Penalty for non-compliance with “Kuwaitization” set to increase

IMPACT – MEDIUM

What is the change? Kuwait will soon increase the penalty for companies that do not adhere to “Kuwaitization” quotas.

What does the change mean? Beginning July 1, fines will increase to 300 Kuwaiti Dinars (about $986) per worker per year. The current penalty is 100 Kuwaiti Dinars.

• Implementation date: July 1.
• Visas/permits impacted: Work permits.
• Who is impacted: Companies employing foreign workers in Kuwait.
• Business impact: Businesses that violate “Kuwaitization” quotas will face not only increased penalties but may jeopardize their ability to sponsor foreign workers in the future.

Background: Like other countries in the region, Kuwait has stepped up efforts in recent years to promote its local workforce. Foreign worker quotas vary depending on sector and company size. On the whole, Kuwait is moving toward stricter limitations on sponsoring foreign workers. Officials have now moved to increase the penalty for those who hire foreign workers outside their quota.

Analysis & Comments: Employers are encouraged to work with their immigration provider to make sure they are in compliance with applicable “Kuwaitization” rules, particularly in light of the increased penalties.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.