Kuwait offers unlimited opportunities for companies looking to expand. There are many regulations and payroll rules for Kuwait, so companies starting or expanding a business in Kuwait need to ensure compliance or risk fines and penalties.
Kuwait uses a source taxation method, meaning that tax is imposed on the Kuwaiti-source income, and a taxation liability can also arise from work not considered taxable in many other countries and jurisdictions. The source of income is considered Kuwaiti if the performance of services are in in Kuwait. Even work performed outside of Kuwait is taxable if the contract involves any activity in Kuwait. The entire revenue from transactions may be taxable if there is any significant presence of employees or short-term visits to Kuwait by representatives of a company.
Under Kuwait Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country. There are also several labor and payroll regulations to consider:
- The minimum wage is 60 KWD per month ($197.50 USD)
- Standard working hours are 48 per week
- There is no payroll tax in Kuwait
- Labor laws instituted by the Ministry of Social Affairs and Labour are applicable to the private sector, including domestic and temporary workers
- Employment contracts must be written in Arabic
- All foreign workers must obtain a work and residency permit to work in Kuwait (except workers from Saudi Arabia, UAE, Qatar, Bahrain, Oman)
- As of July 2018, foreign workers under the age of 30 will not be granted a work permit
- As of 2023 foreign workers in government jobs will be replaced by Kuwaiti citizens
To ensure compliance with local labor laws and payroll, it is vital to stay ahead of changes each year. Blue Marble offers cloud-based global payroll technology with aggregated monthly reporting, so you can view your payroll across all countries and currencies in real-time. Our in-country experts can help with payroll and labor questions and ensure compliance with all regulations in Kuwait. To learn more about payroll in Kuwait, click here