Commercial Laws of Kuwait

            Commercial laws of Kuwait are essential in the course of doing business in this nation. The commercial laws determine when and where, as well as whom to conduct business transactions in the context of Kuwait. These commercial regulations have enormous implications on the volume of revenues, as well as profitability at the end of each fiscal period. In this context, the essay will focus on the examination of the business or commercial laws concerning the case of Kuwait.

            Articles 23 and 24 of the commercial code of Kuwait determine the basic premise for doing business in the nation. According to Article 23, non-Kuwaitis have no legal rights to engage in commercial activities in Kuwait in the absence of a Kuwaiti partner whose equity is at least 51 percent. On the other hand, Article 24 indicates that a foreign institution or business entity cannot establish a branch in Kuwait, thus, lack of a platform to engage in the commercial activities in the nation unless through utilization of a Kuwait agent (Mako et al., 29).

            In the course of attracting foreign investments into the nation, the parliamentary arm of the government sought to integrate a law regulating foreign capital direct investment. The law is essential in the generation of exception to the general rules in which foreign investors can execute business transactions in Kuwait. The law offers permission of up to 100 percent foreign ownership of the business corporation in selective sectors. From this perspective, a foreign person or entity might consider entering the Kuwaiti market and enjoy execution of businesses in diverse ways such as the establishment of corporations, the appointment of local commercial agents, engaging in a joint venture agreement, and integration of a commercial representative.

            From a general perspective, individuals, Kuwaiti and foreign nationalities, as well as Kuwaiti business corporations are not subject to taxation systems on their income. Nevertheless, foreign corporates executing commercial activities in Kuwait must pay income tax in agreement with the commercial rules and codes. The tax rate is approximately 15 percent of the net income (Saleh 36). The commercial companies’ law is essential in the provision for the establishment of diverse types of companies, as well as ventures in the case of Kuwait. Some of the types include joint liability company, limited partnership, closed shareholding company, limited liability company, joint venture, and public shareholding company.

            Conclusively, the commercial laws determine when and where, as well as whom to conduct business transactions in the context of Kuwait. Article 23 states that non-Kuwaitis have no legal rights to engage in commercial activities in Kuwait in the absence of a Kuwaiti partner whose equity is at least 51 percent. Alternatively, article 24 provides that a foreign institution or business entity cannot establish a branch in Kuwait, thus, lack of platform to engage in the commercial activities in the nation unless through utilization of a Kuwait agent.

Works Cited

Mako, William, et al. “Kuwait: Fostering Sustainable Investment through Modern             Commercial Law Systems.” (2013).

Saleh, Samir. Commercial Arbitration in the Arab Middle East: Jordan, Kuwait, Bahrain,            and Saudi Arabia. Lexgulf Publishers, 2012.