Population: 2,335,648

Economy Overview:

Kuwait is a small, rich, relatively open economy with proved crude oil reserves of about 96 billion barrels - 10% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income. Kuwait's climate limits agricultural development. Consequently, with the exception of fish, it depends almost wholly on food imports. About 75% of potable water must be distilled or imported. Kuwait continues its discussions with foreign oil companies to develop fields in the northern part of the country.

General Business Practices

a). The Arabic language is used in business transactions and court proceedings.
b.) The Kuwait Diner (KD) is the primary monetary unit used.
c.) It is considered professional etiquette to shake hands.

Collections

A. Background of Industry.

(A) The volume of collection work done in Kuwait is approximately 30 million KD. Collections are handled by both Lawyers and Collection Agencies and both Consumer as well as Commercial debts are collected.
(B) No bonding is required by Collection agencies, however licences are required, for example permits from the Ministry of Commerce and Chamber of Commerce.

C. General Procedures.

1. Typical steps undertaken by a collection agency is a telephone call to identify the debtor and verify location. This will generally lead a collection agency to determine the debtor's capabilities to repay the debt, and obtain payment as promised. If the debtor fails to pay after 3 promises a demand letter is sent through the courts. Court demand letters are fairly strong and are a prerequisite to issuing a writ.
2. Lawyers will generally use the same method as that described above.

D. Charges & Remuneration.

1. Lawyers generally request a down payment and a percentage of the debt recovered.
2. Collection agencies usually charge commission depending on the size and age of the debt. This fees in most cases does not exceed 50%.
3. Collection charges can not be passed onto the debtor.
4. Interest can be added at 7% by court order only.

E. Accounting & Remitting.

1. There is no restriction in remitting money in and out of Kuwait.
2. Payments can be made directly to the creditor or to the debt collection agency or lawyer. If payments are made direct to the creditor, and invoice for the agreed commission is forwarded.
3. At present there is no requirement for a collection agency or lawyer to maintain separate trust accounts.

F. Miscellaneous.

1. Skip tracing service is offered for KD 60.
2. When a lawyer is unable to collect a debt, they seek the assistance of a collection agency. If a collection agency is unable to recover, the case is closed back to the client explaining why the case is not collectable.
3. Dishonoured cheques are collectable and are a criminal offence. The debtor may face criminal charges and a jail term of 2-3 years.