Trade Policy

The key selling factors in Kuwait remain price, quality, effective and convenient after-sale service and support, payment terms/discounting, and commitment to the business relationship.  Payment installment plans and discounts is a common marketing tool in a market that exhibits a high price elasticity of demand (price sensitivity).

Marketing schemes vary and include offering commercial discounts, frequent sales, free service for equipment purchased over a limited offer period, give-aways, warranties, trade-in opportunity and promotional events.

Most products imported to Kuwait from a non-Gulf Cooperation Council (GCC) member state will be assessed a duty of 5 percent. This will need to be included in any pricing calculation. There is no Value Added Tax.

In addition to the CIF price quotation plus import duty, exporters should also factor in the Kuwaiti agent’s commission (typically between 5 and 15 percent), other transportation costs, and any installation costs/training that may be part of the agreed upon terms of delivery.

Government Procurement Preference
There is a 10 percent price preference on public contracts in favor of Kuwaiti businesses. If a contracting officer or authority determines that a local company meets the technical specifications per the request for proposal, and though the bid price may be higher (within 10 percent), the local company may be awarded the public contract.

Sales Service/Customer Support
Foreign suppliers should identify local manufacturer representatives/ distributors with the necessary service and maintenance capability. Companies should include follow-on maintenance clauses if the products/equipment so requires. Local representatives must ensure that appropriate standards of manufacture and service are maintained.

Consumer warranties are often provided to products including electronic goods, white/brown appliances, vehicles, tires and a variety of consumer products. Warranties can range from 90 days to up to five years depending on the product or capital good. When sales volume reaches a substantial value, the establishing of a factory service center with their local representative may be an option. There are a number of independent service and repair centers, however, use of lower valued components or non-manufacturers suggested maintenance protocols might often take place.

After-sales service and customer support is especially critical in the automotive and white appliances industry. Automobile dealers offer a one-year or 15,000 mile warranty.  White appliance dealers will offer either repair or replacement over a particular period, and dealers will make home repair house calls.