Employer of Record in Kuwait

Without the need for entity creation, your business growth into Kuwait will be facilitated by our all-inclusive Employer of Record (EOR) solution for Kuwait. Our cutting-edge, automated global HR platform makes it simple to enrol your remote employees, administers their benefits and payroll, and makes sure they are in compliance with local laws. We facilitate your company’s global expansion by using the resources of our global network. To find out more, call us right away.

Overview of Kuwait

• Official Name: State of Kuwait
• Location: Southwest Asia
• Population: 4.2 Million (2019)
• Currency: KWD Kuwaiti Dinar
• Capital city: Kuwait City
• Languages: Arabic (Official), English
• GDP: 107.94 Billion USD (2020)

Employment Landscape in Kuwait

Foreigners and locals are equally subject to Kuwait’s employment rules. Their privileges do differ in a few ways, though.

A business must be informed of all aspects of Kuwait’s employment laws in order to establish a local presence there. Despite having a complicated and perplexing appearance, they are not much different from the employment laws in many other nations. Nevertheless, it is advised to collaborate with a local payroll provider that is knowledgeable with Kuwait’s labour rules for both local and foreign employees in order to reduce or alleviate any difficulties that may occur for businesses wishing to open a local office.

Entitlements	Explanation
Statutory Working Hours	Kuwait allows for a maximum of eight hours of work per day and forty hours of labour per week, with the exception of twenty-six hours per week during the month of Ramadan, when people fast. Employees are entitled to a weekly day off, which is normally on Friday, as well as a daily break of one hour. In Kuwait, female employees are allowed to work up to a forty-five-hour regular workweek, eight hours each day. per day.
Overtime Rules	Each year, employees are only permitted to work a total of 180 hours, or 90 days, of overtime. The daily base rate for overtime compensation is 125%. If a person works on their day off, they are paid 150% of their usual wage and are given an additional day off. Employees are entitled to 200% of their usual wage if they work on a public holiday.
Paid Public Holidays	The following Public Holidays are observed in Kuwait – New Year’s Day National Day Liberation Day Ascension Day/Isra wa Miraj Eid Al Fitr Eid Al Adha Islamic New Year/Hijri New Year Prophet Mohammed’s Birthday Waqfat Arafat
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. Sick Leave Days Pay Entitlement First 15 Days 100% pay 16 to 25 Days 75% pay 26 to 35 Days 50% pay 35 to 45 Days 25% pay
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.

Contractors vs. Full-Time Employees

Making the choice between hiring full-time workers or independent freelancers is vital when growing your company internationally. While hiring a full-time employee may be preferable if you need someone for a function that is part of your core company and requires a long-term commitment, contractors are perfect for short-term initiatives that don’t require much oversight. Hiring contractors can help you gain access to elite talent at a cheaper cost in sectors involving knowledge workers, such as IT solutions, services, business analytics, and software development.

Recruitment in Kuwait

Businesses growing in Kuwait must have a thorough grasp of the labour regulations of the nation, which can be complicated due to the large number of foreign workers. Companies must make sure they have the appropriate work residency and employment contracts in place in order to comply with the law.

Many businesses utilise contractors and online job boards to identify available talent when employing knowledgeable employees. These portals do not aid in the hiring or onboarding processes; they only offer a pool of prospects. Non-compliance may lead to fines and delays, which might have a big effect on how business is conducted.

It may be less expensive to employ a worldwide EOR solution as an Employer of Record in Kuwait than to have its own HR division. In addition to lowering legal and financial concerns, it does away with the necessity to create a legal corporation. Additionally, this approach gives the organisation the ability to grow by adding new contracts.

Probation Period

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.

Termination of Service

Both the Employer and the Employee may cancel an employment contract after delivering a termination notice under Kuwaiti employment law.

Notice Period

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.

Severance Pay

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)

EOR Solutions In Kuwait

Businesses wishing to grow into Kuwait can take advantage of Kuwait Employer of Record’s (Kuwait EOR) practical solution. Businesses that choose to go the EOR way may simplify their operations and guarantee adherence to regional labour rules and regulations without the need to form an organisation. With our complete services, we handle all employment duties, such as processing monthly payroll, managing contracts, obtaining work permits, filing taxes, and more. You can build your business with peace of mind as our team of local professionals in Kuwait helps you manage the challenges of the labour market there.

General Employer of Record Service Terms

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.

Outsourcing Employment Through An Employer of Record

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.

Types of Visas in Kuwait

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.

 

Work Permit

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 our company 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	Step 1: In order to apply for a work visa, our local partner contacts the General Administration of Criminal Investigation at the Ministry of Interior. Step 2: Through the Ministry of Social Affairs & Labor, our local partner in Kuwait submits an application for a work visa. Step 3: The Kuwaiti Ministry of Foreign Affairs sends a duplicate of the work permit to the Kuwaiti Embassy in the country where the employee resides for approval. Step 4: The employee enters Kuwait authorized and in possession of an entry visa. Step 5: The employee receives a letter approving their ability to begin working and depart for Kuwait. Step 6: The employee applies for and obtains a Civil Card within 30 days.
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.

Things You Must Know to Set Up Payroll in Kuwait

Understanding the regulations that apply to various categories is crucial when setting up payroll and handling taxes in Kuwait. Whether to choose international or local specialists is one of the main factors to be taken into account. Compliance with local tax rules, such as income tax, business tax, withholding tax, employee compensation insurance, and social security expenditures, is essential for overseas businesses.

In Kuwait, there are primarily two methods for handling payroll. The first step is to organise an internal team to manage payroll, which can be difficult and time-consuming. The second choice is to work with a local payroll expert who can streamline administration and guarantee adherence to Kuwaiti rules.

The employment procedure might be greatly delayed since businesses cannot set up their payroll in Kuwait without a registered subsidiary. But with the aid of an Employer of Record, all employment-related compliances may be managed, speeding up and simplifying the recruiting process.

Taxes in Kuwait

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. The Social Security tax rate as of right now is 19.5%. The corporate social security rate is 11.5 %. The employee social security rate is 10.5%.
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 procedure of establishing a subsidiary in Kuwait may be impacted by a variety of circumstances. For instance, depending on the area or city in Kuwait where you intend to incorporate, the subsidiary laws may change. The kind of subsidiary you want to establish is another important factor to take into account because each alternative has different legal requirements and operational constraints. A branch is more constrictive than a limited liability corporation (LLC), which offers greater operational flexibility.

Setting up a subsidiary in Kuwait entails a number of steps, such as registering with the Department of Companies of the Ministry of Commerce and Industry (MOCI), reserving a distinctive 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, getting approval for the memorandum of association from the Department of Companies, and obtaining a commercial licence.

Establishing a subsidiary in Kuwait for a foreign company may be a difficult procedure that calls for careful consideration of regulatory requirements, cultural values, and business practices.