Marzuna’s comprehensive Employer of Record (EOR) solution for Kuwait will enable your firm to develop without the requirement to create an organization. Our state-of-the-art, automated worldwide human resources platform streamlines the enrollment process for your remote workers, manages their benefits and payments, and ensures that they abide by local regulations. We leverage the resources of our extensive worldwide network to help your business expand internationally. Please give us a call right now to learn more.
Kuwait’s employment laws apply to both foreign and local workers, with some distinctions in their entitlements.
To establish a local presence in Kuwait, businesses must be well-versed in all aspects of Kuwait’s employment laws. Although they may appear complex and intricate, these laws share similarities with employment regulations in many other countries. It is, however, advisable for businesses seeking to establish a local office in Kuwait to collaborate with a local payroll provider well-versed in Kuwait’s labor regulations for both local and foreign employees. This partnership can help mitigate or eliminate any potential challenges that may arise.
| Entitlements | Explanation | ||||||||||
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| Statutory Working Hours |
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| Overtime Rules |
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| Paid Public Holidays | The following Public Holidays are observed in Kuwait –
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| Annual Leave | After nine months of service, employees are qualified for 30 paid yearly leaves. Every month of service entitles the employee to one day of yearly leave. Annual leave may be accumulated for up to two years with certain agreements outlined in the employment contract, but it must be used within a year after accrual. Annual leave must be paid for in full by the employer before it begins, and the employer and employee must agree on the annual leave plan within the first 14 days of each year. | ||||||||||
| Sick Leave | A maximum of 45 paid sick days and 30 unpaid sick days may be taken by employees each year. To use sick leave, you need a medical certificate.
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| Maternity-Leave | In Kuwait, female employees are entitled to up to 4 months of unpaid leave and 70 days of compensated maternity leave. There is no law governing paternity leave for male employees, nevertheless. Employers with 50 or more workers are required to offer childcare facilities and give breastfeeding mothers at least a two-hour break during working hours. It’s also vital to remember that women cannot have their employment terminated while they are on maternity or illness leave. The purpose of these rules is to protect pregnant female employees during and after their pregnancies. | ||||||||||
| Bonus Payment | The bonus is not a requirement that employers must give to their workers. | ||||||||||
| Health Benefits | In Kuwait, healthcare is a significant component of work, and firms are obligated to offer health insurance to their staff in order to get a residency visa. While expats must pay an annual fee to utilise public healthcare services, Kuwaiti nationals are entitled to free public healthcare facilities. To receive a medical card for treatment at public hospitals and clinics, employees must register at the closest clinic. It’s important to remember that Kuwait also offers private healthcare services, which may be purchased independently. |
Selecting between independent freelancers and full-time employees is crucial when expanding your business globally. In situations where you need someone for a long-term, core company role, hiring a full-time employee may be better; nevertheless, contractors are ideal for short-term projects that don’t require much supervision. For a lower cost, hiring contractors may help you access top talent in knowledge worker-intensive industries like software development, business analytics, IT solutions, and services.
Expanding businesses in Kuwait must navigate the intricacies of the country’s labor regulations, which can be challenging due to the significant presence of foreign workers. It’s crucial for companies to ensure they have the right work residency permits and employment contracts in place to remain compliant with the law.
When seeking to hire qualified employees, many businesses turn to contractors and online job boards. While these platforms provide access to a pool of potential candidates, they do not assist with the hiring and onboarding processes. Non-compliance with labor regulations can result in fines and delays that may significantly impact business operations.
Opting for a global Employer of Record (EOR) solution, such as Marzuna Employer of Record in Kuwait, can be a more cost-effective alternative than maintaining an in-house HR department. In addition to alleviating legal and financial concerns, this approach eliminates the need to establish a local legal entity, offering the flexibility to expand by adding new contracts.
The probationary term for a worker is 100 working days, according to Kuwaiti labour legislation. The employee becomes entitled for the end of service reward commensurate to his work time if the employer terminates the employee within the probationary period. Following the completion of the probationary term, the employee is entitled to the perks and privileges outlined in the employment contract.
Both the Employer and the Employee may cancel an employment contract after delivering a termination notice under Kuwaiti employment law.
For employees paid on a monthly basis, the notice period is three months; for all other employees, it is one month. If a company fires an employee without providing a notice period, they are still required to pay the full salary for the notice period. Employees who are unable to finish the notice period are subject to the same regulations.
| Employee Salary Type | Severance Pay Entitlement |
|---|---|
| Monthly | 15 days each year of service during the first five years, and 1 month for each year after that (up to a maximum of 18 months of pay). |
| Hourly/Daily/Weekly | Ten days’ pay for the first five years of employment, and fifteen days’ pay for each additional year (up to a maximum of one year’s pay) |
The useful solution offered by Marzuna Employer of Record (Kuwait EOR) is available to companies looking to expand into Kuwait. By adopting the EOR approach, businesses may ensure compliance with local labor laws and regulations and streamline their operations without having to establish an organization. We take care of all employment-related tasks with our full services, including handling contracts, acquiring work permits, submitting taxes, and processing payroll on a monthly basis. With the assistance of our team of local experts in Kuwait, you may establish your company with confidence while navigating the difficulties presented by the country’s labor market.
| Terms | Explanation |
|---|---|
| Taxes that apply to invoices | Kuwait entity – 7% GST Foreign company: No GST |
| Minimum duration of service | 3 months |
| Currency Accepted | USD / EUR / GBP |
| Required Details & Documents | Personal information, a copy of your passport, your bank information, a copy of your civil ID (if you’re a permanent resident), and your job description are all required information for Kuwaiti citizens.
Personal information, a job description, educational requirements, technical credentials, a copy of a passport, an HIV/AIDS test report, a medical certificate, and a police clearance indicating that they have no criminal histories are required for expatriates. |
You will need to decide how to manage your personnel as your company gets ready to grow into Kuwait. You have two options for managing payroll and the complete employee lifecycle: either build an internal team or collaborate with an Employer of Record (EOR). Building an internal workforce might take time and money because you’ll need to create a legal corporation, understand local laws, and manage all payroll and HR tasks by yourself. Alternately, working in conjunction with an EOR can be a cost-effective and successful alternative that enables you to concentrate on your main business while the EOR takes care of all employment-related duties.
| Visa Category | Explanation |
|---|---|
| Kuwait Tourist Visa | Visitors have a fantastic opportunity to see Kuwait and its various attractions with the Tourist Visa. Tourists can enter Kuwait with this visa and roam about at will for up to 90 days, giving them plenty of time to take advantage of everything Kuwait has to offer. The application procedure is simple, and it usually takes 1 to 3 business days to process the visa. This makes it the perfect choice for those searching for a quick and hassle-free method to visit Kuwait. The Tourist Visa is the ideal way to make the most of your vacation, whether you’re interested in Kuwait’s spectacular architecture, rich history, or vibrant culture. |
| Kuwait Visit Visa | Travelers must have a sponsor who is either a resident relative or a business in order to receive a visit visa for Kuwait. Depending on the purpose of the trip, different visas may have different restrictions. However, it usually takes two business days to process your order. The Visit Visa is good for entrance within 90 days after being issued and permits travelers to stay in Kuwait for a maximum of 30 days. For people who need to conduct business in Kuwait or who wish to visit friends or family, this sort of visa is a great choice. Travelers may easily enjoy their stay in Kuwait thanks to the simple and quick Visit Visa application process with the help of a sponsor. |
| Kuwait Multiple Entry Visit Visa | Foreign businesses who often travel to Kuwait for business might consider the Multiple Entry Visa. This kind of business-sponsored visa entitles the holder to repeated entries and exits from Kuwait during a predetermined time frame. For people who must attend several conferences, seminars, or other gatherings in Kuwait during the year, the visa is very helpful. It’s crucial to remember that the Ministry of Defense must approve the application for the visa, and that procedure might take some time. Once issued, the visa provides business travellers who must often visit Kuwait with a practical and affordable alternative. |
| Kuwait’s Residence Visa | Expats who are not Gulf Cooperation Council (GCC) nationals must get a Kuwait Residence Visa in order to reside and work in Kuwait. With this kind of visa, foreigners can stay in the nation for an extended amount of time lawfully. The work visa, domestic servant visa, and dependent visa are the three basic types of Kuwait residence visas. The Domestic Servant Visa is for domestic employees who will work for a Kuwaiti sponsor, whereas the Work Visa is for international workers who have employment lined up in Kuwait. Family members of foreigners who are already residing and working in Kuwait are eligible for the Dependent Visa. Following the required procedures will guarantee a smooth and effective application. Each type of visa has its own criteria and application process. |
| Kuwait Work Visa | A foreign individual must first get a job offer from a commercial enterprise or a government entity in order to apply for a work visa in Kuwait. Once the offer is accepted, the employer is in charge of starting the visa application process by requesting a work permit or visa on the employee’s behalf. The applicant must provide a number of papers in order to complete the application procedure, including a current passport, a valid visa, a passport-sized photo, a report of an HIV/AIDS test, a certificate from a local physician, and a police clearance verifying that they have no outstanding warrants. These records are essential for confirming the worker’s identification, physical fitness, and eligibility to work in Kuwait. The employee will obtain a No Object Certificate when their application is accepted, allowing them to travel to Kuwait. Once they arrive in Kuwait, they are given a residency visa. It’s crucial to make plans in advance because the visa application procedure might take several weeks to complete. Foreign employees may live and work in Kuwait lawfully and take advantage of all the benefits this dynamic nation has to offer with a work visa in hand. |
Foreign nationals who wish to live and work in Kuwait must apply for a resident visa, which is only granted in the event that the applicant is still in possession of a valid employment offer. The requirements that must be satisfied in order for the employer to apply for a work visa on behalf of their foreign employee are laid forth in the Kuwait Private Sector Labor Law. This entails keeping an exhaustive file for each foreign employee that contains copies of important documents like the work permit, Kuwaiti Civil ID, records of annual and sick leave, overtime hours, work-related illnesses or injuries, fines, end-of-service dates, and reasons for leaving the position (if applicable). The employment contract and copies of receipts demonstrating that all paperwork, tools, and credentials were returned by the employee after employment are required to be preserved in the employee’s file. By following these guidelines, employers may make sure they are fulfilling their legal obligations and providing international employees with a safe and secure work environment in Kuwait.
| Work Permits Assistance | Explanation |
|---|---|
| Can Marzuna Sponsor Work Permit in Kuwait | Yes |
| Processing and Approval Time | The foreign citizen must visit Kuwait as soon as possible with their work entrance visa, which will be validated upon arrival when their work permit has been issued. It’s crucial to remember that requirements related to entrance and post-arrival, such as medical examinations and fingerprints, must be finished within 60 days of the work permit’s issuing. Planning beforehand is crucial to avoid any delays or problems with the work permit procedure because the approval process typically takes 1 to 3 working days. Foreign people can start their job and residency in Kuwait without any additional issues if all entrance and post-arrival processes are fulfilled within the allotted term. |
| Work Permit Process |
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| Passport Submission | During the employee’s appointment with the Ministry of Social Affairs & Labour, the employee presents their original passport. |
| Work Permit Process for Different Countries | The procedure to get a work permit is generally the same. For inhabitants of some nations, such as China, there are a few exceptions. |
| Change of Sponsor Within Kuwait | To switch sponsors, the employee must submit a new application. |
| Where is the application processed? | The worker’s home country or Kuwait processes the application. |
| Work Permit Restrictions | Depending on the nation of origin, a certain charge is applied. |
| What is the cost of a Business Visa? | USD 160 |
| What is the duration of a Business Visa? | One Year/Multiple Entries |
| Switch Business Visa to Work Permit? | No |
| Can spouses work on dependent visas? | If a dependent visa is not converted into a work visa sponsored by Kuwait, a spouse cannot work on it. The transfer is possible following six to twelve months of ownership. a dependent visa |
| Termination of Work Permit | There is no need for a cancellation notice. |
| Special Requirements for Work Permit Cancellation | The work permit must be revoked by the employer or designated employment representative. |
Understanding the regulations that pertain to different categories is essential when establishing payroll and managing taxes in Kuwait. One of the key considerations is whether to engage international or local experts. Adhering to local tax regulations, including income tax, business tax, withholding tax, employee compensation insurance, and social security expenses, is critical for foreign businesses.
In Kuwait, there are primarily two approaches to payroll management. The first option involves setting up an in-house team to handle payroll, which can be a complex and time-consuming task. The second option is to collaborate with a local payroll specialist who can streamline the process and ensure compliance with Kuwaiti regulations.
Establishing a payroll system in Kuwait can be significantly delayed for businesses that do not have a registered subsidiary. However, with the assistance of an Employer of Record, all employment-related compliance matters can be efficiently managed, expediting and simplifying the hiring process.
| Tax | Explanation |
|---|---|
| Personal Income Tax | There is no income tax in Kuwait |
| Corporate Tax | Companies are subject to a 15% corporate income tax in Kuwait. Based on the net income generated by businesses within a given fiscal year, the tax amount is determined. |
| Social Security Rate | The Social Security Rate tax in Kuwait is based on labour revenue paid to both businesses and workers.
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| Financial Tax Year | twelve flexible months. The initial tax period may last up to 18 months. 18 months. |
| Corporation Tax | The typical tax rate for foreign businesses operating in Kuwait is 15%. rate of 15%. |
| Capital Gains Tax – Other Assets | Capital gains are liable to income tax at the usual rate of 15% since they are regarded as ordinary company profits. |
| Capital Gains Tax – Residential Property | In Kuwait, individuals are not taxed. |
The process of establishing a subsidiary in Kuwait can be influenced by various factors. For instance, the subsidiary laws may vary depending on the specific area or city in Kuwait where you plan to incorporate. Additionally, the type of subsidiary you wish to establish is another crucial consideration, as each option comes with distinct legal requirements and operational constraints. For example, a branch has more limitations compared to a limited liability corporation (LLC), which offers greater operational flexibility.
Establishing a subsidiary in Kuwait involves several steps, including registering with the Department of Companies of the Ministry of Commerce and Industry (MOCI), reserving a unique company name, obtaining a letter from the Department of Companies for the bank, depositing capital at the bank, having your company offices inspected by the municipality, obtaining approval for the memorandum of association from the Department of Companies, and securing a commercial license.
Establishing a subsidiary in Kuwait for a foreign company can be a complex process that necessitates careful consideration of regulatory requirements, cultural values, and business practices. It is essential to have a thorough understanding of the local landscape and engage with experts who can guide you through the intricacies of subsidiary establishment in Kuwait.
