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Kuwait City is the official currency of Kuwait Its currency symbol is د.ك, KWD.
Estimated at 11% of employees salary.
Arabic is the official language of Kuwait, since it is the language of the Holy Quran and Islam is the official religion of the state.
The population of Kuwait is 4.329 million (based on World Bank numbers as of 2021).
Employees are paid monthly.
To start growing your team in Kuwait, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
If you are thinking about expanding to the Middle East region, Kuwait should be on your radar. In recent times, the government’s interest in driving external business into the
country is increasing. Newly approved laws make it possible for foreign individuals to do business within the country (in certain sectors) while still holding 100% of their
business equity.
With almost 70% of the population being expatriates, the country population is young, educated and has good English proficiency levels.
Partnering with an already established entity can accelerate the business setup time and avoid non-compliant situations.
There are specific rules for foreign/Kuwaiti individuals but employee costs in Kuwait are expected to be 10-15% of their salary.
Employees in Kuwait mainly work exclusively in an office or on a hybrid model. Workers have the same rights regardless of their working location.
There is no income tax in Kuwait. Kuwaiti individuals should contribute 8% of their salary to Social Security (up to a ceiling of 2,750 KWD per month).
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| Pension and Disability: | 11%. |
| Unemployment: | 0.5%. |
Contracts in Kuwait must include:
Under Kuwaiti Labour Law, the employee needs to sign a written employment contract in Arabic and in a second language upon the request of an employee. In the case of a
dispute, the Arabic version prevails over an employment contract in any other language.
An employment contract can be for either a definite or indefinite term. A definite-term employment contract should not exceed five years and should not be for less than one
year. After the initial fixed period, the contract can be renewed, or is deemed to be renewed if both the parties continue performance following the expiry date.
An employee of a foreign employer who physically works in Kuwait typically signs two contracts: an employment contract with the foreign (or primary) employer; and an
employment contract with the agent (or secondary) employer. The second, or local, contract is an essential part of the work permit application and for the purposes of
Kuwait law, the local employment contract is the official contract that is registered by the agent with the MSAL. Although the first employment contract outlined here is
optional, it is widely used by foreign employers to provide the full foreign employment structure and benefits to employees, while at the same time complying with the Labour
Law.
A probation period can be no longer than 100 days.
Emerald Technology can onboard employees in Kuwait within 48 hours.
It is acceptable to have restrictive covenants contained in the Kuwaiti contract of employment, provided that the employee has become acquainted with the employer’s
clients or the secrets of the business and the covenants are reasonably drafted in relation to their duration, geographic scope and the nature of the business to be protected.
Parties are permitted to include a liquidated damages clause in the contract of employment as it is generally not possible to obtain an injunction in Kuwait; however, any
such penalty should not be exorbitant. Non-compete clauses and customer non-solicit clauses typically last no longer than 12-24 months. Employee non-solicits are also
permissible.
Kuwait has a state-funded health system that is ‘free at the point of entry’ for Kuwaiti nationals. Non-citizens who are resident in Kuwait are entitled to a health insurance card for which they pay an annual fee.
It is mandatory for expat workers in Kuwait to have health insurance of some description. Foreign citizens will not be permitted an entry visa for the country without health insurance, usually private. Though it is not mandatory for this to be provided by the employer, it is advisable and will create a more attractive work prospect for your foreign employee.
Social Security Contributions in KuwaitThe employee contributes 10% of their salary to a Pension & Disability fund, in addition to the employer contribution of 11%.”
Expectant mothers in Kuwait are entitled to 70 days’ paid maternity leave, and up to four additional months’ unpaid leave.
There are no provisions in Kuwaiti law regarding paternity leave
Employees in Kuwait are entitled to sick leave, provided they can produce a satisfactory medical report. The allowance is as follows:
First six days of illness: 100% salary
Next six days of illness: 75% salary
Next six days of illness: 50% salary
Next six days of illness: 25% salary
This is the total annual entitlement and not per period of sickness.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:
| Notice Periods: | Termination requires three months’ notice from either side for employees paid a monthly salary, or one month for all others. A contract can be terminated without notice or compensation in the event that the employee caused a significant monetary loss, committed fraud, or disclosed secrets that led to losses. |
If an employee is made redundant, they are entitled to a payment based on years of continuous service.
| Severance Pay: | Employees who are paid on monthly basis shall be entitled to 15 days’ severance payment for each of the first five years of service and one month for each year thereafter. The total end of service benefit shall not exceed 18 months’ remuneration. |
Employees are entitled to 14 days’ annual leave after completing one whole year of service, and 21 days’ annual leave every year after five years of continuous service.
There is no minimum wage in Kuwait.
The maximum permitted work week under Kuwaiti law is 48 hours (8 hours per day over 6 days). Most companies work 5-day weeks, with Friday and Saturdays off. Those working 6 days get Friday off. During Ramadan, the working hours are reduced to 6 per day. Employees are entitled to a one-hour break after working five straight hours, which is not included in the day’s working hours. Overtime should not be more than 2 hours per day, 3 days per week, or 90 days per year, and must be paid at 1.25x regular salary. Fridays must be paid at 1.5x regular salary, plus a compensatory day off. National holidays must be paid at 2x regular salary.”
Salary payments should be made monthly.
There is no personal income tax in Kuwait.
Similar to other countries, Kuwait has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.
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