Tech startups in Kuwait

Attorney Fajer Ahmed

As I am sitting in the audience of ArabNet, a conference focused on digital business and entrepreneurship in MENA, and listening to entrepreneurs pitching their ideas, I can’t help but think about how much the market has changed in Kuwait because of new legislations and how it can continue to prosper with new legislations introduced. The tech startup industry in Kuwait is a booming industry, and although Kuwait is a small market internationally, some startups have proven their capability of being international players. I was proud to hear stories of young entrepreneurs such as Just Clean sharing their success stories. Therefore, today I would like to focus on tech startups and the change that has been happening in Kuwait.

Tech startup
Question: We have heard from many sources that there new legislations that facilitate starting a tech startup in Kuwait. Can you please elaborate?
Fajer: Yes, the government as part of its 2035 New Kuwait plan is really pushing for a more diversified economy focusing on different sectors and a private sector that is fully functional and not reliant on government funding, as well as foreign investment into Kuwait. For startups, this means a focus on new laws, such as the following:
1. Although there are no new laws specifically for startups, there have been new bylaws making it easier for startups to obtain licenses, space and so on. Setting up the Kuwait Business Center has also been a great help to many of my clients.
2. Licenses for ‘home businesses’ without the need of a commercial location – all you need is an address. With that said, activities are limited as of now, and I hope they expand to include tech startups.

New laws
Question: What new laws would you suggest for tech startups in Kuwait?
Fajer: In the simplest of terms, I would suggest the following laws for tech startups in Kuwait:
1. Intellectual property laws – although you can copyright source codes in Kuwait (it is done at Kuwait National Library) and other innovations can be patented as well, there could be more advanced laws to structure intellectual property right issues.
2. Crowdfunding – we are blessed in Kuwait to have very strong networks and family ties, and although there are successful project that have been crowdfunded, there is no law that specifically addresses and organizes crowdfunded projects.
3. Although we had a new companies law recently, there are still issues that need to be organized, like investors in general, silent investors and the possibility of having shares for work, which are all important for SMEs.

National Fund
Question: Is it true that Kuwaitis are eligible for funds from the Kuwait National Fund for Small and Medium Enterprises?
Fajer: Yes, Kuwaitis are eligible for financial and technical support from the Kuwait National Fund; an independent public corporation with a total capital of KD 2 billion that develops and finances small and medium enterprises. Obviously, since the fund is providing equity to new and already established companies, they have their own terms and conditions, with the most important being the following:
1. All partners need to be Kuwaiti and 21 years old and above.
2. Have 1-50 employees and a capital of not more than KD 500,000.
3. You will need to support your business with KD 20,000 of the capital.
4. A business plan needs to be submitted.
5. Government employees can apply and once accepted, they can get paid leave to work on their new startups.
6. From experience, evaluation takes up to 60 business days.

Should you have any questions or concerns, or you require a consultation, please email me at [email protected]

By Attorney Fajer Ahmed

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