In this post, we are giving an overview of the Kuwait as high business potential middle east country. If you are interested to start your own export/import business, find new great business ideas or learn, what products could be exported from Kuwait and to which countries and what are some best business opportunities in this country nowadays. Or if you looking to expand your overseas business and start exporting and finding customers from Kuwait, or why not start importing from there, then we will also cover the topics for you.

For beginners, we have a free online course, delivered directly to your email you can enroll in below.

FREE Export-Import business course includes the following lessons:

  • How to start as a direct exporter/importer
  • How to start as a commission agent
  • The best way to approach selling & finding customers
  • The biggest mistake beginners are doing
  • Guidelines to help you decide your next steps & taking action

Overview about Kuwait

Kuwait is a country located in the Middle East, a territory of 17,820 km2, a population of more than 4 million people (including long-term immigrants), of which the population of native Kuwait is only 45%, GDP income per capita is about 34,000 USD / person/year.

Kuwait is an oil exporter, earning the majority of its income from oil and petroleum products export.

Besides oil, Kuwait also exports other commodities such as vehicles, fertilizers, cell phones,  jewelry parts, precious or clad metal, milk, and cream condensed or added with sugar or other sweetening matter, flour.

The export markets of Kuwait are China, Saudi Arabia, India, UAE, Iraq, USA, Qatar, Turkey, Pakistan, Jordan.

Import markets of  Kuwait are China, UAE, United States, Japan, Germany, Saudi Arabia, India, Italy, Korea.

Things to know about business opportunities in Kuwait market

Since the population is mainly muslims, there are some caveats that investors planning to invest in this market need to pay special attention.

When exporting goods to Kuwait market:

  • They strictly prohibited goods imported from Israel.
  • For food, it is forbidden to slaughter pigs, eat and drink, import and sell pork, prohibit foods processed or derived from pork even in the smallest amount. Alcohol is prohibited.
  • Prohibit the import of products that are inconsistent with the Islamic law, such as depraved cultural products, cultural products of other religions with content against Islamic customs and traditions, statues of gods, and Buddha statues.
  • The main items that need to export into the Kuwait market are agricultural products, food, construction materials, machinery, cars, garments.
  • All types of products and goods imported into Kuwait need to ensure Halal requirements.
  • When exporting goods to Kuwait, you should check out carefully to not return products.

Opportunities and challenges of the Kuwait market

Main export products

  1. Mineral fuels including oil
  2. Aircraft, spacecraft
  3. Organic chemicals
  4. Plastics, plastic articles
  5. Iron, steel
  6. Gems, precious metals
  7. Machinery including computers
  8. Aluminum
  9. Copper
  10. Salt, sulphur, stone, cement

Main import products

  1. Vehicles other than railway or tramway rolling stock, and parts and accessories
  2. Nuclear reactors, boilers, machinery and mechanical appliances;
  3. Electrical machinery and equipment
  4. Articles of iron or steel
  5. Pharmaceutical products
  6. Natural or cultured pearls, precious or semi-precious stones
  7. Plastics
  8. Iron and steel
  9. Optical, photographic, cinematographic
  10. Furniture

Import regulations

Taxes  

Kuwait is one of the countries with the lowest import taxes in the world.

Kuwait has an open economic policy with all economies, except the origin of imported goods except Israel.

As a member of the Gulf Nations Cooperation Council (GCC), Kuwait obliged to implement intra-regional trade liberalization agreements (imports and exports between GCC countries enjoy higher preferences than goods).

Goods imported into Kuwait from countries outside the GCC are usually subject to import duties of 0-5% CIF. The goods imported into Kuwait enjoy a 0% preferential tax rate including food, food, medicine, fresh plants and animals, gold, essential consumer goods, printing materials, and products. Agro-industrial products have a 40% content of production value in GCC, raw materials / semi-finished products, and spare parts for new industries. Goods imported into the GCC only taxed once.

Kuwait applies a Sponsorship system. Accordingly, foreign businesses wishing to do business in Kuwait must have sponsored by Kuwaiti enterprises or individuals.

In recent years, the Kuwaiti government in its efforts to reform the economy has considered removing the patronage system that is to obstruct business freedom, increase costs and reduce this competition.

Import license

According to Kuwaiti law, only enterprises with import licenses from Kuwait Industry and Commerce (KCCI) or import licenses from the Kuwait Ministry of Industry and Trade have the right to import.

Kuwaiti enterprises can easily apply for this license. Must renewed the Permits annually. Having an import license, the businessman can import without limitation the type, quantity, and origin, except for some special goods such as firearms, explosives, alcoholic beverages, addictive substances, gems … Special permits required from relevant agencies such as the Department of Defense.

Halal requirements

Goods entering Kuwait must meet Halal requirements – Islamic quality standards, for example, prohibited foods derived from pigs, or alcoholic materials, depraved cultural products, etc.

To be certified Halal, the goods must meet the following standards:

  • Products that are not Haram or use products containing Haram substances by the requirements of Sharia law and the Qur’an Quran.
  • The organization must have a product control system that conforms to Halal standards or has similar quality assurance requirements.
  • The production line does not mix Haram and Halal. For businesses that produce products related to animals (excluding seafood), stricter production requirements required. For example, cannot produce food products related to pigs.
  • Subject to post-certification supervision through review of quality assurance factors and results in testing of product samples obtained from the manufacturing organization or the market.

Technical standards (KSS)

Imported as well as domestically produced goods must comply with Kuwaiti technical standards (KSS). In the absence of KSS standards, apply standards for such goods as specified in Gulf Technical Standards (GSS).

This is the common standard apply under the GCC Unified Economic Agreements. Where the GSS does not, international regulations apply.

How to start an export business to Kuwait

Step 1: Research the export market

Market research is the collection, systematic analysis of market information (statistics, customer opinions, etc.) to decision-making to find market opportunities for an enterprise’s existing or produce goods and services.

Market research helps find the largest market for your product, the fastest-growing market, market trends and prospects, conditions, business practices, and opportunities for your products on the market.

Commodities with the potential to exports into Kuwait are tea, coffee, dried fruit, canned, canned drinks, fruit juices, cashew, pepper, spices, clothes, furniture, and frankincense , aromatherapy, premium silk, premium pearls, charcoal, marble, white granite …

Step 2: Prepare the export documents

Goods imported into Kuwait, to get clearance, need at least 4 types of documents: Commercial Invoice, Certificate of Origin, Official Delivery Order, Packing List.

The invoice, CO, bill of lading must be in 3 originals and must endorse by a chamber of commerce in the exporting country. Normally, if verified by a joint local- Arab chamber will be more valuable and must consular certify (also known as consular legalization) by the Saudi Consulate, or by any Arab country any other (except Iraq).

Information about the foreign country of origin required must show in the packing sheet and must display on each packaging unit (package).

Step 3: Export marketing

Developing an online marketing strategy is entirely up to how well you understand your target market and where they spend most of their time online. Depending on your customer base, you may choose to use any (or all) of these ways of marketing:

– Search Engine Optimization (SEO is search engine optimization to help the website get a naturally high ranking on search results. SEO is one of the basic forms of Online Marketing to help a website get natural traffic for stable and long-term growth)

– Email Marketing: marketing through email. It is one of the highly personal forms of Online Marketing because you reach out to each customer individually.

– Social Media: You create fan pages to interact with customers to build the brand.

– Display Ads: Display ads on a website (you pay for another website to advertise your banner, or you do advertising on Youtube).

Some forms of Digital Marketing:

Advertising TV, radio, LCD, …

Mobile Marketing (SMS, App, Mobile Game …)

The advantages of Online Marketing

Marketing Online allows you to reach a large customers in seconds. As long as you have a computer online, you can reach millions of people at the same time without any geographic or time constraints.

Read also: How to get export orders abroad.

Step 4: Sign export orders contracts

When signing a contract, the more information a business can get from its partner is the better. Especially information about the legal, financial capacity of the partner.

If they do not have the capacity but still sign the contract, the possibility of them breaching the contract is very high. Or before signing a contract, it is necessary to find out the partner’s information through some diplomatic representative lawyers

Contracts for the sale and purchase of foreign trade goods should contain the following the main terms:

1. Name of goods.

2. Quantity and determination according to world trade practice.

3. Specifications, quality, and determination according to world trading practices.

4. Delivery deadline and location.

5. Prices and delivery terms.

6. Payment method and payment vouchers.

In addition to the above main terms, depending on each transaction, the contract may further stipulate one or more of the following terms:

1. Packaging – symbols.

2. Examining and inspecting import and export goods.

3. Sanctions:

3.1. Penalties for breach of contract for failure to perform or improper performance of the contract: delayed delivery, delayed notice of delivery, delayed payment, delayed notice of train (in case of purchase and sale under FOB terms), lack of delivery, or no delivery, etc.

3.2. Compensation for damage: Delivery of improper quality, delivery lack of quantity, weight; no receiving goods, etc.

4. The resolution of arising disputes:

4.1 Negotiation, conciliation, and complaints.

4.2 Choosing arbitration: should choose the form of statutory arbitration, ie a standing arbitration organization, an intermediary, established specializing in adjudicating foreign trade disputes.

Other provisions depending on the characteristics of the goods or of deliveries:

– Warranty and maintenance;

– Send a representative to the buyer’s country or the seller’s country to supervise and inspect the delivery.

– Assign experts to assemble, operate, instruct to use responsibility, time, cost …).

Step 5: Select the appropriate transport

Speed

The difference that makes the freight difference between sea and air freight mainly comes from speed. Airfreight typically ranges from a few to 10 days, including airport hold times, flight routing and waiting times available, and handling at origin and destination. Sea freight depends on the distance and available services, ranging from one week to 70 days.

Weight

Based on the volume and weight of goods that we will determine, we should choose the appropriate mode of transport:

– Sea transport: Shipments over 100 kgs.

– Air freight: Shipments between 45 kgs and 100 kgs.

– courier transport: Shipments below 45 kgs (if any).

Transport cost

Transport cost will also affect the choice of transport method:

Seafaring: cheaper

Air travel: expensive

Take the courier: very expensive

Sea-air transport

Sea-air shipping is a shipping method that neutralizes the costs of shipping, transit time, and volume of goods transported.

The cost of shipping sea air is not as cheap as sea cargo, but it is cheaper than air cargo. Transit time is also faster than by sea but slower than by air.

However, the cargo handling and procedures are a bit more complicated than with other modes of transporting export goods.

Therefore, you should find a logistics company specializing in sea-air cargo services to deliver goods to ensure.

How to start import business in Kuwait

Step 1: Apply for an import business license

To import goods yourself, or even just one shipment from Kuwait to your home country, you must first have a business license to import those goods. In case you do not have an import license, you can go through the import companies, customs services, or customs agents to sign a contract to import that item. Make sure you meet the legal documents to import.

When you import goods by yourself, you need to find the source of the goods in Kuwait, then sign a foreign trade contract. The contract will specify the method of international payment as well as documents required for delivering the goods.

Step 2: Find the source of supplier

The supplier is hugely important in your import business. The supplier must ensure to provide sufficient quantity,  stability, accuracy goods which meet the requirements of production and business.

So you need to spend time researching and selecting suppliers carefully. You can rely on objective reviews of previous customers, or go directly to the product review site.

How to find a supplier?

1. Collect information

First of all, it is necessary to collect secondary information: reports on purchasing and supply analysis in enterprises, information in media (newspapers, magazines, social networks, …) through supplier promotion information.

2. Evaluate

Classifying suppliers according to the criteria, such as economic sectors, location in distribution channels, technology level. Each type of supplier according to classification methods will give the most characteristics to evaluate.

3. Contact, suggestion

On the information after contact with the supplier, you can conduct the purchasing relationship.

4. Experiment

you check whether the suppliers are sure they meet the standards through the sales deal.

Step 3: Order the goods

Ordering is an offer to sign a commercial contract from the buyer. In the order, the buyer specifies the goods to purchase and all the necessary contents for the contract.

People only place orders with regular customers, or the two sides have signed long-term contracts and multiple delivery agreements. As for other conditions, the two parties apply according to the contracts signed in the previous transaction.

Step 4: Track the shipping packing

If the exporter or service company FWD neglects or does not update you, you must actively ask them to update you regularly to grasp the progress of your order.

Step 5: Buy insurance

The goods importer needs to understand the value of the business to decide whether to buy insurance because this is an optional element.

Step 6: Voucher verification

After closing the certificates, in the process, you ask them to send the Draft.

Carefully check the information on the bills to see if it match or not.

You need to base on train time schedules to actively request deadlines for each document, ensuring everything goes according to plan.

In many cases, imported goods have arrived, but documents and certificates related to the shipment have not completed. It causes a delay in shipments, time-consuming and costly.

Step 7: Complete the payment

The payment is based on the goods import contract between the two parties.

In international payment, you need to prepare documents by the stated contract. For example, in the contract that says the full payment term of 100% after receiving a copy of BL, invoice, packing list, you must have all the papers …

Some low-cost import/export business related ideas

If you do not have a lot of capital or are reluctant to risk then consult these new import/export ideas, maybe this is a little exercise before starting with larger projects.

Although “plunging” to a new import-export business trend can sometimes be risky, it can also bring a lot of fun as well as benefits.

Import- export products consulting

If you have good skills in product/sourcing and analysis and consulted by friends and family on products, then buying and selling advice could be a suitable business with your skills.

Personal product consultants find items for customers who are having difficulty finding products that match their criteria. Tasks include evaluating product potential, visiting websites, and choosing the right items for them.

Virtual assistant

One of the most successful business ideas is to provide a virtual assistant service. All businesses, big or small, require help with day-to-day operations management. You can use your excellent organizational skills to reduce their burden. Of course, you will pay for the time and effort spent responding to emails, scheduling meetings, and performing other administrative tasks.

Conclusion

Above is the information that we give you good overview about import and export business opportunities and challenges in the Kuwait market. We hope the above information will help you better understand this market to export to the Kuwait market. Always take your time to conclude comprehensive market analysis. We recommend to read also about export/import business in Dubai.

If you want to learn how to start your own export-import business online or offline, then we have online courses and programs which will give you the best guide to start an international business from scratch. We have also tools and resources which help you to grow and expand your business and get more customers and raise profitability.

We advise you to take courses and use the resources ad tools listed below: