When looking for a business partner in Kuwait, these eight tips will help you make the right decision and avoid the headache.

Starting a business is always a big step, but launching a new venture in another country like Kuwait comes with the additional challenge of looking for a business partner in Kuwait. 

‍

Besides the obvious challenges of venturing solo, like navigating cultural norms, establishing local connections, and managing daily operations, there’s the legal one. In Kuwait, having a local partner is often a must when opening a new business. 

‍

Like anywhere else, selecting a business partner in Kuwait is challenging. You need to know who you’re dealing with professionally and personally—things like trustworthiness and dependability, but also practical business matters like their credit history, management style, and local connections. 

‍

To help you simplify the process, this article provides eight essential tips for finding an ideal Kuwaiti partner who is truly invested in the venture's success. 

‍

[Starting a new business in Kuwait? Manage finances and payments with your co-founder easily with next-gen transactions. Mobile, instant, online — download the Kem app for free on Google Play and Apple today.]

‍

Understanding the business landscape in Kuwait 

Kuwait is a prime business opportunity for foreign entrepreneurs and expats, with a globalized market and affluent consumer base, especially in the rapidly growing e-commerce sector. However, success requires navigating Kuwait City's relationship-driven business culture rooted in Arabic traditions.

‍

Legally, foreign investors are generally required to partner with Kuwaiti nationals, who must own at least 51% of the company's capital. However, there are exceptions for certain sectors where 100% foreign ownership is permitted with a foreign investment license from the Ministry of Commerce and Industry.

‍

Finding your perfect business partner in Kuwait

One key factor in starting a new business in Kuwait without stress is partnering with the right person. Your partner can make or break your entry into the Kuwaiti market. Not any part-Kuwaiti, part-foreigner company will do; you need to find a local partner genuinely aligned with your vision and ready to go all-in on making the venture a success. An inactive or mismatched partner can cause major headaches and roadblocks.

‍

So, how do you go about looking for a business partner in Kuwait for your specific business? Here are some key tips:

‍

1. Defining your business goals and needs

Clarifying objectives upfront prevents later misunderstandings. As a prospective business owner outlining your startup's business plan, you need to clearly define what strengths or resources you will need when looking for a business partner in Kuwait. Think Arabic or English fluency, local market knowledge, access to networks, financial investment, or specific technical or operational expertise.

‍

Compatible partners easily compromise to advance shared goals. Identify necessary technical, financial, or operational strengths while respecting different ways of working collaboratively. Agree openly on responsibilities, schedules, and investment expectations to establish accountability and gauge commitment levels to develop an effective business plan and marketing strategy for the local market.

‍

2. Establishing trust

Trust is fundamental in any business partnership, particularly in Kuwait's tight-knit business landscape, where reputations spread quickly. Trust develops through consistency, so follow on promises while respecting different perspectives. In addition, compromise demonstrates putting the venture above personal egos between partners, building the essential cooperation needed for success.

‍

3. Prioritizing cultural compatibility

If not properly understood, cultural norms in the Middle East can be major issues in cross-cultural partnerships. When evaluating potential Kuwaiti partners, look beyond their professional backgrounds. Discuss deal-breakers and problem-solving styles to uncover compatibility beyond ambitions. 

‍

Are your values, communication styles, and workplace expectations seemingly compatible? Finding a cultural match will make the partnership smoother. Look for complementary skill sets, shared core values, financial capacity, strong ethics, an influential network, and personal rapport.

‍

Ahmad Hatem, Legal Consultant and Partner at Al Safar and Partners Law Firm highlights communication, saying, "Clear communication is the compass that keeps it on course. In the world of partnerships, it's crucial to establish and maintain open lines of communication. When partners communicate effectively, they can address issues, share ideas, and make informed decisions together.”

‍

‍

“When partners communicate effectively, they can address issues, share ideas, and make informed decisions together.” – Ahmad Hatem, Legal Consultant and Partner at Al Safar and Partners Law Firm

‍

4. Conducting due diligence

Thoroughly research potential partners’ experience, reputation, and credibility within networks by contacting multiple referees honestly when looking for a business partner in Kuwait. Verify educational and professional claims to prevent surprises later.

‍

Examine past business involvements, transactions, and any legal issues to avoid incompatible or high-risk partners. In addition, scrutinize proposed capital or expertise contributions and discuss intentions frankly to cement understanding. After all, clarity at this stage prevents future disputes through realistic partner and opportunity assessments. 

‍

Karl Hougaard, Founder and Managing Partner at Trade License Zone in the UAE, recommends, “Thorough research is imperative before venturing into any market. Entrepreneurs must grasp the nuances of each partner country’s business culture, regulations, and consumer preferences. A comprehensive understanding of the competitive landscape ensures informed decision-making.”

‍

“Thorough research is imperative before venturing into any market.” – Karl Hougaard, Founder and Managing Partner at Trade License Zone

‍

5. Negotiating terms and agreements 

Be sure to contract out decision-making powers, roles, responsibilities, and equity splits to avoid ambiguity. This includes outlining a marketing strategy and determining who will oversee key functions like business development, operations, finance, human resources, etc.

‍

Address potential issues proactively through compromise instead of ignoring them. Remember to record terms legally to formalize understanding and protect all parties’ interests with professional guidance.

‍

6. Leveraging networks

In Kuwait's tight-knit business circles, personal connections can open doors and forge trust faster than anything else. Attend community events, join the Kuwait Chamber of Commerce and Industry, and tap expat networking groups to activate partner search efforts.

‍

Respectfully ask about complementary individuals approaching business similarly to increase compatibility chances. Maintain networking sincerely even after the search to cultivate valuable long-term industry relationships.

‍

Network extensively through professional events, organizations, and contacts. Use online platforms like LinkedIn as well. Identify candidates with complementary skills for specific business opportunities, whether it's expertise in operations, business management, finance, marketing, business development, or other key areas.

‍

7. Seeking professional assistance

Various organizations aimed at facilitating foreign business and investment in Kuwait are able to assist in finding  you a good business partner. Groups like the Kuwait Direct Investment Promotion Authority (KDIPA) and the Kuwait Chamber of Commerce and Industry could potentially provide guidance or partner leads.

‍

Abdullah Alaiban, a Kuwaiti Certified Business Solutions Consultant, also recommends local consultants for locating partners and suppliers: "A local consultant can help you find business partners and suppliers in Kuwait. This can be essential for building a successful business in the country.”

‍

“A local consultant can help you find business partners and suppliers in Kuwait.” – Abdullah Alaiban, Certified Business Solutions Consultant

‍

8. Adopting financial transparency

Finding the right business partner in Kuwait goes beyond having a shared vision and complementary skills. It's crucial to ensure you and your business partner prioritize financial transparency. 

‍

In a joint business venture, financials are like the heartbeat of the company. If any of the two founders lack a clear view of the finances, the professional relationship will be skewed and lead to problems. 

‍

Using a modern payment system enables transparency. For example, using a streamlined point-of-sale (POS) system with instant payments gives a clear view of your business’ revenue.  Real-time sales data allows for collaborative decision-making, fostering trust and open communication.

‍

Financial transparency, first and foremost, fosters trust – and translates to a smoother workflow, improved cash flow, and a more profitable venture for both of you.

‍

Kem is widely used among Kuwaitis as a peer-to-peer payment app for easily sending and requesting money. The platform also offers powerful payment tools for small businesses in Kuwait and Saudi Arabia. Kem's integrated point-of-sale (POS) system and instant payment capabilities provide an all-in-one solution for merchants to run their operations smoothly.

‍

[Starting a small business with a co-founder in Kuwait? Kem is a flexible P2P payment platform that powers small businesses with instant online payments. Signing up takes less than a minute. Download the Kem app for free on Google Play and Apple today!]

Takeaways

• Research potential partners' backgrounds, reputations, and financial situations to avoid surprises later.
• Formalize an agreement outlining decision-making power, equity splits, and responsibilities for each partner.
• Consider consulting with organizations like KDIPA or local business consultants for assistance in finding a suitable partner.
• Look for a partner who prioritizes financial transparency and utilizes modern tools like point-of-sale (POS) systems.
• Kem provides a POS system with instant payments, which is useful for managing personal finances between partners and potentially even micro-transactions within the business.