Globalization Partners provides employer of record services for clients that want to hire employees and run payroll without first establishing a branch office or subsidiary in Kuwait. Your candidate is hired via Globalization Partners’ Kuwait PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our Global Employer of Record Platform™ and Global PEO service enables clients to run payroll in Kuwait while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Kuwait.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. Globalization Partners allows you to harness the talent of the brightest people in 150 countries around the world, quickly and painlessly.
Kuwait is a small country in Western Asia, located at the tip of the Persian Gulf, bordering Saudi Arabia and Iraq. 4.2 million people live in Kuwait, but 2.9 million of them are expats. Relationships are extremely important in Kuwaiti business where nepotism is quite common. When greeting one another, it is considerate to spend time catching up on acquaintances, and family members, and other areas of mutual interest. Kuwaitis are known for being tough negotiators, and problems should be dealt with one-on-one outside the meeting, rather than in a group setting. Rarely will you receive “no” for an answer, rather disagreement will be couched in terms like “perhaps” or “possibly,” so you should be sure to check assumptions.
Facts of Note for Kuwait:
Basic Facts About Hiring in Kuwait
The process for non-Kuwaiti nationals to obtain a first time residence permit takes approximately 2 months. Residence permits can be issued for durations of 1, 2 or 3 years and require the following steps:
Work visas and residency permits are employer-specific. As such, for individuals who wish to transfer employment to a new sponsor, the sponsor of the existing visa must first cancel the visa immediately after which the new visa can be issued. The individual is required to leave Kuwait and re-enter on the new visa.
Prior to exiting Kuwait for good, the residence permit must be officially cancelled. Failure to do so could delay the departure or cause problems in the future.
When negotiating terms of an employment contract and offer letter with an employee in Kuwait, it may be useful to keep the following in mind:
Public Holidays in Kuwait
There are 9 official holidays in Kuwait.
Bonus in Kuwait
Although companies are legally required to pay bonuses, many companies do not.
Working Hours in Kuwait
In Kuwait, the working week is generally 40 to 48 hours, although in Ramadan the work day is reduced to six hours. Some companies only reduce the hours for Muslims, but legally it applies to all employees.
Fridays are the rest day. International companies generally have Saturdays off as well, but local companies are more likely to have Thursdays off.
Vacation in Kuwait
Employees are entitled to a 30-day paid annual leave after having served an initial 9 months for the employer. Once accrued, annual leave should be taken within one year as negotiated with the employee’s manager.
If employees have not previously performed Al-Hajj, they are entitled to 21 days leave after two continuous years of service for the same employer.
Sick Leave in Kuwait
Employees are entitled to the following sick leave provided that a doctor’s medical report is presented:
Maternity/Paternity Leave in Kuwait
Female employees are entitled to 3o days of maternity leave before the expected due date and 40 days after the birth of the child.
Pregnant women are also entitled to take 100 days of leave, consecutive or not, after the maternity leave, but they are not eligible for pay and must present a medial certificate as proof that they are unable to work.
There is no statutory paternity leave.
Termination/Severance in Kuwait
Any probationary period must be specified in the work contract and may not exceed 100 working days.
Under indefinite period employment contracts under which the employee is paid on a monthly basis, both the employer and employee have the right to terminate the contract with three months of advance notice.
For employees paid on a monthly basis, the employer must pay an end of service benefit equal to 15 days of remuneration for each of the first five years of service and one month remuneration for every year thereafter. The total of the end of service benefit should not exceed one and a half year’s remuneration.
The entire end of service benefits are due where the employer terminates the contract.
If the employee terminates the contract, end of service benefits are paid as follows:
The worker who terminates his work contract shall be entitled to an end of service certificate from the employer stating the duration of his services, his position and the last remuneration he received. The employer shall not have the right to include, explicitly or implicitly, any expressions that may harm the employee or limit his employment prospects. The employer shall return to the worker all the documents, certificates or tools delivered to him by the employee.
Taxes in Kuwait
There is no personal income tax in Kuwait.
Social Security contributions of 18.5% of the employee’s salary must be paid, with 11% paid by the employer and 7.5% by the employee, up to a salary ceiling of KD 2,250 per month.
Health Insurance in Kuwait
Residence permits are not granted or renewed without proof of the individual’s health insurance policy. The employer is liable to pay for the health insurance premiums, which must provide for the following basic health and medical services:
Additional Benefits in Kuwait
Some common benefits in Kuwait are:
Employment Contracts in Kuwait
Fixed term contracts are allowed with a maximum length of a single fixed-term contract being set at 60 months, but there is no limit on multiple contracts.
A copy of all employment contracts must be lodged with the competent Ministry. As such there is a set format that the contracts must follow. Generally, only the fixed portion of a compensation package is included in the contract lodged with the Ministry. A separate contract may be needed to document variable compensation. An offer letter and employment contract in Kuwait should always state the salary and any compensation amounts in Kuwaiti dinar rather than a foreign currency.
This information is provided as general accepted information and is not intended as advisory services.
Why Globalization Partners
Establishing a branch office or subsidiary in Kuwait to engage a small team is time consuming, expensive and complex. Kuwaiti labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. Globalization Partners makes it painless and easy to expand into Kuwait. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Kuwait PEO and Global Employer of Record Platform provides you piece of mind so that you can focus on running your business.
If you would like to discuss how Globalization Partners can provide a seamless employee leasing or PEO solution for hiring employees in Kuwait, please contact us at firstname.lastname@example.org.