Starting your own business

As a young Kuwaiti myself (relatively young to be honest), it is only normal that I have been surrounded by other young Kuwaitis, especially since I have been brought up and lived most of my life in Kuwait.

I have watched my generation go through trends and phases, trying to balance the interesting dynamics of Kuwait with our multicultural population and our traditions, yet I can proudly say that my generation in the past few years has been extremely brave and talented and has contributed to the progression of this country and the region in so many ways. How? From F & B chains that have franchises in the GCC (like Slider Station, Pick Yo, Luscious and many more) to magazines that are also leading in the GCC industry (Khaleejesque) to fashion designers, sportspeople, writers, innovators photographers and artists. The list goes on and on – what a creative generation!

The government has fortunately realized how important it is to have regulations that can assist young Kuwaitis and make the process of obtaining a commercial license easier, lessening bureaucratic and legal hurdles. So today not only do I want to answer common questions I get from SMEs, but also say that I am willing to support SMEs in any way possible, because I believe they are a vital part of our economy.

Minimum capital
Question: Is it true that the minimum capital for establishing a company has gone down to KD 1,000? And what exactly is minimum capital?
Fajer: Yes, it is true the minimum capital for starting a Limited Liability Company (WLL) is now KD 1,000. As I have said before, I try to make my writing as simple as possible because I want as many people as possible to understand the law. I believe in making the law easy. Once the amount is deposited in the bank, the amount will be frozen until you have obtained the commercial license.

Steps needed
Question: What are the steps that I need to carry out to obtain a commercial license?
Fajer: The answer to this question depends on the type of license, which also depends on the type of activity and the relationship you want to have with your partners. But I will go ahead and describe the process for a Limited Liability Company.

1. Ministry of Commerce and Industry.
You need to register at the department designated for companies at the ministry. You will need a copy of your civil ID, a paper from the Social Security Authority confirming that both of the partners work in the private sector, the lease contract, a receipt of rent payment and a paper from the Public Authority of Civil Information confirming the use of the space for commercial activities. You should also be able to obtain a paper from the department addressed to your bank so that you can deposit the minimum capital. Different papers will also be issued according to the activity that the company will undertake.

2. Copyright of the company name
You will need to reserve a commercial name for your company that has not been used or is not in use by any other company. This should be according to the commercial register guidelines. The name is then published in the official gazette to confirm that no one else is using the said name.

3. Inspection
The Municipality will come and check that the location complies with the Municipality’s health and safety regulations. The Fire Department will also carry out an inspection.

4. Memorandum of Association
A Memorandum of Association in simple terms is an official document that lays out the company’s relationship with any third parties. It’s a very important document and should be drafted with care, although in Kuwait it is very common to “copy/paste” an MOU, and this is because the Ministry of Commerce has a standard draft. It has to be approved by the Ministry of Commerce and it has to also be notarized by the Ministry of Justice.

5. Commercial License
The commercial license is then issued and a membership to the Kuwait Chamber of Commerce and Industry is issued, as well as registers at the Ministry of Labor and Social Affairs.
The process can take as little as three weeks and up to a few months depending on the circumstances. I really hope that you get inspired to start your own company, a company that will contribute to the Kuwaiti society hopefully by resolving a social issue. We are blessed to have a supportive system in Kuwait and many young talents, so start with the ideas you have and ask for the support around you.

For any legal questions or queries, email [email protected]

By Attorney Fajer Ahmed

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