|Doing Business in Kuwait?|
|Business in Kuwait|
|Entry Visas and Work Permits|
|Foreign Direct Investment (FDI)|
|Audit and Accounting Regulations and Practices|
|KSCs, KSC(c)s and WLLs are required by statute to have an annual audit. The auditor must be independent of the company being audited and must be registered with the Ministry of Commerce and Industry, Publicly traded companies are required to be audited by two separate firms acting as joint auditors,
The Law of Commercial Companies requires the auditor's annual report to include the following information:
|Foreign contractors must support their income tax filings by providing audited financial statements of their Kuwaiti operations,|
|The Kuwait Association of Accountants and Auditors is the local professional body of accountants; it has approximately 530 members.
Under Law No.5, which governs the auditing profession, registered auditors must be natural persons and Kuwaiti nationals, pass an examination and meet other requirements. About 90 individuals are qualified to practice. Registered auditors are permitted to undertake consulting work.
The Kuwait Association of Accountants and Auditors is a member of the International Federation of Accountants (IFAC), which is responsible for issuing international standards on auditing.
The State Audit Bureau, an independent government agency, is responsible for monitoring state revenues and expenditures, and carries out audits of the records of all ministries and public establishments, even though some of those organisations also have independent auditors.
|Financial Reporting and Auditing|
|Books and Records|
|All business enterprises must maintain adequate financial records, which need not be maintained in Arabic.
Ministerial Order No. 206 specifies the books and records to be maintained by a foreign body corporate subject to the provisions of the Tax Decree. In practice, this includes all foreign companies and partnerships doing business in Kuwait. Under the order, the following books and records are required:
|The books of account of a taxpayer, or those of a Kuwaiti-registered company in which the taxpayer is a minority shareholder, are invariably subject to a tax audit by the Department of Income Taxes before a tax assessment is finalized.|
|Method of Accounting|
|The accrual method of accounting is required for financial accounting purposes in Kuwait. However, provisions are not allowed for tax purposes.|
|The financial statements, which must be in Arabic, consist of the balance sheet and income statement, the directors' report and the auditors' report. The names of the directors and auditors of KSCs must be published in the Official Gazette. This requirement does not apply to KSC(c)s.
KSCs and KSC(c)s must submit audited financial statements in Arabic within three months of the company's year-end.
WLLs must submit their audited financial statements to the Ministry of Commerce and Industry within ten days of the annual general meeting. Although WLLs are required by law to hold at least one general meeting of shareholders each year, in practice they often do not comply with this rule.
|Source of Accounting Principles|
|KSCs, KSC(c)s and WLLs must comply with the standards promulgated by the International Accounting Standards Board (IASB).|
|KSCs and KSC(c)s must submit audited financial statements within three months of the company's year-end to the Ministry of Commerce and Industry and the general meeting of shareholders. A representative of the Ministry of Commerce and Industry is required to be present at the annual general meeting. Publicly traded companies must also submit audited financial statements to the Kuwait Stock Exchange within three months of the company's year-end.|