Kuwait at a Glance
Working in Kuwait
With a gross domestic product of over US $150 billion in 2012, the importance of Kuwait’s economy largely surpasses its small geographical size. Kuwait has a wealthy and fairly open economy which mainly relies on the country’s immense oil resources. At 2%, Kuwait has one of the lowest unemployment rates in the world.
Expatriates with skills needed in the country’s booming economy are welcomed with open arms. Still, this applies only to those who will be employed in Kuwait for a temporary period. Foreigners generally are not granted citizenship, irrespective of how long they have been a resident of Kuwait. Foreigners cannot own land or property, either.
Main Industries in Kuwait
Kuwait’s economy is dominated by the massive oil industry. Kuwait has crude oil reserves of around102 million barrels, about 7% of total world reserves. Petroleum accounts for close to half of Kuwait’s GDP and 95% of government income. Many expatriates working in Kuwait are employed in this sector.
The manufacturing sector is also dominated by oil products and is mainly export-oriented. The fastest growing fields in the service sector have recently been real estate, business services and finance. These also offer various opportunities for expats.
As Kuwait has practically no arable land, it does not have any meaningful agriculture. The state imports more than 95% of its food. The only exception is the fishing industry, as seafood is plentiful in Kuwait’s coastal waters.
Work Permits for Kuwait
All expats with the exception of nationals of Gulf Cooperation Council member states have to obtain a work permit before they can take up employment in Kuwait. Work permits are only issued if the expat has a valid employment offer.
The employer then functions as a sponsor for the expatriate employee while he or she is working in Kuwait. This means he handles all the administrative work for you, from filing the visa application to opening your bank account. Also, your sponsor is responsible for you as long as you are resident in Kuwait and liable if you violate any regulations.
Once the work permit has been granted and residency obtained, an expat can now in turn act as sponsor for his (!) spouse and children. If dependents also want to have a job in Kuwait, they have to obtain separate work permits under the sponsorship of a Kuwaiti national.
Taxation in Kuwait
Most of Kuwait’s extensive government spending is financed by oil revenues. Taxes, the main source of government income elsewhere, are apparently dispensable. There are no personal taxes, not even for expats working in Kuwait.
The only ones liable to income tax are foreign companies working in Kuwait. The corporate income tax rate for foreign businesses currently is a flat 15%. Kuwaiti-owned businesses are exempted from any corporate taxes.
As those working in Kuwait will soon find out, the country does not have any value-added tax, either. There are speculations, however, that it may soon be introduced.
Social Security in Kuwait
Kuwait has a comprehensive social security system covering all Kuwaiti nationals working in Kuwait. It covers pensions, disability and sickness benefits as well as free public health care. The system is financed partly by the state and partly by monthly contributions from employees and employers.
The public social security system, however, is not accessible for expats working in Kuwait. Some employers have corporate pension schemes for expatriate employees. If these are not available, it is advisable to continue paying into a state pension scheme and/or private pension plan in your home country while you are working in Kuwait.
Expatriates do have access to public medical care while residing in Kuwait. In recent years, however, there has been increasing pressure on foreign companies to provide private health insurance for expatriates working in Kuwait in order to reduce the burden on the public system.