Kuwait - Mixed (Common, Civil and Sharia law)
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Kuwait taxes

Want to setup a company? This will tell you about tax laws in Kuwait, reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common company type in Kuwait.

Kuwait does not impose income tax on companies wholly owned by nationals of Kuwait or other Gulf Cooperation Council jurisdictions. However, GCC companies with foreign ownership are subject to taxation to the extent of the foreign ownership. Income tax is levied on net profits earned from Kuwait-source. However, the tax law does not clearly state the tax treatment of foreign income and is currently treated on a case-by-case basis. Corporate Income tax rate is 15% in Kuwait. This ranks the country as 47th overall in terms of corporate tax rate worldwide.

Kuwait does not imposes value added tax, that ranks the country as 1st overall in terms of VAT taxation rate internationally. In terms of other taxation, an employer will contribute 11.50% to the equivalent of a social security fund and an employee will contribute 10.50%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 98hours. Contributing to this is the number of yearly labor tax payments, which is 12 in KW.

Thin capitalization standards aren't in effect. Thin capitalisation refers to any sort of requirements on a business and the debt-to-asset ratios. Dividends are generally exempted from taxation. A dividend is a distribution of a portion of a company profit, passed by by the board, to a class of its shareholders. Dividends can be issued as cash payments, shares of stock, or other property. Capital gains on the sale of assets and shares by foreign shareholders are treated as normal business profits and are subject to 15% tax. Capital Gains from the disposal of securities on the Kuwait Stock Exchange are exempted. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

There are no withholding taxes on payments on interests, dividends or royalties to non-residents.
There is no known tax on wealth in Kuwait. There are not known inheritance, real property and transfer taxes in Kuwait. There are no well known R&D intitiatives that provide breaks on taxation in Kuwait.

The above is not tax or legal advice for your company's situation. Incorporations.io can to point you to an accountantin Kuwait who can get you an answer. Ready to get started? Click the free consultation button above.

It takes approximately 98 hours to file and prepare documents for a Kuwait Mixed (Common, Civil and Sharia law).
The corporate tax is approximately 15% which is 48 in the world.

Owners of a company in Kuwait are not allowed to carry back a loss and may be allowed to carry forward a loss for 3 years.

The vat rate in Kuwait is 0% which ranks 1 in the world.

Patent box
RND credit
Wealth tax
Estate tax
Transfer taxes
Asset taxes
Capital duties
51Tax treaties
0%Offshore Tax
15%Corp rate
-Loss carryback years
98Corporate time
0%VAT rate
15%Capital gains
2018AEOI planned

Read this to learn about incorporating a company in

We can help you form a company in Kuwait. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Kuwait, which is required by law.

We can help you with your incorporations needs for an initial payment of just $1000.

Easy Step by Step Process:
The standard process typically takes between two (2) to three (3) weeks depending on when we receive all the required information from you. Once we receive your information, we will email you a complete set of documents for your review within 3 working days upon confirmation of payment. After executing the documents, you will need to mail them to us and we will formally submit your application for filing with the Registry. The Registry will then take about 3-8 working days to process the incorporation and produce certificates necessary for opening your bank account.

Applying for Your Bank Accounts:
Incorporations.IO maintains close working relationship within our extensive network of partner banks to help you apply for and receive banking services that are most appropriate to your specific situation. From the time of verification of incorporation it can take (1) one week to (2) two weeks to apply for and receive a bank account. We work primarily with banks that allow for remotely opened accounts to ensure you are ready to do business as soon as possible.

Applying for Payment Processing:
We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we have partners that can assist you and are happy to help you with introductions that can empower your business.

Start Online or via Phone:
We can get started for you whenever you are ready via a US$1000 initial payment via credit card. I get notified whenever a payment is made here and would send out the welcome letter and initial forms we would need within 12 hours. If you prefer, we can also process via a phone or Skype call.

Kuwait Tax Treaties

CountryTypeDate signed
DTC 2012-11-13
DTC 2001-05-29
DTC 2009-11-03
DTC 2001-05-29
DTC 2009-10-27
DTC 2012-03-30
DTC 2010-02-23
DTC 2007-04-10
DTC 2009-04-13
DTC 2006-06-15
DTC 1999-02-09
DTC 2007-12-11
DTC 2000-04-18
DTC 2010-06-22
DTC 2009-12-27
DTC 1984-12-15
DTC 2009-11-09
DTC 2003-01-20
DTC 2010-11-23
DTC 2002-01-28
DTC 2010-12-07
Czech Republic
DTC 2001-06-05
United Kingdom
DTC 1999-07-21
DTC 1997-04-23
DTC 1992-07-26
DTC 2011-10-13
DTC 2013-04-20
DTC 2002-06-13
DTC 2001-01-21
DTC 1997-10-06
DTC 1987-12-17
DTC 1990-03-10
DTC 1998-06-30
DTC 1994-01-17
DTC 2002-06-15
DTC 1994-01-27
DTC 1997-03-24
Japan DTC 2010-02-17
DTC 2002-02-21
DTC 2003-02-05
DTC 1999-05-18
DTC 1989-12-25
DTC 2003-03-02
Hong Kong
DTC 2010-05-13
South Africa
DTC 2004-02-17
DTC 1999-02-16
South Korea
DTC 1998-12-05
DTC 2010-01-11
DTC 1996-11-16
DTC 2008-05-26
DTC 2002-07-24

Country Info

National Flag of
دولة الكويت (ara)
Area Code
Kuwait City
Western Asia
Native Languages

Companies Act of Kuwait


Article 1. - All commercial companies shall be governed by the law and commercial practice.

Article 2. - All companies, other than joint ventures, shall have legal personality.

Article 3. - Actions brought by the creditors of any commercial company against a partner shall be time-barred after five years from the winding-up of the company or from the date of retirement of a partner, if the action is brought against such partner.

Time limitations shall run from the date of expiry of the month in all cases when the month is reckoned, and from the closing date of the liquidation, if the matter relates to cases arising out of the liquidation itself.


Article 4. - A collective name partnership is one formed by two or more persons under a certain specified name in order to carry on commercial activities; the partners thereof shall be jointly liable to the extent of all their property for all the obligations of the partnership.


Article 5.- A collective name partnership shall have an incorporation Deed, which shall contain the following particulars:

i. Style and trade name (if any) of the partnership;

ii. The location of the partnership head office;

iii. Names and surnames of the joint liability partners, one of whom at least, shall be a Kuwaiti national;

iv. Names and surnames of the joint liability partners, one of whom at least, shall be a Kuwaiti national;

v. Managers, whether partners or not, who are authorized to manage and sign for the partnership;

vi. The amount of the capital and each partner's contribution, provided the percentage of the Kuwaiti partners' holdings in partnerships that are formed after the operation hereof, shall not be less than 51 (fifty-one) per cent of the capital;

vii. The method of distribution of profits and losses to the partners;

viii. The term of the partnership;

ix. Any other particulars which the partners deem should be included in the incorporation deed.

Article 6.- The incorporation deed shall be written on an official document.

Article 7.- The partnership name shall consist of the names of all or of one or more of the partners followed by the words "AND PARTNERS" or any words denoting the same meaning; the partnership name shall always be consistent with its existing body.

Article 8.- A person outside the partnership who agrees, voluntarily, to have his name included in the partnership name, shall become liable for its obligations towards any person who bona fide relies on said name.

Article 9.- The partners may prepare articles for the partnership, written on an official document, which shall lay down the detailed provisions agreed by the partners for the management of the partnership; a copy of said articles shall be attached to the incorporation deed.

Article 10.- The partnership managers shall carry out the registration proceedings in conformity with the provisions of the Register of Commerce Law. The partnership shall, in regard to a third party, be deemed to exist from the date on which the registration proceedings have been completed; actions begun by the partnership shall not be accepted by the courts if the registration formalities have not been effected; however, third parties may adduce the existence of the partnership even when the registration formalities have not been carried out.

Article 11.- The partner in a collective name partnership shall acquire the capacity of a trader and shall be deemed to carry on trading activities under the partnership name; the bankruptcy of a partnership leads to the bankruptcy of each of its partners.

Article 12.- A partner may assign his holdings in the partnership to an outsider subject to the consent of all the partners, save when the incorporation deed provides otherwise; a Kuwaiti partner may not assign his holding in a partnership which is incorporated after the operation hereof to a non-Kuwaiti person, if such assignment will reduce the holdings of the Kuwaiti partners to less than 51 (fifty one) per cent of the partnership capital. The advertising formalities shall be carried out in conformity with the provisions of the Register of Commerce Law.

However, a partner may cede to a third party the benefits and fruits of his holding in the partnership, provided that the cession agreement shall operate only between the contracting parties.

Article 13.- If it is agreed that a partner shall neither receive profits nor suffer losses, the partnership deed may be rescinded upon application being made by the partner who does not have the right to receive profits, or by any of the partners who are to bear the losses.

Article 14.- A partner's holdings may not merely be the influence which he enjoys his financial credibility.


Article 15.- The manager of a partnership shall manage the business as may be necessary, according to the stipulations laid down in the incorporation deed and the articles of the partnership.

Article 16.- In case of the plurality of management and in the absence of any relevant provision in the incorporation deed or the articles, resolutions shall be passed by an absolute majority, except when a manager raises an objection based on the fact that such business is in violation of the partnership objects, as set down in the incorporation deed, in which case the matter shall be referred to the court to determine the issue. Resolutions which amend the incorporation deed or the articles shall be passed unanimously by the partners.

Article 17.- A partnership shall be bound by the acts of the managers which are within the scope of their powers, if they do so under the partnership name, even when the transaction is for their personal benefit, provided the third party who dealt with them did so in good faith.

Article 18.- Partners, who are not mangers, may not manage the partnership but may have personal access to the partnership books and documents; any agreement providing otherwise shall be null and avoid.

Article 19.- Neither a partner nor the manager of a partnership may enter into a contract with the partnership for his personal account, unless he obtains the prior approval of all the partners for each transaction. However, a general approval may be granted for one year which may be renewable.

Article 20. - Neither a partner nor the manager of the partnership may carry out any act which is detrimental to the partnership or which is inconsistent with the objects for which the partnership was formed, unless the prior consent of all partners has been obtained; neither of the aforementioned persons may carry on any activity which is similar to the activities of the partnership, without a prior permit approved by all partners; such consent shall have to be renewed each year.

Article 21.- A partnership manager may not be dismissed from his office except by majority opinion of the partners. However, a manager may be discharged from his position by judgment of the court, entered upon application being made by a partner, if there are reasonable grounds to justify the dismissal. The dismissal of a manager, as well as the appointment of a new manager, shall be advertised in conformity with the Register of Commerce Law.

Article 22. - The creditors of a partnership are entitled to have recourse to the partnership's assets as well as to the personal assets of a partner who was, at the time of contracting, a member of the partnership; all partners shall be jointly liable to the creditors of the partnership; however, execution may not be effected against the personal assets of a partner unless notice to pay has been served on the partnership, which has failed to pay within the reasonable time-limit fixed by the creditor.

Article 23. - When a partner has incurred personal debts, the partnership creditors may compete with his personal creditors in claiming against the personal assets of such partner; such personal creditors of the partner may not, during the existence of the partnership, recover their dues from the holdings of said partner in the partnership capital, but may receive their dues from his share of the profits. After the liquidation of the partnership, such creditors may receive their dues from the share which belongs to their debtor out of the assets of the partnership, after deduction of the partnership debts.


Article 24. - A collective name partnership shall lapse on the occurrence of any of the following events:

i. expiry of the fixed term of the partnership.

ii. completion of the business for which the partnership was formed.

iii. loss of all of the partnership's assets or of a large part thereof in consequence of which its existence is rendered useless;

iv. declaration of the partnership's bankruptcy;

v. declaration of the bankruptcy of a partner or when a partner is placed under interdiction;

vi. unanimity of the partners to dissolve the partnership;

vii. entry of a court judgment of dissolution of the partnership.

Article 25. - If the partnership term is extended after the expiry date of its fixed term, it shall be deemed to be a new partnership, but its existence shall remain in force, if the extension is effected before the expiry date of its initial term.

Article 26. - If a partner is placed under interdiction or declared bankrupt, the other partners may resolve to continue the partnership, provided that the formalities of advertising are dully effected as laid down in the Register of Commerce Law.

Article 27. - If a partner dies, the partnership shall continue with the surviving partners and any one of the deceased partner's heirs may apply to be considered a dormant partner, save when the incorporation deed or the articles provide otherwise.

Article 28. - A partnership shall be dissolved by a court judgment, upon the application of a partner when he alleges that a partner has failed to perform his commitments of when he adduces any other cause which the court considers so grave as to warrant dissolution; any agreement to the contrary shall be null and void.

Article 29. - The partners may apply to the court for judgment to dismiss a partner whose activities may be such as to justify the dissolution of the partnership, in which case the partnership shall continue among the other partners.

Article 30. - The rights of a deceased partner's heirs who do not become dormant partners, the rights of a partner who has been interdicted or declared bankrupt, if it is resolved to keep the partnership in existence, or the rights of a dismissed partner, shall be assessed according to their value on the date of the fact which led to the cessation of the partner's membership, in accordance with a specially prepared inventory, and the sum shall be paid to him in cash; such a person shall not be entitled to any new rights that accrue to the partnership thereafter unless such rights are the result of transactions made before such event, save when the incorporation deed or articles of the partnership stipulate otherwise


Article 31. - If a partnership lapses, its assets shall be liquidated and divided among the partners in the manner stipulated in the incorporation deed or in the articles of the partnership; in the absence of a provision to that effect, the following shall be applied.

Article 32. - The powers of a manager of a partnership shall cease on the lapse of the partnership, but its legal personality shall be maintained as long as is necessary for, and until the completion of, the liquidation.

Article 33. - If the partners fail to agree on a liquidator, the court : shall, upon application by a partner, appoint a liquidator; until the liquidator is appointed the managers shall, in regard to third parties, be deemed to have the status of a liquidator.

Article 34. - The liquidator shall prepare an inventory of the partnership assets; in order to do so he may seek the assistance of the managers.

Article 35. - The liquidator may not commence any new activities of the partnership except those required to complete a prior activity. The liquidator may not dispose of the trading premises unless all the partners have vested him with prior power to do so.

Article 36. - The liquidator shall collect all the debts of the partnership due from third parties and from the partners, pay off all the partnership debts, and carry out the activities required for the liquidation.

Article 37. - The liquidator may sell the movable and immovable assets of the partnership by auction of through negotiation, save when the order establishing his appointment restricts such authority; however, he may not sell more than that part of the partnership assets which is required to pay off its debts, unless the partners agree otherwise.

Article 38. - The liquidator shall give to the partners all the information which they require regarding the state of the liquidation, but the partners may not arbitrarily create unjustifiable obstacles to the liquidation.

Article 39. - The liquidator may receive fees for his work; if the order appointing him does not specify his fees the court shall do so.

Article 40. - After paying the creditors dues and after setting aside an amount to pay the unmatured or disputed debts, the partnership assets shall be divided among all the partners. Each partner shall receive a share equal to the value of his contribution to the partnership capital as stated in the incorporation deed; any balance remaining thereafter shall be apportioned to the partners, each according to his share of the profits. If the net assets of the partnership are insufficient to pay the partners share, the amount of the loss shall be apportioned among them according to the percentage agreed for the allocation of losses.

Article 41. - In dividing the partnership assets, the rules prescribed for the division of common property shall be applied.


Article 42. - A commentate partnership comprises two categories or partner namely:

1. Active partner who shall manage the partnership and be jointly liable to the extent of their personal assets for all the obligations of the partnership; and 2. Dormant partner, whose role is confined to the contribution of money to the partnership, and shall be liable only for the partnership obligations up to the amount of his contributions. Said partnerships shall have to recorded in the Register of Commerce according to law.

Article 43. - A commentate partnership is of two kinds; a simple commandant partnership and a commentate partnership by shares.


Article 44. - A simple commentate partnership shall be governed, even in regard to the dormant partners, by the rules prescribed for a collective name partnership in regard to incorporation, management, lapse and liquidation, due consideration being given to the following:

Article 45. - The partnership name shall comprise the names of the active partners only; if there is one active partner liable to the extent of all his property, the word "AND PARTNERS" shall be added after his name. A dormant partner may not have his name in the partnership name lest he become liable as an active partner towards a bona fide third part.

Article 46. - A dormant partner may not involve himself, even pursuant to a procreation, in the management of the partnership, but if he does he shall be jointly liable with the active partners for the commitments that arise out of his management activities; he may be made liable for all, or for a number, of the partnership obligations, depending upon the volume an repetition of the activities and the confidence placed in him by third parties because of such activities. Control exercised over the activities and opinions given to the managers of the partnership, as well as the authorization for them to carry on activities which are beyond the scope of their authority, shall not be deemed to be acts of involvement.

Article 47. - The incorporation deed of the partnership shall state the names of the partners and their status, i.e. active or dormant; one at lea of the active partners shall be a Kuwaiti national, and not less than S1 (fifty-one) per cent of the capital of any partnership, which is incorporated after the operation date hereof, shall be owned by partners of Kuwaiti nationality.


Article 48. - A commentate partnership by shares shall be governed by the same rules which govern a simple commentate partnership, due consideration being given to the following:

Article 49. - The capital of a commentate partnership by shares shall be divided into shares; a dormant partner shall be bound by the legal prescriptions which are applicable to a shareholder in a joint stock company, to such extent as shall not be inconsistent with the terms laid down for a commentate partnership by shares.

Article 5O. - The management of a commentate partnership by shares shall be assigned to one or more active partners; the incorporation deed and articles of the partnership shall set down the names of the managers and their powers.

Persons assigned to manage the partnership shall, as regards liability, have the status of the promoters and directors of a joint stock company.

Article 51. - A commentate partnership by shares shall have a Board of Control made up of at least three shareholders or other persons; the Board may require the managers to give an account of their management and in order to do so, the Board may examine the books and documents of the partnership and inventory the cash, financial securities, instruments establishing the rights of the partnership and the available stocks of goods.

Article 52. - The Board of Control may give an opinion on matters referred to it by the partnership managers and may grant permission for any transactions to be carried on, which under the partnership articles require its permission.

Article 53. - The Shareholders General Meeting may not transact business pertaining to the relationship of the company with third parties nor may it amend the partnership articles, except with the approval of the managers, save when the partnership articles provide otherwise.

Article 54. - The words "COMMENTATE PARTNERSHIP BY SHARES" shall be shown next to its name on contracts, invoices, stationery and publications.

Article 55. - A commentate partnership by shares shall terminate on the death of the partner who has charge of its management, unless the articles provide otherwise. The Board of Control may appoint an interim manager to carry on the urgent managerial business until the General Meeting is convened; such interim manager shall, within fifteen days from the date of his appointment, convene the said meeting according to the proceedings laid down in the partnership articles.


Article 56. - A joint venture is a commercial partnership formed between two or more persons, provided that the partnership shall be confined to the relationship between the partners and shall not be valid in regard to third parties.

Article 57. - The deed of a joint venture shall neither be entered in the Register of Commerce nor shall it be advertised; the deed shall be executed by the partners to set down their rights and obligations and to fix the method of sharing profits and losses as well as any other terms and conditions. Said deed shall be governed by the general principles which are laid down in the partnership deed.

Article 58. - A joint venture shall not have legal personality; the legal relationship of third parties in the business of the partnership shall be restricted to the partners with whom such third party has entered into contract. Thereafter, the partners shall have recourse against each other regarding the partnership business to the extent of their relation therewith and according to each partner's share of the profit and loss, in conformity with the agreement set down in the deed which was executed by them.

Article 60. - By exception to the provisions of the preceding Article, a third party may adduce the partnership deed, if the partnership transacted business with him as such.

Article 61. - If a partner who deals with a third party is not a national of Kuwait, he shall be required to have a guarantee in such dealing from a Kuwaiti.

Article 62. - A joint venture may neither issue negotiable shares nor debentures.


Article 63. - A joint stock company is formed by a number of persons who subscribe for negotiable shares and those persons shall not be liable for the commitments of the company except to the extent of the face value of the shares subscribed for.

Article 64. - A joint stock company is 'anonymous' if it is devoid of names, but shall be given a certain specified commercial name to denote its object and describe it. Such name may not originate from the name of a natural person, save when the object of the company is the exploitation of a patent of invention which is legally registered in the name of such person. The company name shall, whenever it occurs, be followed by the words 'JOINT STOCK COMPANY'.

Article 65. - A joint stock company may not have the same or similar name of another company, save when such name belongs to a company in liquidation which has endorsed the use of such name. A company who claims that another company has taken its same or similar name may apply to the competent government department to require such company to change the same; if the application is rejected, it may refer the matter to the court, requesting the change of the name and claiming compensation.

Article 66. - A joint stock company may by a resolution passed by an extraordinary general meeting change its name; the new name shall be entered in the Register of Commerce in accordance with the law and a notice to that effect shall be inserted in the Official Gazette. The change of a company's name shall have no adverse effect on the company's rights and obligations nor on the legal proceedings which have been initiated by it or against it.

Article 67. - A joint stock company may be for a certain specified term as stated in the Memorandum and Articles of Association; if the object of the company is the carrying out of a certain specified work, the expiry of its term may be fixed to coincide with the completion of such work. The specified term of a company may not be extended impliedly by including a provision to that effect in the Memorandum and Articles of Association; such specified term may be extended by a resolution passed by an Extraordinary General Meeting.

Article 68. - Every joint stock company, which is incorporated in Kuwait, shall be of Kuwaiti nationality; all partners shall be Kuwaiti and the company's head office shall be in Kuwait. However, as an exceptional measure, a number of persons who are not Kuwaiti nationals may be partners in a joint stock company (but not banking and insurance companies) if it is necessary to invest foreign capital or exploit foreign expertise, provided that the capital holdings of Kuwaitis shall not be less than 51 (fifty-one) per cent and provided also a license to that effect is obtained from the government department concerned.

Article 69. - The government department concerned may issue an order setting down a pro-forma of the Memorandum and Articles of Association of joint stock companies, who shall have to comply with the same.



Article 70. - The Memorandum and Articles of Association shall be made out on an official paper; the Memorandum of Association shall give the following particular:

1 - company name;

2 - company head office;

3 - the objects for which the company is formed;

4 - the names of the promoter shareholders whose number may not be less than five companies formed by the Government are excluded from the foregoing provision and the Government may, either alone or with a lesser number of persons than that specified above, form a joint stock company;

5 - the amount of the company's capital and the number of shares into which it is divided;

6 - particulars of contributions other than in cash and all the relevant conditions, as well as the name of the contributor and the rights of pledge and privileges devolving on said contribution;

7 - the privileges which are determined for the promoters and the causes therefore;

8 - an approximate estimation of the costs, fees and expenses which the company pays, or is bound to pay, because of its incorporation.

Article 71. - The promoters shall submit an application to the government department concerned for the issue of a decree for the incorporation of the company, and shall attach to such application an official copy of its Memorandum and Articles of Association. The application for incorporation shall give sufficient particulars of the company, to be extracted from the Memorandum and Articles of Association.

Article 72. - The government department concerned shall, within one month from the date of submission of the application for an incorporation decree, satisfy itself that the incorporation of the company is not prejudicial to public order or morality, that it is built on sound bases and that the Memorandum and Articles of Association do not violate the provisions of the law.

Article 73. - If the incorporation of the company is rejected, the promoters may not submit another application for a licence until the expiry of six months from the date of the decision of rejection.

Article 74. - If a decree authorizing the incorporation of the company is issued, it shall be published in the Official Gazette and the company shall acquire its legal personality from the date of enactment of the decree.

Article 75. - When the decree has been promulgated in the Official Gazette, the promoters shall commence the proceedings of subscribing for shares.

Article 76. - The promoters shall, when inviting public subscription, publish a prospectus giving the following particulars:

1 - a summary of the Memorandum and Articles of Association of the company stating the company objects, the name of the promoters, the amount of the capital, the number of shares, the value of each share and the amount payable on account of the shares, the contributions in kind and the expenses, fees and costs incurred for the incorporation of the company.

2 - the maximum number of shares which each person may subscribe for;

3 - the number of shares that qualify a shareholder to become a director as well as the emoluments and benefits that may be acquired by the directors;

4 - the date, place and conditions of subscription;

5 - all other matters that tend to have an effect on the financial position of the company. Such prospectus shall be published in the Official Gazette and a copy thereof shall be sent to the government department concerned.

Article 77. - Subscriptions shall be made in one or more of the accredited banks, to which shall be paid the amounts payable on subscription; all such amounts shall be entered in an account to be opened in the name of the company. Subscriptions shall remain open for a period not less than ten days nor more than three months. (As amended by Law No. 3 of 1965) The promoters may not subscribe, directly or indirectly, for more shares than the number stipulated in the Memorandum; any subscriptions otherwise shall be null and void.

Article 78. - Subscriptions shall be in writing, giving the number of shares subscribed for and stating that the subscriber accepts the Memorandum and Articles of Association of the company, and he shall give the elected domicile, which shall be in Kuwait, and any other particulars which may be incumbent on him to give. The subscriber shall deliver said particulars, and pay the amounts payable, to the bank against a receipt, signed by the bank giving the subscriber's name, his elected domicile, the date of subscription the number of the shares subscribed for, and the installments paid thereon. The subscription shall be deemed to be final when the subscriber receives said receipt.

Article 79. - A printed copy of the Memorandum and Articles of Association shall be delivered to the subscriber and the fact shall be stated in the receipt. Article 80. - The bank shall keep all amounts received from the subscribers and may not deliver them except to the first board of directors.

Article 81. - The promoters shall subscribe for shares of a value being not less than ten per cent of the company capital and shall pay, before publishing the subscriptions prospectus, the amount which is equal to the amount to be paid on subscription by the public for each share subscribed for; the payment of such amount shall be stated in the prospectus.

Article 82. - If, within the time-limit set for subscribing, all the shares offered to the public are not subscribed for, the promoters may extend the time-limit for a further period not exceeding three months; if, on the expiry of the extended period, all the shares have not been subscribed for, the promoters shall either cancel the incorporation or reduce the capital of the company.

Article 83. - In case of cancellation of the incorporation of the company, the promoters shall refund to the subscribers the full amount they have paid; they shall be jointly liable for the refund of said amounts and the payment of the expenses incurred for the incorporation of the company.

Article 84. - In the case of the reduction of capital, the subscribers may cancel their subscriptions within a time-limit which may not be less than the initial time-limit allowed for subscriptions, but if they fail to cancel their subscriptions within said time-limit, the subscriptions shall be deemed to be irrevocable.

Article 85. - If all the shares have been subscribed for, during the time limit set for subscribing, the door of subscriptions shall be closed provided that this is not done before the lapse of ten days from the commencement of subscriptions. If after closing the door of subscriptions it is revealed that the number of shares subscribed for exceeds the number of the offered shares, the shares shall be allocated to the subscribers proportionally to the number subscribed for and the allocation shall be made to the nearest full share.

Article 86. - When the subscriptions violate the foregoing provisions, any interested person may apply to the courts to decree the nullification of the subscriptions; the initiation of an action for nullification shall prescribe at the same time as that for the prescription of a criminal case; if the act is not punishable under the Criminal Law, the action for nullification shall prescribe after three years from the date of closing the subscriptions.

Article 87. - (As amended) The promoters shall file, during three months of the date of closing subscriptions, with the government department concerned a statement showing the number of shares subscribed for, that the subscribers have paid the amounts payable on such shares as well as the names and addresses of the subscribers and the number of shares subscribed for, the value of each share and the amount paid thereon and also the names of subscribers whose subscriptions have been nullified as a result of sorting out the applications for subscriptions. The government department concerned may, if it finds that some of the provisions hereof regarding subscriptions on the allocation of shares have not been observed report the same to the Constituent General Meeting and shall report further the violation to the authorities concerned.

Article 88. - The promoters shall, within the time-limit set down in the preceding Article, serve on subscribers notice of the Constituent General Meeting, and have a copy of the notice sent to the government department concerned; but, if on the expiry of such time limit, the promoters fail to send such notice, the government department concerned shall do so. The Constituent General Meeting shall have a quorum if those persons who hold, in person or by proper proxy, more than one-half of the number of shares subscribed for, are present. One of the promoters shall be elected by the Meeting to preside at it.

Article 89. - The promoters shall place before the Constituent General Meeting a report giving full particulars of all the incorporation formalities together with the supporting documents. The Meeting shall satisfy itself of the conformity of said particulars to the facts, the law, and the Memorandum and Articles of Association of the company.

Article 90. - The Constituent General Meeting shall elect the first directors and the first auditors and declare the legal incorporation of the company.

Article 91. - When the company has been legally incorporated, the directors shall cause the company to be entered in the Register of Commerce in conformity with the law; failure to carry out said registration nullifies the company or the particulars which were not registered; the directors shall be held jointly liable for such nullification.

Article 92. - The company Articles shall be posted in its offices; any person may obtain a true copy thereof against payment of a fair price. The name, kind, head office, date of incorporation, the amount of the capital subscribed for, as well as the paid-up capital and any increase or reduction of the capital of the company and the registration number of the Register of Commerce, shall be clearly stated on all contracts concluded by the company and on all the letters, circulars, notices and other publications issued by it.

Article 93. - The directors shall, within two months of the date on which the General Meeting approves the accounts, publish in the Official Gazette the balance sheet of the expired financial year and a list stating the names of the directors and the auditors.

Article 94. - By exception to the above provisions, joint stock companies, other than concessionary and monopoly companies which do not invite the public to subscribe for shares, may, without obtaining a decree, be incorporated by official document issued by all the promoters, whose number may not be less than five; such document shall contain the Memorandum and Articles of Association and the following acknowledgements:

i - that the provisions of both the Memorandum and Articles conform to the pro-forma provided for in Article 69 (if any);

ii - that the promoters have subscribed for all the shares, have paid the legally prescribed amounts in respect thereof and placed the amounts so paid at the disposal of the company in an accredited bank;

iii - that contributions in kind are in conformity with the law and have been satisfied in full;

iv - that the promoters have constituted the relevant administrative bodies of the company.

A copy of the supporting documents and papers of the foregoing acknowledgements shall be attached to and kept with the official document.

Article 95. - A company which is incorporated in conformity with the provisions of the preceding Article shall not have legal personality and may not commence business until the incorporation has been recorded in the Commercial Register and the official document issued for its incorporation has been advertised in the Official Gazette.

Article 96. - When a joint stock company has been illegally incorporated, any interested person may, within five years of its date of incorporation, serve notice on it requiring the completion of any formality which has been omitted; if the company fails, within one month of the notice, to effect the required rectification, such interested person may apply for a judgment of nullification and the company shall be liquidated as though it is a de facto company. However, the shareholders may not adduce the nullity of the company against third parties.

Article 97. - When the company incorporation is illegal, any interested person may, within the time-limit set for the nullification action in the preceding Article, bring an action for joint liability against the promoters, the first directors and first auditors.


Article 98. - The company capital shall be sufficient for the implementation of its objects and shall be in the currency of Kuwait, provided it is not less than five hundred thousand rupees for companies who invite subscriptions from the public, and not less than one hundred thousand rupees for companies who do not invite the public to subscribe for shares.

Article 99. - (As amended by Decree Law No. 3/75) The capital of a company shall be divided into equal shares at a nominal value of not less than one Dinar nor more than seventy-five each; a share is indivisible but may be co-owned by two or more persons provided they are represented in relation to the company by one of their number; the co-owners of a share shall be jointly liable for the commitments arising from such ownership.

Article 100. - Shares shall be issued at their nominal value and may not be issued at a lower value; if they are issued at a higher value, the premium shall be applied in the first place for payment of the expenses of the issue and secondly for the reserve or redemption of the shares (conversion into stock).

Article 101. - The shares of a company incorporated in Kuwait shall be nominative; if the company is authorized to have other than Kuwaiti shareholders the shares held by Kuwaitis shall be nominative. However, the divided vouchers, whose form and conditions shall be set down in the Articles of Association, may be either nominative or to bearer.

Article 102. - The value of shares shall be paid either in cash in one payment or by installments; the first call payable on subscription may not be less than twenty per cent of the share value; in all cases, the full value of a share shall be paid within five years of the date of the Incorporation Decree.

Article 103. - The company shall issue, at the time of the subscription, provisional bonds showing the number of the shares subscribed for, the amount paid in respect thereof and the remaining installments; such bonds shall replace the ordinary shares until payment of all calls, when they shall be replaced by shares.

Article 104. - If a shareholder fails to pay the calls, within the prescribed time-limits, the company may, after serving notice on him, offer his shares for sale by public auction or at the stock exchange (if any); the unpaid calls, interest and expenses, shall be collected from the sale price and have priority over all creditors, and the balance shall be paid to the shareholder; but if the sale price is insufficient, the company shall have a right of recourse against the personal assets of such shareholder for recovery of the difference.

Article 105. - (As amended) The company may give shares in kind in consideration of payment other than in cash or evaluated rights; the promoters shall apply to the President of Al Kulliya Court to appoint an expert to verify whether such shares have been properly evaluated; such evaluation shall not become final until approved by the numerical majority of the subscribers who hold two-thirds of the cash shares, after the exclusion of the cash shares held by the contributors of shares in kind, in which case the latter shall not be entitled to vote on such approval. Contributions in kind may not represent other than shares of which the values are fully paid up.

The foregoing provisions shall apply if the Memorandum and Articles of Association of the company provide for the purchase of non-cash property or rights evaluated by a promoter, his spouses, or relations up to the second degree, even when such promoter has contributed cash shares.

Article 106. - Shares and provisional bonds may not be disposed of until the company has issued its first balance sheet for twelve months at least; any disposal made shall be void; any interested person may adduce such nullification and the Court shall of its own accord, determine the nullification. After the issue for the aforesaid balance sheet, disposal is allowed; disposal shall not have effect against the company unless it is entered in the od hoc register kept by the company. The registration shall be effected in the presence of both contracting parties and a company delegate; the transferee shall be a Kuwaiti if the transferred shares or provisional bonds are held by a Kuwaiti national.

Article 107. - Shares and provisional bonds may be pledged, donated or disposed of in any other way; such disposal shall be effected in accordance with the provisions of the preceding Article.

Article 108. - The company assets may not be attached to satisfy debts due from a shareholder, but the shares and dividends of a debtor are subject to attachment and an inscription to that effect shall, upon notice issued by the competent authority, be made against the record of said shares in the od hoc register which is kept by the company; such inscription may not be crossed out except pursuant to notice to that effect issued by the same authority. Resolutions passed by the General Meeting shall apply to the distrainer and the mortgager as they apply to the shareholder whose shares are attached or the mortgage, but the former shall not have the rights which attach to a member of the company.

Article 109. - The promoters may not dispose of their shares within two years from the date of the legal incorporation of the company. Any disposal effected otherwise than aforesaid shall be null and void. Any interested person may adduce such nullification and the Court shall, of its own accord, so determine.

Article 110. - The capital may not be increased unless calls on the original shares have been paid up; the nominal value of the new shares shall be equal to the nominal value of the old shares; the original terms of subscriptions shall apply in respect of the new shares.

Article 111. - Every shareholder has a priority right of subscribing for a number of the new shares commensurate with the number of shares already held by him; a time-limit, being not less than fifteen days, shall be granted for the exercise of the said priority right as from the date of notifying the shareholders accordingly.

Article 112. - The company may reduce the capital if it is in excess of its needs, or when a loss is suffered and the company deems it proper to reduce the capital to its actual value, provided the reduction shall be by a resolution passed by an Extraordinary General Meeting.

Article 113. - The reduction may be effected in either of the following two ways:

1. by reduction of the nominal value of the shares by canceling the obligation to pay the unmatured calls;

2. by reduction of the nominal value of the shares by canceling part of their paid-up price equivalent to the loss (if any), or by refunding part thereof, if the company considers that the capital is in excess of its needs.

Article 114. - The company may not, without the sanction of the several Meeting, buy its own shares, in which case the purchase money shall be taken from the voluntary reserve and the value of shares shall be paid in full; the shares so purchased shall be deemed to be redeemed shares.

Article 115. - The company shall grant shares to be termed "redeemed shares" to the shareholders whose shares have been purchased according to the provisions of the preceding Article. Holders of redeemed shares shall enjoy the same rights as those of ordinary shareholders, except with regard to the recovery of the nominal value of the share, in case of the liquidation of the company.

Article 116. - The company may borrow money against the issue of negotiable debentures of equal nominal value to be given to subscribers against the 1-25 amounts loaned to the company; the loan shall be raised by invitation to the public to subscribe for debentures.

Article 117. - The debentures vest the holders thereof with a right to receive a certain specified rate of interest payable on a fixed date and with a right to recover the amounts of his debt from the company assets.

Article 118. - The company may not issue debentures unless the following conditions have been satisfied:

I- the subscribed capital has been paid in full;

ii- the value of the debentures issued by the company shall not exceed the amount of its capital, exception being made for real estate, industrial and agricultural banks;

iii- the General Meeting has passed a resolution to issue debentures.

Article 119. - Before issuing an invitation to subscribe for debentures, the directors shall publish in the Official Gazette a prospectus signed by and giving the address of each director containing the resolution of the General Meeting which approved the issue of the debentures, the number, nominal value, rate of interest and the maturity date, its conditions and securities of the debenture to be issued, as well as the number of debentures issued previously by the company and the securities therefore, the amount of the company capital, the value of the contributions in kind, the results of the latest approved balance sheet and the purpose for which the loan is issued. The above particulars shall be stated on all notices and publications pertaining to the loan and on the debentures when issued. If the foregoing conditions are not satisfied, the subscribers for debentures may cancel their subscriptions and recover the amounts which they had paid.

Article 120. - If the price of a debenture has not been paid in full on subscription, and the subscriber fails to pay on maturity the calls made on him by the company, the company may sell the debenture by public auction or at the price of the stock exchange market valuation according to the pro visions of Article 104.

Article 121. - Debentures may be issued with a premium payable on redemption or the refund of the value of the debentures; lottery debentures may not be issued except pursuant to a decree.

Article 122. - The company shall refund the value of debentures in conformity with the conditions of the issue; the date of the refund may neither be advanced nor delayed.

Article 123. - The company may accept its debentures in repayment of the debts due to it, even though repayment is made before the date fixed for their redemption; the company may re-offer such debentures for subscription unless the same is forbidden by stipulation in the company's Articles of Association or when such debentures have been redeemed to satisfy a commitment binding on the company to recover them.

When redeemed shares are re-offered for re-subscription according to the provisions of the preceding paragraph, such offer shall not be deemed to be one for subscription for a new loan but shall have the same status as the debentures subscribed for in the relevant issue; if subscribed for, the subscribers shall have the rights which attach to such issue.

Article 124. - The company shall keep a register, wherein shall be entered the particulars of every debenture issue, and it shall show the number thereof subscribed for, the amounts paid in respect thereof and the particulars of redemption or repayment thereof.

Article 125. - The debenture holders of every issue shall form one single body and the resolutions passed by them shall apply to dissenting and absent members. The company shall, within two weeks of the date of closing the subscription, call said body to d meeting to approve its Articles of Association and to elect its representatives.

Article 126. - Said body shall hold its meetings pursuant to a convocation by its representatives, or by its company directors or upon the request of a number of debenture holders representing at least five per cent of the value of such debentures; the notice of such meeting shall contain the agenda of the meeting and be published in the Official Gazette.

Article 127. - The resolutions of said body shall not be valid unless the number of the debenture holders present in the meeting represents two-thirds of the debentures issued; if this quorum is not present, a notice containing the same agenda shall be sent to the members for a second meeting, in which the presence of debenture holders representing one-third of the debentures shall be sufficient for the transaction of business.