case the promissory note will be considered payable on sight.

If a group of persons sign, or endorse a promissory note, and some of them are mentally incompetent, then the law holds those mentally competent as liable and answerable to the bearer of promissory note.

A person that signs a promissory note on behalf of another person, without the latter's express approval or authorization is bound by law to pay that promissory note, and after paying the note he can claim his money from that person on whose behalf he signed. This also applies to the one who exceeds the limits of his legal representation..

It is legally possible to have several copies of the same promissory note; in this case all copies of the promissory note must have the same number, otherwise each copy will be considered as a promissory note in itself..

A person obligated to pay a promissory note, who pays the note based on a copy he holds with the same number as the original, is considered free from obligation towards the original note, and its other copies. If the financial institution or bank accepts the promissory note and its copies, then it should get the original and all accepted copies when it pays the bearer, otherwise all accepted copies not taken by the bank or financial institution must be paid again if presented for payment. If the promissory note has been issued with several signatures on it, and after a certain period of time somebody tampered with it, or forged parts of it, and after that event some other person endorsed the forged promissory note, then the signatories are responsible only for what is in the original copy, as for those who signed after the forgery, they will be responsible for what is forged in the promissory note..

If one of the endorsers of the promissory note writes on the back of it, that any further endorsements shall be on the copy and not on the original, then further endorsement on the original are considered null. A bearer of promissory note must hand over the original to the legitimate bearer of the copy..

The one supposed to pay the promissory note (drawer of the note) must have its sum of money in the bank; he is accountable to the bearer and endorser of the note. The amount of a promissory note is considered secured in the bank if the drawer is a creditor to the bank at the time the note is due. The bearer of the promissory note has the legal priority to claim his money from the drawer's money kept in bank; in case the drawer goes bankrupt..

The bearer of the promissory note is not obligated to accept payment prior to maturity date. But if the bank, the party obligated, pay the bearer before the maturity date, then it bears the responsibility resulting from this conduct.

Partial payments of a promissory note should not be refused by the bearer of a promissory note and as a consequence partial relief is effected on the drawer and endorsers and their guarantors. An indication of partial payment can be put on promissory note.

A debtor, who signs a promissory note to pay a certain sum of money at a certain time, can pay up the promissory note in the execution department of the courts and get from the execution department a certificate that clears him of the debt. This certificate must be given to the creditor (bearer of the promissory note) in order that the creditor give back the promissory note to debtor. If the debtor does not hand over the certificate of payment issued from the execution department then the debtor will have to pay again the same amount to the bearer of a promissory note if the bearer protests in the court, because the creditor cannot claim his money from the court without submitting the certificate.

If the promissory note is lost, or the bearer goes bankrupt, the promissory can refuse to pay the note. If a lost promissory note that was not accepted by the bank has several copies, it is possible for the bearer of a copy to demand its amount. But if the promissory note has several copies and the one accepted by the bank (endorsed with signature of the bank as accepted by bank) is lost, it is not possible to claim the money, by presenting an endorsed copy if it does not have an express acceptance from the bank unless the bearer resorts to the court and gets a ruling for that matter, in addition to the ruling he should present a guarantor.

If the promissory note was lost and the bearer could not submit any copy of it for payment then he must protest to the court a day after the maturity date, and this protest should be notified to the drawer and to all endorsers of the promissory note, even if the court does not issue a ruling in the appropriate time.

All court cases related to promissory notes, cannot be heard in court after the passage of three years from maturity date. All court cases filed by bearer of promissory note towards the promissory, or endorser of a promissory note, cannot be heard in the court after one year from protest filed by the bearer in the appropriate time, or from date of maturity if the promissory note excludes protest. Court cases filed by endorsers towards each other, or towards the promissory cannot be heard in the court after six months from the date an endorser pays the promissory note, or from the date the court case is filed against him. If the case is filed, the prescription period starts from the date of last proceeding in the case. But if debtor acknowledges the debt then this prescription period shown above does not count.

Public Authority for Agriculture Affairs & Fish Resources (PAAAFR)

Has overall responsibility for the development of ranching, agriculture, horticulture, and fisheries in Kuwait, and provides financial and technical assistance to private companies.

Public Authority for Civil Information (PACI)

Maintains a comprehensive database on citizens and expatriates alike. PACI issues the civil ID card which must be carried by all residents.

Public Authority for Industry (PAI)

Is responsible for promoting and developing local industry and issues industrial licenses and supervises industrial activities.

Public Sector

Comprises Ministries, Public Authorities and Institutes which run the Government's affairs. The Ministries are :

  • Ministry of Awqaf & Islamic Affairs

  • inistry of Information

  • Ministry of Commerce & Industry

  • Ministry of Interior

  • Ministry of Communication

  • Ministry of Justice

  • Ministry of Defence

  • Ministry of Oil

  • Ministry of Education
  • Ministry of Planning
  • Ministry of Electricity & Water
  • Ministry of Public Health
  • Ministry of External Affairs
  • Ministry of Public Works
  • Ministry of Finance & Economy
  • Ministry of Social Affairs & Labour
  • Ministry of Housing
  • Municipality

The most important institutions from the public sectors are :

Shuaiba Area Authority

Administers Shuaiba Industrial Area and leases plots to factories and companies at nominal annual rents. The SAA's functions are being taken over by PAI.

Specialized Banks

In addition to the Industrial Bank of Kuwait there are two other specialised banks: the Kuwait Real Estate Bank, which invests funds in loans to finance the purchase or construction of real estate in Kuwait, and the Savings and Credit Bank, which provides loans on easy terms to Kuwaitis to build their own houses as well as for other purposes. The Industrial Bank and the Kuwait Real Estate Bank have recently merged. Kuwait is also the headquarters of Gulf Investment Corporation, a major financial institution set up by the six Gulf Cooperation Council (GCC) states to promote the establishment of companies in various fields by investing in their equity and providing the necessary loan to fund the projects in which it invests provided it must be viable and commercially sound.

The banks suffered little physical damage during the Iraqi invasion and the bullion that was taken by the Iraqis from the Central Bank was returned shortly after liberation.

Since the liberation, the banking system has been wrestling with three major problems :

1. The estimated $19 billion debts which arose from the collapse of the Suq Al Manakh. This was financial market which was allowed to develop alongside the regular stock market. This market operated on the basis of post dated cheques and collapsed when some investors tried to withdraw money. It is estimated that there are nearly 10,000 corporate and individual borrowers but the list of names has never been published.

2. The outstanding personal loans for the hundreds of thousands of cars that were stolen or destroyed in the war.

3. The reduction in the population of the country has severely reduced the number of financial transactions within the banking system.

Since liberation there has been continuous speculation about possible mergers between various banks but, apart from a statement of intent from the Industrial Bank and the Real Estate Bank, little in the way of firm plans are visible.

After the liberation of Kuwait, the Government established a scheme that would relieve the banks, including the specialised banks noted before, of all domestic Kuwait debt caused by the invasion by Iraq on 2nd August 1990. The Government issued bonds totalling some KD 5.6 billion to the banks in exchange for their loan portfolios. The individual debts have twenty years in which to repay their debts to the Government, unless they arrange to settle immediately, in which case they can expect a substantial discount. The implementation of this programme enabled the banks to have clean balance sheets with which to start a new era of self-reliance, without any further support from the Government.

Most recently consideration is being given by the Kuwaitis to allow international investors to hold up to 40% of the shares in the Kuwait banks. American, British and other international banks are reported to be negotiating such deals.

A recent survey shows that Kuwaitis form 38 percent of the workforce which were 2134 working in the banking sector at the end of year 2003. There is a plan to increase this number.

Stock Exchange

The concept of shares was introduced in 1952 by the National Bank of Kuwait by offering public subscription. Subsequently many Kuwait share holding companies emerged. The early trading in the stocks was done through real estate brokerage offices and public cafes at the merchants market. During the period of transformation of the economy from tradition to oil, there was no stock market as such. The first law to organize the stock market in Kuwait was issued in October 1962. It addressed the topic of organizing the stock of companies established abroad. The commercial law number 15 of 1960 had a significant role in organizing the issuance of shares and the subscription, yet there was no law to systemize the trading of the shares of several share holding companies in various economic activities.

However, in 1970, law number 32 was issued concerning the regulation of stock trading in share holding companies. This law was considered the first significant step towards the organization of trading in local shares which necessitated formation of a consultation committee for supervision of trading. A committee was assigned to structure the legislative articles and organize activities related to the stock market and foreign currencies. It was assigned to design a framework of proportions focusing on establishing stock market and set the necessary laws to preserve the economic interest of the country in the event of unusual fluctuations in the prices of shares. The task of assessment of foreign companies willing to register the shares in Kuwait was also given to this committee.

In November 1970, resolution No. 32 was issued by the Ministry of Commerce and Industry concerning the trading of shares in Kuwaiti share holding companies.

In February 1972, the first premises for the securities trading section was inaugurated in the commercial area 5 in the city, where employees of the exchange summed up each day's trading in shares and issued the daily report detailing the number of traded shares, prices, and the number of transactions executed. This report was available to brokerage offices and the mass media. Ministerial resolution no. 61 was issued in November 1976 to organize dealing in Kuwaiti share holding company shares and designated the first committee in the ministry to supervise the Kuwaiti share holding companies and regulate the trading of shares. Until 1983 the Kuwait Stock Exchange was working according to the rules and regulations of this ministerial resolution. The Kuwait Stock Exchange was officially established by an Amiri Decree issued in 1983. After the liberation of Kuwait, the Stock Exchange reopened in September 1992.

The shares of more than 50 Kuwaiti and a number of Gulf (GCC) companies are listed on the exchange, the eight Kuwaiti banks account for more than half of all daily dealings, with active dealings in only three of these. It should also be noted that the Government itself at present owns a major part of all local shares listed. Total capitalisation prior to the invasion was about KD 3.5 billion. In 1989 the Kuwait Stock Exchange opened to non-Kuwaiti GCC citizens; it was also possible for non-GCC nationals to have an interest in these shares, through investment funds. On a typical day about 10 to 12 million shares are traded with a value of about KD 3 million. This business is transacted in about '300' trades each day.

However, with a relatively small population and a limited number of good investment opportunities locally, wealthy Kuwaitis generally prefer to invest overseas. It is estimated that Kuwait's private money overseas is in the order of US$30 billion, an average of $500 per member of the population.

In August 2000 the Kuwaiti Cabinet approved regulations necessary to implement the bill allowing foreigners to own stocks and trade on the bourse. The legislation allows foreign investors and expatriates living in Kuwait to own up to 100 per cent of the stock of Kuwaiti companies listed on the KSE, except in banks where the ownership will be limited to 49 per cent. The new regulations provide complete freedom for foreigners to buy, sell and own stocks like Kuwaitis. KSE has plans to introduce trading through the Internet to enable foreign investors easy access to Kuwait stocks. Their website is www.kuwaitse.com. The article (3) of the law states that the rules applicable in the Kuwait Stock Exchange will be applied on the shares possessed by non-Kuwaitis in the share holding companies that are enlisted with Kuwait Stock Exchange.

4. Business Channels

Agencies

The relevant law relating to the Kuwaiti agent is No. 36 of 1964 on commercial agencies : this is the basis for all existing agency agreements. If a foreign company wishes to trade in Kuwait without setting up a Kuwaiti registered entity (e.g. a Kuwait Shareholding Company) it may only do so through a Kuwaiti agent.

Law 36 of 1964 is used in practice to regulate :

  • Commercial agents, who undertake to promote a product for a principal, negotiate deals on his behalf, and possibly conclude such deals and carry them out.
  • Distributors, who promote, import and distribute the principal's products in their own name.
  • Service Agents/Sponsors, a foreign company that wishes to carry out Government contract work is required to appoint such a Kuwait sponsor (Article 24 Law of Commerce, No. 68 of 1980).

The only entity that can be registered in Kuwait is a Kuwait company acting as agent or sponsor. A foreign company cannot independently register a branch in Kuwait and get a separate commercial registration number - it can only exist through the medium of an agency agreement

It is often convenient to refer to the principal's operations in Kuwait as being those of a branch, and this is the usual arrangement, (although this is not its legal form). The agency or sponsorship agreement between the Kuwaiti and the foreign company must be registered with the Ministry of Commerce and Industry. All new agencies or sponsorship agreements are published weekly in the Government's official Gazette. Al Yawm, an Arabic publication widely translated in English and available commercially. Registration of an agency should not take more than two weeks from the time the documents are prepared in Arabic.

An agreement will normally contain a description of what the responsibilities of either party are. The extent to which the agent is liable needs legal advice. Similar legal advice is required on the extent to which a principal is legally bound. Careful attention should be paid, in particular to agency agreements that deal with, taking orders on commission or for a distributor importing on his own behalf. It is important to redefine the responsibilities and obligations of both parties even though, those obligations are already included in Commercial Law.

The remuneration of the agent is a matter of agreement between him and his principal; typically the agent is paid either a fixed fee or a commission. If an agency agreement is terminated by the principal, it may become necessary to compensate the agent; the termination of an agency or distributor agreement can be a costly matter

Closed Shareholding Company

A Shareholding Company, other than a company holding a concession or a monopoly, the shares of which are not to be offered to the public for subscription, may exceptionally, be formed without the issue of a decree, by an official instrument in writing signed by all the (intending) founders, who shall be not less than five in number...". The capital of a Closed Shareholding Company must be at least KD.7,500.

It is unlikely that a company would be registered by the Ministry, unless it was adequately capitalised.

Companies

Shareholding Company (KSC)

Participation in a Joint Stock (shareholding) company is restricted. The law states that every Shareholding Company incorporated in Kuwait shall be of Kuwaiti nationality, and its members shall be Kuwaitis and its place of the registered office Kuwait.

Subject to the provision that the Kuwaiti proportion of the company concerned is not less than 51%, a non-Kuwaiti (other than a bank or an insurance company) can be a member of a Shareholding Company if his or her membership in that company supplies a need for foreign capital or foreign expertise. The approval of the Ministry of Commerce and Industry must be obtained before proceeding with the formation formalities.

Closed Shareholding Company (KSCC)

A Shareholding Company, other than a company holding a concession or a monopoly, the shares of which are not to be offered to the public for subscription, may exceptionally, be formed without the issue of a decree, by an official instrument in writing signed by all the (intending) founders, who shall be not less than five in number...". The capital of a Closed Shareholding Company must be at least KD.7,500.

It is unlikely that a company would be registered by the Ministry, unless it was adequately capitalised

Limited Liability Company

Limited Liability Companies, known locally as WLL's ("With Limited Liability') may also be formed. These are the equivalent of the French SARL, a German GMBH or a United Kingdom

Limited (LTD.) company. The principal features are as follows:

  • Ownership limited to Kuwaitis, of which the maximum number is 30 and the minimum 2 (a husband and wife are considered to be one party).
  • The minimum capital is KD 7,500.
  • A WLL may not engage in insurance, banking or investment on behalf of others.
  • At least 51% of the capital must be owned by Kuwaitis.

A Kuwaiti company having foreign participation is often referred to loosely in the business community as a Joint Venture company.

Sole Proprietorship

This form is reserved solely for Kuwaiti citizens apart from small traders such as shopkeepers, and is not dealt within the Company's Law.

General Partnership

A General partnership is an association of two or more persons who are liable jointly for partnership debts to the extent of their personal assets. It is a separate legal entity and can transact business in its own name. This partnership is formed by drawing up a Memorandum of Association and Articles of Association and registering the partnership in the Commercial Register. Each partner is required to contribute to the capital and it is not sufficient to contribute only according to one's influence or financial standing. The Kuwaiti share of capital must always be at least 51%. A partner may only transfer his share to a third party if the Memorandum of Association allows this or if he obtains the consent of his partners. A partner may, however, transfer the benefit of his share to a third party, but an agreement for such a transfer is only effective if the other members of the partnership agree.

Limited Partnership

A Limited Partnership has two categories of partners, general partners who have unlimited liability, otherwise referred to as a Simple Limited Partnership, and limited partners who are liable for partnership debts only to the extent of their investment in the partnership, in other words a partnership limited by shares.

A Simple Partnership is governed in the same way as a General Partnership, subject to certain special rules. At least one of the general partners must be Kuwaiti and therefore his share in the partnership must be at least 51%.

A partnership limited by shares is governed in the same way as Simple Limited Partnerships, subject to certain special rules. The total capital must be divided into shares, and the position of the limited partners is governed by the rules relating to shareholders in a Joint Stock company. This type of partnership must have a Supervisory Board consisting of at least three people, who may, but need not necessary, be partners.

Although these are common forms of business organisations used by Kuwaitis, particularly in family groupings, they are not appropriate for use by foreign investors.

Joint Ventures

A Joint Venture may be formed by two or more persons, who are jointly and severally liable. It is usual for the objects and terms to be set out in a Joint Venture contract. A Joint Venture is not a legal entity and does not require registration in the commercial register. Joint Venture partners are separately registered in their own names.

It is common for a number of foreign contractors involved jointly in a major project to form a construction Joint Venture or Consortium.

Setting Up Foreign Companies

Amendments have been submitted for approval where foreigners will be allowed to set up and own companies in specific areas exclusively under special permits issued by the Government provided they fulfill certain conditions. Currently, the existing Kuwait Corporate Law does not allow foreigners to own more than 49% of any business. Also some key Government figures are devising a plan aimed at approving the foreign investments bill without forwarding it to the National Assembly Finance Panel.

Agencies

The relevant law relating to the Kuwaiti agent is No. 36 of 1964 on commercial agencies : this is the basis for all existing agency agreements. If a foreign company wishes to trade in Kuwait without setting up a Kuwaiti registered entity (e.g. a Kuwait Shareholding Company) it may only do so through a Kuwaiti agent.

Law 36 of 1964 is used in practice to regulate : Commercial agents, who undertake

  • Commercial agents, who undertake to promote a product for a principal, negotiate deals on his behalf, and possibly conclude such deals and carry them out.
  • Distributors, who promote, import and distribute the principal's products in their own name.
  • Service Agents/Sponsors, a foreign company that wishes to carry out Government contract work is required to appoint such a Kuwait sponsor (Article 24 Law of Commerce, No. 68 of 1980).

The only entity that can be registered in Kuwait is a Kuwait company acting as agent or sponsor. A foreign company cannot independently register a branch in Kuwait and get a separate commercial registration number - it can only exist through the medium of an agency agreement. It is often convenient to refer to the principal's operations in Kuwait as being those of a branch, and this is the usual arrangement, (although this is not its legal form). The agency or sponsorship agreement between the Kuwaiti and the foreign company must be registered with the Ministry of Commerce and Industry. All new agencies or sponsorship agreements are published weekly in the Government's official Gazette. Al Yawm, an Arabic publication widely translated in English and available commercially. Registration of an agency should not take more than two weeks from the time the documents are prepared in Arabic.

An agreement will normally contain a description of what the responsibilities of either party are. The extent to which the agent is liable needs legal advice. Similar legal advice is required on the extent to which a principal is legally bound. Careful attention should be paid, in particular to agency agreements that deal with, taking orders on commission or for a distributor importing on his own behalf. It is important to redefine the responsibilities and obligations of both parties even though, those obligations are already included in Commercial Law.

The remuneration of the agent is a matter of agreement between him and his principal; typically the agent is paid either a fixed fee or a commission. If an agency agreement is terminated by the principal, it may become necessary to compensate the agent; the termination of an agency or distributor agreement can be a costly matter.

Consultants and other professionals

Professional rules relating to legal practice by non-Kuwaitis apply to Kuwaitis and foreign legal firms to operate in Kuwait are required to have a Kuwaiti partner.

Consultants must be registered with the 'Consultants and Physical Plan' Department of the Ministry of Planning, to be considered for Government contracts. The registration list of the consultancy should be detailed and updated regularly. Although there is no legal requirement to form an association with a Kuwait consultancy, bids requiring a local input will benefit. More often than not the Government stipulates that bids should be made by local consultants in association with international firms. It is quite common for foreign consultants to tie up with a local practice on a project by project basis.

General Partnership

A General partnership is an association of two or more persons who are liable jointly for partnership debts to the extent of their personal assets. It is a separate legal entity and can transact business in its own name. This partnership is formed by drawing up a Memorandum of Association and Articles of Association and registering the partnership in the Commercial Register. Each partner is required to contribute to the capital and it is not sufficient to contribute only according to one's influence or financial standing. The Kuwaiti share of capital must always be at least 51%. A partner may only transfer his share to a third party if the Memorandum of Association allows this or if he obtains the consent of his partners. A partner may, however, transfer the benefit of his share to a third party, but an agreement for such a transfer is only effective if the other members of the partnership agree.

Industrial Areas and Plots

Clause (1), Article (15) of the Industrial law allows industries to apply for land to set up the industry. Such applications may be submitted to the competent authority which allocates land plots with the Ministry of Commerce and Industry consent. While the preparation and provision of infrastructure and services cost the government more than 1KD per sq. meter the subsidised offer to industries may be only 5 - 10 fils per sq. meter for periods up to 50 years. In Sabhan and Mina Abdullah areas the subsidised cost is about 200 fils per sq. meter.

Industries

According to the studies published by the Public Authority for Industry and the Gulf Organisation for Industrial Consultancy, Kuwait has good scope for industrialization and could easily establish basic or even advance petrochemical industries based on its massive oil reserves which are estimated at 96.5 billion barrels.

Geological surveys in Kuwait have shown the existence of 10 to 15 million cubic meters of sand pebbles and abundance of limestone used in the construction industry. It also indicated that some stone structures in the northern part of Kuwait could be used to manufacture cement. In 2003, the Industrial Bank of Kuwait cut the interest on loans given to Industries from 5% to 3.5%. This move, implemented after endless deliberations, will definitely boost Industrial activity in Kuwait though over an extended period of time.

Agriculture has a very limited scope as less than 0.5 per cent land in Kuwait has been earmarked for agriculture. However, studies show that existent scrap metal offers a potential for melting and forging industry and animal skin from slaughter houses can support leather industry in Kuwait.

Public Authority for Industry (PAI)

PAI is responsible for issuing industrial licenses and developing local industry, its objectives include encouraging, protecting and supporting the local industry. Functions include drawing up an industrial plan, proposing industrial sites, providing necessary infrastructure and industrial services. PAI is responsible for rules and procedures regulating the granting or cancellation of industrial licenses. Supervising compliance with the Kuwaiti, Gulf and International standards and specifications dictated by the regulations for imported and local products. It is also responsible for verifying the compliance of any industrial project with the domestic and international rules governing the environment protection, including studies relevant to the industrial activity and ways to support it and determine the means for protection of domestic products.

Industrial Areas and Plots

Clause (1), Article (15) of the Industrial law allows industries to apply for land to set up the industry. Such applications may be submitted to the competent authority which allocates land plots with the Ministry of Commerce and Industry consent. While the preparation and provision of infrastructure and services cost the government more than 1KD per sq. meter the subsidised offer to industries may be only 5 - 10 fils per sq. meter for periods up to 50 years. In Sabhan and Mina Abdullah areas the subsidised cost is about 200 fils per sq. meter.

Consultants And Other Professionals

Professional rules relating to legal practice by non-Kuwaitis apply to Kuwaitis and foreign legal firms to operate in Kuwait are required to have a Kuwaiti partner. Consultants must be registered with the 'Consultants and Physical Plan' Department of the Ministry of Planning, to be considered for Government contracts. The registration list of the consultancy should be detailed and updated regularly. Although there is no legal requirement to form an association with a Kuwait consultancy, bids requiring a local input will benefit. More often than not the Government stipulates that bids should be made by local consultants in association with international firms. It is quite common for foreign consultants to tie up with a local practice on a project by project basis.

Introduction

Business structures which can be formulated in Kuwait are regulated by the Commercial Companies Law 15 of 1960, as amended. Points relevant to foreigners, are also covered in the Commercial Law No 68 of 1980. The Companies Law is administered by the Companies Department at the Ministry of Commerce and Industry.

The term 'company' is often used to mean any type of business entity and the term 'partner' to mean those who take part in the business entity. It is important to note that since all the laws are originally written in Arabic and then translated into English, the precise version of the former tends to be used differently: e.g. the Arabic words for 'company' and 'partnership' are only closest approximations which resemble the western concept of the company or a partnership.

Joint Ventures

A Joint Venture may be formed by two or more persons, who are jointly and severally liable. It is usual for the objects and terms to be set out in a Joint Venture contract. A Joint Venture is not a legal entity and does not require registration in the commercial register. Joint Venture partners are separately registered in their own names.

It is common for a number of foreign contractors involved jointly in a major project to form a construction Joint Venture or Consortium.

Limited Liability Company

Limited Liability Companies, known locally as WLL's ("With Limited Liability') may also be formed. These are the equivalent of the French SARL, a German GMBH or a United Kingdom

Limited (LTD.) company. The principal features are as follows:

  • Ownership limited to Kuwaitis, of which the maximum number is 30 and the minimum 2 (a husband and wife are considered to be one party).
  • The minimum capital is KD 7,500.
  • A WLL may not engage in insurance, banking or investment on behalf of others.
  • At least 51% of the capital must be owned by Kuwaitis.

A Kuwaiti company having foreign participation is often referred to loosely in the business community as a Joint Venture company.

Public Authority for Industry (PAI)

PAI is responsible for issuing industrial licenses and developing local industry, its objectives include encouraging, protecting and supporting the local industry. Functions include drawing up an industrial plan, proposing industrial sites, providing necessary infrastructure and industrial services. PAI is responsible for rules and procedures regulating the granting or cancellation of industrial licenses. Supervising compliance with the Kuwaiti, Gulf and International standards and specifications dictated by the regulations for imported and local products. It is also responsible for verifying the compliance of any industrial project with the domestic and international rules governing the environment protection, including studies relevant to the industrial activity and ways to support it and determine the means for protection of domestic products.

Setting up Foreign Companies

Amendments have been submitted for approval where foreigners will be allowed to set up and own companies in specific areas exclusively under special permits issued by the Government provided they fulfill certain conditions. Currently, the existing Kuwait Corporate Law does not allow foreigners to own more than 49% of any business. Also some key Government figures are devising a plan aimed at approving the foreign investments bill without forwarding it to the National Assembly Finance Panel.

Shareholding Company

Participation in a Joint Stock (shareholding) company is restricted. The law states that every Shareholding Company incorporated in Kuwait shall be of Kuwaiti nationality, and its members shall be Kuwaitis and its place of the registered office Kuwait.

Subject to the provision that the Kuwaiti proportion of the company concerned is not less than 51%, a non-Kuwaiti (other than a bank or an insurance company) can be a member of a Shareholding Company if his or her membership in that company supplies a need for foreign capital or foreign expertise. The approval of the Ministry of Commerce and Industry must be obtained before proceeding with the formation formalities.

Sole Proprietorship

This form is reserved solely for Kuwaiti citizens apart from small traders such as shopkeepers, and is not dealt within the Company's Law.

5. Representation and Registration

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 freedorn 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

Agency and 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.

COPYRIGHT

Until 1999 there was no general copyright law under which the rights in intellectual works could be protected effectively. The only protected works were audio and visual recordings of Kuwaiti, Arab, American and British origin. In addition, public institutions were not allowed to buy pirated computer softwares. Though, a number of companies have been able to implement copyright protocols and make it very difficult for copies to be made freely available in the open market. An example of this is Microsoft effectively being able to ban copies of their range of software. Except for trademarks, the protection of intellectual property rights in Kuwait was quite poor until 1999 when, to satisfy Kuwait's obligations under World Trade Organisation agreements, comprehensive legislation to protect intellectual property was promulgated by Amiri Decree under article 71 of the constitution. These laws were approved by the National Assembly on 23rd December 1999 as law number 64/1999 governing Intellectual Property Rights.

Under the Law No. 64 of 1999 protection is to be given to all literary works (written and oral), theatrical shows, musical works (with or without lyrics), choreographic works, motion pictures, audio, video and radio works, artistic works (painting, sculpture, carving, architecture and decoration), photographs, applied art (craft or industrial designs), illustrations, maps, designs and models, computer works (software and databases), and translated works.

Foreign Company with Kuwait Base or 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 must be in Arabic explaining the product or service and confirming his agency's appointment. The letterhead is normally 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.

ISO Certificates

Arab companies have obtained more ISO Certificates than their counterparts in other parts of the world. Only 19% of companies in the developed world had obtained the certification in the year 2001. This trend contrasts sharply with what pertains in the Arab world because American and European merchants do not accept goods exported by Arab companies which does not have ISO 9000 certification. 67 major companies in Kuwait had the certification by the end of year 2001. The lack of interest in certification is attributed to the ignorance of its benefits. However, this may change when more Arab countries join the World Trade Organisation.

Patents & Industrial Designs

Patents are protected against unauthorised use for an initial period of ten years; they then may be registered for a further five years only. There are special arrangements for food and drug manufacturing processes, where the patents are limited to the initial ten-year period. A KD 10 fee is payable for filing a patent. It is possible for patents to be licensed.

Under Law 4 of 1962, a patent may be issued for any new invention suitable for industrial use which has not been used in Kuwait during the previous 20 years. Kuwaiti nationals, foreign residents, foreign businessmen with a local presence and foreigners in countries that grant reciprocal rights to Kuwaitis, have the right to be granted patents in Kuwait.

All documents for filing a patent application, including the specifications of the invention, must be in Arabic. Under Law 4 of 1962 patent holders are protected against unauthorised use of their invention or design for an initial period of 15 years, renewable for a further 5 years. Under the new law the period of protection will be 20 years, though patents registered in other countries will only be granted protection for the remainder of the period of protection where they are registered. The new law also extends the period of protection for drawings, models and integrated circuits from 5 years to 10 years, which may be renewed for a further 5 years. The law will, in addition, allow improved versions of existing patents to be protected for 7 years.

Registration
To Register a Trademark

An application must be submitted in Arabic to the Trademark Control Office along with a fee of KD 24. Once accepted, it will be advertised in three consecutive issues of the official gazette. Any other claimant has 30 days after the third advertisement to challenge the registration in writing. The registrar must give a copy of the objections to the applicant, who has 30 days to submit a reply. In case of a deadlock, the legal proceedings move to courts. The control office is not a court of law and cannot turn down or reject an application without reason.

Trademarks

Trademarks are the most valuable and widely used form of intellectual property, and they may be registered in Kuwait. The protection of trademarks is governed by articles 61 to 85 of the Commercial Code, as amended by Decreed Law #3 of 1999. A Trademarks Register, open to public inspection, is maintained in the Patent & Trademark Department at the Ministry of Commerce & Industry. Under the new law, the definition of a trade mark extends to Audio/Visual marks. The person who registers a trademark is considered the sole owner with the exclusive right to use the mark on the products for which it is registered irrespective of nationality. Registration initially protects a mark for ten years from the date of application to register. Registration can be renewed indefinitely for further periods of ten years each. The registrar must notify the owner that the period of protection has expired within one month of expiry and if the owner does not apply for renewal within six months of expiry, the mark is automatically deleted from the register. If a trademark has not been used for a five-year period, an interested party can apply for the mark on the goods for which it is registered, third party can therefore be prevented from using the mark on competing products. A trademark may be sold but the change in ownership must be entered in the Register and published in the official gazette. A person who infringes a registered trademark is liable to a fine of KD 600 or imprisonment or both, and to pay compensation.

6. Ways of Doing Business

Business Entities

Business enterprises can take several forms, viz Kuwait shareholding company (KSC), company with limited liability (WLL), and general partnership. The time and cost of establishing and registering these entities ranges from one month and at least KD500 for a general partnership to about three months and KD3,000 for a KSC.

Business Licenses

General trading, contracting, importing and industrial licenses are issued by the Ministry of Commerce & Industry (MCI). For particular commercial activities, specific licenses are required and these are often issued by the ministry that controls that activity, e.g. publishing licenses are granted by the Ministry of Information. Business licenses are only issued to Kuwaiti nationals and Kuwaiti companies and, in some cases, to GCC nationals and companies. Costs are usually KD100 per license. All licenses require periodic renewal, normally every two years.

Business to Business

Doing business in Kuwait on a company to company basis is very much the same as anywhere else except that you will find much more emphasis on price. Selling quality or value-added products or services is extremely hard work indeed.

The best salesmen with the best business cases usually win through and we offer the following suggestions to help you when selling in Kuwait.

  • Come with plenty of money - the cost of doing business in Kuwait is high

    All major hotels in Kuwait operate a cartel and are relatively expensive even by international standards. Most of them only offer discounts to travellers who stay more than thirty consecutive nights. Airline tickets are also expensive if purchased in Kuwait. The charges for international telephone calls are also extremely high when compared to those in Europe. Most hotels have business centres but again these are very expensive to use for all but small volumes.

  • Do not be in a hurry to catch the next plane to another country in the Gulf

    This is a commonly made mistake. Visiting businessmen, entrepreneur or salesmen come to Kuwait as part of a tour through the Middle East and work to a fixed flight plan. It is almost impossible to establish a firm schedule of business meetings and you will be doing yourself a great disservice if you have to cut short your visit just because you have another plane to catch.

    The business cycle is often protracted and it can take several months to turn an inquiry or a proposal into an order. This makes it very hard to succeed with a series of short visits. In our experience, the most successful visiting salesmen do not work out of hotels, but make informal arrangements with established companies to use their facilities as a base. The point to remember is that during the initial phases the prospect is assessing you, the salesman, as much as your products. The Kuwaitis tend to place more emphasis on this aspect than you might be used to.

  • Business Communications

    The mail service in Kuwait is currently very limited in its scope. If you want an important letter to get to your prospect it is usually best to deliver it yourself. You can entrust it to a driver but be sure it arrives at the correct place. Fax is widely used for business communication, is common practice, in the absence of mail service, to fax a copy of a letter and follow-up by sending the original, later. One point to consider with the fax as a lack of confidentiality, as most will have quite informal arrangements for the collection and delivery of incoming faxes.

    All Kuwaiti businessmen carry a mobile telephone and expect instant access to everybody. It is good to switch to the roaming service on your mobile for at least the time that you are in the country.

  • Very few businessmen or women keep diaries

    It is not easy, therefore, to make firm appointments to see people. If you do manage to make an appointment you must be prepared for the customer not to keep to it. If you do get to see the person you may be interrupted by other callers who may join the meeting. Try to learn to take advantage of these local practices and do not expect your prospect to change to European, American or other ways just because that is your nationality.

  • Be prepared for requests for discounts at all levels

    In our experience it is best to assume that the owner of the company is likely to make the final decision and you do not have the order until you have agreed on a price.

    At this level, you may think you have finalised the negotiations on the deal only to find it starts all over again when you get to the next level in the organisation. Your problem then being that your 'final' offer becomes the starting point for the next round.

    If you do offer concessions to get the order make sure that these are fully documented and signed off at the level that issues the signed order.

  • Work hard to identify the decision makers

    This is an area where time spent is well worth the effort. You will be faced with a complex situation and we offer a few points to succeed in this area. Most companies in Kuwait comprise of different nationalities. Kuwaitis, Indians, Pakistanis, Lebanese, Egyptians, Europeans and Americans are the common nationalities encountered in the day-to-day business. Strong internal networks or cliques develop within these groups and salesmen should be conscious of these and avoid getting too aligned with any one group. These networks extend across company boundaries and can be a very good source of new contacts.

    There are wide variations in the use of business titles. In one company the Director of Administration may be the trusted right hand of the owner who is empowered to make most of the buying decisions. In a similar company, the person with the same title can be little more than a secretary to the owner.

    Finally, listen very carefully for the names of the people you are dealing with. There are certain names which crop up time and again in Kuwait. Most Kuwaitis have their family as their prime loyalty and the family ties transcend all company organisation.

  • Be careful with business trips for your prospects

    These can be a very powerful way of referencing your products but remember that many Kuwaitis are only too happy to accept an offer to visit your Head Office or your manufacturing plant especially if it is in Europe or on the west coast of the United States. To avoid misunderstandings make sure that the payment of expenses is agreed in advance.

  • Executive Calls

    It is very good for a salesman to introduce the most senior manager of his company to his prospects and customers in Kuwait. Many of your competitors, European and American companies do not do this and it is our experience that such visits are very worthwhile. They are very difficult to arrange due to the logistics and a nightmare for the salesman as he is never sure until he walks through the door that the person being visited is even in the country let alone at work that day. You will need an understanding executive to accompany you if you are to make a success of this but the benefits of making such calls far outweigh the difficulties.

  • Local Working Hours

    Ministries 0730 - 1400 Sunday to Thursday

    Banks 0730 - 1330 Sunday to Thursday

    Private sectors mostly work a split shift system with a three hour break in the middle of the day. From this it can be seen that it is not practical to try to run an all day seminar in Kuwait. The best you are likely to be able to do is to invite people for an 0830 hrs start. You will get underway at 0915 hrs when most of the invitees have arrived. You need to complete the presentations by 1230 hrs, if you do not finish by then you will simply lose your audience. They will get up and leave! A buffet lunch will be much appreciated by the attendees.

Commercial Activities

This law applies to merchants of all types, traders, and commercial dealings in themselves as they are done by ordinary person.

Beside the controlling power of this law on commercial matters, customary practices or considered by the judge if there is no specific reference in the law regarding a certain matter, and if this does not exist then the civil law shall be resorted to by the judge .

A commercial act is an act intended to result in profit even if the doer of the act is not a registered merchant.

The following activities are considered commercial:

  • Buying products, commodities, services for the purpose of selling them back whether, they are, or after undergoing a manufacturing process.
  • Buying products, commodities, services (material or immaterial) for the purpose of leasing them to others.
  • Selling or leasing or subletting any commodity or product or service.
  • Employing a person for the purpose of subletting his work to others.
  • All forms of supply contracts.
  • Buying and selling real estate (plots, buildings, houses etc)

The following activities are considered commercial regardless of who undertakes them (whether a registered merchant or not):

  • Banking procedures and dealings.
  • Current accounts
  • Exchange and various financial dealings.
  • Commercial agencies and brokerage.
  • Cheques and promissory notes.
  • Establishment, companies, buying and selling of shares and bonds.
  • Public stores and any mortgages served on materials or monies stored in them. Mining of natural resources, extraction of oil, and quarries.
  • All kinds of insurance.
  • Public entertainment places, and public places like restaurants, hotels, malls etc.
  • Distribution of oil, gas, electricity
  • Extending of mail and telecommunation services.
  • All forms of transportation (freight: land, sea, air ).
  • All forms of agencies: travel agents, export- import etc.
  • Publishing, TV news agencies, advertisement and selling of books.
  • Manufacturing, even when connected to an agricultural investment.
  • Building construction and general contracting.
  • Building repairs, renovation, demolishing etc

All forms of activites dealing with maritime and related activites such as buying and selling of products used by maritime industry, salaries of captains and sailors and those servicing the ship.

All activities related to air traffic: including salaries of pilots and all types of servicing staff be they on land, or in the air.

Any related activity the merchant undertakes to facilitate his works, and activities related to works mentioned above.

Any activity undertaken by a merchant is considered commercial unless proven to be of civil nature.

An artist's work or a book by an author is considered a commercial work, it can be sold by the artist or the author without the act of selling being considered a commercial act.

A farmer selling his produce is not considered a merchant, even if he transforms his produce into certain products, but if he establishes a factory, or shop to exhibit his produce and sell it as it is, or after being transformed, then this is considered a commercial activity.

If the contract between two parties is considered a commercial contract only to one of them, then the commercial law shall be applied to both parties unless specified in the contract otherwise.

Anybody practicing a commercial activity, be he a person or a company, is considered a merchant and this law is applied to them.

Companies established in accordance with the law of companies are considered merchants even if they do not practice a commercial activity. Any ordinary person that does an incidental commercial activity is not considered a merchant, and the law applies to that activity only and not to him as a person. Persons practicing certain crafts and trades meant to provide sustenance only are not considered merchants, and thus are exempt from obligations to have book keeping and commercial registration and are exempt from bankruptcy rules too.

Any Kuwaiti person 21 years of age can practice commercial activity, provided he is not forbidden by law to do so. If the Kuwaiti is a minor; and he wants to get involved in commerce, then his guardian should register his authorization as guardian with the Ministry of commerce & Industry, at the commercial registrar department. If liquidation or bankruptcy is effected on the business it will be only on the money employed by the minor in that commercial activity. A non- Kuwaiti is not allowed to work in commercial activities without a Kuwaiti partner, but he is allowed to work earn his living only. A foreigner can invest his money in investment companies and deposit them in banks.

Doing commercial activities is forbidden to the following persons:

- Those who declared bankruptcy or, were bankrupt in the first year of their commercial practice.

- Those indicted for crimes of honor related to money, perjury, breach of trust, fraud, malicious

cheating, using forged money, and similar crimes.

Commercial Book Keeping

Commercial practice by merchants necessitates bookkeeping: at least two kinds of accountancy books are required. These two books are:

- The ledger, in which are recorded all financial transcations of the merchant classified in accordance with specific activities.

- Inventory record book, in which the details of incoming and outgoing merchandise are recorded, showing what the merchant has in his inventory by the end of the fiscal year.

These two books are the least the merchant should have; different types of books are required for smooth business to run which is not the concern of law. The commercial books (the accountancy books) should be clear of any scratches, deletions, additions, margin writings, or whitening, or writing between lines.

These books should be taken to the Public Notary at the Ministry of Justice to put the seal on all pages of the books before it is used (this is not mandatory), no fees are required. When the book is full, it should be taken back to the Public Notary for putting the seal on it indicating the book can no longer be used for recording additional data. A merchant must keep his invoices, receipts, vouchers, and other documents for a period of five years, after this period he can dispose them off without any legal liability effected on him or his business. As for the ledger and other accountancy books he should keep them for a period of ten years.

Commercial Sale

If the merchant does not hand over the merchanise to the client in the agreed-upon time, the sale clauses in the contract is considered void unless the client wishes to continue the contract. If the client receives the merchandise later than the delivery date in contract, and as a consequence of that he suffers some losses, he may claim compensation; especially if he were to buy from another source with a higher price.

If the buyer receives the merchandise with extensive shortages, he may cancel the contract and claim compensation, or decrease the amount to be paid to seller commensurate with the shortages. The buyer can do both actions any time within a year of purchase of receipt of merchandise.

If the buyer does not pay the value of merchandise in the agreed-upon time then the seller has the right to demand an increment in price if he could have sold it for a better price after the passing of the agreed-upon date without payment from buyer. But if the buyer refuses to receive the delivered merchandise without any legally acceptable reason, then the seller has the right to deposit the merchandise at a safe place and auction it off after a certain period of time after informing the buyer. But if the merchandise were perishable, the seller can sell off the undelivered merchandise and deposit the proceeds in the court after deducting his dues and all expenses incurred on him by this action.

In the commercial sale agreement all details about merchandise, payment, and delivery should be included. This will help the seller and buyer in concluding a safe and mutually satisfying transaction.

Foreign Capital Investment Law (FCIL)

With the passing of Law No. 8/2001, the Direct Foreign Capital Investment Law came into effect. Under FCIL, foreign companies are now exempt from the stipulation of having a Kuwaiti partner(s) having 51% ownership. This law has now enabled any foreign company (in certain circumstances) of having 100% ownership of any legal business in Kuwait. Furthermore, under the FCIL special incentives are provided to foreign companies to attract their investment in Kuwaiti companies, for example, tax holidays for periods of up to ten years, double taxation where applicable, whole or partial exemption from tarrifs on imports of machinery, spare parts, raw materials etc.

To obtain such benefits under FCIL, an application to be registered as such must be submitted to the Foriegn Capital Investment Office which will in turn forward the application with (or without) its recommendations to the Foreign Investment Capital Committee for its review and assessment. The FCIL will also authorize a foreign investor to assign its investment / project in whole or part to a local or another foreign entity. However, the project or investment will still be regulated under the FCIL.

Illegal Competition & Monopoly

A merchant should not resort to devious and illegal methods in marketing and selling his products. He is forbiddden from maliciously cheating his customers, or publish advertisements counter to the facts his products show, and he should not resort to methods harming his fellow merchants, otherwise he will be held liable to compensate them.

A merchant should not propagate false information about the origin of his product, or its specifications, or about his own business aiming at causing loss to other merchants. Also he should not use devious means to lure a competitor's clients away from that competitor causing him loss. These illicit activities are punishable by law through compensation to the affected merchant.

If a merchant employing a certain employee, gives that employee a certificate of good conduct knowing that employee is not deserving and not trust worthy, and that employee seeks a different merchant as employer submitting this certificate of good conduct; then if any bad thing happens because of that employee to his new employer (the second merchant), the new employer can demand compensation from the first employer (merchant).

Any merchant practicing a trade that provides information about merchants who supplies faulty information of any kind, causing some harm to those requesting the information, can be sued by those affected for appropriate compensation.

Any form of commercial conduct meant to cause hindrance to a competitor, or hurt his reputation, or underrate his product or service, is considered as a form of illegal competition. Merchants should not collude among themselves to fix a price for a certain products, or service aiming at causing harm to other merchants. The law punishes any merchant practicing monopoly and illegal competition by fining him between KD 1000 and three times what profit he made.

Imports & Customs Duty

The right to import goods into Kuwait on a commercial basis is restricted to Kuwaiti individuals and firms who are members of the Kuwait Chamber of Commerce & Industry (KCCl) and who have import licenses issued by the Ministry of Commerce & Industry (MCI).

Customs duty is levied on all imports into Kuwait, if your tender documents stipulate that a price for goods delivered inside Kuwait is required, ensure that duty is included in your quoted price. The rate for most items is 4% however, if similar goods are manufactured inside Kuwait, or sometimes, other GCC countries, a higher rate can be applied to foreign imports. Get your agent to check with Customs. The duty rate is applied to the CIF cost of the goods.

The General Directorate of Customs issued orders to implement the Amiri Decree 2 / 2002 to set taxes on all imported cigarettes and tobacco products by 100 percent. This decision to increase taxes is an implementation of the decision of the GCC council of minister of health to unify taxes at 100 percent. The move was to increase tobacco taxes from 70 percent to 100 percent to protect the health of the GCC citizens.

On entering into a contract with your customer, ensure that local suppliers and sub-contractors are contractually bound to you with back-to-back terms and performance bonds.

Although there is no personal tax, any foreign company is liable to tax on profits earned in Kuwait. Also in 2001, all docking fees were cancelled at Kuwait ports in an another outstanding step to attract foreign investments.

Kuwait Business Laws

The rules of commerce are in general similar to Western European practice. Any Kuwaiti or GCC national over 21 years of age may carry on commerce in Kuwait provided he or she is not affected by a personal legal restriction. But A foreigner (non-GCC national) may not carry on a trade unless he or she has one or more Kuwaiti partners and the capital owned by the Kuwaiti partner(s) in the joint business is not less than 51% of the total capital (60% in the case of banks, investment houses and insurance companies). A foreign firm (including a partnership) may not set up a branch and may not perform any commercial activities in the country except through a Kuwaiti agent. Foreign individuals and firms may not acquire commercial licenses in their own name nor may they own real estate locally.

Kuwait Free Trade Zone (KFTZ)

Kuwait's new privately-managed Free Trade Zone is located in Shuwaikh and allows 100% foreign ownership of businesses within the zone. There are no import duties and foreign corporate income is tax-free. Commercial, industrial and service licenses are available without a local sponsor. KFTZ provides a variety of infrastructural services. Tel: 1802808, Fax: 24822067, http: www.kuwaitfreezone.com, email: info@nrec.com.kw

KFTZ has launched a website www.kftzonline.com to provide efficient means for clients to access KFTZ services such as business visas, work visas, gate passes, contract amendments and termination, building permits etc.

New Liberalized Business Laws

Extensive legislation to reform Kuwait's economy, liberalise its business laws and comply with WTO rules was issued by Amiri Decree in June 1999. In May 2000 the National Assembly approved the indirect Foreign Investment Law which allows foreigners to own stocks on the Kuwait Stock Exchange (KSE). Law No. 20/2000 on allowing non-Kuwaitis to possess shares in Kuwaiti shareholding companies was approved. According to the Article (1) of the law, non-Kuwaitis may possess shares in the Kuwaiti shareholding companies already incorporated during the effective date or which may be incorporated after its implementation. Non-Kuwatis may participate in the establishment of these companies in accordance with the provisions of the law. In August 2000 the Kuwaiti Cabinet approved regulations necessary to implement the bill allowing foreigners to own stocks and trade on the bourse. The legislation allows foreign investors and expatriates living in Kuwait to own up to 100 per cent of the stock of Kuwaiti companies listed on the KSE, except in banks where the ownership will be limited to 49 per cent.

Obligations & Commercial Contracts

The commercial law is considered complementary to civil law as regards the rules concerning obligations and contract; and the civil law applies when no direct and express text in the commercial law is relevant to a certain case.

All those obligated, in a certain commercial debt, to pay the creditor are considered as jointly indebted to the creditor, and the creditor has the right to demand his debt when mature, or as agreed, from any one of the joint debtors (debtors in a common commercial debt).

A commercial guarantee (when a guarantor guarantees somebody for commercial transactions) binds the debtor and guarantor jointly in paying the debt (see civil law guarantee contract) in which case the creditor can execute on whomsoever he likes, the debtor or guarantor, without first executing on the debtor.

A merchant who does a service to somebody, his service is considered as service in return for a fee, even if they are not in agreement regarding a fee (a realtor when he provides a service without an explicit demand of fee is legally deserving a fee).

All commercial debts are considered debts with interest of 7% (unlike civil debts) or as specified by the Central Bank, and this can be stipulated in the agreement between the parties.

If the debtor delays in paying off his debt he is supposed to pay interest for the additional period in accordance with the rate agreed upon between parties.

But if the debtor wishes to pay off his debt before it is due, then the creditor can refuse to accept the money unless the debtor pays the interest in full, and as agreed upon. A creditor is not obligated to postpone the due date of debt if the debtor asks for that because of his inability to pay on time.

Tenders

Most purchase enquiries from Ministries and oil companies are issued as invitations to tender. Majority of Ministerial tenders will be issued through the Central Tenders Committee (CTC) the remainder will be issued directly by the tender office of the concerned Ministry. The reverse is the case with oil sector tenders with the majority being issued directly by their tender offices. Tenders are awarded on price basis once technical compliance is established.

WHO CAN PARTICIPATE

This depends on whether it is an 'open' or 'restricted' tender. Any properly registered local company can participate in an open tender, so can any foreign company which has a properly registered local agent. Participation in restricted tenders is limited to suitably pre-qualified companies who are registered with the issuing body.

P R E - Q UA L I F I C AT I ON

If you intend to do any business with the oil companies you must be pre-qualified. Kuwait Oil Company (KOC) and Kuwait National Petroleum Company (KNPC) each have a set of prequalification documents which have to be completed. In addition to details of your products and services they will also require information on past and current projects plus financial information. Ensure you put in all products and services you provide, no matter how obvious or irrelevant they may seem. Government Ministries will issue invitations to pre-qualify for certain projects, but in any case your agent should submit your details to all relevant departments. Pre-qualification forms can only be submitted with a valid agency agreement and even though a pre-qualified company has been invited to tender, the tender documents can only be collected on production of a valid agency agreement.

TENDER ANNOUNCEMENT

Most Government and some oil sector tenders are announced in the Official Gazette, published weekly in Arabic. Official English language translation of the Gazette, known as the 'Al Yawm' is available on Sunday. The annual subscription is KD 60. Large tenders are often also announced in the local newspapers.

Invitations to tender are also issued directly to the would-be suppliers without any published announcements. This is frequently the case with oil sector requirements, therefore it is very important to ensure that you are properly registered and pre-qualified.

COLLECTION OF TENDER DOCUMENTS

The issuing body and the purchase price of the tender documents will be given in the tender announcements. To collect the documents the following will be required.

1. A covering letter in Arabic

2. The registration documentation from the issuing body (this takes the form of a card with CTC)

PRE-TENDER MEETINGS

Participants are often invited to pre-tender meetings. These are worth attending and are often mandatory, if you don't attend, your bid will not be accepted. They provide a good opportunity to have points clarified, site visits and weigh up the competition. However, if the meeting is to take place in an area which requires a security pass, make sure the pass is obtained in good time.

DO'S & DONT'S
  • Do take a working copy of the tender document and keep the originals in a safe place.
  • Do take care to keep the original receipt of purchase. It is best to keep this with the original documents as it must be submitted with the bid.
  • Do Not make any marks on the original tender documents other than those required for tender submission otherwise the bid will be liable for rejection.
  • Do obtain a proper translation of all Arabic text, particularly the terms and conditions. The Arabic version of these invariably contain more details than the English, and in case of dispute the Arabic text will always take precedence.
  • Do check all the weekly editions of the Al Yawm to see if any amendments to the tender have been published or if a pre-tender meeting has been called.
TERMS & CONDITIONS

Ensure that you have a proper translation of the Arabic text and that you fully understand all the terms and conditions. These are not negotiable. It is not appropriate to submit your own terms with the covering letter. If you have signed the tender documents you are committed to the terms and conditions and your bid bond will be forfeited if you withdraw your offer after the tender is awarded.

BONDS

When submitting your tender you must provide a bid bond, this guarantees your offer to the issuing body and is forfeited if you withdraw your offer during the period of validity of the bond. Bonds have to be issued by a local Kuwaiti bank in Arabic and English and the banks are familiar with their format. Bonds are unconditional and have to be exactly in prescribed format.

If you are successful in your tender and are awarded the contract you will have to open a performance bond. Again the bond is unconditional and has a prescribed format. The performance bond guarantees your performance against the contract terms and can be forfeited if you fail to perform against the contract.

The value of bid and performance bonds is given in the tender announcements. Bid bonds are usually opened for a period of three months while the tenders are being studied. In practice they invariably have to be extended for much longer periods. Bid bonds of unsuccessful tenders are returned when the successful tenderer signs the contract and submits a performance bond. No interest is paid on either bid or performance bonds.

After the completion of work, performance bonds may have to be valid for a fixed period. This is to cover things such as warranty and maintenance contracts.

SUBMITTING YOUR TENDER

Always, make sure you know where to take the completed tender. Only submit the tender on the date it is due - if it goes in early it runs the risk of getting lost. Also, be sure that it is submitted before 1300 hrs on the due date; arrivals even seconds later than announced time will be rejected.

Go through a check list of all items to be completed and delivered. These will include:

  • Original tender documents duly completed in full, signed and stamped with the company seal. If extra copies of the tender are submitted, they too have to be treated in same way as the original. If your company is submitting the tender directly rather than through your agent both yours and agent's company stamp must appear on every page of every document. Similarly all pages where a full signature is not required must be initialled and stamped.

  • If an envelope was included with the tender documents your tender submission must go into it (unfortunately, sometimes the envelopes provided are too small).

  • All amendments to the tender that may have been issued prior to the closing date are considered part of the tender and must be treated as tender documents.

  • The original receipt of purchase of the tender documents (this is often included in the envelope).

  • The power of attorney(s) for the signatory(ies) on the tender documents, notarised and attested.

  • A copy of your agency agreement - fully notarised and attested. See Representation and Registration.

  • Boycott Certificate.

A F T E R S U BMI S S I ON

A list of bidders and their bid prices can be obtained by participants of CTC tenders upon production of a copy of the receipt of purchase of the original tender documents. This list, written in Arabic is available 7-10 days after the tender close date.

Obtaining the results of tenders through other issuing bodies is not so straight forward. KOC and KNPC occasionally publicise details but no issuing body apart, from the CTC, has an official mechanism. The Ministries of Defence and Interior have a policy of not publishing the results of their tenderers.

The bids will be examined for technical and commercial companies with tender documents. Bidders should be prepared to answer any questions that may arise. These may take the format of a written questionnaire, which will require formal written answer, or bidders may even be called in for a meeting to discuss and clarify their offer. Once the tender has been submitted, bidders are not allowed to amend their bid in any way, either by altering the price or the technical specification unless called upon to do so by the issuing party.

Towards the end of the period of validity of the bond, issuing party may well issue a request for the bond period to be extended - usually a period of 30 days if they are not in a position to decide to whom the tender should be awarded . It is not unusual for several such amendments to be made.

Once the decision to whom to award the tender is made, the successful bidder is invited to sign a contract with the issuing party. The Contract is written in Arabic and English. It is very important to obtain a copy of the Contract prior to signature and ensure you are fully aware of the contents of both Arabic and English text.

Companies are not officially informed that their bids are unsuccessful, so ensure that you keep up to date with the situation so that your bid bond is released as early as possible.

C O S T S

Local labour is easily obtained on a casual basis - as long as the skill requirements are not too high and there are many civil, mechanical and technical contractors. However, bear in mind the cost of bonds and the effects that contractual payment terms will have. It is not unusual for many months to elapse between the close date of tender and the contract award. During this period you have a bid bond guaranteeing your offer including prices. Ensure your suppliers and sub-contractors keep their offers firm.

The currency in which the bid is to be submitted will be stipulated in the tender documents - this will usually be Kuwaiti Dinars. The price quoted will be the amount paid to the contractor, irrespective of exchange rate fluctuations.

Transport Contract

A transport contract is an agreement by which the transporter agrees to transport a thing or a person from one place to another for a fee.

MERCHANDISE TRANSPORT REGULATION

The sender of merchandise is supposed to pay the carrier unless it is indicated in the contract that the recipient of merchandise pays, in which case both sender and recipient will be jointly held responsible to pay the carrier. A carrier cannot claim fees for whatever merchandise perished by force majeure.

Sender of goods (merchandise) can ask the carrier to deliver the goods to a party other than the one designated in the contract provided he pays the fees, and whatever compensation needed to the carrier. He can also ask him to return the goods back to him but this cannot be effected if the sender does not provide the freight policy, or if the recipient already received the goods.

The owner of transported goods has the right to dispose of his goods the way he likes, and in accordance with the freight policy, and he himself bears the responsibility for loss of goods during transport unless there exists a reason for someone else to be responsible for example, the carrier.

The carrier must put the goods on board his freighter (truck, ship, airplane) and arrange it well, and if the sender wishes to put the materials or goods on board himself, the carrier has the right to refuse or allowing him so, or let him do so under his supervision, and make sure the placement is proper.

The carriers bears full responsibility for the delivery of goods in proper condition if he were to delay in delivery.

Goods of precious value must be noted in writing and in detail before being carried to destination so that the carrier will be held responsible for it.

The carrier is held liable for what his employees do during execution of his obligations towards the sender.

In case the goods in the custody of carrier are lost for whatever reason, he is held liable to compensate the sender, or pay the recipient at the destination point the market value of the goods, whether the price of goods is indicated in the policy, or not. If the price of goods is indicated in the policy, the carrier can contest the price of goods to prove their real price if he thinks the price in the policy document is exaggerated.

If the carried goods were perishable, and some damages happened to the goods due to negligence of carrier, or whatever reason effected by carrier, then it is legally possible to relinquish the goods to the carrier in return for an equivalent compensation (amount of money equivalent to price of goods).

If the recipient of goods at the destination does not place any reservation regarding the goods, and he discovers later on that the goods suffered damages, then the recipient loses his right to ask for compensation. But if upon receiving the goods he finds defects in them and can prove so, then he must file a compensation lawsuit against the carrier within 30 days from delivery date. Ascertaining the condition of goods upon arrival must be done by knowledgeable administrative personnel or by an expert appointed by courts to exclude any possibility of error.

The carrier cannot relieve himself from responsibility concerning the proper condition of goods during transportation, or upon delivery except if the damages occur due to force majeure, or a delinquency from the sender or recipient, or due to defects in goods, and in all cases he has to prove that in the court.

The carrier bears full responsibility for whatever deeds his employees do when executing the contract. The carrier can relieve himself in writing, submitted to sender; of any liability regarding delay in delivery, and he can define clearly his responsibility regarding damage to goods and actual compensation except if damage to goods was due to grave or intentional error.

In case of goods were transported by carrier under the supervision of sender, or the recipient then it is their responsibility if damages to goods occur, unless a mistake made by carrier or his staff leads to the damages.

PASSENGER TRANSPORTATION REGULATION

A carrier bears the responsibility to transport passengers and their luggage to the point of destination. He is also responsible for their safety, and for any damage that can befall passengers during the transportation act (getting inside the vehicle, getting out of it, and being in it). Nothing exempts the carrier from responsibility except a force majeure that befalls the passengers during travel time, or a mistake by the passenger himself. In any case, an accident that results in injury, or death to a passenger, must be compensated for (usually insurance companies bears the civil liability for loss and damage.

A carrier should not demand any insurance fees from passengers against any damage or harm that might befall them during the transportation act, and he cannot in any way exempt himself from liability for physical harm done to passengers during travel time (from the moment they are on premises till they arrive at destination), even if he states that in the contract. This contractual condition, if it exists, is considered legally null and void. But the carrier can put a condition stating that he is not responsible for loss or damage done to personal property of passengers, or delay in arrival as long as this damage happens beyond his or his personnel's will or interference. This condition should be written and made clear to passengers.

The carrier is held liable for loss or damage of luggage or other personal property, if he is negligent and committed an error that led to that; if death to a passenger occurs in the means of transportation, the carrier must keep the belongings of the deceased and hand it over to the concerned heirs or police. The passenger has to pay the fees even if he changes his mind and decides not to travel unless he dies or falls ill, in which case the contract is considered null and the passenger can refund his money, or decide not to pay it. If the passenger refuses to pay the fee, the carrier has the right to hold the passenger's property (luggage, and other personal things in custody) till he gets his money or he can sell the luggage and get his money from the proceeds.

AIR TRANSPORT REGULATION

Air transport is carrying passengers aboard planes to global destination, and airfreight of all kinds, in return for a certain designated fee. The luggage are the bags that the passenger brings with them and hand over to the carrier's employees for weight checking and labeling. A label should be affixed to the passenger's ticket to prove his ownership of the luggage. All what is being stated in the law regarding transport of goods, or passengers apply as well with the following rules specifically for air travel.

An airliner is responsible for the safety of passengers whether they are on the premises of the airliner, going on board, or unboarding. The airliner is held liable for all kinds of damage incurred by passengers, be they moral or material.

The airliner bears full responsibility for any damage and loss of luggage, or goods.

The airliner is considered responsible for luggage of passengers, be they in the custody of the airliner in the departure lounge, stores, on the plane, or any destination the plane goes to with the luggage.

The airliner bears responsibility for damage caused to passengers resulting from delays in arrival to destination for whatever reason, unless the airliner can prove that the delay happened beyond their will and control.

In case the damage occurs during travel, the airliner is liable to pay in cash the compensation to every passenger. But if the damage were caused to goods or luggage then the airliner must compensate in the amount of KD 6 per kilogram (kg) of goods or luggage. It is possible to compensate more than that if the goods, or luggage are valuable, and the passenger or sender declare their value in writing and pay the necessary extra charges before sending the goods or luggage to destination. The sender or passenger must get a receipt of what he paid for and a photocopy of the declaration presented to carrier about the valuable goods; the airliner can contest the value declared but has to prove that point.

The carrier bears the responsibility to compensate for loss or damage incurred on goods or parcels, whether partial or total damage, in accordance with the rate indicated above (KD 6 per kg of damage or lost goods).

As for the personal belongings carried by the passengers on board, the airliner compensates loss or damage to a maximum of KD.120 only if the airliner was responsible for their loss. Any condition exempting the carriers from responsibility to compensate is considered null and void unless goods or luggage contain defects that contribute to their destruction or loss.

Goods sent by airfreight are packed and sent without any reservation regarding their condition, (they are considered in good condition and not having any damage) unless the carrier can prove otherwise. If the recipient discovers any damage to the goods he should notify immediately on the policy documents, or within seven days at most regarding damage incurred to luggage. As regarding damage noticed to goods, the recipient must report that within 14 days from day of receiving goods. And if for whatever reason a delay takes place from the recipient side to protest to the carrier about the condition of goods received, then it should be done within 21 days from the day the goods were received, and in this case the protest of the recipient regarding damaged goods should be in the form of a notification sent from the court to the carrier (airliner). A copy of this protest should be attached to the freight policy when filing a case against the carrier in the appropriate time (within 21 days). The prescription period (denying right to sue the airliner) is two years from the date the plane carrying the damaged goods arrives, or the day it was supposed to arrive, or when the transport ceased.

LAWSUITS FILING DURATION

Lawsuits will not be heard if filed after one year from delivery date, if the merchandise or goods received are damaged, wholly or partially, or did not arrive within the agreed-upon time. Anyone who commits a major mistake concerning the transport act shall not have right to uphold the prescription rule in court. Any agreement by the parties counter to the law is considered null and void.

7.Taxation

Introduction

There is no personal income tax system in Kuwait either on salaries or on income from commercial activities. Corporate income tax is levied only on foreign companies operating in Kuwait. There are no other taxes of any consequence, such as sales or value added taxes, estate taxes etc

Appeals

There is no appeals process laid down in the tax law, and any dispute between the Director of Income Taxes and the taxpayer needs to be referred to civil courts for resolution. It is, however, virtually unknown for tax persecutions to reach the court. All assessments are normally, agreed through negotiation with the tax department.

Audits

Normal accounting records need to be kept as the Income Tax department, will often insist on inspecting the books and original supporting documentation before agreeing the tax liability. Accounting records may be kept in English, or Arabic or both, but when kept in both languages they must be complete.

Deductions

Agent's Commission : The tax deduction for commissions paid to a local agent or sponsor is limited to 3% of revenue.

Business Expenses : For expenses to the deductible, they must be incurred in the production of income in Kuwait. Such expenses must be supported by adequate documentary evidence.

Capital Losses : Losses incurred on the disposal of capital assets are allowed as deductions from income.

Depreciation : The permissible rates of depreciation for tax deduction purposes are available in detail from the Ministry of Finance-Tax Department.

Head Office Overheads : The tax authorities allow the following deductions from income as a contribution towards expenses incurred by the head office of a foreign company:

Gross Income

Gross income will include revenue from dividends, interest, business, discounts, trade, rents, and premiums, as well as any other profits from either an income or a capital gain. Tax is assessed on contract work on the gross billing, which excludes the advance payment. Completed contract or percentage accounting methods are unlikely to be accepted by the tax authorities.

Limitations

There is no specific provision regarding the statute of limitation and, therefore reliance needs to be placed in the Civil Law (No 67 of 1980). In brief, this law allows that no claim or other annual charge due to the state may be enforced after a period of 5 years. It is, however, the option of the authors of this report that non submission of tax declarations or non payment of taxes for five years would not exonerate the taxpayer from any claims since the law specifies that the onus to file a tax declaration and make liable payments lies with the taxpayer.

Loss Carryovers

Losses may be carried forward and deducted from subsequent profits without Limitation as to period, provided there is no cessation of activities i.e. the absence of revenue generating activities for a year; they may not be carried back.

Penalties

In an event that a declaration is overlooked or payment not made by a due date, 1% of the tax is payable as a fine. This fine will apply for each 30 days or fraction of, during which either the payment has not been made or the declaration overlooked.

It is important to cooperate fully with the Director of Income Taxes and to ensure prompt filing of tax declarations. It goes without saying that this also applies to the payment of any tax liability.

Rates

Rates of tax range from none at all on profits of upto KD 5,250 to 55% on profits over KD 375,000. No progressive charges on bands of income are made. The total profit is charged at the rate applicable to the band within which it falls. For example, on an income of KD 375,000 the tax payable is 45% which equals KD 168,750. Relief is often granted in cases where the taxable profit is only marginally higher than the previous level.

Resident Corporations

Under the current application to the Tax Decree of 1955, foreign companies described in the decree as "bodies corporate" which carry on trade in Kuwait are taxable.

It would appear that the term "body corporate" means an association formed and registered under the laws of any other country or state. In other words any organization which is recognised as having a legal existence which is separate from that of its owners. It is worth noting that Partnership will fall within this definition. Profits earned in Kuwait by foreign companies owned by nationals of the Gulf Cooperation Council are not taxed.

There is little difference in principle between the taxation of profits of a Joint Venture or a locally registered Shareholding Company. Tax is however levied on the proportion of the company owned by a foreign investor, this applies to the case where a foreign investment is held in a company which is partially owned by a resident of one of the Gulf Co-operation Council states. It is normal for management fees to be added to the revenue in the case of a tax declaration.

A shareholding in a Limited Liability Company must be held in the name of an individual; if a foreign company wants to buy shares, it can only do so through a nominee arrangement. Individuals are not liable to taxation in Kuwait, therefore, it would appear to be a method of legally avoiding liability. The Director of Income Taxes has not, so far, been willing to challenge these arrangements. It is abundantly clear, however, that if the tax authorities in Kuwait become aware of the foreign companies interest in a Limited Liability Company a tax would be made through the nominee on the foreign interest.

Tax Incentives

It is not possible for a foreign corporation to obtain tax exemption except under Government-to- Government contracts, e.g. defence purposes. A ten year tax holiday can be arranged for a new industrial project.

Occasionally, it is possible to negotiate a tax-reimbursable contract, particularly with a Ministry or other Government agency. In such a case the foreign taxpayer needs to file a tax declaration, pay tax and agree to the assessment in the normal way. The tax paid is then recovered from the contract owner.

Taxation Law & Administration

The Tax Decree of 1955 (Amiri Decree No. 3 of 1955) governs taxation in Kuwait along with various tax treaties (dealing with income tax), with a number of foreign nations. These decrees are supplemented by Directives issued by the Director of Income Taxes.

Payment, filing and assessment procedures are covered by tax administration. A taxpayer may request in writing to have a year end other than the 31st December. The Gregorian calendar year is used for tax purposes. An eighteen month accounting period is allowed initially, thereafter twelvemonth accounting periods are required.

The deadline for tax declarations is the fifteenth day of the fourth month following the end of the taxable period (e.g. the 15th April in the case of 31st December year-end). Tax is payable in four equal instalments on the fifteenth day of the fourth, sixth, ninth and twelfth months following the end of the taxable period. When filing audited accounts an extension of a maximum of 75 days may be granted. Remember, no tax payment is necessary until the accounts are filed. This applies particularly when an extension has been granted. However, it is important to remember that if the payment has been left to the last moment it must then be in one lump sum, no instalments will be allowed. The method of payment will be cash or a certified cheque drawn on a Kuwaiti bank.

Internationally recognised firms of accounts which are approved by the Director of Taxes may certify accounts. This is provided for in Article 9 of the Tax Decree. The Director of Taxes will require that the declaration and supporting financial statements must be in Arabic and are to be certified by an accountant in practice in Kuwait who is registered with the Ministry of Commerce and Industry.

Profit disclosed by audited financial statements and adjusted for tax depreciation and any items disallowed by the tax inspector are used to assess tax liabilities. It is sometimes possible to negotiate a deemed profit basis of assessment, however, this would need special circumstances.

Territoriality

Kuwait is always considered as the source of income, i.e. if the performance of the services or manufacture of the goods takes place within the borders of the state.

Where, in a supply and installation contract, the taxpayer is required to account to the Kuwait tax authorities the place of performance is interpreted to include work carried out outside Kuwait normally under a contract which also involves onshore activity. The relevance of the tax assessment which includes an assessment of an entire contract, when only a small percentage is carried out inside Kuwait, means that applications for specific exemptions under a double taxation treaty should take place before any contract is agreed.

Treaties

Kuwait has signed double taxation treaties with Cyprus, France, Germany and Italy. Treaties with Belgium and China await ratification. Treaties are also in final draft form or are being negotiated with Australia, Austria, Canada, Finland, Hungary, India, Malaysia, Singapore, Switzerland, Turkey and the United States. Because Kuwait does not withhold tax on dividends, interest or royalties, these treaties do not provide special withholding rates for payments from Kuwait to residents of these countries. There are also double taxation agreements with certain countries relating solely to international air and / or sea transport. Kuwait is a signatory of the Arab Tax Treaty and the GCC Joint Agreement, both of which allows for the avoidance of double taxation in most areas.

Accounting Standards : Compliance with the standards promulgated by the International Accounting Standards Committee (IASC) is mandatory for Shareholding and Limited Liability companies for accounting periods starting on / after 1st January 1991. Prior to that date there was board compliance with most International Accounting Standards. Areas where there has been an important impact, now full compliance is obligatory, are in respect of:

  • Related Party Transactions, particularly with respect to the quantification of such transactions.

  • Consolidated Financial Statements and Accounting for Investments in Subsidiaries. Consolidation of controlled subsidiaries had not previously been a common practice in Kuwait, especially in the large family trading groups.

  • Disclosures in the Financial Statements of Banks and similar Financial Institutions. There has been a significant improvement in the disclosures of banks financial statements as a result of the introduction of this standard.

The Government has proposed a long list of drastic measures including income tax, sales tax, levying customs duty on imports, charging for employment of expatriate labour as part of the plan to bridge the growing budget deficit. The Finance Minister, affirmed that diversification of revenues is essential for narrowing the budget deficit. This would entail a comprehensive taxation reform planwhich would primarily aim at achieving four major targets:

  • It aims at rationalisation of the customs duty policy on imports by "bridging gaps in it and limiting exemption only to essential commodities." This would help in rationalising the structure of local prices and improve its efficiency.

  • It aims at introducing sale tax on local services to complement the customs duty on imports.

  • It aims at imposing taxes on individuals including expatriates. This form of taxation would serve to cover the indirect cost of expatriate manpower achieved through enjoying free charge services in a bid to narrow the salary gap between Kuwaitis and expatriates. The alternative for this is the imposition of charges on free services.

  • It aims at collecting income tax from Kuwaiti companies, and not only from foreign companies. Currently, Kuwaiti companies are not required to pay any form of taxation or charges.

Treatment of Group of Companies

If a foreign company has more than one activity in Kuwait, including that through separate subsidiaries in the same line of business, a single tax declaration is required, aggregating income from all activities.

Dividends, Interests and Royalties to Foreign Affiliates :Where a foreign company has a minority shareholders interest in a locally registered company, tax is levied on the foreign company's income (whether distributed or not) plus any amounts receivable for interest, royalties, technical services or management fees.

Non Resident Companies : Kuwait tax laws do not distinguish between resident companies, non-resident companies and branches of foreign companies.

Partnerships : Although a partnership is an association of individuals who are not subject to taxation in Kuwait, the Director of Income Taxes treats a foreign partnership as if it were a body corporate and levies taxes on its operations in Kuwait in the normal way.

Joint Ventures : A Joint Venture or Consortium has no legal status in Kuwait, and the tax department normally raises assessments on the following basis:-

  • Consortium involving joint performance of the contract - a combined tax declaration for the total earnings from the contract. Each partner's share of taxable profit may then be taxed individually.

  • Consortium involving separate performance by the partners - each partner to account for his share of revenue in a separate tax declaration.

Withholdings : There are no withholding taxes in Kuwait. There are, however, retentions made on payments due to foreign companies until such time as they satisfy their Kuwait customer that they have dealt with their Kuwaiti tax obligations.

A directive issued by the Director of Income Taxes in January 1980 requested all Ministries, Government departments, and public and semi-public establishments to withhold final payments due to foreign entities until such entities present a tax clearance issued by the Director of Income Taxes.

The scope of this request was broadened by the Ministry of Finance on 30th December 1985 by Order No. 44 which stated that:

  • Businesses in Kuwait are required to inform the Director of Income Taxes of the companies with whom they are doing business as contractors, subcontractors or in any other form. Information to be provided should include the name and address of the company together with a photocopy of the contract.

  • The final payment due to the contractor or sub-contractor must be withheld until the contractor or sub-contractor presents a certificate from the Director of Income Taxes confirming that all tax liabilities have been settled. The final payment should not be less than 5% of the total contract value.

  • When inspecting the tax declaration filed with the Director of Income Taxes, the Ministry of Finance will disallow all payments made to sub-contractors that have not been reported.

8.Trade Associations

Import and Export Regulations

Only importers who are registered with the commercial registrar at the Ministry of Commerce and Industry in Kuwait may have a licence to import goods. Kuwaiti individuals can obtain an import licence. Companies which import goods or practice business as commercial agencies must fulfil the following principal condition:

  • They must be registered in the commercial register at the Ministry of Commerce and Industry, as well as with the Kuwait Chamber of Commerce and Industry.
  • The Kuwaiti shareholding in the capital of the company must be at least 51%.
  • Objects of the company should include import, trade and commercial agency business.

There are no customs duty on food and essential consumer goods while a flat rate of 4% on the CIF value is levied on virtually all other items, except where the goods are locally manufactured, the protective tariffs range upto 25%.

All goods imported into Kuwait must be clearly stamped with the country of origin. All foodstuffs are subject to strict regulations covering packaging, labelling, description of contents, date of manufacture and expiry. There are restrictions on the use of certain additives and other chemical products. All food products, including samples, are subject to examination by the Municipality's Public Health Laboratories. Pharmaceutical preparations must be registered with the Ministry of Public Health.

Imports from Israel are not permitted under Arab Boycott rules. Certificates of origin are required to enable goods to enter the country. Goods such as firearms, explosives needs special import licences, whereas pork and alcohol are prohibited. The documentation accompanying goods exported to Kuwait must be authenticated by the Kuwait Embassy in the country of origin

Generally, goods once landed can be cleared through customs within a week or two provided the documentation is completely in order. All goods receive a rigorous customs examination. This applies equally to containerised cargoes whether by air or by sea. Lorries are liable to be off-loaded randomly at a special inspection point in Kuwait City. Customs will, accept no responsibility for damage, delays or losses. There are no customs duty levied on food and essential consumer goods.

The Department of Standards and Metrology in the Ministry of Commerce and Industry has drawn up a number of Kuwaiti standards (about 300). These have been based on a combination of American, British, German and other national standards.

Persons travelling to Kuwait may bring in tobacco and perfume without restriction. There are few restrains on exports, except for a few items which require export licences; and no duties are levied on goods exported from Kuwait. Foreign contractors require a No Objection Certificate from the Director of Income Taxes in order to be able to take the equipment out of Kuwait.

National and International Trade Associations

Kuwait belongs to the Arab League, the International Monetary Fund, the Organisation of Arab Petroleum Exporting Countries, the Organisation of Petroleum Exporting Countries, the General Agreement on Tariffs and Trade, the United Nations and the World Bank. The Gulf Cooperating Council (GCC), formed in 1981 includes Kuwait, Bahrain, Qatar, Saudi Arabia, Oman and the United Arab Emirates. The Gulf Cooperation Council aims to promote cooperation between its member states, this cooperation is in the fields of economy and industry.

The GCC has succeeded in a number of areas, mainly that citizens of GCC countries can move freely amongst the six countries without the need for visas, also there are no customs duty within the GCC (on Gulf produced materials). Probably, more significantly, there is now freedom for professionals of one GCC state to work in another. In addition to being able to work and live in each other's country. Members of the GCC group of Nations are also allowed to own shares in the companies that operate in the GCC countries.

9. Living in Kuwait

Introduction

Kuwait is a civilized nation and in spite of the harsh weather, it is a pleasant place to live in. The country is surprisingly green in parts and has many fine parks and gardens. Everything essential to modern, comfortable and luxurious living is available. Banking services, communication, educational and health facilities are as good as in advanced countries. There is no personal income tax and there are no property or municipal taxes. Government housing is available in certain cases to Kuwaitis at nominal rents. Education for Kuwaitis in Government schools is free. Kuwait is a welfare state, and many aspects of the inhabitant's needs are heavily subsidised. Water, electricity, petrol, and basic foods such as fish, milk, meat, rice, bread, are extremely cheap because of Government imposed price controls. Local telephone calls are free; medical care was totally free until very recently - now nominal fees is charged for certain services like special tests, X-Rays etc. In addition, KD.1 will be charged on a visit to the local area clinics and KD. 2 on hospital visits. Health insurance has been made compulsory for all expatriates as of 2000 and is closely linked with the residence permit. No new residence permits will be stamped or old ones renewed without the insurance. It is KD. 50 for the head of the family, KD. 40 for the wife and KD. 30 for every child below 18. Employers will have to pay the insurance premiums for their employees.

Although Kuwait imports most of its requirements, it does however produce its own tomatoes, cucumbers and melons as well as other fruits and vegetables. In particular, it produces sufficient fish that can occasionally export supplies to other Gulf states. Dairy products and poultry are also produced locally.

Supermarkets and cooperative societies (locally known as Jamiah) are of excellent quality. Each residential area of Kuwait has its own shopping complex which include a Jamiah. Kuwait abounds with modern shopping centres selling a wide variety of consumer and luxury goods. Crime is virtually unknown; it is very rare to hear of burglaries or muggings, and certainly pickpockets would appear not to exist.

There are two daily newspapers in English and several in Arabic. Most western newspapers are available on the day after their publication. One of the four television channels is available locally in English. Satellite television is available in most hotels and some apartment blocks. Although satellite dishes are banned in Saudi Arabia, they are allowed in Kuwait.

A brief amendment in the traffic law stipulates that any car made before 1990 will not be officially renewed. In order to curb traffic violations the National Assembly in June 2001 passed tougher traffic laws containing more penalties and fines for major offences such as running a red signal, driving under the influence of alcohol/narcotics, repetitive offences. Driving a vehicle under the influence of alchohol/narcotics can carry a sentence of up to one year in prison and/or KD 500 fine. Running a red light is punishable by a KD 50 fine and reckless driving by KD 100.

Absence Abroad

A residence visa is cancelled if the holder is absent abroad for a continuous period of six months. The only exceptions are for those who (a) are studying abroad, (b) are receiving necessary treatment abroad, or (c) are required by virtue of their work to be abroad, provided permission in all three cases is obtained before leaving Kuwait. For a student studying overseas, application for permission is made to the immigration office in the applicant's residential area. An official letter from the student's college stating that he or she is studying there, authenticated by the Kuwaiti embassy in the foreign country and attested by the Ministry of Foreign Affairs in Kuwait is required. A typist outside the immigration office will type a letter of application in Arabic, which must state the reasons for the application. Other documents needed include copies of passport and civil ID plus four passport sized photographs. The permission is given in the form of a letter. The permission must be shown to the immigration officer both on departure from and on return to Kuwait. The permission is valid for the remainder of the holder's residence and can be used for several entries and exits. It does not need to be renewed until residence is renewed.

Business Visa

Application for visas to Kuwait can be made in the country of the applicant's residence at the Kuwait Embassy or, alternatively, at any Kuwait Embassy outside the country of residence. A visa can also be obtained from the Ministry of Interior in Kuwait through the visitor's sponsor or host. Hotels also provide entry visas to Kuwait, provided you stay at their premises.

New visa regulations are in effect now and allow certain nationalities (Andorras, Australia, Austria, Belgium, Bhutan, Brunei, Canada, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Korea (South), Liechtenstein, Luxembourg, Malaysia, Monaco, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Romania, San Marino, Singapore, Slovenia, Spain, Sweden, Switzerland, UK, USA, Vatican) to obtain Tourism visa valid for 3 months upon arrival.

Also professionals of other countries not covered in the list and residing in any of the GCC countries can enter Kuwait for a 3 months tourism visa.

For others an application form stating the reason for the visit should be completed and submitted to the Embassy alongwith two passport size photographs of the candidate. The application must also be accompanied by two letters - one from the sponsor (containing an invitation) and the other, a letter of introduction from the candidate's company.

If the application is accepted, a one month visa will be issued. Upon arrival, the passport is stamped and a sheet is attached which states the date of expiry of the stay. A person in Kuwait on a tourist visa may not take up employment, for which he or she must have a residence visa. The passport should be carried always with the person as frequent checks for correct documentation is a way of life in Kuwait.

If the three month stay is insufficient and needs to be extended, then the Immigration Department must be contacted to request an extension. Alternatively, you can also travel to one of the neighbouring GCC countries and re-enter Kuwait on a new visa. If the date of exit expires you might be required to pay a fine (KD.2 per day) as a penalty before the exit stamp is issued. This fine can be paid at the point of departure. It can also be paid at the relevant Immigration Department.

Kuwait has also in principle agreed to issue multiple entry visas to certain categories such as businessmen, which allows the holder to enter the country any number of times within a specified twelve month period for up to one month stay per visit. However, in practice, many of the sponsors seem reluctant to exercise this option.

Entry permits must be obtained well in advance since resolving a problem at the airport upon arrival is usually not possible. Very often, people have been refused entry and are forced to leave Kuwait on the next flight. Transit visitors are permitted a maximum of one week stay and can be obtained from a Kuwaiti Consulate abroad or from a Port Authority in Kuwait. The applicant must have a valid visa for his next country of destination and, unless he is working on a ship or airline, international truck drivers and their helpers may obtain multiple entry transit visas. but a visit permit must be arranged in advance. In any case most airlines do not issue boarding cards without a valid permit or visa.

Civil Identity Cards

Once your residence has been stamped you must apply for your Civil Identification Card, which should be always carried on your person. The Public Authority for Civil Information (PACI) body handles all matters pertaining to Civil Identification cards. The PACI has numbered all possible offices, residential flats, villas etc. This PACI number is an important reference number and will be required in case you need to apply for a new card due to a change in address.

NEW APPLICATION :

This process normally takes two weeks provided the documentation is in order.

  • Documents required are passport copies, blood type certificates, finger print report, rent contract, sponsor's documents (Civil ID copy) and 2 photographs (4cm x 3cm).

  • The sponsor has to fill up a form available at the Civil ID office or at the Cooperative Society by inserting a Quarter Dinar note into the machine provided by the PACI.

  • The forms filled with the required documents has to be deposited at the Civil ID office or at the Cooperative Society by inserting the envelope containing the required documents into the machine and a receipt collected.

  • The progress of your Civil ID from depositing to completion can be checked through phone service : 1889988

  • If the documents are not complete then the person handling your papers informs you and advises you accordingly at the PACI office.

  • The application must be submitted within 30 days of stamping of residence permit on your passport otherwise a fine of KD 20 will be levied for late submission.

  • If your Civil ID is ready, then you can collect it from the machines installed by PACI office located at the Ministries Complex - Sixth Ring Road by depositing KD.2 into the machine. If the Civil ID card is not collected within 30 days of it being ready then a fine of KD 20 will be levied.

RENEWAL

The validity of the Civil ID card corresponds to the validity of your iqama (residence permit). Naturally if you change jobs then the card needs to be changed accordingly as the particulars undergo change. A change of address also means a new card.

RENEWAL DUE TO EXPIRY OF EARLIER CARD

PACI is linked with the Interior Ministry system and the Civil ID card will be automatically renewed as soon as the residence (Iqama) is renewed and a call on 1889988 is made and the civil ID number is punched over the phone within a period of not more than 30 days after the renewal of residence (Iqama) otherwise a fine of KD.20 will be imposed. The card can be collected from the PACI office within 30 days after it is confirmed ready or else a fine of another KD 20 will be imposed.

RENEWAL DUE TO CHANGE OF ADDRESS
  • Documents required are a copy of your new rent contract preferably in Arabic, your current Civil Identity card, and 2 photographs.

  • Note the PACI number of the new flat.

  • Go to PACI office located in South Surra to submit the application with the required documents.

  • The card should be ready within a week and can be collected from the PACI office

REPLACEMENT DUE TO LOST OR STOLEN
  • Go in person to PACI office located in South Surra with original passport and passport copies, 2 photographs and the form in the envelope.

  • An affidavit has to be signed and a fee of KD 10 paid.

  • Collect the receipt and your card should be ready within a week.

Contract of Employment

An employee's terms of service are contained in his employment contract, which maybe for a fixed time or be indefinite. A fixed time may not exceed five years. An employment contract should be written and must show at least:

  • Remuneration payable,

  • Description of the nature of the job,

  • Date of appointment, and

  • Duration.

The written contract must be in Arabic. A translation into another language may be attached but the Arabic version is authoritative. An employee maybe hired on probation for a 100 days at most. During this time he may be terminated without notice, though accrued indemnity but not holiday pay must be paid. An employee may not be put on probation more than once by the same employer.

Death in Kuwait

In case of death of an expatriate his/her embassy should be notified immediately and paperwork should be done without delay so as to bury the deceased as soon as possible. Clearance from police is also required if the death occurred at home or any other place except at the hospital. A death report is issued by the coroner which will establish the cause of death and on that behalf a death certificate will be issued. There is no charge for burial service and it can be done either in Sulaibikhat or Al-Riqqa cemetery. Cremation is considered insult to the deceased and hence not allowed and if the corpse needs to be repatriated to the deceased country then the post mortem report and the death certificate is required, attested by the Ministries of Health and also the Foreign Affairs as well as the Police clearance. The passport will have to be cancelled from his/her embassy in Kuwait and death certificate on the basis of Kuwait's death certificate will be issued. Any major forwarding agent will handle all the formalities.

Deportation

Persons with court cases pending against employers cannot be deported, even if their residencies run out. If threatened with deportation, the Ministry of Social Affairs & Labour should be contacted immediately. A person with a case in the Labour Court can have his or her residency extended by presenting an official letter from the Court on the matter to the Immigration Department in their area. The Immigration Department will extend residency as long as the case goes on. But as soon as the case is settled, a copy of the decision must be presented to the Immigration Department. As a concession, persons who win a case against an employer are usually allowed by the Ministry of Social Affairs & Labour to transfer to a new sponsor regardless of the transfer rules.

Disputes and Civil Rights

Expatriates who are finding it difficult to get their legal rights in work-related or other disputes may find the following organisations helpful:

Employee

Once the employee has arrived on a NOC, the process of stamping the residence or the 'Iqama' starts, this can in some instance take weeks. The formalities have to be completed within 60 days of entry otherwise a daily penalty fee of KD 2/- will be levied. It is important to note that after a person has entered the country on a NOC he or she cannot leave the country until the residence permit has been issued. Also he or she will not be able to drive a vehicle in Kuwait until a valid Kuwaiti Driving Licence is issued, unless, of course a temporary licence is obtained in the interim. One can only apply for a Driving Licence once the Residence has been obtained and the Civil ID has been issued.

Employing Juveniles

The law defines a juvenile as a male or female who is between 14 years and less than 18 years of age, and prohibits employment of juveniles unless the following is met:

A permit to employ him must be taken from the Ministry.

Medical check up before employment, and regular check-ups after employment.

The juvenile should work in a healthy non-hazardous environment, but it is acceptable for a juvenile to be employed in hazardous work environment for training purposes only, and after a special permit is taken from the Ministry with the following conditions secured:

  • The juvenile should not be less then 14 years old.

  • The juvenile should be healthy and physically fit for the job.

  • The juvenile should not work during the night, he or she should be allowed to work during the day, and for six hours only; four hours of work, one hour of rest, and one final hour of work.

Employing Women

It is not allowed for woman to work during the night except in hospitals, clinics, and other places which the Ministry approves. It is forbidden to employ women in hazardous jobs or dangerous industries. A pregnant woman has the right to a leave as follows:

  • Thirty days before delivery, forty day after delivery.

  • And she has the right to stop working, continually or intermittently, for hundred days without payment, provided she submits a medical report recommending this period of rest. In this case she cannot benefit from her annual leave. The salary of woman is equal to that of man if she does the same work.

End of Service Remuneration

End of service remuneration is as follows:

  • For employees getting their wages on hourly, daily, weekly basis or by measure of work accomplished, they get ten days pay for each year of the first five years of service.

  • Fifteen days pay per year for each year of service over five years and with a maximum remuneration of one year’s pay (based on the last wage taken by employee).

  • For employees who get a monthly salary, the pay of fifteen days of each year of the first five years in service, and the pay of one month of each year over five years till termination of contract, and to a maximum pay of one and half years (based on the last basic salary taken by the employee).

  • If the contract between employer and employee contains more benefits for the employee, then these benefits must be applied (contract should be respected).

  • An employee who resigns does not get end of service remuneration if he does not complete 2 years of service, but if he completes five years or more, and then resigns, he gets only half of what he normally deserves.

  • The working woman gets her full remuneration if she quits work within six months of her marriage.

Harmful Conduct

Anybody who causes harm of whatever kind is obligated by law to compensate the injured, irrespective of whether the one who caused harm is a reasonable person or mentally incompetent one, or a minor. If several persons shared in causing the injury, they also shared the responsibility to commensurate with their contribution to the harmful act, will equally bear responsibility, depending upon circumstances and the nature of the harmful act.

Provoking others to commit a harmful act implicates the provoker of the act, and consequently the provoker will be held responsible with the natural doers of harm.

Compensation is decided by the judge in accordance with the gravity of harm done. It is generally determined by the actual loss and the loss of chance of benefit. Compensation is mandatory whether the harm caused is material, or moral such as tarnishing the reputation of somebody, causing pain and suffering, and similar acts of wrongdoings.

Compensation for the death of a person who dies in an accident of a sort is restricted only to his family and next of kin. If the harmful act was due to force majeure, then the doer will not be held responsible for compensation (in case of death only blood money is paid)

If the conduct of the victim contributed to the harmful acts done to him, then he will share in the responsibility commensurate with his contribution to the harmful act that led to his injury, except if he dies as a result; then the principal doer of harm shall bear full liabilty and pay the full amount of blood money.

If a harmful act is caused in the process of self defense, or in defending one's honor or property or another's honor or property, within reasonable limits allowed by law then the doer of harm in this case is not responsible for compensation. The same applies for those who inflict harm on others in the process of evading harm to themselves and their property or defending others and their properties.

Mentally incompetent and minors. Anyone bound by law or contract to take care of a mentally incompetent person, and control his conduct, will be held responsible for any wrongdoing done to others by that person. Any ordinary person is considered mentally incompetent if he is less than 15 years of age, or is still under the care and supervision of a reasonable man; (students in schools, apprentices in workshops and offices, wives less than 21 years of age, are considered mentally incompetent and should be under the supervision of a reasonable man).

The civil liability for any harm done to students in public schools will be shouldered by the Ministry of Education. In private schools and institutes the civil liability falls on the owners of these schools and institutes. The owner of the school is obligated by law to redress harm done to students, or others in the school, unless the teacher commits an error that leads to harming others.

The relationship between the principal and his subjects is such that if the subject does a wrong doing that necessitates compensation, the principal is obligated by law to compensate, but in turn he can take his subject to court and demand compensation to be paid back to him.

Anybody occupying a flat or house is responsible for damage caused to people from falling objects from roof or balconies, unless he can prove that this happened due to a force majeure, or by somebody he can name to be held responsible.

Injury to others resulting from careless handling of animals, machinery, cars, airplanes, apparatuses, wires, electrical appliances, anything that can cause harm or injury necessitates compensation, in such way that anybody who does not take care of his animals, or things which can be cause of injuries to others, is compelled by law to compensate the injured if he cannot prove that the injury was caused by force majeure or by others, or the victim injured contributed to his injury.

Illegal Acts Compensation. If there is no explicit agreement between parties about compensation for damage, loss, or injury, then the judge will estimate compensation in accordance with the gravity of damage. Nevertheless, in case of death or fatal injury, the compensation is KD.10,000 given to the family of victim (traffic accident leading to death, work related death etc), regardless of the social position or career of victim (if scientist or worker), of course the judge will take into consideration moral and psychological damage and material loss if they are claimed. This blood money (DIYA) is not subject to any rights exercised by others and creditors cannot claim their rights from the Diya money.

Lawsuits against a doer of an illegal act should be filed within three years from knowing about damage, and fifteen years from the day the injury happens, whichever period lapses first. But if the illegal act is a crime, then the prescribed legal period to file a civil case demanding compensation stays open so long as the case is under criminal investigation, or judicial deliberation.

Any agreement prior to an illegal act that exempts the injurer from liability and accountability to law is considered null and void. But the injured and the injurer can agree to a certain compensation, or the injured can willingly forgo his rights after an illegal act has done its damage or an agreement can be formulated in anticipation of a possible illegal act or injury (insurance policies that cover accidents etc).

Injury Compensation. Any injury that results in partial physical damage (handicap) or extensive damage or death, must be compensated for whether the injurer is known or not. If known he must compensate the injured or the latter's inheritors (universal successors); if not known then the state of Kuwait will bear the responsibility of compensation to injured's inheritors if they did not commit an act of error that led to not knowing the identity of the injurer, and the state of Kuwait will claim it from the injurer when caught. But if the illegal act or injury happened due to self defense and in accordance with legal limit to self-defense then compensation to injured or his inheritors is not guaranteed. Also if the injured intentionally exposes himself to danger, he or his inheritors cannot claim compensation.

The prescription period for civil liability resulting from any form of accident causing physical injury is three years from the date of accident.

Compensation is not restricted to physical injury and death but extends to moral, social and psychological damages. This form of compensation is considered by the judge on a case by case basis and in accordance with the social status and economic productivity of the injured.

Health Insurance Scheme

From 10th April, 2000 health insurance was made mandatory for expatriates. No residence permit is renewed unless the premium for health insurance is paid and the renewal period is also linked to the period of health insurance coverage. Expatriates holding health insurance from local private insurance companies will be allowed to renew their residence for the period of validity of the insurance. However, for holders of private insurance, the Ministry will charge KD 4 for each visit to health clinic besides the one dinar charge. They will also have to pay for medicine, laboratory tests and radiology scans. Visit to the outpatient clinic will cost KD 6, stay at public hospital KD 10 per day, KD 80 per day at an intensive care unit and KD 5 per day for stay at a psychiatric hospital. Expatriates covered by private insurance companies will also have to pay KD 10 per visit to a birth registration clinic. The charge for normal delivery is KD 200 inclusive of a three day stay at a hospital. Any overstay will cost KD 10 per day.

Most large organisations employ a 'Mandoub' who is the official representative for processing the documentation. The documents for a Residence visa are:

  • Copy of the NOC with the entry stamp

  • Copy of the employee's passport

  • Medical certificate of fitness which includes TB and AIDS test - involving blood test and chest X-Ray

  • Police clearance certificate, including finger prints

  • Health Insurance Fees of KD. 50 per year for an adult if done through government health authorities.

Human Rights Committee - National Assembly

Complaints on any matter, whether related to employment or other issues, can be sent to the HRC by letter or by fax, or can be discussed on the telephone or by visiting the National Assembly building in person. Persons who are refused entry to the National Assembly building should call the Committee directly. The HRC are particularly interested in expatriates who are having difficulty in obtaining their passports from their employers, and such persons are asked to fax a signed letter in Arabic stating the facts of their case, their civil ID and passport numbers, country of origin, and the name of their employer to the Committee who will treat the matter in strict confidentiality.

Regulations under the private sector labour law are issued at irregular intervals. They only become effective when published in Al-Kuwait AI-Youm, the official gazette.

The Ministry of Social Affairs and Labour has submitted final amendments to the new labour draft law, in line with international labour agreements signed by Kuwait, to the Council of Ministers for ratification. The new draft law incorporates several amendments to the bill for expatriates in the private sector including additional annual and sick leave benefits and less working hours during the holy month of Ramadan. Important feature in the new draft law, compels employers to pay workers their salary before the seventh of each month and obliges sponsors to provide insurance for workers in the industrial sector. According to the new bill, public holidays have been increased to 12 days instead of the current 8, sick annual leave from 30 to 90 days (paid and unpaid), and the annual leave to 21 days instead of the current 14 days, which will increase to 30 days after five years of service compared to present 21 days. The draft law may allow expats to setup labour unions on an equal basis with their Kuwaiti counterparts. The labour draft stipulates to increase maternity leave from 40 to 45 days, raise the termination notice from 15 to 30 days and bars employers from terminating the contracts of their employees while on leave.

Injury Compensation

In cases of injury during working hours, or because of work, the employer must do the following:

  • Inform the nearest police station.

  • Inform the Ministry.

The injured employee can report his injury if his condition permits. The injured employee will be treated in public or private hospitals with the employer bearing all expenses. It is important to note that the medical report put forth by the doctor of public hospital is the one upheld (taken as true one).

The injured employee under treatment gets his full salary for the treatment period and up to six months (if the treatment lasts long); and half the salary for the rest of the treatment and recuperation period, until his invalidity is established medically, or his health regained.

The employee who gets injured during working hours, or because of his work, will get compensation specified in the ministerial decree in accordance with the severity of injury. If proved that the employee intentionally exposed himself to danger that led to the injury, or the injury was a result of his misconduct, then he will lose his right for compensation. Nevertheless, if the injury results in 25% invalidity or death, then compensation must be fulfilled.

Issuance of New Work Permits

Decision 107 restricted issuance of work permits to special cases only for the following sectors: However, these rules were changed for a limited period and then re-instated again.

  • Businessmen connected with Government contracts

  • Companies totally or partially owned by the Government

  • Hospitals, Medical Centres, Pharmacies, Private Clinics and Laboratories

  • Banks, Insurance Companies and Investment Companies

  • Hotels and Guest Houses

  • Private Schools and Nurseries

  • Clubs, Federations, Public Societies and Cooperatives

  • Industrial Establishments

  • Airlines

  • Fishing, Agriculture and Shepherds

  • Financial, Administrative, Engineering and Consultative Houses

  • Lawyers and Legal Advise Firms

  • Newspaper and Printing & Publishing Houses

  • Car Agents and Distributors

Kuwait Trade Union Federation

The federation has a special interest in preventing the abuse of expatriate labourers. It provides legal advice to labourers free of charge and also helps them to take action against their employers.

Kuwait Manpower Law

Kuwaiti Manpower Law No. 19/2000 introduced in May 2001 aims at solving the Kuwaiti unemployment problem by creating job opportunities for Kuwaitis in the private sector. A high-ranking government team entrusted with implementing the law has to endorse the set of additional charges for expatriates on residence transfers, residence renewals and work permits. The team is seeking a legal basis to specify Kuwaiti manpower percentages to work in the private sector. The companies which do not comply with these percentages will be charged KD250 for issuing new work permits for each expat appointed. Kuwait has begun applying a 2.5% tax on the net profit of Kuwaiti companies listed on the Kuwait Stock Exchange (KSE). This tax will supplement additional charges to be collected from expatriates in the private sector.

A statistical report revealed that the total labour force in Kuwait reached about 1.2 million individuals this year, dropping 29,836 that in the last year, or a 2.4% decrease in annual growth due to a plunge of annual growth of expatriates. The Kuwaiti workforce increased from 251,387 to 263,250 witnessing a 5.4% growth.

However the Kuwaiti unemployment rate increased as the total unemployed figure jumped from 2,552 at the start of the period to 2,749 at the end.

INNOMINATE CONTRACTS

(general contracts with no designated purpose) Rendered by Isa Boland & Associates Lawyers

  • Preliminary Agreements This form of agreement is a contract drawn temporarily pending formulations of a final agreement or contract, which should contain some major stipulations. It is possible to agree that future amendments to a contract may be stipulated. Appointing a date for the final contract to be drawn is required and if the date is not specified by parties to the contract, then a reasonable period of time is considered legally acceptable. If one of the signatories to the preliminary agreement refuses to sign the final contract and the other party was abiding by the agreement, then the latter can file a case to legalize the agreement as final contract binding for both parties.

  • Promise to contract For a verbal agreement to be considered as a promise-to-contract the promisor must indicate clearly the matters of the contract, and the period it will take him to enter into contract with the other party. In case a certain person promises another a contract, and the other accepts the promise, then the contract is considered existent for the specified period of the promise unless the promisee (the one who is promised) dies, in which case his successors can accept or refuse the promised contract; but if the promisee has a special reputation without which the promisor would not have offered his promise, then the promise to contract is considered null and void.

  • Down payment prior to contract (contract by down payment). When formulating a contract, if one of the parties pays a down payment, or earnest money, this means that both parties can choose not to conclude the agreement unless agreed otherwise. But the one who pays the down payment will lose his money if he decides not continue the contract. If the one who took the money refuses to conclude the contract then he should return the earnest money to the other party in addition to an equivalent amount regardless of what damage might occur. The down payment must be returned to its payer if the execution of the contract is beyond the means of both parties.

  • Contract of adhesion (where the dominant party prepares a contract with terms he insists on). It is legally possible to have such contracts where one party puts down his terms without any room for change by the other party. Nevertheless if the terms were unfair the dominant party can be sued in court and the judge can alleviate these terms to make it fair or cancel it altogether. Any suspicious element or ambiguities in the contract are interpreted to the favour of the weak party.

DEFECTS OF CONSENT

ERRORS

It is possible for an ordinary person to commit an error by signing a certain contract not knowing that he committed an error, with the other party being ignorant of the error too, in such a cases it is possible to annul the contract. But if he accepts the contract with its error, then the other party must fulfill his obligations and exercise his rights without causing harm to the party.

CHEATING

This occurs when one of the parties, or his legal representative exercises cheating and trickery to cause the other party to sign a contract that contains illusory information, or does not mention important facts about the substance of the contract, or whatever form of cheating that could cause material or immaterial harm to the other party. In such cases it is possible to abrogate the contract if the cheated party proves he would not have accepted to sign such a contract had he known the truth.

But if cheating is done by a third party not related to the contract, then the contract will hold unless one of the contracting parties knows about the cheating, or was able to learn about it.

Any untrue information discovered in contracts, or necessary information not mentioned in a contract, or lack of good will, is interpreted as malicious cheating. If both parties exercised cheating in the contract the contract holds as legal.

COERCION

When coercion is applied to a party to sign a contract, and he does so to evade physical or psychological harm, the contract can be abrogated. In this case the judge will take into consideration the person of the coerced party, his or her age, whether the person (he or she) is educated or not, sick or not. In order to cancel such a contract the coercion must be exercised by one of the contracting parties or his legal representative.

UNDUE INFLUENCE

If a certain person takes advantage of another in need, or in a vulnerable position, or takes advantage of his or her passion, or abuses his moral authority over a relative, to let him sign a contract which is more beneficial to him then to abused party, then such contracts can be cancelled by court ruling, or amended in a just way.

Filing a case for the purpose of abrogating a contract with this defect of consent should be within one year the date it is signed, except if the contract was signed because one of the parties was passionately in likeness to the other, and the latter exploited this weakness to formulate the contract and conclude it. In such a case the period of prescription will be fifteen years; that is, a case can be filed for remedy within fifteen years from signing date.

UNFAIRNESS

An unfair treatment in contracts, if it were not effected by the previously mentioned defects of consent, will be considered as legally binding unless the state, or public figures, or mentally incompetent persons were involved, in which case the contract is adjusted to make it fair for both parties. This unjust treatment is not taken into consideration in public tenders. The prescription period for cases based on this defect is fifteen years from date of contract, or one year from date of knowing about the defect, or gaining mental competence, or death.but for public figures and the state it is one year from date of contract.

NOMINATE CONTRACTS

SALE CONTRACT

The law defines sale as a contract between a seller who owns certain goods and a buyer who pays for them to own them. In a sale contract the buyer must know what goods he is buying in order for the sale transaction to legally execute. The buyer is considered having knowledge of the goods when they are well specified in the contract, or clearly mentioned that the buyer knows the condition of goods beyond the slightest doubt; of course this holds as legally binding unless the buyer can prove that the seller cheated him into buying the goods. If the buyer does not object to the seller within a reasonable period of time he is considered as having accepted the goods sold to him.

If both seller and buyer conclude a sale contract without explicit mention of price of goods, then the prevalent market price at the place and time the contract is concluded will be considered the price agreed upon.

EFFECT OF SALE

Goods sold to a buyer are not considered as his own till the buyer pays the price in full, or goes by the agreement formed by seller and buyer. It is possible that one might buy goods on installments; in such a case, the goods are considered his own only after paying all installments, even though he may be using them, or benefiting from them.

If the price is considered on the basis of weight of goods then only net weight is considered, unless both parties clearly agree otherwise.

If the seller declares that he bought goods for a certain price found to be less by the buyer, then the buyer can stick to the actual price paid by the seller plus the profit increment.

Any restriction of information about goods to be sold, and suspicious about how they were acquired that affect the decision of buyer, leading him to conclude the deal, is considered a malicious act punishable by law.

OBLIGATION OF SELLER

If a sale transaction takes place, the seller must provide the buyer with revelant information and documents, as well as transfer the ownership of goods to the buyer; it is worth noting that some agreements entail delivery of goods at a later date with full consideration of nature of goods. If after delivering goods the buyer discovers the quantity to be less than the agreed-upon with the seller, the seller is bound by law to compensate the difference in quantity without termination of contract. Termination of contract can be effected by the buyer if the quantity received is far less than agreed upon. Conversely a seller that delivers goods to the buyer must pay the seller. This is the case when the goods delivered are countable, but if the goods are uncountable and the incremental difference is substantial, then the buyer has the right to terminate and dissolve the sale contract if he does not want to pay for the increment in quantity. In the events the goods are priced at wholesale rate and the increment in goods cannot be exactly measured in monetary value, then the buyer has the choice to pay for the increment demanded by seller, or terminate the contract.

The law gives the contractual parties the liberty to agree on whatever legal terms they desire; in other words, the parties to a sale contract can put down their terms clearly which can be different from what is indicated above yet accepted by customary practices.

The buyer has the right to abrogate the contract due to increase or decrease of quantity agreed upon and delivered within a year of the date of delivery, otherwise his right in taking the seller to court demanding compensation will not be heard and the contract shall be considered fulfilled.

The mutual agreement between seller and buyer should define the nature of goods, their quantity, prices, payments, date of delivery, and how to deliver the goods, and the inspection of goods for compatibility with specification, as well as other necessary bits of information vital for a proper legal transaction (documents, sampling for testing etc).

In case the date of delivery is not specified in the contract, the seller is obligated to deliver the goods immediately after the contract is concluded.

A seller guarantees the goods in proper condition free from any legal restraints (claims) and in accordance with the terms of contract. If it happens that a buyer of a certain goods is ignorant of legal restraints on those goods has been sued by a third party who claims his rights on those goods, the buyer should bring the seller to court, as the seller guaranteed that his goods were free from any obligations (legal claims and restraints), if he does not involve the seller, and the judge issues the final ruling against the buyer depriving him of goods, then the seller is free from his obligations concerning the goods if he can prove this with his presence in court seeing the case would have brought a favorable ruling to the buyer. In this case all the buyer can do is take the seller to court and claim the money he paid him for the goods.

The seller does not guarantee goods with commonly acceptable minor defects, as well as defects known and acceptable to buyer. The buyer can take legal action against the seller if he can prove the latter resorted to cheating and misinformation that led to concluding of contract.

When a buyer purchases some goods he must inspect them for visible and hidden defects, if defects are found, he must inform the seller, otherwise his right to claim replacement will not be considered. But if the goods bought do not show the defects upon inspection but show them after a lapse of time, then the buyer must immediately inform the seller about the hidden defects in accordance with the agreement, otherwise he will lose his right in the guarantee or warranty (he cannot claim a replacement). But if the buyer discovers the defects in the purchased goods while using them as his own property, he loses his right for replacement (goods can be serviced).

Lawsuits by buyer demanding compensation for defective goods are not heard in the court after one year from date of delivery, whether the buyer knew about the defects when he received the goods, or after one year from delivery date. The contract can stipulate a specific period of time during which the buyer can return the goods if defective in any way. In all cases, if the seller maliciously cheats the buyer into purchasing the goods, then the buyer can bring the seller to court without the seller being able to uphold the prescription period, and demand monetary compensation and press criminal charges against him.

If the seller and the buyer agree to certain specifications of goods in a contract, then the seller delivers the goods with specifications different from what is agreed upon, the buyer will have the right to abrogate the contract and demand compensation, or he can keep the goods and still demand compensation due to difference in specifications of goods delivered.

Certain defective goods can be repaired without affecting the quality of goods, in such cases the buyer of such goods must inform the seller within one month of discovery of repairable defects; if the seller does not repair the goods, then the buyer can abrogate the contract and demand compensation, if need be, or can keep the goods and demand compensation for damages incurred.

OBLIGATION OF BUYER

The buyer is obligated to pay the price of goods as agreed upon, in cash or in installments. The buyer has the right not to pay if he knows that goods are liable to certain legal claims or restraints, but if the seller submits some form of guarantee acceptable to him, then the buyer must pay the value of goods. This also applies to defective goods, when the buyer refuses to pay their cost. (If the seller submits some form of guarantee the buyer must pay). In case the buyer does not fulfill his commitments by paying the value of goods purchased, the seller can abrogate the contract or enforce payment by law.

If the purchased goods perished in the custody of the seller for a legal reason concerning the buyer, then the cost of goods will be borne by the buyer. The seller will bear the cost of goods if they perish in his custody due to his negligence. The buyer bears all expenses required to conclude the sale unless agreed otherwise.

GUARANTEE

The law defines the guarantee as a form of contract in which a third party agrees to pay a debt to a creditor on behalf of a debtor. It is clear from the definition that the guarantor has the full responsibility to settle the debt when the debtor defaults. The parties to the guarantee are at least three: the creditor, the debtor and the guarantor.

Though the debtor is part of the process his consent is not needed. A legally binding guarantee must be clearly stated by the guarantor, in written form, any other way of expressing a guarantee is not considered as legally binding (presenting a thing of value equal to debt can be a guarantee).

The debtor must bring in a well to do guarantor residing in Kuwait, and be able to pay the debt of the debtor, or he has the choice of offering an acceptable guarantee in kind equivalent to the debt. If the chosen guarantor becomes unable to pay, or he leaves the country, the creditor can demand his money and start litigation, unless the debtor brings a new capable guarantor to the creditor.

A guarantor can be either Kuwaiti or non-Kuwaiti so long as he is capable to pay and has a permanent residence in Kuwait.

The guarantor can guarantee the debtor regardless of the latter's approval. Prospective guarantees are possible only if the amount and date of its effect are stated clearly (bank guarantees).

A lawful guarantee must not be on an unlawful subject matter in which case the guarantee is considered illegal, and thus null and void.

If a third party guarantees that a minor (mentally incompetent) person will pay a certain debt, the guarantor is considered the debtor , and accountable to creditor. The amount of a financial guarantee should not be more than the amount of debt, and should not include conditions harder than those of debt. If this were to be, the guarantee is considered legally void and ineffectual; but if the amount of guarantee were less than the amount of debt and with reasonable conditions, it is considered acceptable and legally binding.

GUARANTOR & CREDITOR RELATION

The guarantor is relieved of his obligation towards the creditor if the creditor receives from a third party a settlement in kind equivalent to his dues without reserving his rights to claim his dues from the guarantor in case the object given by the third party had some legal claim on it.

The creditor must keep all collaterals serving the debt; if he loses them he will lose his right commensurate with the value of collaterals lost (collaterals can be anything of value attached to the debt as guarantee to pay it back).

A creditor has the right to claim his money in time, after the lapse of the due date, but if the guarantor notifies the creditor of the urgency to execute his right on the debtor, and the creditor fails to do so from three months from the date of notice, then the guarantor is considered legally relieved of his obligations towards the creditor, even if the creditor agrees to extend the settlement date. In case a debtor goes bankrupt the creditor should quickly claim his money, otherwise the guarantor will be legally relieved from paying the creditor whatever share the creditor would have got had he claimed his money in time.

Yet if the guarantee is absolute, no matter what happens to the debtor the guarantor has to pay, then a creditor first executes on either the debtor or the guarantor, as he finds suitable; while if the guarantee is not absolute the creditor must first execute on the debtor before he resorts to the guarantor.

The guarantor should show the creditor where the debtor has money. Money and property abroad or under litigation cannot be executed upon by the creditor. If the guarantor shows the creditor where the debtor has money and property that can pay the debt, and the creditor does not act on the information provided by the guarantor, then the guarantor is relieved by the same amount he indicated to the creditor.

The guarantor can ask the creditor to execute his rights on the collaterals in his possession before resorting to guarantor's money. But if the debt is paid in full by the guarantor, the creditor must hand over all collaterals of debt to the guarantor; nevertheless if the debtor objects to that, then the collaterals must be handed over to an honest and decent person where the rights of guarantor and debtor are secured. But if the collateral was a mortgaged real estate attached to the debt, the creditor must legally transfer the mortgage to the favor of the guarantor who paid the debt on behalf of the debtor.

A commercial guarantee, a judicial guarantee, and the other legally formulated ones are absolute guarantees where the guarantor is held liable whether the debtor goes bankrupt or not. If there are several joint guarantors and one of them pays the debt, then he will have the right to demand from the others their shares in the guaranteed debt, and their shares of the share of the one unable to pay.

GUARANTOR & DEBTOR RELATION

The law obligates the guarantor to inform and notify the debtor that he wants to settle the debt with the creditor, if he does not notify the debtor and discovers after paying the money, that the debtor has already paid the money, or the debt was legally settled due to passing of time or some other legitimate reasons, then the guarantor cannot claim the money he paid, from the debtor. If the guarantor is sued by the creditor the guarantor must bring the debtor into the case, or he will lose his right to claim his money from debtor. If the guarantor pays the debt then he is considered as a new creditor to the debtor, and thus can claim the money from him. If there are several joint debtors (common debtors), their guarantor who settles their debt can claim the money from any one of them.

POWER OF ATTORNEY

A power of attorney is a form of contract in which the principal authorizes the agent to act in official and legal capacity on his behalf.

ELEMENTS OF POWER OF ATTORNEY

For a power of attorney to be legally sound and enforceable, it must show the intent of a mentally competent person, to demand from a Notary public to formulate a power of attorney to a named agent. A power of attorney phrased in general terms with no specific indication as to what actions the agents can do, will be considered as license to manage affairs and not more, such as: giving salaries, receiving rents, book keeping, maintenance and paying of debts, and the like. Power of attorney are of few types:

  • Special power of attorney

    It gives power to the agent to stand before the judge, file lawsuits, follow them up, conciliation, arbitrations, and other similar acts as well as specific actions and deeds desired by the principal. For each of these actions a special power of attorney may be prescribed or all of these may be included in one power of attorney.

  • General power of attorney

    It allows the agent to act on behalf of the principal in almost everything (except marriage related issues) buying, selling, business deals of all kinds, settlement of debts, and other similar actions.

  • General power of attorney with right to self-contract

    It gives extra power to the agent by letting him enter into contract with himself in whatever dealings he wishes to do with the principal (the agent can buy and sell to himself and do whatever he likes to his personal benefit without consulting with the principal). He can buy property owned by principal, and register it in his own name. He can do almost anything in the name of the principal.

OBLIGATION OF AGENTS

The agent should conduct his dealing on behalf of the principal in accordance with the limits described in the power of attorney, and if he exceeds his limits to the favor of the principal, he should inform the latter as soon as possible. An agent acting on behalf of the principal within the legal powers given to him, can be paid or not paid for his services. If paid he should exert the effort of a reasonable person in executing the affairs he handles, not more, not less. But if he is not paid for being an agent, then he should act as if he is acting for his own benefit.

An agent must submit a report on what he had done on behalf of principal, and should present accounts, if need be unless it is agreed with principal that reporting is not neccesary.

The agent should not use the money of the principal for his own use unless permitted to do so by the principal. If he uses the principal's money without explicit permission and a conflict erupts between the principal and the agent, then the judge can force the agent to return the money with appropriate compensation. The principal can appoint several agents in one power of attorney (one document) and specify whether they should act jontly or independently but in matters that do not need consultation and advise they can act independently. In case of damage incurred on principal by one of the joint agents, all are held liable, if they contribute to the error that leads to the damage.

If the principal authorizes the agent to appoint legal representatives to act on behalf of the principal, then the agent will be held accountable for mistakes in choosing his representative, and in giving faulty instructions to him, and in this case the representative of the agent and the principal can sue each other if need arises.

OBLIGATION OF THE PRINCIPAL

A power of attorney is an act of will taken by the principal to appoint another person as agent capable of managing the affairs of the principal described in the power of attorney document. It can be with a lawyer to handle cases in the court and give legal advice and other legal services, or with a business manager to run the business of the principal, or with any other person to handle a specific matter. If there is a fee to be paid to the agent in return of his services, this fee will be subject to the discretion of the court, in case of litigation between principal and agent, but if the principal paid the fee to the agent then the court has no say regarding that if litigation takes place.

The principal must give back to the agent all expenses paid by the agent in servicing the principal regardless of the effects of actions taken by the agent on behalf of the principal. The principal is held liable for any damage that befalls the agent due to the latter's execution of the power of attorney, or the services done to the former, but not mistakes committed by the agent that lead to the damage.

TERMINATION OF POWER OF ATTORNEY

A power of attorney is terminated in the following cases:

  • If the intent for which the power of attorney is made has expired

  • If it expires (if there is a date mentioned)

  • If the principal or agent dies

  • If the principal or agent has become mentally incompetent

  • The principal has the inalienable right to cancel, or amend the power of attorney, without the agent's consent, unless the agent or the third party has direct and explicit interest in keeping the power of attorney valid as it is.

    If the principal cancels the power of attorney and this causes damage to the agent, then the agent has the right to contest and demand compensation from the principal.

    The agent too has the right to rescind the power of attorney and return it to the principal, and if this happens in unappropriate times causing damage to the principal, the principle can sue the agent demanding compensation.

    In case the agent wants to rescind the power of attorney , he should notify others who have current dealings with him, of his wish to do so, and give them ample time to manage their affairs resulting from dealings with him as an agent.

    When the power of attorney expires or is terminated, the agent must complete or accomplish whatever neccesary steps should be taken to finish what he was doing in order to avoid damage to the principal (if they know about the power of attorney), and take necessary steps to protect the interests of the principal.

Kuwait Traffic Law

This law deals with all aspects of traffic, the conduct of drivers, vehicles on the roads, pedestrians, and relationship among them on the roads. It will cover the few clauses of the law that touch upon conduct of drivers, the way they handle their vehicles, maintenance of vehicles, registration of ownership, civil and criminal liability befalling the owners of vehicles, or their drivers, penalties, concilliations, and other relevent issues.

All vehicles should be licenced in accordance with procedures stipulated in the executive regulations. The exceptions to that are the following:

  • Vehicles on temporary stay in Kuwait (vehicles for transit, re-export and tourists vehicles).

  • Military vehicles.

The executive regulations following this law show in detail the procedures needed to get vehicles licenced for road traffic. This law imposes upon vehicles' dealers the obligation to register the sold vehicles in the name of buyer even if he does not pay its price in full (with indication on the vehicle licence that it is bought on installments).

Insurance against civil liability is obligatory for all vehicles; the law dictates that vehicles should be in proper working conditions when on the roads, otherwise licensing or renewal of licence is refused.

When licencing the vehicle the number plates given to owner by traffic department should be put on the front and back of vehicles in their designated places without any change effected on them. But if number plates were lost(one or both) the traffic department must be informed immediately.

The traffic law dictates that any change of address, or other personal information of vehicle owner, loss or damage of vehicle licence, must be reported to traffic department within ten days. For lost or damaged vehicle license, the owner can apply to get a new one; but after he gets a new one if the lost one is found, he should hand it over to the traffic department.

In case the owner of the vehicle intends to have some change done to his vehicle, (change of colour, body parts additions, etc.) he must get approval from Traffic department before he embarks on doing that change.

If the vehicle owner wants to sell the vehicle the procedures are easy: after both buyer and seller agree and settle on price and payment, the rest is done in the insurance company by filling a form and signing it with the neccesary attachments of papers (copy of civil ID) and taking the form to the traffic department for registration. This should happen within ten days, otherwise the consideration will be considered null, and a new one must be made.

In case the vehicle owner dies, his inheritors must inform the traffic department within sixty days ; if one inherits the vehicle he should register it in his own name within a week at most. If the owner is a company, or establishment (legal person), the name of the legal representative of the company must be indicated on the registration form. If the owner is mentally incompetent then his guardian's name should be put on the registration form.

DRIVING LICENSE

No one is allowed to drive without a driving license issued to him in accordance with the procedures as expressed in the executive regulations; exempted from this are the following:

  • Holders of military driving license

  • Foreigners visiting Kuwait or tourists who have valid driving licenses issued from their country in accordance with conditions stated in executive regulations.

  • The law demands from the holder of a Kuwaiti driving license to inform authorities of any change to his address within a period of ten days of change. The driving license should be with the driver when driving his vehicle, and should be presented to the Traffic police and other authorities on request.

    A person teaching another person how to drive is considered jointly liable for any criminal acts, or breach of law committed by the person learning how to drive unless he proves that the one learning how to drive did that on his own accord without regard to instructions, or in violation of his instructions. Needless to say the traffic law requires anyone intending to learn driving, to apply for a permit and get it before he ventures into driving lessons.

    Transporting of passengers requires a special permit from the traffic department, and private vehicles are not allowed to transport passengers for money.

    The law allows the traffic authorities to withdraw the driving license given the first time to the driver, if the driver commits too grave violations of the law in the first year of his having the license and he will not be issued another driving license till the period of 4 months lapses from the day of withdrawal of driving license; and he might be subjected to another driving test beside penalties effected on him.

    TRAFFIC RULES AND CONDUCTS

    Driving has its rules and requires proper conduct which must be adhered to, to protect lives and property. The driver must comply with the traffic rules and regulations to facilitate safe driving on the roads. The traffic department takes it upon itself to state these rules and regulations of proper driving and to monitor its application.

    The law forbids anyone from placing hurdles, of whatever kind on the roads without an appropriate permit from the traffic department. The traffic police has the right to remove these hurdles at the expense of the person who places them.

    The article 29 requires drivers in an accident that results in injury, to stop and report the accident to the authorities.

    Article 30 states that the owner of the vehicle, or the one legally responsible for it, is held accountable to any breach of law effected through the vehicle, unless proven otherwise.

    Article 31 states that the vehicle driver and the passengers in the vehicle are not allowed to practice any immoral acts in the vehicle (kissing, sexual acts etc).

    Article 32 states that vehicles of all types are not allowed to race on certain roads without a certain permit.

    PENALTIES

    Anyone who commits any of the following acts is punished with a maximum sentence of three months imprisonment, or a maximum fine of KD 100, or both.

    • Driving a vehicle without a driving license, or a vehicle that needs a special permit not issued to driver, or driving a public transport vehicle with a private driving license, or driving a vehicle without a valid insurance.

    • Driving recklessly exposing oneself and others to harm.

    • Causing damage to public property.

    • Driving an unsafe vehicle.

    • Repairing a damaged vehicle without the neccesary permit to do so. (Ministry of Interior, police department issues these permits). In case this happens, the workshop or the repair shop where the vehicle was repaired will be held responsible.

    • Driving a vehicle without its number plates or with changes effected on them, or driving an unlicensed vehicle.

    • Giving wrong information on official forms for the purpose of getting a driving license, or renewing it or getting a permit to learn driving (Istimara) or getting a vehicle license, or demand a replacement for any of the above.

    Anyone who jumps a red traffic light gets a maximum prison sentence of three months or a fine of maximum KD.300 or both, and if he speeds beyond the limits allowed, he gets the same prison sentence or KD.100 fine, or both. Also he gets penalty of KD.100 or a prison sentence or both penalties if he races without permit, or in violation of what the permit allows. If he drives in opposite direction of traffic on the highways he gets the same penalty as the previous one.

    Under article 34, commiting the following acts would bring a penalty of maximum of one month in prison, or maximum KD.75 fine or both.

    • Causing damage to property.

    • Using private vehicles as taxis ( to transport people for money).

    • Intentionally blocking the traffic flow on roads.

    • Driving a vehicle with no brakes, or having mechanical problems.

    • Lending a vehicle to somebody who does not have driving license.

    • Under article 35, a person is punished by imprisonment for a maximum of 15 days or a maximum fine of KD.25, or both if he commits any of the following acts:

    • Driving a vehicle without the consent of its owner, or person in charge of it.

    • Driving a vehicle that has any changed effects on it (number plate, color or illegible numbers).

    • Driving a vehicle without a valid permit, or without a permit, or with a different permit.

    • Refusing inspection of the vehicle's license and driver's license to the Traffic police.

    • Violating rules regarding dimensions of vehicle and limits of loads.

    • Driving a vehicle that emits toxic fumes and hazardous materials; and being mechanically unfit and unsafe to drive.

    • Fixing unpermitted extra lights or loudspeakers onto the vehicle.

    • Damaging traffic signals and signs, or monitors or effecting any changes to them.

    • Driving and parking on pedestrian ways.

    • Parking the vehicle at night on highways and unlighted roads outside the town, without lights or light reflectors.

    • Using high intensity lights in unpermitted circumstances.

    • Not abiding by road lanes, or other traffic signs, or driving on the far sides of the roads where emergency parking is allowed.

    • Turning or driving in the opposite direction of traffic.

    • Driving an uninsured vehicle.

    • Under article 36, the following acts of violating the law are punished with a penalty of KD.15.

    • Public transport vehicles that take in more than the permitted number of passengers.

    • Public transport vehicle refusing to take passengers without a legitimate reason.

    • Demanding fares more than what is allowed.

    • Carelessly leaving animals on the roads.

    • Violation of traffic rules by motorcyclists and pedestrians.

    • Driving a vehicle in the night without any lights on.

    • Driving a vehicle without carrying the neccesary license.

    • Driving a vehicle with lower speed, than indicated on the roads, that leads to traffic jam.

    • Abandoning the vehicle by the side of the road.

    • Not fastening the seat belts.

    • Parking in places reserved for the physically handicapped.

    • Riding on external parts of vehicle.

    • Driving a vehicle that lacks safety measures stipulated in executive regulations.

    • Violating the instructions of traffic or security police.

    • Tinting the windows and windshields of vehicle without permission from traffic authorities.

    The law under article 37 also states the penalty of maximum KD.15 to any violation of the law not mentioned in the section on penalties.

    The law under article 38 metes out a harsher penalty on the driver caught under the influence of alcohol, drugs, or mind-altering medications, or other similar substances. It prescribes a prison sentence of maximum one year, or fine of maximum KD.500, or both. The court will take account of any other law but extends a severer punishment for such cases. In addition to such punishment the court will order withdrawal and withholding of the driving license for a maximum period of one year. In case of repeating this violation the court will order withdrawal of driving license for three years, and will double the punishment terms.

    The court of law has the right to withdraw the vehicle license, driving license, or number plates, for a maximum period of one year if the driver is indicted for a crime related to his vehicle under article 39.

    Conciliation under article 41 is accepted from the driver who violates certain articles on the following bases:

    • To pay KD.30 for violations of article 33 of the Traffic law

    • To pay KD.20 for violation of article 34 of the Traffic law

    • To pay KD.15 for violation of article 35 of the Traffic law

    • To pay KD.10 for violation of article 36 of the Traffic law

    • To pay KD.5 for violation of article 37 of the Traffic law

    • But in case of violation of article 33, the following is applied:

    • To pay KD.50 if the violation is crossing the red traffic light, or driving in opposite direction on highways and ring roads and not having a permit to race on designated roads.

    • To pay between KD.20 to KD.50 in case of exceeding the speed limit. Settlements of fine payments should be done in traffic departments within a period of two months, or after the violator is informed.

    Article 42. The Director General of traffic department has the right to withdraw by authority of administrative order, the driving license, or vehicle license, or vehicle number plates, for a maximum period of four months in the following circumstances:

    • If the driver violates article 33 and 34.

    • Using the vehicle in violation of moral order.

    • In case of an accident resulting in death, or other unintented injuries, where the traffic police and other enforcement bodies can withdraw the driving license and other licenses when investigating the accident. The withdrawal of license is suspended after the judgement ruling in the criminal case but if the judgement entails withdrawal of the license then the period of administrative withdrawal of license does not count, and a new period of withdrawal must be put to effect.

    Article 44 concerns the ministerial decree regarding allocation of points commensurate with different violations of traffic law. Each kind of traffic law violation corresponds to certain number of points. These points are registered in the violation record of a person if he is present at the time of writing the ticket; if he is not present, then these points will not be registered. This decree states that the driving license will be withdrawn for periods of times specified as follows.

    • Three months if points reach 14 for the first time.

    • Six months if points reach 12 for the second time.

    • Nine months if points reach 10 for the third time.

    • One year if points reach 8 for the fourth time.

    • Withdrawing the driving license for good if points reach 6 in the fifth time. In this last case the driver will not be issued a new driving license until he passes a new driving test.

    • These traffic violation points are registered on the computer and erased only in two situations:

    • If the driving license is withdrawn in accordance with the dictates of this decree.

    • If the driver does not commit any traffic violation for a year from date of last violation committed.

    • The number of license withdrawals stays in the computer for reference. The police can arrest anyone who commits any of the following violations:

    • Driving a vehicle under the effects of drugs, alcohol, and mind-altering drugs, or medications.

    • Participating in races on roads without appropriate permits.

    • Attempting to escape after accident resulting in death, injury, or from officers ordering him to stop.
    • Driving a vehicle recklessly endangering people's lives.

    Article 45. Concerns law enforcement bodies. Deals with ministry of interior traffic department and police enforcing the law.

    Article 46. The reports drawn by police and traffic officers are considered true and legally binding till proven otherwise.

    The executive regulations that relate directly to the individual, and should be known by everybody driving vehicles in Kuwait to prevent committing costly mistakes. In effect one owns a vehicle if he has one of the following documents:

    • A purchase contract issued from the manufacturer or local agent.

    • An official authenticated document signifying sale of the vehicles to somebody, or indication of ownership.

    • For imported vehicles: customs clearing papers.

    • Any legal binding documents that indicates ownership of vehicles: contract of association with company (if the company owns the vehicles), a will, donations etc.

    • In case of death of owner any document that signifies death of owner and the vehicle's transfer of ownership from deceased to one of the inheritors.

    • A judicial ruling designating the legal owner of vehicle.

    Under article 9 of the law, if a vehicle under mechanical inspection is found unsuitable to be on the roads, the owner can place a petition to the Director of traffic department, to re-inspect the vehicle, and it will be re-inspected within 48 hours, if found good, the fees of petition will be refunded. Also the owner of the vehicles can re-submit it for re-inspection after repairs are done, or other legal requirements fulfilled.`

    Under article 19, vehicles of transit travellers, foreigners visiting the country, or tourists are exempted from vehicle registration in Kuwait in the following cases:

    • The vehicle has legally registered number plates and valid license.

    • Owners of foreign vehicles entering Kuwait must refer to traffic department within one week of their entry to Kuwait.

    • Insuring the vehicle in Kuwait or having the insurance policy covering driving in Kuwait.

    • Informing the traffic department about addresses and places of residences of owners or drivers of foreign vehicles during their stay in Kuwait as tourists or transit traveller.

    • Foreign vehicles in Kuwait should not stay more than 3 months, but if it is necessary to stay longer, the traffic department must be informed one week before the end of 3 month period.

    Article 28. Regarding heavy vehicles, construction vehicles of all types, industrial, or agricultural vehicles, the following should be met:

    • The person requesting license for above vehicles must be one practicing a trade or profession that uses such vehicles.

    • Approval of the governmental department supervising this trade or business.(Ministry of Commerce and industry, Authority for Agriculture and fisheries).

    • Number of persons traveling in the vehicles must be indicated on the license (no extra persons are allowed in the vehicles). Heavy vehicles are not allowed to travel on public roads without necessary permits.

    Article 37. Owners of licensed vehicles must return the number plates to the traffic department in the following cases.

    • If the license has expired and the owner does not intend to renew it or a legal obstacle forbids.

    • If the owner of the vehicles does not want the vehicle any more.

    • If the license is withdrawn, or legally cancelled, or number plates are withdrawn.

    • In the above mentioned cases the number plates must be handed over to the traffic department or send by mail or hand over to Kuwaiti embassies as the situation arises.

      INSURANCE

      Article 63. Insuring vehicles against civil liability is obligatory. The insurance policy covers damage and injuries of property and persons.

      Article 64. The obligatory insurance covers the passengers in the following types of vehicles, except the driver's family (father, mother, wife and children) :

      • Private vehicles (family cars etc).

      • Public transport vehicles.

      • Taxis.

      • Different types of private transport vehicles.

      • Ambulances of all types and other hospital cars.

      • All forms of transport vehicles.

      Article 68. In case of an accident resulting in damage and injuries, the insurance company does not get affected by any settlement between the insured and the injured.

      Article 74. In case of an accident resulting in injury, the insured must inform the insurance company within forty eight hours; nevertheless delay in informing the insurance company does not relieve it from liability and obligation to compensate the injured.

      Article 75. The insurance company has the right to put down in the contract any condition it deems reasonable, and in line with the traffic Law, and has the right to seek compensation from the insured if he breaches these conditions in an accident that leads to damage or injuries.

      Article 76. The insurance company has the right to reclaim from the insured whatever money it paid the injured, in the following cases:

      • If it proves that the insured has given the insurance company wrong information that affected its decision to issue the insurance policy.

      • Using a vehicle in breach of what the permit allows:

        - overloading the vehicle - transporting more passengers than allowed - using the vehicle for racing or speed testing
      • If the accident happens and the driver is found drunk or under sedation.

      • If the driver does not have the proper driving license designated for the type of vehicle.

      • If the driver intentionally causes an accident that results in death.

      Article 77. In case of damage befalling others from an accident, the insurance company must pay compensation regardless of its right to reclaim money from the insured.

      Article 78. A person is not considered a passenger (and thus with no insurance cover) if he is not in a vehicle designated to carry passengers; and persons are considered passengers in a vehicle if:

      • They are getting into the vehicle.
      • They are getting out of the vehicle.
      • They are in the vehicle.

      Article 81. In case of a final court judgement of an accident, the insurance company must pay compensation within ten days from being informed of final court judgement, and must follow prescribed legal procedures if it objects to the court judgement.

      Article 87. In order for a person to be given a driving license the following conditions must be met:

      • For Kuwaitis
      • - Applicant must be of legal age.

        - Be healthy and fit

        - Pass a driving test.

      • As of december 2005, foreigners living in Kuwait must now meet the following criteria in addition to the above.

      - Valid residence permit.

      - Salary above KD.250

      - Should be legal resident in Kuwait for a minimum of 2 years when applying.

      - Hold a university degree

      Exempted from the above conditions are foreigners with the following jobs or professions:

      • Drivers for companies and establishments (employees working as drivers).

      • Domestic helpers coming to Kuwait as drivers.

      • Consultants, judges, prosecutors, experts, and lawyers.

      • Doctors and pharmacists.

      • College and university professors

      • Teachers, social consultants, laboratory technicians.

      • Engineers and their assistants.

      • Foreign wife of Kuwaiti as well as his divorcee or widow.

      • Foreign husbands of Kuwaiti women and their children.

      • Imams and Muazzins of Mosques.

      • Librarians working in government institutions.

      • Nurses, paramedics, laboratory technicians and supporting medical staff.

      • Journalists and media professionals.

      • Trainers, coaches, and professional players working for sporting clubs.

      • Pilots and other aircraft crews: stewards and stewardesses.

      • Housewives with children, whose husbands have a salary of KD.250 or more, and have been in Kuwait for at least two years before the wife applies for license.

      • Computer programmer with a university degree .

      • Mandoubs (persons who handle paper work for companies in administrative departments).

      • Undertakers and other morticians

      • Translators and interpretors

      • Company heads
      • University heads
      • Diplomatic staff
      • Counsellors

      Technicians of all kinds are exempted from the two years minimum legal residence condition if their salaries are not less then KD.250 per month.

      Article 92 concerns with the medical checkup of an applicant and it is as follows:

      • Medical checkup (normally for eyesight only) must be performed when driving license is applied for the first time, and every three years for drivers of private and public transport vehicles and taxis.

      • Medical checkup for a driver is required if the traffic department comes to know that a serious health problem befell the driver (weak eyesight, physical handicap of any kind).

      • Medical checkup for a driver reaching the age of 50 years, and then every five years till the driver reaches sixty years of age. A medical checkup must be performed annually when he reaches sixty years and above.

      • For public transport driving license, once a driver reaches 40 years of age, medical checkup must be done every three years, and annually when he reaches sixty years and above.

      • Tourists, or transit travelers, or visitors of any kind holding foreign driving licenses are allowed to drive in Kuwait if they meet the following conditions:

      • Refer to traffic department within one week of their arrival in Kuwait requesting permission to drive using their non-Kuwaiti driving license.

      • The tourist or transit visitor should not exceed duration of stay in Kuwait without proper permission from authorities, and when granted permission to stay more, should refer to traffic department before his legal stay necessitaties extension.

      • The foreign driving license must be valid.

      • The vehicle he drives in Kuwait must be insured.

      • The driving license is withdrawn if the driver commits too grave a traffic law violation in the first year of his having the driving license, such as the following:

      • Crossing the red traffic signal.

      • Driving opposite the direction of traffic.

      • Exceeding speed limits.

      The driving license can also be withdrawn if the driver commits a violation of the traffic law that endangers people's lives, or causes property damage. In such cases the driver whose driving license was withdrawn can re-apply and get a new driving license after a lapse of four months, and successful passing of the driving test.

      WITHHOLDING VEHICLES IN VIOLATION

      The cases in which a vehicle is seized and withheld for a certain period of time are the following:

      • If the vehicle is found without number plates or with number plates different from those issued by traffic department.

      • If the vehicle is found on the roads after the vehicles license or number plates are withdrawn.

      • If the vehicle is found without valid insurance policy or without valid license.

      • If the driver does not have a driving license or is not carrying it with him.

      • If the vehicle has visible mechanical defects and no brakes.

      • If the driver is racing.

      • If immoral acts are committed in the vehicle.

      • If the vehicle is obstructing traffic flow.

      • If the driver is drunk, or under the influence of drugs.

      • Using a vehicle for unlicensed purposes (using private vehicles to carry passengers).

      • If the vehicle is parked in a no-parking zone or on the sidewalk

      • Abandoning a vehicle on the road.

      If the owners of seized vehicle do not claim their vehicle and pay the penalty fees within a period of three months, the traffic department has the right to auction the vehicle and take from the proceeds whatever official dues and penalties are incurred, and put the rest in trust for the owner. But before the traffic department resorts to auction, it must publicize its intention in the official gazette ten days before auction date.

      The traffic violation of exceeding the speed limit is reconciled with traffic department as follows:

      • If the speed of vehicle exceeds the speed limt by 20 Km per hour the fine is KD.20.

      • If the speed of vehicle exceeds the speed limit by 20 to 30 Km per hour the fine is KD.30

      • If the speed of vehicle exceeds the speed limit by 30 to 40 Km per hour the fine is KD.40

      • If the speed of vehicle exceeds the speed limit by 40 Km per hour or more the fine is KD.50

      All kinds of traffic law violations are assigned an appropriate number of points for each. These points are registered on the computer system, and a certain number of points leads to the penalty of license withdrawal. The points are automatically erased from the system after:

      • The lapse of one year free from traffic violations.
      • A court ruling of not guilty.
      • suspension of the court case for lack of evidence.

      Any driver committing a serious traffic law violation repeatedly, and accumulating a certain number of points will have all his procedures in governmental departments suspended until the withdrawal procedures of his driving license is completed.

      BODY DAMAGE REPAIR

      All vehicle body repair shops must get the permission to repair a damaged body of a vehicle (due to accident) from the Interior Ministry (investigation officer in the police staion). And those that do not abide by this rule can face suspension of business for a period of 90 days, or get their license cancelled by Ministry of Commerce & Industry in line with a request by traffic department.

      DRIVER'S CONDUCT
      • Drivers are required to respect traffic law in order to secure safe driving and not cause damage to people and property (public or private). They should behave in a civilised manner, refrain from immoral acts in vehicles, and not cause disturbances to pedestrians and residents in neighborhood .

      • They should perform regular vehicle maintenance to insure their road safety and if sudden mechanical problem arise, the driver must move away from traffic lanes.

      • A driver should not use glaring headlights or disturb people by honking near hospitals or schools, and should not loaf around with his vehicle in residential neighborhoods.

      • A driver involved in an accident must immediately inform authorities while staying put; and if passersby witnesses an accident resulting in physical injury they must extend a helping hand without effecting the scene of the accident.

Labour Contract

The labor contract between employers and employee can be either written or verbal. It should be in Arabic with a translation to the language spoken by the employee, or into English, if requested, and it should at least comprise the following information:

  • Date of contract, duration of contract (if it has fixed duration), salary or wage, type of job and its nature, and any information and condition deemed necessary by the parties to the contract.

  • In case the contract is verbal and conflict arises between employee and employer, the case of the wronged party shall be proven by all means possible; and if the contract has a fixed duration it should not exceed five years, renewable upon the consent of parties.

  • It should be noted that the Arabic version of the contract is the one legally binding in case of discrepancy between the Arabic original and a translated version.

The law states that it is legal to try the employee for a period of hundred days, after which the employer can relieve him of his work without notification but with payment of certain compensation as agreed. (the law does not indicate whether this compensation is full salary or not).

Labour Departments

The MSA&L has five Labour Departments, one in each governorate. Labour disputes should be referred to one of these departments, along with documents to substantiate a claim. The Department will give advice on the merits of a case.

Labour in the Private Sector

This law applies to employees in the private sector; it does not apply to domestic helpers of all kinds (drivers, servants, cooks, maids, etc.). Employees in the public sector and oil sector have different laws to them and they are only applied to Kuwaiti and Gulf nationals; foreigners working in these sectors are under the jurisdiction of this law.

Labour Laws

There are three main legal codes governing labour conditions in Kuwait. The employment conditions of civil servants are regulated by the Labour Law for Government Employees. Those who work in the oil industry are protected by the Labour Law of the Oil Sector. And the Labour Law of the Private Sector governs employment conditions in private businesses. Persons in domestic service, such as maids and chauffeurs, however are not covered by any particular code and must rely for protection on general principles of law.

Labour regulations in the private sector are enforced by the Ministry of Social Affairs & Labour (MSA&L). Persons on temporary contracts of less than six months are excluded from the scope of the private sector labour law. Where an employer's head office is outside Kuwait, the labour law of the country where the employer has its head office, governs expatriates working in Kuwait, unless the employer has a branch in Kuwait which concluded the contract with the employee in which case Kuwaiti law applies.

Labour Organization

In Kuwait there is no serious labor organization. All organizations or associations are under the umbrella of the Ministry and membership restricted to Kuwaitis. Lately the government ministries and institutions started forming syndicates or associations to protect the right of government employees and better their lives & are benign entities.

No Objection Certificate

A visitor can also enter Kuwait on a No Objection Certificate (NOC). The certificate is issued by the Ministry of Social Affairs and Labour (for domestic employees) or by the Chamber of Commerce (for businessmen). This has to be arranged in advance by the Kuwaiti sponsor or employer. The NOC can be arranged for in the following ways:

Prior to arrival

The Kuwait Consulate or the Embassy based in the employee's country is sent the intimation to issue the NOC which is collected by the employee. He or she can then enter Kuwait directly for employment. A residence visa is then issued once the employee has entered the country.

After the employee's arrival

The employee enters Kuwait on a Business visa, after which an application is made for a NOC for employment. Once this is obtained the person has to go through the process of Medical tests and fingerprinting to stamp the residence permit and obtain the civil identity card.

Occupational Diseases

Any occupational disease that befalls the employee is compensated for by his consecutive employers. (If he had more than one employer throughout his working life) All employers he works for in the same hazardous occupation are jointly liable to compensate the employee, each one in accordance with the duration spent by the employee at his service.

Punishments

Any person who breaches this shall face the following:

  • A warning notification from ministry to correct his illegal conduct within three months

  • If illegal conduct is repeated within 3 months from the first warning the employer is fined one hundred to two hundred dinars for every employee breaching the labor law.

  • And if this illegal conduct is repeated within 3 years the penalty will be doubled.

Any employer who recruits employees from outside the country and does not hand them the work they came for, or he is not in actual need of them, faces a fine of KD.500 or imprisonment of maximum of three years, or both penalties.

Reconciliation & Conflicts

In cases of conflict between an employer and some or all of his employees, regarding the terms of work, the following procedures must be followed:

  • Direct negotiation between employer and employee, or their representatives, if the problem is solved it must be registered in the Ministry within a week of it being solved.

  • If the problem remains unsolved both parties can resort to the Ministry to help solve the problem.

  • If stage two fails, the Ministry forms an arbitration committee consisting of representatives of both parties, a representative of the court of justice, and a representative of the Prosecution Department (Niyaba); to meet, and deliberate, and decide on the issue. The decision of the arbitration committee will be considered final and binding to both parties.

The Ministry prepares the regulations and procedures for arbitration between the two parties.

  • Terms of a labor contract breaching this law do not legally stand, only if the terms give more benefit to the employee do the breaching terms hold as legal.

  • Civil service of the Ministry have the right to inspect the employer’s offices or factories to make sure they apply the law and ministerial decrees and regulations; they have the right to interview and ask questions regarding application of law and regulations.

All cases filed by employees against employers are free from fees and are quickly looked into by the courts. Yet before resorting to the court, the employee should place a complaint at the Ministry that his employer is not abiding by the contract. The Ministry will receive the complaint and summon the employer to attend and explain his position, if the problem is solved to the satisfaction of the employee, there will be no need to take the matter to court. If not, then the Ministry will send the case to the court on behalf of the employee. The Employee must be aware that the passing of one year after termination of contract without litigation in labor court against non-complying employers, will negate their dues; as a matter of fact the court will not hear such cases; it will dismiss them.

Remuneration & Deductions

Remuneration includes basic pay, incentives, commissions, obligatory bonuses, gratuities from third parties and allowances from which the employee benefits (such as housing allowance), but excludes allowances on account of expenses and profit shares.

Payment of a bonus is obligatory if it is stipulated in the employment contract or in the by-laws of the firm or has been paid in the same amount regularly every year. An employee's total remuneration must be used when calculating terminal indemnity or compensation on account of injury. Where an employee is paid on a time basis the last salary payable is used but if he is paid on a piece-work basis then the average wage paid to him for his actual work during the previous three months is used. There is no minimum wage. Salaried employees must be paid at least once a month. Piece-workers and those on hourly or weekly wages must be paid every two weeks.

Persons working for a subcontractor who has failed to pay their salary may demand payment from their employer's superior contractor to the extent that the latter owes their employer money for work done. When an employer goes bankrupt, the outstanding salaries and termination benefits of his employees must be paid before other creditors. An employee may not be obliged to buy products made by his employer. If he owes his employer money then not more than 10% of his salary may be deducted to pay off his debt and he may not be charged interest. Where an employee's salary is attached on account of debts to third parties, the deduction is limited to 25% of his salary.

Renewal of Residence Visas

After the initial residence has expired it can be renewed, provided the expatriate intends to continue under the same sponsor. Renewal is a fairly simple matter. Applications are made at the passport office. Medical tests are not required on renewal. However the employee's work permit must first be renewed with the Ministry of Social Affairs & Labour. The application for renewal must be supported by:

  • the employee's passport and a copy of it,

  • the renewed work permit,

  • medical insurance receipt and

  • a copy of the sponsor's signature as required for business purposes.

Normally the sponsor or his official 'mandoub' will attend at the passport office to renew the employee's iqama. Where the employee does so himself, he must have a letter from his sponsor authorising him to do so.

Residence Visa
Salaries & Wages

A salary is what the employee earns monthly as remuneration for his work. Its consists of the basic amount of money plus any benefit he might have agreed upon, plus rewards, increments, commissions etc (as agreed with employer). At the end of the employment period, the employer should consider the last salary paid as the basis for calculation of the end of service remuneration, (that is so if the employee is paid on a monthly basis). But if the employee works by piece, or by measure of work done, or work accomplished, then an average of the last three months of his wage should be taken into consideration when calculating his end of service remuneration. Wages are considered either as daily basis, or weekly basis, or monthly basis or per hour of work done, or per piece of work done. It is worth noting that common practice is of two kinds:

  • Monthly paid salaries for white collar employees.

  • Wages paid on a daily work basis at the end of the month for blue collar workers.

Daily workers should get their wages every two weeks but if this has not been the custom they should get their salaries every month paid punctually. An employer cannot change the status of his employee from a monthly paid one to a daily paid one, or one paid by week, or paid for units of work accomplished, without the employee’s acceptance. The employer is not allowed to do:

  • Force the employee to buy from his products or from a place designated by him.

  • Deduct more than 10% from employee’s salary or wage to pay back debt due to the employer.

  • No restriction of any legal nature on the salary of the employee should exceed 25% of total salary. Priority goes to alimony of ex-wife, then to creditors regarding debts on food, shelter, and clothing.

Scope of Application

This law applies to employees who earn their living from physical, or mental work, and to owners of businesses, be they persons or commercial entities who earn their living from employing workers to do physical, or mental work for them.

An owner of a business company must issue a work permit for his employee from the Ministry of Social Affairs & Labor (henceforth referred to as the Ministry) excluding Kuwaitis or GCC nationals. The Ministry issues the work permit upon the request of the owner of a Kuwaiti company (henceforth referred to as employer) registered at the Ministry, and in accordance with requirements stipulated by the Ministry and met by the company. Once the work permit is issued a copy goes to Ministry of Interior based on which a work entry visa is issued.

Anybody who is not registered at the Ministry is not allowed to work (having a work permit means the person is registered at the Ministry). The Ministry is authorized to license offices for recruitment of workers from outside the country. These licensed offices are not allowed to take money from workers for their recruitment services, and are prohibited from keeping the recruited workers for themselves.

Services Available to the Residents
DENTAL CLINICS

Some of the primary care polyclinics include dental units. There are also six public dental clinics in the country. The main one is behind the Amiri Hospital in Sharq. Though Kuwaitis are entitled to a full range of services, the range of dental procedures available to expatriates is restricted to cleaning, scaling and tooth extraction. To avail of special dental services, such as having a permanent bridge or crown installed, or even a root canal, expatriates must attend a private dental clinic at their own expense.

PRIVATE MEDICAL CARE

Despite the excellent comprehensive services provided by the public health service, private hospitals and clinics thrive in Kuwait. The MPH regulates standards and the fees they may charge. The private hospitals and clinics have their own pharmacies. Most of them are general hospitals with some specialist departments. Some have limited equipment, such as ICUs, or specialists but still they have to refer patients to government hospitals for special procedures. Private clinics are usually staffed by doctors of a particular speciality. There are several private dentists and dental clinics providing services to international standards. Orthodontics are only available to expatriates through these dentists and clinics.

SPECIAL DRUGS FOR EXPATS

The health ministry has authorised the dispensing of high-end special medicines to expatriate patients under treatment in hospital wards. Earlier such medicines were restricted to Kuwaitis only. If expatriates are admitted to hospitals, these medicines can be dispensed to them so long as they remain in the wards. Visiting outpatients will continue to buy their medicines against a prescription. Medication commonly required for ailments such as hypertension, high cholesterol , kidney diseases, rheumatism and cancer were not previously dispensed to expatriates because of their high cost. An injection for rheumatism costs approximately KD 120 and for cancer KD 150, and for neuroendocrine tumour KD 600. The budget for medicines in three major hospitals in the country, viz Al Farwaniya , Mubarak Al-Kabeer and Al-Amiri amounts to KD 6 million annually.

PRIVATE MEDICAL INSURANCE

Medical insurance, from companies such as Expacare, BUPA and ARIG, can be bought in Kuwait. Local group insurance often require a minimum of 15 persons, with an annual premium of about KD75 per person for a cover of KD5000 for both inpatient and outpatient treatment with an excess of 20%. For individuals there are some local medical insurance schemes (about KD125 per year) but the cover provided, the exclusions and age limits sometimes leave a lot to be desired.

PHARMACIES

All areas have pharmacies. Some of the smaller pharmacies do not stock a full range of medicines. But in each major area - Kuwait City, Hawalli & Nugra, Salmiya & Rumaithiya, Fahaheel & Ahmadi, Kheitan & Farwaniyah at least one major pharmacy stays open all night. These late night openings are rotated, and the particular pharmacy, its opening night and telephone number are shown daily in the newspapers. Requirements for prescriptions are no less stringent than in Europe and North America. Though the contraceptive pill is available over-the-counter, many items freely available in Europe and the USA require a prescription in Kuwait, and indeed tranquillizers may only be prescribed by consultants with a special prescription. The prices of all medicines are fixed by the MPH and all pharmacies must, by law, charge the same price.

HOTELS & MOTELS

There are more than 20 hotels in Kuwait. These are officially classified as 5 Star, 4 Star and 3 Star. Kuwait's top hotels compare favourably with the best internationally. Facilities include swimming pools, health clubs, tennis courts, shops, and business centres. Many have good conference and seminar facilities. Prices per day in the 5 Star range from KD50 for a single room to upto KD100 for an executive suite, to as much as KD250 for the most expensive suite. Substantial discounts are usually available for long stays, a 15% service charge is always added to all prices. Kuwait also has a number of establishments which describe themselves as 'Motels', but which are really serviced apartments. The better ones have flats with two bedrooms, two bathrooms, sitting room and fully equipped kitchen, and the prices include housekeeping and laundry services. The motels usually have swimming pools, satellite TV and international fax facilities. Cheaper than hotels but offering similar facilities of comparable quality, they are suitable for executive expatriates, on short-term contracts of six months or so, for whom renting an apartment would not be cost effective.

DRIVING IN KUWAIT

Driving is on the right (left hand drive). The overall speed limit is 120kph, but on some motorways the limit is 100kph or 80kph. Speed limits are 45kph in urban areas and 60kph on urban dual carriageways and all bridges, flyovers and loop roads. Kuwait's roads are quite good, and as sign posts are in both Arabic and English, getting from one area to another is easy. There are 7 ring roads in Kuwait and the Ministry of Public Works is considering an eighth ring road, which would extend from Ahmadi in the south to Jahra in the north. Sources close to the Ministry have stated that a particular advantage of the road will be its potential as alternative traffic for trucks and other heavy vehicles. There are radar cameras, which record vehicle and speed, on motorways and some main roads and at traffic lights. Wearing seat-belts is compulsory for all passengers and children under 10 years may not sit in front. When entering a roundabout a car must stop fully, rather than just giving way. The rule of "right of way to cars approaching from left" is applicable on the roundabouts. Parking against black and yellow blocks painted on curbstones and on pavements is illegal. A driver must show his driving license and Registration Card when asked by the police. If he cannot do so, he is taken to the police station, fined and held until someone brings them on his behalf. A driver who is jailed by the traffic court for a major offence may find that he is barred from renewing his residence and is thus effectively deported.

CAR HIRE & LEASING

There are plenty of car hire firms in Kuwait. To rent a car, foreigners on visit visas need an international license, major credit card, and passport copy. Foreigners residing in Kuwait must have a Kuwaiti license. Hire rates, sometimes a combination of time and distance with the first 150km a day free. Charges are based on a 24-hour day and an hourly charge (excess hours) for late return is made. Special weekend rates are available. Insurance maybe included in the hire rates. But those using an international license must have their license validated through a local insurance company, at a cost of KD.9 a month.

PETROL OR GAS

Kuwait has over 90 petrol stations, many of them self-service. All are operated by Kuwait National Petroleum Company (KNPC). Petrol stations are easy enough to find in the Metropolitan Area and some are open 24-hours a day. But they are few and far between in the more remote desert regions. However, at only 60fils a litre for unleaded premium petrol and 65fils for super premium and only 55fils a litre for diesel, fuel is the cheapest in the world.

The pre-paid Smart Card for fuel consumption is now available in Kuwait from PetroNet in a selective suitable denomination of KD.15, KD.20, KD.25 and KD.30. The holder of card could utilize the nominal amount partly or fully in one or various fillings in accordance to the announced official fuel tariff, where the cost of the fuel will be deducted from the card and the remaining balance could be used for several other refueling. When the amount of the card is fully consumed, the card is disposable. PetroNet pre-paid card is considered as a reporting and controlling instrument for fuel expense, where a receipt for each fueling transaction will be issued detailing card number, name of the station, date, time, quantity of litres, the amount paid and remaining balance. Moreover, a statement with a track record for each card could be obtained by fax from PetroNet. For more info, contact PetroNet representative at the station or call Tel : 2438001- Fax : 2438002

DRIVING OUT OF KUWAIT

To drive a car from Kuwait through other countries the following are required:

  • International Driving License

  • Orange Card Insurance (for Arab countries)

  • Triptyque Green Card Insurance (for Europe) To enter European countries, a vehicle ownership international book is also needed.

International driving licenses are issued by the KT club for KD.8, on presentation of a valid Kuwaiti driving license and one passport-sized photograph. The club also issues the vehicle ownership international book. Orange and green card insurance may be obtained from car insurance companies or the KT Club. The triptyque (international car certificate or 'carnet de passage') is a 25-page booklet containing tear-off transit coupons, with one entry and one exit coupon plus counterfoil per page. The booklet shows the details of the vehicle, and guarantees that if it is left in the foreign country through which it is passing then any customs duty will be paid by the automobile club which issued it. A triptyque is valid for one year, during which 25 entries into and exits from other countries can be made without paying import duty. When entering a country the entry coupon is removed by customs, and the entry stamped on the counterfoil. When leaving the exit coupon is removed and the exit will be stamped on the counterfoil. Triptyques can be obtained from the KT Club, other driving clubs and from some travel agents. A Kuwaiti guarantor plus a fee of KD.30 is required. If a Kuwaiti guarantor is not available then a bank guarantee letter is required for a maximum amount of KD.2000 (according to the model of the car). A fee of KD.23 is charged by the bank.

EXPORTING VEHICLE

There are two ways to export a vehicle from Kuwait. The first is the easiest for those who are driving back to their home country. The second way is for those who are sending their car home by seafreight. In the first way the expatriate obtains a triptyque and drives home on Kuwaiti number plates. Once the car has been registered in his home country he returns the number plates to the traffic department in Kuwait, and the triptyque to the issuer in Kuwait to have his deposit refunded or his Kuwaiti guarantor's guarantee released. In the second, more official way, the number plates are taken to the traffic department and exchanged for an export number and various documents. These are then taken to the customs department in Shuwaikh in order to obtain an export permit which allows the vehicle to be shipped out of Kuwait.

DRIVING LICENCES

A GCC national may drive a car in Kuwait on his home country license. Non-GCC nationals may not drive on a GCC license. An expatriate on a visit visa may only drive on an international driving license for the period of validity of his visa and any extension and a license issued in his home country is not acceptable. Foreign nationals with residence permits can only drive on a Kuwaiti license.

DRIVING ACCIDENTS

The emergency services and police usually respond quickly to traffic accidents. In nearly all cases all the parties involved are required to go with the police to the nearest station to sort out matters. If the police decide to prosecute and the accident is not serious, those involved are required to post a bond pending their appearance in court. If an accident is serious, the parties may be held in custody until they appear in court.

DRIVING OFFENCES & PENALTIES

The new traffic law was passed by the National Assembly in June 2001 introducing stiffer penalties for major life-threatening offences such as running a red light, speeding or driving under the influence of alcohol or narcotics and repetitive offences. Operating a vehicle under the influence of alcohol or drugs is punishable by up to a year in prison and/or a KD.500 fine. The court can also confiscate the driving license in case of repetitive offences. Driving without a valid driving license or driving a vehicle not permitted to drive as per the driving license, is punishable by KD.100 fine and/or one month in jail. Out of court settlement is possible after the payment of KD.30 fine. Breaking a red light is punishable by up to three months in jail and/or KD.300 fine, however out of court settlement can be made by paying KD.50.

Speeding, unauthorised racking, wrong side driving are punishable by up to KD.100 fine. For out of court settlement the violator will have to pay KD.50 fine. Failure to fasten the seat belt, failure to produce a driver's license or the vehicle registration book upon request by traffic police or security men is punishable by up to KD.15 fine. An out of court settlement is possible after payment of KD.10.

There are two types of monetary penalties, settlement and court fines. Settlement refers to fines that may be paid without going to court. However, out-of-court settlements must be made within 30 days of committing the offence or from the date of being informed. If this time limit is exceeded then the offender must pay the minimum court fine in settlement, unless he decides to go to court. Out-of-court settlement is not acceptable in certain circumstances and the matter must go to court where the penalties are more onerous. If jumping a red light or exceeding the speed limit results in death or serious injury, settlement is not allowed and the driver is liable to a court fine of at least KD1000 and a jail term of one to two years. If these offences are carried out under the influence of alcohol or drugs, the jail-term is two to three years. The law has also introduced the "points system" which is a record of the number and nature of traffic offences for drivers within a period of one year. The points will determine the penalty of suspending the driving license for up to one year or revoke the driver's license completely and require drivers to pass driving test again. The new points system for traffic offences effective from November 1, 2001 is as follows:

  • Four points are recorded in the drivers record for breaking the red light, exceeding the speed limit, driving the vehicle in the opposite direction of the traffic flow or reckless driving.

  • Three points are recorded for driving a vehicle other than the type allowed in the driver's license, driving a vehicle with expired or suspended registration, using a vehicle for racing without a permit, using a vehicle to commit immoral acts, driving a vehicle without or with tampered license plate, or using false information to obtain drivers license or car registration documents.

  • Two points are recorded for using a private vehicle to ferry passengers for money, deliberately obstructing traffic, driving a vehicle with malfunctioning brakes or handing over the vehicle to someone without a valid driving license.

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    One point is recorded for driving a vehicle with unclear or unreadable license plates, driving a vehicle with a missing plate, or making any changes to the shape and colour of the plates, failure to produce the driving license or the registration card, operating a vehicle producing excessive noise or smoke or with insecure cargo, or faulty tyres.

A driver who accumulates 14 points faces having his license suspended for three months for the first time. For the next 12 points, the driving license is suspended for six months, for next 10 points nine months and for another next 8 points up to one year.

For the next six points, the fifth time, the driving license is revoked and the driver must apply for a new driving license and take the driving test again. The points are cancelled only after the execution of the stipulated penalties or maintaining a clean driving record for a year after recording of the most recent points. A court conviction or an out-of-court settlement for traffic offences does not cancel the recorded points. New drivers who commit serious offences such as breaking the lights, exceeding the speed limit or driving against the traffic flow, during their first year on the road have their licenses withdrawn, and have to wait four months and retake the driving test before applying for a new licence.

The police have the power to detain drivers for the following reasons:

  • Driving without a valid driving license

  • Driving under the influence of alcohol or drugs

  • Causing an accident which may result in death or serious injury

  • Racing on the public roads.

  • Attempting to flee after being involved in an accident in which people may have been injured or after being ordered to stop

  • Failing to stop at a red traffic light.

  • Driving recklessly so as to endanger others.

Spouses & Dependents

Expatriate employees working for the Government sector or the Private sector whose monthly salaries are not less than KD 250 per month are granted a residence permit for their wife and children. The employee acts as the sponsor and has to pay the following annual fees for the family:

1. Spouse

KD 100 for the first year and KD 10 renewal fee for consecutive years plus KD 40 per year Health Insurance Fees.

2. Upto 2 children

KD 100 each for the first year and KD 10 renewal fee for consecutive years plus KD 40 per year Health Insurance Fees.

3. 3rd child onwards

KD 200 each for the first year and KD 10 renewal fee for consecutive years plus KD 40 per year Health Insurance Fees.

Employees are allowed to sponsor one domestic servant, provided both the parents are working and there is a necessity to have someone to look after the children. A fee of KD. 200 per year will be charged from the sponsor (Non Kuwaiti) for sponsoring a domestic servant.

Termination of Contract

If the labor contract between employer and employee has expired, and the employee kept working for the employer with the latter’s approval and consent, the contract is considered renewed for an unspecified period of time.

If the duration of the contract is not specified, and one of the parties wishes to terminate the contract, he must notify the other party of his intent at least 5 days before expiry date in case the employee is paid on monthly basis; and before seven days if the employee is paid on daily basis.

But if the labor contract has a specific duration, and one of the parties terminated the contract without due recourse to terms of contract, then he bears full responsibility to compensate the other party for damage caused to him by the abrupt termination of contract; bearing this in mind, there are conditions and situations where the employer and employee can terminate the contract without notifying each other.

The employer can terminate the contract without notification or compensation in the following cases:

  • If the employee does not fulfill his responsibilities and duties to his job and causes damage to employer (intentional contribution to damage directly or indirectly is a liability).

  • If he causes a big loss to employer.

  • If he breaks repeatedly the regulations given to him by the employer except when breaking it from his safety.

  • If the employee divulge secrets of the business.

  • If the employee commits a crime related to honesty such as: breach of trust, malicious conduct, cheating, fraud, etc.

  • If the employee cheats the employer in order to get the job.

  • If the employee does not come to work for seven consecutive days.

  • If the employee breaches the contract.

  • If he assaults the employer or employer’s representative, or any of his colleagues.

Other than the conditions indicated above the employer must compensate the employee for whatever period remains in the contract till its expiry date.

The employee can terminate the contract without notifying the employer, and with full compensation given to him in the following situations:

  • If the employer or his representative assaults the employee.

  • If the employer or his representative breaches the contract terms.

  • If the work given to employee is hazardous to his safety and health.

  • The contract is also considered terminated in the following situations:

  • If the employee passes away.

  • If the employee becomes invalid and incapable of continuing his work after spending all legitimate sick leave.

As a consequence of these two situations, the inheritors of the employee would take the legal compensation, and in no way can the employer terminate the contract while the employee is sick and under treatment.

If the company or establishment becomes bankrupt, is liquidated, closed down for whatever reason, merges with other company, transferred to other through inheritance, or any legal action, then the contract with employees is considered terminated and their dues becomes debts on this company.

Transfer of Work Visas

Transfer of work visas is permitted according to the new decree issued by the Ministry of Social Affairs and Labour with a fees of KD 200 (non-refundable).

Fees on transfers will not be applicable to those who have completed one year of service with their current employer or had completed ten years of stay in Kuwait - exceptions are made only for certain cases.

Unjust Enrichment

A person who enriches himself by whatever amount of money without a legitimate reason to do so, is obligated by law to return what he enriched himself with to the person affected. The prescription period for unjust enrichment is three years from the date the affected person knows about it. (He cannot file a case of redress after the passage of three years from the date he knows of the unjust enrichment).

Any one receiving money which is not his, from another person, in good faith must return the money to its owner or back to the one he received from. If he has malicious intentions (this must be proved)then he must return the money in addition to what he may have gained from its use, or missed to gain, from the day he received the money; but if a mentally incompetent person receives what is not his, he is not obligated to return the lawful gain he received from its use.

Work & Penalties

The employer should do the following regarding schedule of work and penalties: Keep a register to put down all relevant information about the employees:

  • Personal information.
  • Vacation leaves.
  • Sick leaves.
  • Penalties.
  • Other information as needed.

- Give the employee a work card.

- Hang on wall in the office a list showing working hours and holidays.

- Hang on the wall a list of penalties effected on employees in case of breach of rules; and the employer, when preparing this list, should take into consideration the following:

- To identify the possible wrongdoings of workers.

- The list of penalties should be in ascending order.

- Not to impose penalty on an employee who commits a wrongdoing outside the work environment, unless it is related to his work.

- Penalty discount of salary should not exceed five days in a month.

- Not to suspend the employee from work for more than 10 days in a month.

- The employee should not be punished for a mistake that he made 15 days before it was discovered, or after the date salaries were paid.

- The employee should not be punished more than once for the same mistake.

Work Environment

The employer should prepare the work environment in such a way as to prevent any damage or harm caused to employees from machines, debris, and any other hazardous materials that might be in the work environment. He should take safety procedures to secure his employees well-being and health. He should provide a clean, healthy place for his employees, equipped with proper ventilation, sanitary services, and good lighting. He should take necessary and sufficient precautions to protect his employees from occupational hazards and diseases, likely to happen to workers in certain industries. He should provide a First Aid Kit under control of a practicing nurse. He should provide means of transportation for his employees if the place of work is far from public transport facilities, secure a healthy residence, clean water and provisions; and all these should be in accordance with the contract formulated between the employer and his employees.

Working Hours, Holidays and Leave

It is not allowed for employees to work more than 8 hours per day, (forty eight hours per week): five consecutive working hours, one hour of rest and two final working hours. But for workers in hotels, restaurants, hospitals, sanitariums and other caretaking institutions, working hours can extend in accordance with a decree from Minister of Social Affairs and Labor. Working hours can be decreased if weather conditions are severe, or if work to be done is hazardous to health. Employees are allowed to work more than eight hours if the employer requests so from them in cases demanding extra work, or to urgently fix something, or to avoid loss, provided the employee does not work more than two overtime hours extra per day; and to be paid from these two extra hours 25% more than his regular salary or wage for these two hours. The weekly rest day is Friday. If the employee is asked to work on Friday, he should be paid 50% more than what he is paid for a day. The official holidays should be paid in full to employees, and they are as follows:

One day for Gregorian Calendar (January 1)

One day for Islamic New Year (Alhijra)

One day for Isra wal Mairaj

Three days for Eid Al Fitr

Three days for Eid Al Adha

One day Prophet’s Birthday

One day National Day (February 25)

One day Liberation Day (February 26)

The employee who works on holidays must be paid double his regular salary for the day. Employees have the right to sick leave based on a medical report prepared by a doctor in a public hospital or a doctor appointed by the employer. Paid sick leaves are as follows:

six days with full payment.

six days with ¾ of the salary (amount of salary equivalent to six days of work).

six days with half the salary.

six days with one quarter of salary.

six days without pay.

It must be known that if a conflict arises over the medical report, the report prepared by the public hospital doctor will be taken as the true one and it will be legally binding. The employee has the right to an annual leave of fourteen days paid in full if he spends one year of continual work at his employer and 21 days if he spends five years or more at his work. Fixing the date of the annual leave is the prerogative of the employer, and he has the right to give it in full or in parts with the consent of the employee.

10.Communication

Telecommunication

Kuwait has an efficient telecommunication system with telephone, telex, fax and internet access to all parts of the world. Courier services are also readily available. Telephones are installed promptly provided the relevant documentation supporting the application is complete.

11.Accomodation

Introduction

Foreign nationals are not permitted to own property. Accommodation can only be rented. Normally, leases for accommodation, are for a period of one year at the end of which, the lease continues on a month to month basis on the same terms and conditions unless otherwise specified by a written agreement. It is usual for employers to include accommodation as part of the benefits of the employment contract.

In its continuing pro-landlord policies, the National Assembly amended the 1992 bill. Henceforth, the landlord (Kuwaiti citizen only) can now hike the rent to a maximum of 100% before the expiry of the lease. The tenant, only on the giving end, has either to accept or vacate. New 'pro-landlord' amendments have been passed on April 5, 1994, and came into effect from May 1, 1994. Yet another pro-landlord amendments have been passed the following year, accordingly the open end contract does not exist any more. It is as follows:

  • The landlord now has the right to evict tenants after one year without stating a reason. However, in this case he must serve the tenant with a court notice prior to the termination of the contract period. Failure to do so, will mean automatic renewal of the contract for a further period of one year. At the time of renewal the landlord reserves the right to increase the rent, as stipulated by the earlier amendment.
  • If the landlord asks to evacuate adhering to the notice period of nine months, and the tenant refuses, then the latter will be considered as 'illegally occupying the premises'.
  • Court notices for sessions will be served only once irrespective of whether the person concerned was available or not. If the person (tenant) was located, the notice will be handed over to him/her, failing which the notice will be stuck onto the door of his/her apartment.
  • Once the verdict has been passed, appeals will not be considered. If the landlord sells the property during the tenure of the lease, the tenant is not affected. If the landlord wishes to terminate the lease he can do so under the following eviction stipulations:
  • The landlord requires the flat for himself or his immediate family.
  • The tenant has illegally sublet the flat without the landlord's permission or knowledge.
  • Non payment of rent for more than 20 days after its due date.
  • The tenant has carried out unauthorised activities at the premises.

If the landlord evicts the tenant for any of the reasons mentioned, then the Rent Tribunal grants the latter a grace period of 6 months to find alternative accommodation. For the transient businessman in Kuwait who might require accommodation for a month or so, it is advisable to hire either a studio apartment or stay at a hotel. Serviced apartments and chalets are available in certain hotels.

Furniture of all types and standards are readily available. Electricity is 230 volts, 50 cycles AC. There is no piped gas facility - gas for cookers is supplied in cylinders (available near all local cooperatives). The water supplied through the pipes carries both brackish and drinking water. The latter from the desalination plants is bacteriologically safe and therefore drinkable, provided it is filtered. Filters must be fitted to the water supply for washing machines, dishwashers and drinking water taps.

Since 1981, the Ministry has been implementing a system that depends on estimating the average annual consumption based on the previous year's consumption. Bills had to be distributed for the whole year in advance and it was left for the consumers to pay in ten instalments. This system has many problems and complaints. It also led to accumulation of huge amounts of unpaid bills. The Ministry is however continuing with the old system till a new one is devised. It has now been decided to set up a full computerised central control room directly linked with Ministry's main computer. This KD 50 million system is considered costly and difficult to maintain but requires less manpower.

TENANCY LAW
This law covers rental of residential apartments, houses, buildings, lands for storage use, offices, warehouses etc. This law doesn’t cover agricultural lands, or premises meant for speculation for cases in which the tenancy contract is signed between two parties, where it contains specific stipulation meant to secure big profits for one of the parties. In such cases the commercial law is applicable. The state has the right to expropriate any real estate for the public welfare in return for a suitable compensation to owner. For state-owned real estate leased to others, the state has the right of eviction if the lessee, or his tenant has breached the contract with the state.

The tenancy contract obligates the owner of real estate to present his property, subject of the tenancy contract, to the tenant for a specified or unspecified period of time. If the period of time is not specified in the tenancy contract, then the period of property use by tenant is the period for which money is paid monthly, quarterly or annually etc.

In case of conflict between owner and tenant regarding rent, certain standards are taken into consideration by the court to decide whether rent should be increased. These standards are as follows:

  • Prevalent rent of similar properties, their size, quality, architectural finish, and services etc.
  • All tenancy contracts must be written; old unwritten contract are governed by rules and regulations prevalent at the time of the verbal contract.
  • For cases where there several tenants occupy the same premises (flat, house etc.) the law considers priority to the first tenant who occupies the property in good faith and with a proven contract date preceding all others.
  • After the tenancy contract is concluded the owner must hand over the property in good condition and free of defects, and if the tenant discovers any defects that are unacceptable to him, he has the right to cancel the contract and claim compensation if need be.
  • The owner must do maintenance to the rented property in appropriate times (during holidays, vacations etc.). The maintenance includes necessary general rehabilitation of property, sewage, and other utilities, stairs, and roof. If he does not undertake this responsibility, the tenant has the right to demand in court permission to do so, and incur the reasonable costs on the owner.
  • If the declared costs are exaggerated, the judge has the right to adjust the figure in such a way as not to over burden the owner, the rest is borne by the tenant; and if he does not accept to pay the difference he can cancel the contract.
  • The judge takes into consideration the amount of the rent and duration of stay in premises in his decision regarding compensation for repairs.
  • The tenant cannot refuse the owner any necessary repairs or maintenance, or renovation that must be done, but the tenant can claim compensation or demand reduction of rent if the owner causes damage of any kind to the tenant when doing necessary repairs, or the tenant can terminate the contract. Nonetheless the tenant and the owner can agree in writing on any terms different from that.
  • The rent must be paid at the beginning of every month, or as agreed. In case of litigation with owner for whatever reason, the rent must be deposited in the execution department of the Justice Palace or courts within 20 days from rent's due date, and that should be done after the tenant officially offers the rent to owner and the latter refuses to accept the rent. The execution department then informs the owner of the deposit within five days. But if the owner accepts the money deposited at the execution department of two consecutive times, then the tenant can deposit further rents at the execution department without previously offering the rent to the owner; the tenant can give the rent to owner directly if the owner agrees to receive the rent and give the tenant the receipt. The tenant cannot withdraw from the execution department what he deposited unless he gets a court ruling allowing that, or explicit permission and consent of owner. In case of conflict between owner and tenant regarding rent, the tenant must pay the rent at the execution department pending court ruling or conciliatory agreement between them.
  • The amount of rent agreed upon by both parties can only be changed or amended with the mutual agreement of both parties, or by a court ruling. It is legally possible to amend the amount of rent after five years, or the lapse of contract period if the contract is more than five years, bearing in mind the rent value of similar property, and whatever specifications that incrementally effect the value of property. Also consideration should be taken that the increment should not exceed 100% of the difference between what the tenant pays the owner and what similar property is rented for at the time of dispute.
  • The tenant should not effect any structural changes to the property, and if he does, the owner has the right to demand that the tenant restore it to its original condition.
  • The tenant must take good care of the property he uses, should maintain it properly (sanitary fittings, paint, doors, electrical fittings, etc) unless the agreement between owner and tenant dictates otherwise, or the owner willingly does that.
  • The tenant is responsible for any abuse or damage incurred while he is occupying the property. The tenant should not sublet the property or part of it, unless permitted by the owner, and if the tenant has taken a permission to sublet the property or part of it, and after some duration of occupancy leaves the property, then the rent relation between owner and tenant will be transferred to another occupant.
  • In case of subletting parts of the property, the owner has the right to ask the tenant, who sublet parts of the property without the consent of owner, to vacate the property.
  • In case the owner sells his property to another person, the tenant if he knows of the sale, should pay the rent to the new owner, and the tenancy contract with the previous owner will be considered effective till a new one is drawn up with the new owner without affecting the period of time needed to amend the rent (five years). Naturally the new owner should inform the tenant about the new situation; if he fails to do so, and the tenant pays the previous owner, then the new owner must claim his money from the previous owner. But if he proves beyond doubt that the tenant knew about the sale of property and still paid the previous owner, then he can claim the rent from the tenant regardless of what the tenant paid to the previous owner.
  • If the new owner discovers that the tenancy contract between the old owner and the tenant is fraud, or fictitious, then the tenancy contract will be considered null and void without any effects on the new owner.
  • The tenant must pay the rent to whoever owns the property.
  • If the state expropriates a certain property, then its owner will be considered a tenant of the property, if he already occupies it, till he gets its estimated value from the state; but if his property is already rented to tenants then the relation between owner and tenant remains intact till he is paid half the evaluation amount, (the value of his property), and is officially notified to vacate the property.

TENANCY CONTRACT TERMINATION
The tenancy contract is considered terminated on the day of termination indicated in the contract; but if the tenant stays in the property without any objection from the owner, the tenancy contract is considered renewed for the same period of occupancy indicated in the contract. (one year, five years, etc)

If the owner of property wishes to terminate the contract, or the tenant wants to vacate the property then the appropriate notification must be sent to the party concerned:

  • A notification to vacate within fifteen days for the rent periods not exceeding three months.
  • A notification to vacate within one month for rent period not exceeding six months.
  • A notification to vacate within two months for rent period exceeding six months.

If a clause is stipulated withina tenancy contract for a certain period of vacating the property, then this period should be upheld. All notifications to vacate property must be written and officially handed over to party concerned. An owner of property can ask occupants (tenants) to vacate the property only in the following cases:

  • If the tenant delayed in paying rent (being absent or away from country is not an excuse)
  • If the tenant sublets part of property without express approval from owner.
  • If the tenant has breached the contract in any way (effected changes on property, or used property for other purposes than declared etc).
  • If the tenant of commercial property closes the property for a period of time exceeding six months without reasonable excuse, even if he was paying the rent regularly.
  • If the property becomes unfit for occupancy, or the owner has gotten official permit to demolish it. If the owner wants to demolish the property for the following reasons:
  • After 25 years of building it.
  • If the municipality grants him an extension of area for building where he can demolish and rebuild a bigger building.
  • Where there is old style house and the owner decides to build a new building for commercial or residential use; in this case new building area must be commensurate with the highest percentage of building area permitted by municipality. Evacuation of property becomes effective after the owner informs the tenant that he acquired all the necessary permits to demolish and rebuild. He should rebuild within six months from date of obtaining the permit, otherwise the vacating tenant can reoccupy the property and demand necessary compensation.
  • If the owner wants to build an additional floor to the rented building, when doing so requires evacuation of tenants, the owner should start construction within six months from date of obtaining permits, otherwise the tenants have the right to reoccupy property or demand compensation.
  • If the owner decides to add a floor to the rented building without demanding from tenant to vacate, the construction should not effect the tenant; if it does, the tenant can abrogate the contract or ask for decrease in rent.
  • If the owner or one of his close relatives needs to use the property, but he does not do so within a period of six months, and does not present a reasonable excuse, then the tenant has the right to ask for compensation.
  • If the rented property is part of the owner’s residence and he intends to use it for himself, or close relatives.
  • If a commercial property (stores, shops, offices, etc) is owned by a minor (an under-aged person) whose legal guardian rented it, when that person reaches legal age he can demand his property, otherwise the tenant can reoccupy the property or demand compensation.
  • If the property was used for commercial purposes or to practice certain trade or profession, and the tenant was deported by court order or by Ministry of Interior administrative order.

In certain cases, the judge has the right to grant the tenant a period of six months to vacate the property without paying rent or any compensation to the owner. If the judge gives a period to vacate less than six months, then the rest (months to complete six months) should be compensated to tenant by an amount equivalent to rent for the remaining period (six months minimum period granted to vacate).

Regarding compensating the tenant when the owner decides to demolish it is as follows:

  • If the period granted by court or owner for vacating the property is less than six months then the owner must compensate the tenant for the rent of period to complete six months, and if the tenant has been occupying the property in accordance with agreement for more than 6 years, he is entitled to the above compensation in addition to the amount equivalent to 6 months rent.
  • The tenancy contract is not terminated if the owner or tenant dies, but tenant’s inheritors or family can demand termination of contract.
  • When the tenancy contract is terminated for whatever reason, it is imperative that the tenant should leave the property in a good condition, as he received it, but if he stays in the property after termination of contract and without explicit permission from the owner, then the owner can double charge him for the period of overstay (he can legally ask for double the amount of rent). It goes without saying that the owner can get an eviction order from court if there is a legitimate reason to do so.
  • It is required from the tenant to return the property in good condition (it is presumed in the law that the condition of property is good) unless the tenant has a written report or statement from owner (when signing contract) describing the exact condition of the property (barring any deterioration from normal use only). Damage resulting from natural causes is not considered the tenant’s responsibility. Article 24 of this law concerns the establishment of a court for cases of rent disputes. The procedures in this court are relatively quick except for eviction rulings. Article 25 deals with the procedures of filing rent-related cases (any issue covered in the rent contract), and notifying the parties sued. To file a rent-related case one should do the following:
  • Write the complaint and photocopy it, sign it, and register the complaint in the courts clerical department. The clerical department will inform the other party (defendant) of the date of court session.

The following procedures are followed to inform the tenant except when the tenant is the State or a public figure:

  • A copy of the complaint is handed over to tenant or whoever represents him.
  • If the tenant is not present, or refuses to take the complaint, or the one present in the property refuses to receive the complaint, then a notice will be affixed to the door.
  • If the premises were closed, a notice is affixed to the door, and the notifying officer shall indicate in the complaint what procedures he took. After the notification is done, it is considered that the tenant has been informed of the court session. In litigation concerning rent issues notification is done only once.
  • On the session date the parties of the case must attend the session, however, it is possible to give persons of legal age, power of attorney to represent the parties. The power of attorney must be official and authenticated at the public notary. 149 Information on Kuwait
  • The court will look into the case on the session date and in due time the ruling of the court will be issued by the judge, and this ruling cannot be appealed unless a legal error exists, or the ruling is considered null for legal reason (normally all cases are appealed).
  • The period of time during which appeal is accepted is 15 days, appeal is filed after payment of KD.20 fee as deposit to be refunded if appellant wins the case.
  • During the litigation process the tenant should deposit the rent at the execution department of the court before the twentieth day of each month.
  • If the subject of complaint is not paying the rent, then the owner can get a court order demanding that the tenant should pay the overdue rent. The owner in this case must submit to court proof that the tenant did not pay or deposit the money at the execution department. The tenant then has a period of 10 days to place a petition at the same court, and he must pay KD.50 deposit, otherwise his petition will not be filed. If the petition is dismissed by court, the petitioner will lose his deposit, any executable court ruling cannot be legally delayed from the loser, but the winner of the case can delay execution for good reason, but he should deposit KD.100, which will not be refunded if the delaying process does not accomplish its purpose.
  • The owner has the right to ask the tenant to vacate the property after 5 years of occupancy, but if the owner does not ask for this, the tenancy contract is considered renewed for an additional five years. In case the owner decides to take back the property, he must inform the tenant of his wish 3 months before evacuation in the last year of the running tenancy agreement, without infringing upon his right to demand from tenant to vacate the property from other reasons indicated previously in this law.
  • The owner has the right to ask for an increase of rent every 5 years, the increase, if demanded, should not exceed 100% of the difference between the rent he takes and highest rent of other similar premises.
  • If a person rents certain premises for a fixed sum of money and then leases the premises he rented for a sum of money exceeding what he pays to the owner in order to make a profit, then this process is considered a commercial activity and the tenancy law does not apply to it. (it is an investment activity)
  • Every five years of a tenancy contract the owner of premises has the right to increase the rent. Normally, this is done by agreement between tenant and owner; if they do not agree and disagreement ends up in court, the judge will decide on increase in the light of rent paid in similar premises (flats, houses, etc.).
  • For any maintenance paid by the tenant, reasonable prices must be quoted to owner for reimbursement. If the cost of maintenance is found exaggerated the judge will advice the cost within acceptable limits, and the tenant will be left with the choice either to accept to pay the difference, or cancel the contract. 150 Information on Kuwait
  • The tenant officially offers the rent to the owner by doing the following: before the passing of twenty days from the date the tenant is supposed to pay the rent (it should be indicated in the contract) the tenant goes to the execution department of the court of the district he lives in, he deposits the rent and receives a receipt, he gives the address of the owner and his explicit offer to pay the rent (which is deposited at the execution department) the notification clerk of the execution department will inform the owner about the deposited rent. The tenant must check to see if the owner accepted the deposit. He should keep on depositing the rent at the execution department till he receives an acknowledgement in writing from the owner that says the owner accepted to receive the rent directly from the tenant. Actually there is no need to express acceptance of rent from the tenant other than a dated receipt.
  • Subletting rented premises or parts of it must be with the express approval of owner.
  • If a tenant signs a rent contract on a certain date and the owner sells the property which the tenant occupies to another person, after 3 years from the date of rent contract, the new owner can ask for rent increase after the passage of two more years.
  • If the rent contract is illusory or fictitious it will be considered void for the new owner, and thus no compensation whatsoever is required if the tenant claims that it is based on his fictitious rent contract. A fictitious rent contract could be done to perform a certain act that requires a rent contract or proof of residence without the actual use of the premises.
  • Notification to vacate property must be done through the notification section of the execution department of court in written form and for a nominal fee.
  • Normally what happens is that the tenant claims compensation if the owner evicts him on such grounds without starting demolishing and rebuilding in the prescribed time. Nevertheless the owner may demolish without rebuilding within the prescribed period (six months) also in such case the evicted tenant can claim compensation.
  • Court rulings regarding crimes committed by foreigners entail deportation; and deportation can be effected by any order from the Minister of Interior or the Secretary of Interior Ministry if this happens to one having occupancy of a commercial property, then vacating the property will be a matter of course.
  • Eviction rulings take more time to be effective to allow tenants ample time to arrange themselves. Normally all first instance court rulings can be appealed if eviction is demanded by owner.
  • In rent related cases lawyers are not needed. Nevertheless if one is busy or cannot attend the sessions he can appoint power of attorney to someone of legal age to stand before the judge, and voice his defense. However a lawyer does have delaying tactics which are a necessity in tenancy lawsuit and his legal expertise is a must in complicated legal matters, be they about tenancy contracts or otherwise.

12.Places of Interest

Introduction

TOURISTIC ENTERPRISES COMPANY(TEC)

This is a government backed company which is responsible for several of Kuwait's leisure amenities and runs establishments like the Kuwait Towers, Shaab Sea Club, Khiran Resort, Entertainment City, Green Island, Swimming Pool Complex etc. (Tel: 2565 0111 / 2565 3771)

KUWAIT TOWERS

Kuwait Towers is situated on the Arabian Gulf Street and is probably the most conspicuous landmark of Kuwait. The largest tower is 187 meters high and holds water stored in the lower half of the sphere. The top sphere is a revolving restaurant. Entrance is 500fils per person but is free if lunch or dinner has been reserved. Cameras with zoom lenses are forbidden. The second tower is 147 meters high and also holds water.

RECREATIONAL PARKS

Touristic Enterprises Company (TEC) has two recreational parks,
South Sabahiya Garden (Tel: 2361 0472) in Ahmadi Governorate,
Touristic Garden (Tel: 2434 5961 / 2434 9283) in Jleeb Al-Shyoukh.
Each has amusements, rides and other games for children and adults, as well as snack bars and gift stalls. Both parks have 'Roman' theatres for the presentation of entertainment on weekends. Entry is 250 fils per person on ordinary days and 500 fils on evenings when shows are presented. There are also several smaller parks, run by private enterprises, offering amusements and games for children, located in different areas.

MUNICIPAL PARKS

The Government's success in greening the harsh desert can be seen in Kuwait's parks and road verges. Most public parks have children's play areas and there are several amusement parks dedicated to the art of keeping children actively enthralled for hours at a time. The Municipality maintains several well designed public parks, all with naturally shaded areas, around Kuwait City.

GREEN ISLAND

Managed by TEC, this artificial island is near the Kuwait Towers. Linked to the main land by a short walkway, Green Island has an amphitheatre, two restaurants, a viewing tower, a children's castle and landscape of flowers and greenery. The entry charge of 250 fils per person provides a pleasant walk with some nice views of Kuwait City.

AQUA PARK

This is a water resort equipped with water slides, wave pools, swimming pools, play grounds, restaurants etc.

AL-SHAAB LEISURE PARK

Located next to TEC's offices on Arabian Gulf Street. The Park has a variety of games and amusements for young and old, including carousels, dodgems, bowling hall, billiards, snooker and tennis, as well as a theatre and cinema. All the amusements are linked by paths that meander through gardens and around water fountains. There is a restaurant block containing branches of most fast food outlets in Kuwait. Open daily from 4pm to midnight (from 10am on weekends), entry is 500 fils a head and games cost 250 to 750 fils a go, though a full ticket may be purchased for KD 2.500. (Tel: 2561 3777)

BAYT AL BADER

This is yet another example of the old traditional house and is situated right next to Sadu House. It was formerly the home of the Al Bader family built between 1838-1848. Local handicraft exhibitions are sometimes held here.

BRITISH COUNCIL LIBRARY

This library was re-opened in 1992 after the liberation of Kuwait and had to be completely restocked. It is situated on Al-Arabi street, Mansouriyah opposite the sports stadium.

DICKSON HOUSE

Facing the Arabian Gulf Street is an old blue and white house that stands as a precious link with Kuwait's past, an integral part of Kuwait's history. This is where Dame (Umm Saud) Violet Dickson, the wife of the British Political Agent to Kuwait, lived for 61 years. Fortunately, the Dickson house survived the era of modernization and is now recognized as a historical monument. Tragically, during the Iraqi Occupation, the house was looted and its contents ransacked and stripped of a lifetime of memories. The house has now been renovated and refurbished and is open to visitors.

FOREIGN EMBASSIES IN KUWAIT

FOREIGN EMBASSIES IN KUWAIT

FOR LATEST UPDATES CONTACT
MINISTRY OF FOREIGN AFFAIRS - PROTOCOL DEPARTMENT
TEL: 2242 2041 - FAX: 2243 5905

AFGHANISTAN (CAPITAL - KABUL)
Embassy in Kuwait : Surra, Block 6, Street 13, Villa 16
:Tel 2532 8156 - 2532 9461 - Fax : 2532 6274
: EMail : kuwait.afghanistan.mfa@gmail.com
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ALGERIA (CAPITAL - ALGIERS)
Embassy in Kuwait : Daiya, Diplomatic Area, Block 5, Istiqlal Street
:Tel 2251 9987 - Fax : 2251 9497
: EMail : embelg.kw@gmail.com
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ARGENTINA (CAPITAL - BUENOS AIRES)
Embassy in Kuwait : Al Saddiq, Block 4, Street 403, Villa 21
:Tel 25213202 / 25214202 / 25215202
: EMail : ekuwa@mrecic.gov.ar
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ARMENIA (CAPITAL - YEREVAN)
Embassy in Kuwait : Jabriya, Block 8, Street 3, House 8
:Tel 2532 2175 - Fax : 2531 4656
: Email : embassy.kuwait@mfa.am
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AUSTRALIA (CAPITAL - CANBERRA)
Embassy in Kuwait : Dar Al-Awadi Bldg., 12th Floor, Kuwait City
:Tel 2232 2422 - Fax : 2232 2430
: www.kuwait.embassy.gov.au
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AUSTRIA (CAPITAL - VIENNA)
Embassy in Kuwait : Daiya, Block 3, Shawki Street, Villa 10
:Tel 2255 2532 - Fax : 2256 3052
: EMail : kuwait-ob@bmeia.gv.at
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158 Information on Kuwait AZERBAIJAN (CAPITAL - BAKU)
Embassy in Kuwait : Yarmouk, Block 2, 1st Street, Villa 15
:Tel 2535 5247 - Fax : 2535 5246
: EMail : kuwait@mission.mfa.gov.az
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BAHRAIN (CAPITAL - MANAMA)
Embassy in Kuwait : Surra, Block 5, Street 1, Villa 27
:Tel 2531 8530 - Fax : 2533 0882
: EMail : kuwait.mission@mofa.gov.bh
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BANGLADESH (CAPITAL - DHAKA)
Embassy in Kuwait : Khaldiya, Block 2, Street 29, Villa 11
:Tel 2491 3219 / 20 - 2491 3201 - Fax : 2491 3205
: EMail : bdoot@kems.net / embassadorkuwait@mofa.gov.bd
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BELGIUM (CAPITAL - BRUSSELS)
Embassy in Kuwait : Bayan, Block 13, Street 4, Villa 8
:Tel 2538 4582 - Fax : 2538 4583
: EMail : kuwait@diplobel.fed.be
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BENIN (CAPITAL - PORTO NOVO)
Embassy in Kuwait : AL-Salam Area, Block 1, Street 104, House 27
:Tel 2524 2560 - Fax : 2524 2601
: EMail : embeninkwt@hotmail.com
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BHUTAN (CAPITAL - THIMPHU)
Embassy in Kuwait : South Surra, Al Salaam Area, Block 3, Street 308, House 3
:Tel 2521 3601/2 - Fax : 2521 3603
: EMail : admin@rbekuwait.bt
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BOSNIA (CAPITAL - SARAJEVO)
Embassy in Kuwait : Bayan, Block 13, Street 1, House 65
:Tel 2539 2637 - Fax : 2539 2106 \ 7
: EMail : bhembkwt@yahoo.com
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159 Information on Kuwait BRAZIL (CAPITAL - BRASILIA)
Embassy in Kuwait : West Mishref, Block 1, Street 116, Villa 47
:Tel 2537 8561 / 2 - Fax : 2537 8560 \ 5
: Email : ambassador.kuwait@gmail.com
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BULGARIA (CAPITAL - SOFIA)
Embassy in Kuwait : Jabriya, Area 11, Street 1, Villa 31
:Tel 2531 4459 - Fax : 2532 1453
: EMail : bgembkw@gmail.com
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CAMBODIA (CAPITAL - PHNOM PENH)
Embassy in Kuwait : Surra, Block 1, Street 1, Villa 24
:Tel 2531 0029 - Fax : 2531 0026
: EMail : camemb.kwt@mfa.gov.kh
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CANADA (CAPITAL - OTTAWA)
Embassy in Kuwait : Daiya, Block 4, Mutawakkal St., Bldg 24
:Tel 2256 3025 - Fax : 2256 0173
: EMail : kwait@international.gc.ca
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CHINA (CAPITAL - BEIJING)
Embassy in Kuwait : Yarmouk, Block 4, Street 1, House 82
:Tel 2533 3340 - Fax : 2533 3341
: EMail : chinaemb_kw@mfa.gov.cn
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CUBA (CAPITAL - HAVANA)
Embassy in Kuwait : Rawda, Block 3, Abu Hayem Street, House 74
:Tel 2254 9361 / 2255 5077 - Fax : 2254 9360
: EMail : secretariaembacubakuwait@gmail.com
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CYPRUS (CAPITAL - NICOSIA)
Embassy in Kuwait : Salwa, Muthanna Street, Block 3, Villa 35
:Tel 2562 0580 - Fax : 2562 0470
: EMail : amb_office@cyprus-embassy.org.kw
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160 Information on Kuwait CZECH REP. (CAPITAL - PRAGUE)
Embassy in Kuwait : Nuzha, Block 3, St. 34, House 13
:Tel 22529018 - Fax : 22529021
: EMail : kuwait@embassy.mzv.cz
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DJIBOUTI (CAPITAL - DJIBOUTI CITY)
Embassy in Kuwait : Dahia Abdullah Al-Salem, Block 1, Street 14, Villa 5
:Tel 2251 0683 / 4 - Fax : 2251 0682
: EMail : ambdjikow2012@hotmail.com
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EGYPT (CAPITAL - CAIRO)
Embassy in Kuwait : Rawda, Block 5, Street 58, Villa 1
:Tel 2254 8800 - Fax : 2252 7288
: EMail : consolate.kuwait@mfa.gov.eg
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ERITREA (CAPITAL - ASMARA)
Embassy in Kuwait : Jabriya, Block 9, Street 21, Villa 9
:Tel 2531 7426 - Fax : 2531 7429
: EMail : eri_ekwt@hotmail.com
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ETHIOPIA (CAPITAL - ADDIS ABABA)
Embassy in Kuwait : Jabriya, Block 10, St. 107, Villa 30
:Tel 25348198 / 25330128 - Fax : 25331179
: EMail : ethiokuwait@yahoo.com
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FRANCE (CAPITAL - PARIS)
Embassy in Kuwait : Al Mansouriya, Block 1, St.13, Bldg 24
:Tel 22582020 / 22582005 - Fax : 22582011
: EMail : ambsrkwt@qualitynet.net
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GEORGIA (CAPITAL - TBILISI)
Embassy in Kuwait : Qortuba, Block 2, Jadda 3, Street 1, Villa 6
:Tel 2535 2909 - Fax : 2535 4707
: EMail : kuwait.emb@mfa.gov.ge
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161 Information on Kuwait GERMANY (CAPITAL - BERLIN)
Embassy in Kuwait : Kuwait City, Shuhadaa Str., Hamra Tower, Floor 40
:Tel 22058955 - Fax : 22058966
: EMail : info@kuwa.diplo.de
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GREECE (CAPITAL - ATHENS)
Embassy in Kuwait : Khaldiya, Block 4, St.44, Villa 4
:Tel 24817101-24817100/2- - Fax : 24817103
: EMail : gremb.kuw@msa.gr / grembkw@hotmail.com
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HUNGARY (CAPITAL - BUDAPEST)
Embassy in Kuwait : Bayan, Block 13, Street 30, House 381
:Tel 25379351 - Fax : 25379350
: Email : mission.kwi@mfa.gov.hu
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INDIA (CAPITAL - NEW DELHI)
Embassy in Kuwait : Daiya, Diplomatic Enclave, Arabian Gulf St.
:Tel 22530600 - Fax : 22525811 : www.indembkwt.org
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INDONESIA (CAPITAL - JAKARTA)
Embassy in Kuwait : Daiya, Block 1, Rashed Ibn Ahmed Al Roumi St., Villa 2
:Tel 2253 1021 / 5 - Fax : 2253 1024
: EMail : kuwait.kbri@kemlu.go.id
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IRAN (CAPITAL - TEHRAN)
Embassy in Kuwait : Daiya, Diplomatic Area, Block 5
:Tel 22561084 - Fax : 22529868
: EMail : iranemb.kwi@mfa.gov.ir
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ITALY (CAPITAL - ROME)
Embassy in Kuwait : Jabriya, Block 9, Street 1, Villa 84
:Tel 25356010 - Fax : 25336030
: EMail : ambasciata.alkuwait@esteri.it
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162 Information on Kuwait JAPAN (CAPITAL - TOKYO)
Embassy in Kuwait : Mishref, Block 7A, Diplomatic Area, Plot 57
:Tel 25309400 - Fax : 25309401
: Email : admin2@kw.mofa.gov.jp
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JORDAN (CAPITAL - AMMAN)
Embassy in Kuwait : Jabriya, Block 5, Street 1, Villa 20
:Tel 25312294/5 - Fax : 25312291
: EMail : kujor@qualitynet.net
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KENYA (CAPITAL - NAIROBI)
Embassy in Kuwait : Al-Zahra, Block 8, Street 807, Villa 133
:Tel 25243771 / 2 - Fax : 25243788
: EMail : kenemb.kuwait@gmail.com
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KOREA (NORTH) (CAPITAL - PYONG YANG)
Embassy in Kuwait : Surra, Block 5, Street 1, Villa 55
:Tel 25384825 / 25329462 - Fax : 25351097
: EMail : kwtprk@gmail.com
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KOREA (SOUTH)(CAPITAL - SEOUL)
Embassy in Kuwait : Mishref, Plot 6, Block 7A, Diplomatic Zone 2
:Tel 2537 8621/2/3 - Fax : 2537 8628/9
: EMail : kuwait@mofa.go.kr
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KOREA TRADE CENTRE Mailing Address : Murgab, Shuhada Street, Al-Hajery Bldg., 5th Floor
:Tel 22436933 - Fax : 22436948
: EMail : kotra@qualitynet.net / kotraq8@yahoo.com
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LAOS (CAPITAL - VIENTIANE)
Embassy in Kuwait : Salwa, Block 12, Street 7, Villa 17
:Tel 2563 5582 - Fax : 2563 5583
: EMail : laoemb.kw@hotmail.com
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163 Information on Kuwait LEBANON (CAPITAL - BEIRUT)
Embassy in Kuwait : Daiya, Block 5, Arabian Gulf St., Embassy Zone
:Tel 2256 2103 - Fax : 2257 1682
: EMail : lebanonembassy.kw@gmail.com
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LIBYA (CAPITAL - TRIPOLI)
Embassy in Kuwait : Daiya, Block 1, St.14, Bldg 2
:Tel 2257 5184 - Fax : 2257 5182
: EMail : libem_kwt@hotmail.com
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MALAWI (CAPITAL - LILONGWE)
Embassy in Kuwait : Al-Shuhada, Block 5, Street 512, Villa 34
:Tel 2523 5416 - Fax : 2523 5418
: EMail : malakuwait@gmail.com
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MALAYSIA (CAPITAL - KUALA LUMPUR)
Embassy in Kuwait : Daiya, Diplomatic Enclave, Block 5, Al-Yemeni Street
:Tel 2255 0394 - Fax : 2255 0384
: EMail : mwkuwait@kln.gov.my
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MAURITANIA (CAPITAL - NOUAKCHOTT)
Embassy in Kuwait : Jabriya, Block 10, Street 101, Villa 90
:Tel 25312943 - Fax : 25327245
: EMail : ammrkw@yahoo.com
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MONGOLIA (CAPITAL - ULAN BATOR)
Embassy in Kuwait : South Surra, Al-Zahra Area, Block 8, Street 806, Villa 161
:Tel 2521 6551 / 4 - Fax : 2521 6557
: EMail : kuwait@mfat.gov.mn
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MOROCCO (CAPITAL - RABAT)
Embassy in Kuwait : Yarmouk, Block 2, Street 2, Area 3, House 14
:Tel 25312980 - Fax : 25317423
: Email : embkuw@yahoo.sr
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164 Information on Kuwait MYANMAR (CAPITAL - NAYPYIDAW)
Embassy in Kuwait : Al-Salam Area, Block 2, Street 203, Villa 35
:Tel 2524 0736 - Fax : 2524 0749
: Email : myankuwait11@gmail.com
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NEPAL (CAPITAL - KATHMANDU)
Embassy in Kuwait : Jabriya, Block 8, Street 13, Villa 514
:Tel 2532 1603 / 4 / 5 - Fax : 2532 1601
: Email : moh.nepal@hotmail.com
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NETHERLANDS (CAPITAL - AMSTERDAM)
Embassy in Kuwait : Jabriya, Block 6, Street 11, House 7
:Tel 25312650 - Fax : 25326334
: Email : kwe@minbuza.nl
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NIGER (CAPITAL - NIAMEY)
Embassy in Kuwait : Salwa, Block 12, St.6, Bldg 183
:Tel 25652943 - Fax : 25640478
: EMail : ambanikwt@yahoo.fr
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OMAN (CAPITAL - MUSCAT)
Embassy in Kuwait : Adailiya, Block 3, St.3, Bldg 25
:Tel 25215870 - Fax : 25215878
: Email : kuwait@mofa.gov.om
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PAKISTAN (CAPITAL - ISLAMABAD)
Embassy in Kuwait : Jabriya, Block 11, Street 101, Villa 46,
:Tel 25327651 / 49 - Fax : 25328013
: EMail : parepkwt@yahoo.com
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PHILIPPINES (CAPITAL - MANILA)
Embassy in Kuwait : Faiha, Block 6, Nouman Bin Basher St., Villa 153
:Tel 2252 8422 / 2251 1806 / 5595 2909 - Fax : 2254 9492
: EMail : kuwaitpe@philembassykuwait.gov.kw
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165 Information on Kuwait POLAND (CAPITAL - WARSAW)
Embassy in Kuwait : Jabriya, Block 7, Street 3, Villa 20
:Tel 25311572 - Fax : 25311576
: EMail : kuwejt.amb.sekretairat@msz.com.pl
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QATAR (CAPITAL - DOHA)
Embassy in Kuwait : Daiya, Embassies Area, Arabian Gulf Street
:Tel 22513606 - Fax : 22513604
: EMail : kuwait@mofa.gov.qa
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ROMANIA (CAPITAL - BUCHAREST)
Embassy in Kuwait : Keifan, Block 4, Mina Street, Villa 34
:Tel 24845079 - Fax : 24848929
: EMail : kuwait@mae.ro
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RUSSIA (CAPITAL - MOSCOW)
Embassy in Kuwait : Daiya, Block 5, Diplomatic Area, Arabian Gulf Street
:Tel 22560427 / 8 - Fax : 22524969
: EMail : rospos@qualitynet.net
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SAUDI ARABIA (CAPITAL - RIYADH)
Embassy in Kuwait : Daiya, Block 5, Diplomatic Area, Arabian Gulf Road
:Tel 22550021/4 - Fax : 22551858
: kwemb@mofa.gov.sa
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SENEGAL (CAPITAL - DAKAR)
Embassy in Kuwait : Rawda, Block 1, Street 13, House 364
:Tel 22573477 - Fax : 22519611
: EMail : embassysenegal702@yahoo.com
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SERBIA (CAPITAL - BELGRADE)
Embassy in Kuwait : Bayan, Block 13, Street 1, Villa 18
:Tel 25375042 - Fax : 25375049
: EMail : embrskw@gmail.com
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166 Information on Kuwait SIERRA LEONE (CAPITAL - FREETOWN)
Embassy in Kuwait : South Surra, Al-Zahra Area, Block 8, Street 800, Villa 169
:Tel 2524 3246 - Fax : 2524 3238 : www.salembassy-kw.org
**********************************************************************************************
SLOVAK REP. (CAPITAL - BRATISLAVA)
Embassy in Kuwait : Surra, Block 2, Street 16, House 22
:Tel 25353895 - Fax : 25353894
: EMail : emb.kuwait@mzv.sk
**********************************************************************************************
SOMALIA (CAPITAL - MOGADISHU)
Embassy in Kuwait : Bayan, Block 9, Masjid Al-Aqsa Street, House 23
:Tel 2539 4795 - Fax : 2539 4829
: EMail : somemb.kuwait@hotmail.com
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SOUTH AFRICA (CAPITAL - PRETORIA)
Embassy in Kuwait : Salwa, Block 10, St. 1, Villa 91, Gate 3 & 4
:Tel 25617988 - Fax : 25617917
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SPAIN (CAPITAL - MADRID)
Embassy in Kuwait : Surra, Block 3, St. 14, Villa 19
:Tel 25325827 - Fax : 25325826
: EMail : emb.kuwait@maec.es
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SRI LANKA (CAPITAL - COLOMBO)
Embassy in Kuwait : Jabriya, near Police Station, Block 10, Street 107, Bldg 1
:Tel 25339142 - Fax : 25339154
: EMail : lankemb@qualitynet.net
**********************************************************************************************
SUDAN (CAPITAL - KHARTOUM)
Embassy in Kuwait : Surra, Block 1, Street 8, Villa 303
:Tel 25347294 - Fax : 25347219
: EMail : skuwait@live.com
**********************************************************************************************
167 Information on Kuwait SWAZILAND (CAPITAL - MBABANE)
Embassy in Kuwait : Jabriya, Block 7, Street 101, Villa 69
:Tel 2531 3306 / 2531 7695 - Fax : 2531 3307
: EMail : swazikuwait@gmail.com
**********************************************************************************************
SWITZERLAND (CAPITAL - BERN)
Embassy in Kuwait : Qurtuba, Block 2, St. 1, House 122
:Tel 25340172/5 - Fax : 25340176
: EMail : kow.vertretung@eda.admin.ch
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SYRIA (CAPITAL - DAMASCUS)
Embassy in Kuwait : Mishref, Block 6, Alghoss Street, Bldg. 1
:Tel 25396559/60 - Fax : 25396509
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TAIWAN TRADE CENTRE Address : Sharq, Mazaya Tower 2
:Tel 22261971 - Fax : 22261970
: EMail : kwt@mofa.gov.tw
**********************************************************************************************
THAILAND (CAPITAL - BANGKOK)
Embassy in Kuwait : Jabriya, Block 6, Street 8, Villa 1
:Tel 25317530 - Fax : 25317532
: EMail : thaiemkw@kems.net
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TUNISIA (CAPITAL - TUNIS)
Embassy in Kuwait : Adaliya, Isa A. Al-Assousi St., Jadda 36, Block 3, Villa 13
:Tel 22526261-22542144 - Fax : 22528995
: EMail : at.kwt@emoftunisia.com
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TURKEY (CAPITAL - ANKARA)
Embassy in Kuwait : Daiya, Plot 16, Istiqlal St., Embassies Area
:Tel 22277400 - Fax : 22560653 / 22560403
: EMail : embassy.kuwait@info.gov.tr
**********************************************************************************************
168 Information on Kuwait UKRAINE (CAPITAL - KIEV)
Embassy in Kuwait : Surra, Block 5, Street 1, Villa 37
:Tel 25318507 - Fax : 25318508
: Email : emb_kw@mfa.gov.ua
**********************************************************************************************
UAE (CAPITAL - ABU DHABI)
Embassy in Kuwait : Daiya, Block 5, Building 7, Istiqlal Street
:Tel 22528544 / 22521427 - Fax : 22526382
: EMail : marat71@qualitynet.net
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UK (CAPITAL - LONDON)
Embassy in Kuwait : Dasman, Arabian Gulf Street
:Tel 22594320 - Fax : 22594352
: EMail : consularenquirieskuwait@fco.gov.uk
**********************************************************************************************
USA (CAPITAL - WASHINGTON DC)
Embassy in Kuwait : Bayan, Block 14, Masjid Al-Aqsa Street
:Tel 22591001 - Fax : 25380282
: kuwait.usembassy.gov
**********************************************************************************************
VATICAN CITY (CAPITAL - VATICAN CITY)
Embassy in Kuwait : Yarmouk, Block 1, Street 2, Villa 1
:Tel 25337767
: EMail : vatemb.officekuwait@gmail.com
**********************************************************************************************
VENEZUELA (CAPITAL - CARACAS)
Embassy in Kuwait : Surra, Block 5, St. 7, Area 356, Villa 32
:Tel 25324367 - Fax : 25324368
: EMail : embevenezkuwait@gmail.com
**********************************************************************************************
169 Information on Kuwait VIETNAM (CAPITAL - HANOI)
Embassy in Kuwait : Jabriya, Block 10, Street 19, Villa 96
:Tel 2531 1450 / 2535 1593 - Fax : 2535 1592
: EMail : vnemb.kw@mofa.gov.vn
**********************************************************************************************
YEMEN (CAPITAL - SANAA)
Embassy in Kuwait : Jabriya, Block 11, Street 101, House 38
:Tel 25349417 - Fax : 25349415
: EMail : yemenembassykuwait@gmail.com
**********************************************************************************************
ZIMBABWE (CAPITAL - HARARE)
Embassy in Kuwait : Salwa, Block 9, St. 6, Bldg 8
:Tel 25621517 - Fax : 25621491
: EMail : zimkuwait2010@hotmail.com
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