A Kuwait Employer of Record helps foreign employers hire and expand in Kuwait without the need to register a local entity. By partnering with a Kuwait EOR or PEO foreign employers can forget the hassles of registering their business, opening bank accounts, hiring HR and compliance experts and focus on growth and expansion plans in Kuwait.

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The EOR enables you to do this by acting as the primary employer for your Kuwait employees. This means that the onus of preparing employment contracts and paying employees falls on the EOR. Moreover, the EOR also absorbs all compliance risks freeing you up from any legal liabilities.

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Using a Kuwaiti EOR or PEO can be a smart choice for international companies entering Kuwait. Companies expand to new countries for fresh opportunities and to control costs.

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Kuwait is known for its business-friendly environment and relatively low taxes. However, setting up HR operations and payroll there can be complex. This is especially due to its unfamiliar labor laws. Even experienced employers can make compliance mistakes.

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This is because Kuwait’s labor landscape has a few distinct features. Kuwait has a large pool of expatriate workers for whom labor laws are different (from Kuwaitians). For example, if you are hiring an expatriate worker, you have to sponsor their work visas.   Unlike many Western countries that have structured pension systems, in Kuwait, expatriate workers receive an end-of-service benefit (often called an indemnity or gratuity). This benefit is a lump sum payment based on the duration of service and the last drawn salary.

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By partnering with a Kuwaiti EOR/PEO, you can simplify important aspects of business operations like onboarding, payroll, and employee benefits. This lets you focus on your core business activities and strategy while navigating the Kuwaiti market confidently.

EOR/PEO have two pricing methods: fixed and variable.

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Fixed Pricing: With this method, EOR/PEO charge a clear and steady fee.

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Kuwait EOR/PEO is a EOR/PEO that uses fixed pricing. Our pricing for Kuwait depends on the employment laws in the employee's location.

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With Kuwait EOR/PEO, you get value for your investment. Employees hired through Kuwait EOR/PEO receive HR support, benefits management, and access to a real-time expense tracking dashboard.

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Key Metrics For Foreign Employer

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Kuwait’s ranks 61st globally in the talent competitiveness index. The country also ranks no.8 for digital skills and 6th for external openness -  the extent to which the market is open for foreign investments. All this suggest that the country is highly lucrative to set up shop and hire talent for your workforce.

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The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Kuwait.

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Source: The Global Talent Competitiveness Index 2023

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Argentina.

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"Employee misclassification" occurs when employers make mistakes in how they classify their workers. This can happen when an employer wrongly labels someone as an independent contractor or doesn't give them the benefits and rights they should have as an employee.

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Choosing Kuwait EOR /PEO in Kuwait helps reduce the chances of employee misclassification. Kuwait EOR /PEO ensures that everyone abides by labor laws, accurately categorizes workers, handles payroll correctly, and offers complete benefits. This allows companies to concentrate on their main activities while experts manage employment-related duties.

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Kuwait's Law No. 6 of 2010 (the "Labor Law") regulates the labor law in Kuwait and applies to workers in the private sector. The law governs terms and conditions around work hours, overtime, minimum wages, leaves.

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Employment Contract

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In Kuwait, employment contracts are required to be written in Arabic. However, there is also a provision that allows for the contract to be written in a second language at the request of the employee, alongside the Arabic version. This practice aims to ensure that both parties fully understand the terms and conditions of the employment agreement, promoting transparency and clarity in the employment relationship. 

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Regardless of the contract's length, it should include these basic terms:

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1. Identifying both parties

2. Start date (and end date for temporary contracts)

3. Workplace location

4. Job title, duties, and responsibilities

5. Base salary and other benefits

6. Working hours

7. Total annual leave days

8. Notice periods for ending employment

9. Non-compete clause

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Working time

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In Kuwait, the regular workweek can vary from 40 to 48 hours depending on the company. Usual office hours start at 8:30 am or 9:00 am and finish at 5:30 pm or 6:00 pm.

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During Ramadan, the workday is shorter, only six hours. By law, this applies to all employees, but many companies apply it only to Muslims who fast during daylight. Also, Friday is the day of rest for Muslims. If you work a five-day week, your other day off can be either Thursday or Saturday, with Saturday being more common.

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Overtime

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In Kuwait, when you work extra hours, they follow certain rules as per the Kuwait Labor Law:

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1. Overtime on weekdays: You can work a maximum of 2 extra hours a day, but it should not exceed 3 days a week or 90 days a year. You get paid 125% of your normal salary for these extra hours.

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2. Weekend Overtime: If you work extra hours on a weekend (Friday and Saturday), you should be paid 150% of your regular salary. Plus, you get an extra day off that you can take as a paid day off.

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3. Overtime on public holidays: If you work extra hours on a public holiday, you should receive 200% of your regular salary. You also get an extra day off that you can take as a paid day off.

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These rules ensure that you are compensated fairly when you put in extra time at work in Kuwait.

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Public Holidays

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There are 8 public holidays in Kuwait, and this means you get a total of 13 days off during these holidays.

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Minimum Wage

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In Kuwait, the minimum wage can be different based on the type of job. For instance, in jobs related to the private sector and the oil industry, the minimum wage is 75 Kuwaiti Dinars per month.

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Annual Leave

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You have 30 days of annual leave.

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Maternity Leave and Paternity Leave

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Pregnant employees in Kuwait get 70 days of paid maternity leave, with 30 days before their due date and 40 days after giving birth. They can also ask for up to four extra months of unpaid leave after maternity leave ends. But there is no official paternity leave in Kuwait. When it comes to parental leave, there are no specific rules or laws in Kuwait.

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Sick Leaves & Pay

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In Kuwait, if you've been working for at least one month and you get sick, you'll receive different levels of pay depending on how long you're unable to work.

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However, if your sickness persists beyond these periods, the following 30 days will be unpaid. 

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In addition to these sick pay provisions, it's mandatory for all employees in Kuwait to be provided with government medical insurance. This ensures that employees have access to necessary medical care during their illness.

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Income tax 

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There is no personal income tax in Kuwait.

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Other Taxes and Social Security contribution:

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Employer Payroll Contributions

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Employee Payroll Contributions

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Employment Termination and Severance

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Termination Process

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If the employer wishes to terminate an employee in a permanent contract, then the employee must be given at least three months notice.

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Employers have the authority to end a fixed-term contract for various reasons, including business needs, personal reasons, or misconduct by the worker. To terminate the contract, they must provide notice and provide a written explanation. In cases of misconduct, a warning should precede termination, allowing the employee an opportunity to clarify their actions.

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Notice Period

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In Kuwait, both the employer and the employee are obliged to give a notice period of three months.

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Severance Pay

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In Kuwait, the amount of severance pay an employee receives depends on their length of service. 

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For employees paid on a monthly basis, they are entitled to 15 days' pay for each year of service during the first five years, and this increases to one month's pay per year of service thereafter, up to a maximum of 1.5 times their annual salary.

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Employees who are compensated hourly, daily, or weekly, are entitled to ten days' salary for each year of service up to 5 years, and 15 days' salary for each year of service beyond that, up to a maximum of one year's salary.

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Probation Periods

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In Kuwait, the maximum duration for an employee's probationary period is limited to 100 days.

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When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

Gloroots helps you minimize all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. We do this by helping you with generating employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

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Our promise is a stress-free global employment experience for both you and your employee.

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Contact our experts today to kickstart your global hiring campaign.

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Expanding your team means hiring the right people for the right jobs. In Kuwait, it's important to set up a local entity to handle things like compliance, payroll, taxes, and benefits properly. The labor laws in Kuwait can be complex, and it's essential to follow them.

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KuwaitPEO provides a complete Employer of Record (EoR) service. We take care of payroll, taxes, benefits, and compliance, so you can focus on what's important: supporting your employees and growing your business in Kuwait.

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