Arab countries
Despite their close proximity in the Arab Peninsula, Kuwait and UAE are two separate Arab countries located in the Middle East. On top of that, they are actually different in many aspects such as size of land, type of parliamentary systems present, country’s economic well-being and currencies used in everyday transactions. The UAE is a federation that consists of seven emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Qaiwain, Fujairah, and Ras Al-Khaimah) and it is the second largest economy in the Arab world. On the other hand, Kuwait is part of the Organization of the Petroleum Exporting Countries (OPEC) and many investors decide to register a company in Kuwait so that they will be exposed to opportunities in the oil industry.
As compared to previous years, it is easier to start a business in Kuwait now as the minimum capital requirement has been reduced recently. However, the country is still behind UAE in terms of ease of doing business. One main reason behind this is that UAE has signed double tax agreements with over 40 different countries, with Germany and Ireland being the most recent cases.
From the table below, UAE outscores Kuwait in most of the categories and this shows us that investors might prefer registering their business in UAE instead of Kuwait.
Despite UAE having a larger land area than Kuwait, Kuwait possesses more crude oil reserves. As a result, 80% of Kuwait’s annual income is due to petroleum. On the other hand, UAE is not as dependent on crude oil reserves. The country has shifted its focus from oil to tourism across the seven emirates, notably in Dubai.
The two countries are also quite similar in terms of the available business entities. For both Kuwait and UAE, the types of businesses that can be established include Limited Liability Company (LLC), branch office and representative office. Additionally, you will be able to set up an agency agreement in Kuwait. Alternatively, free zone company, professional services company and offshore company can be incorporated in UAE.
| Category | UAE’s rank | Kuwait’s rank | Source |
|---|---|---|---|
| Burden of Government regulation | 5th/140 | 125th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Transparency of Government Policymaking | 16th/140 | 96th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Wastefulness of Government spending | 2nd/140 | 93rd/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Co-operation in Labor-employer Relations | 14th/140 | 48th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Reliance on Professional management | 20th/140 | 123rd/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Pay and productivity | 6th/140 | 101st/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Quality of overall infrastructure | 2nd/140 | 67th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Quality of port infrastructure | 3rd/140 | 74th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Quality of Air Transport infrastructure | 2nd/140 | 89th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| Efficiency of Legal Framework in Settling Disputes | 18th/140 | 45th/140 | World Economic Forums’ Global Competitive Report 2015/16 |
| World’s Freest Economy (Ranked out of 180+ countries) | 25th | 74th | The Heritage Foundation, Index of Economic Freedom, 2016 |
| Ease of doing business (Ranked out of 180+ countries) | 31st | 101st | Doing Business 2016, World Bank Group Flagship Report |
Contact us
To start and run your business in Kuwait and UAE, please contact Healy Consultants Group PLC at +65 6735 0120 or email us at email[at]healyconsultants.com
Image attribution: By SpLoT, Sudopeople – https://en.wikipedia.org/wiki/File:Persian_Gulf_Arab_States_english.PNG, Public Domain, https://commons.wikimedia.org/w/index.php?curid=37250970
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