Kuwait Personal Income Tax

No income taxes are currently imposed on individuals in Kuwait.

Other taxes

Net worth, estate and gift taxes are not imposed on individuals in Kuwait.

Social security

For Kuwaiti employees, contributions are payable monthly by both the employer and employee under the Social Security Law. The employer’s social security contribution is 11.5%, up to a sal­ary ceiling of KWD2,750 per month. Consequently, the maxi­mum employer contribution is KWD316.25 per month. The employee social security contribution rate is 10.5%. For calcula­tion purposes, the cap amounts vary. For 2.5%, the cap amount is KWD1,500 and for 8%, the cap amount is KWD2,750. Consequently, the maximum employee’s contribution is KWD257.50.

Benefits provided, which are generous, include pensions on retirement and allowances for disability, sickness and death.

For employees who are nationals of other Gulf Cooperation Council (GCC) member countries, contributions are payable monthly by both the employer and the employee at varying rates, which are applied to the employee’s monthly salary.

A health insurance scheme applies for all expatriate residents of Kuwait. The annual premium is payable at the time of initial appli­cation or renewal of the expatriate’s residence permit. The pre­mium is KWD50 for expatriates working in Kuwait and from KWD30 to KWD40 for other resident expatriates. KWD4 is added to the premium as government charges. No other social security obligations apply to expatriates. However, expatriate employees are entitled to end-of-service benefits, which are described in End-of service benefits.

End-of-service benefits. End-of-service benefits for expatriate employees are described below.

Employees who are paid on daily, weekly, hourly or piecework basis are entitled to 10 days’ remuneration for the first five years of service and 15 days’ remuneration for each year thereafter.

Employees who are paid on monthly basis are entitled to 15 days’ remuneration for each of the first five years of service and one month remuneration for every year thereafter. However, employ­ees whose work contract has an indefinite term are entitled to half of the end-of-service benefits for a period of service not less than three years and not more than five years. If the period of service is more than 5 years but not more than 10 years, the employee is entitled to two-thirds of the benefit. For a period of service above 10 years, the employee is entitled to the entire end­of-service benefit.

Many employers choose not to follow the above rule of providing half or two-thirds of the entitlement.

Tax treaties

Kuwait has entered into double tax treaties with more than 60 countries. In addition, double tax treaties have been signed or initialized, but not yet ratified, with several other countries.

Entry visas

Nationals of GCC member countries do not require visas to visit Kuwait.

Nationals of certain specified countries, which are Canada, the United States, several European countries and a few Far Eastern countries, are given entry visas on arrival at the Kuwait airport. Nationals from other countries must arrange for entry permits before traveling to Kuwait.

The entry permit obtained on arrival enables a visitor to stay for a maximum of three months in Kuwait. The maximum stay is one month for other entry permits, which may be extended to two months at the discretion of the Department of Immigration. A fine of KWD10 per day is imposed for staying in the country after the expiration of the visa, and violators may also be impris­oned.

All visas in Kuwait are issued for a definite period of time. Per ma­nent visas are not issued in Kuwait. Visas for short visits, usually one month, are issued to business visitors and to certain family members of residents (see Section H).

Business visas are issued to employer-sponsored or business-sponsored applicants. These may be obtained by a sponsor or host in Kuwait (for example, local hotels, local agents or partners in joint ventures) from the Department of Immigration or the Min istry of Interior before travel. To obtain a business visa, photocopies of a passport showing the personal information of an applicant (validity not less than six months from expiration date) and the applicant’s university degree, as well as an application form signed by a Kuwaiti sponsor, are normally required. After the visa is obtained by the sponsor, it may be collected by the visitor at the Kuwait International Air port. It is also possible to obtain a business visa by personal appli cation to the nearest Kuwait embassy or consulate.

Work permits and self-employment

Procedures. Under Kuwait labor law, which is administered by the Ministry of Social Affairs and Labour, priority in employment must be made available first to Kuwaitis, then to GCC nationals, then to Arab nationals and finally to other foreign nationals. As a result of a shortage of qualified Kuwaitis, a large part of the workforce in Kuwait is made up of non-Kuwaiti Arabs, Europeans, Americans and Asians. It is expected that the employment of expatriate workers will continue to be essential for the foresee­able future.

Employers must obtain work permits from the Ministry of Social Affairs and Labour for foreign nationals, other than the GCC nationals, to take up employment. All expatriates, including those who wish to be self-employed, must have Kuwaiti sponsors to obtain work permits.

Work permits are issued by the Ministry of Social Affairs and Labour after the ministry considers various factors, including an employer’s requirement for the labor, the availability of labor in the country and the composition of the population of the country. Issuance of work permits is sometimes banned temporarily based on the aforementioned factors. It usually takes one month to obtain a work permit if no ban is in effect. Work permits must be activated by employees when they arrive to take up residence in Kuwait. The permits are valid for a maximum of three years from the date of issuance.

To obtain a work permit, an employer must submit a copy of the employee’s passport (not less than two years from the expiration date) and sign an application form. In certain cases, authenticated copies of the educational certificates of the employees must also be submitted. After the work permit is issued, it is sent by the employer to the country of origin of the foreign national for pre­sentation at the point of entry into Kuwait.

It is no longer possible to convert a visit visa into a work permit. The employee must have a work visa to enter Kuwait. The employer arranges for the work visa. The employee is required to obtain attested copies of his or her university degree and police clearance certificate from his or her country of residence and provide these to the employer after he or she arrives in Kuwait. After the employee enters Kuwait on a work visa, the employer will have the work visa converted into a work permit.

Payment of salaries through local bank accounts. The Ministry of Social Affairs has announced that it will impose stiff penalties if companies fail to comply with the requirement to pay salaries to employees through local bank accounts in Kuwait.

Non-compliance with such regulations may also affect the ability of the companies to obtain work permits for workers in Kuwait. In addition, the Department of In come Taxes may disallow the payroll costs for employees who did not receive their salaries in their bank accounts in Kuwait.

Residence permits

On arrival in Kuwait, an employee with a work permit must apply to the Department of Immigration for a residence permit. The residence permit, which costs KWD10 per year, is usually arranged within two months after arrival in Kuwait. Residence permits can be issued for up to three years at a time, with renew­al for maximum additional three-year periods available at the request of the employer. All residents in Kuwait must take gov­ernment medical insurance, which costs KWD50 per year.

All residents in Kuwait must obtain identity cards (Civil ID), which must be carried at all times. The Civil ID is obtained from the Public Authority for Civil Information after a residence per­mit is issued.

Foreign nationals with resident status in Kuwait may travel in and out of the country without restriction if the stay outside of Kuwait does not exceed six consecutive months. Resident status is can­celed if a resident stays outside Kuwait longer than six consecu­tive months.

Procedures for obtaining a residence permit include a medical examination, which costs KWD10 and this includes tests for HIV antibodies and for tuberculosis. The procedures also involve fin­gerprinting. International vaccination certificates are not required for entry into Kuwait.

Family and personal considerations

Family members. Expatriates with residence permits in Kuwait may obtain visit or dependent visas for their spouses and depen­dent children, and visit visas for certain other family members. Dependent visas may be issued for a period of three years and are renewable for additional three-year periods. Family visit visas for the spouse and children are issued for a period of three months. The family visit visa for parents is issued for a period of one month. The family visit visa for parents is granted only if the year of birth of the parents is after 1950. A person who enters Kuwait on a dependent or visit visa may not take up employment.

Family visit visa. Family visit visas may be obtained by residents of Kuwait for certain family members. These visas are valid for three months from the date of issue and allow visitors to stay in Kuwait for a maximum period of three months. The following documents are normally required to apply for a family visit visa:

  • Copy of the passport of the prospective visitor
  • Affidavit in Arabic stating the relationship of the prospective visitor to the resident (sponsor) applying for the visa, attested to by the embassy of the sponsor’s home country and by the Min istry of Foreign Affairs of Kuwait
  • Marriage certificate if the visa applicant is a spouse, attested to in the same way as the affidavit mentioned above
  • Copies of the work permit and Civil ID of the sponsor
  • Application form signed by the sponsor

Dependent visa. Spouses and dependent children 18 years of age or younger may obtain family or dependent visas if the monthly salary of the employee is at least KWD250 (this amount could be higher in some cases) for private-sector employees (female chil­dren who are older than 18 years and not married may also obtain dependent visas). Persons holding dependent visas may not take up employ ment in Kuwait.

Education. Kuwait places great emphasis on providing schools at all levels for its population. Education is compulsory for children 6 to 14 years of age. The free government schools are for Kuwaiti nationals only; how ever, a wide range of private schools is avail­able. These come under the inspection program of the Ministry of Education, but are otherwise self-governing. Private education is relatively expensive, with normal fees ranging from KWD700 per year at the kindergarten level to KWD3,800 per year for high school. British, American, French and other curricula are available.

Children on dependent visas may study in any of the private schools. Admission to Kuwait University is restricted to Kuwaitis, dependent children of Kuwait University professors and members of diplomatic missions in Kuwait. For other expatriate residents, special permission is required from the Minister of Education for admission to Kuwait University. Such permission is given in rare cases.

Driver’s permits. Holders of foreign driver’s licenses, except for driver’s licenses issued by GCC countries and the other countries mentioned below, may not drive in Kuwait. Holders of visitors’ visas may drive with international driver’s licenses, which should be endorsed at the Traffic Department after local insurance is obtained.

Kuwait has driver’s license reciprocity with GCC countries, most European Union (EU) countries, Australia, Canada, Japan, Korea (South) and the United States. Nationals and residents of these countries may drive in Kuwait with driver’s licenses from the countries.

Holders of resident visas must obtain Kuwait driver’s licenses. These may be obtained quickly on presentation of a European or American driver’s license. Other applicants must apply for learner’s permits and then take driving tests. In these instances, unless a person has a driver’s work visa, driver’s licenses are restricted to certain categories of professionals, including medi­cal professionals, engineers and accountants.

To obtain a learner’s permit, an applicant must have his or her eyesight tested at one of the government hospitals. Copies of the person’s home country driver’s license and a certificate of quali­fication are required. These documents must be translated into Arabic and attested to by the embassy in the expatriate’s home country and by the Ministry of the Interior in Kuwait.

After a learner’s permit is obtained, a verbal examination is ad min­istered at the Traffic Department. A practical driving test is then given. Private driving schools are available to help prepare for these tests. The whole process of obtaining a driver’s license usu­ally takes one to two months.

To obtain a driver’s license, the conditions mentioned below need to be fulfilled. Exceptions to these conditions exist in some cases and vary on a case-by-case basis. The following are the condi­tions:

  • The gross monthly salary of the applicant must be a minimum of KWD600.
  • The designation mentioned on the residence permit should be in the qualifying list for a driver’s license (for example, engi­neers, accountants and medical professionals)
  • The applicant must have a minimum stay of two years in Kuwait.