UPDATE: I read a comment on Mark's blog saying she abandoned the business and the Kuwaiti owner tried to fix the problem with no avail so of course there are 2-sides to every story. Full story is ongoing......waiting for the other side to speak up.
In order to open a business one has to pay a huge amount to get the place, upwards of 10,000 KD sometimes plus monthly rent and then has to partner up with a Kuwaiti citizen who automatically gets 51% of the business even if he/she doesn't lift a finger. Sometimes the 'silent' partner comes around once the business is a success and then kicks out the other person, not much one can do after that.
I wonder if the Kuwaiti partner has anything to say?
that is Bull shit !!! why is there no law to protect the foreigner who is actually doing the work . the law should be that first and formost there has to be a contract secondly that contract should include a noncompete and if the Kuwaiti parner wants to kick out the other parner then the law should require him to close his business and wait a period of a year to open up a similiar business elsewhere. The only way around this if he proofs that the other partner is doing something haram like selling alcohol or something like that. I am guessing the other parner is usually the one behind the idea and the one doing the hard work. I think its fair that if its that bad that he closes the businees because if it was the kuwaitis idea or sweat that made the business suceed in the first place then why would he partner up with a foreigner?
ReplyDeleteOne more thing foreigners need to stick together by boycotting these business altogether so that The kuwaitis who have intentions of doing this will think twice.
ReplyDeleteThe 51% ownership also ruins hotel chains.... Same thing applies and then the brand pulls out. This is why SO many international companies don't want to do business in Kuwait and/or have offices in Dubai. Stupid.
ReplyDeleteIt amazes me how international businesses actually even consider coming to kuwait when most of the laws arent in their favour. The market sizing is small, the scope for growth is very limited and the scale is miniscule. Economically, Kuwait makes zero sense unless your business is super niche with a super high high segment in the 80-20 rule.
ReplyDeletethat being said, as much as I empathize with this woman for losing everything after SHE did all the work, I cant be surprised that this happens to many expat business partners who see success. And since laws here dont protect hard working people and only look out for kuwaitis (anti - egalitarianism), 90% of the risk for an expat starting a business here has to do with paper work and only 10% to do with actually finance.
The only way to be successful for an expat in Kuwait is to be smart and efficient. Start an online business with Paypal and world pay payment gateways (zero dependence on kUWAITI sponsors)- You'll use the local internet and other resources but wont need a kuwaiti to make your money. Once you get big and get volume orders, get into a "license only" contract with a Kuwaiti so you can start taking Knet payments / cash on delivery.
Doing offline businesses as an Expat here just doesnt make sense anymore, especially considering the Kuwaitis dont want us to be wealthy. I know expat businessmen whove been here for 30+ years running businesses and have told me they can feel the govt. making it harder and harder for them to run their businesses everyday. Solution is simple- use the resources without dependence.
I agree with your words, all expats should just make desserts and food sold from their own kitchens, that's how Waffle & Burger started. There are several Americans who provide food to other Westerners and have no problem. The ones that go into business with a partner have the most problems. Kuwaiti business people are setting up their business in other countries as well because of the red tape and loads of money and wasta needed to do just about anything.
ReplyDeleteEveryone complains Kuwaiti citizens all want government jobs but if they want to provide for themselves it will never happen. Everyone is held back as to not disrupt the rich and wasta folks agendas.
A lot of what's been said here is true, but their are some Kuwaitis that would gladly go into business with someone else who has a good business idea that could be successful (I one of 'em). And I do appreciate all the hard work is done by the other, a special deal could be made. Forget about the 51% on paper. On the other hand, It is equally - if not more - difficult for Kuwaitis to start our own businesses due to the overwhelming wasta and payouts required. Especially if you're an average Joe. I swear, one tiny shop in Jabriya was asking 80,000 KD just to hand over the deed - SOB! then comes the prolong bureaucratic process of opening a company and the swarm of unnecessary papers needed, with lots of under-the-table payouts. By the time you're ready to start selling, you're already shit deep in debut. The dream starts to fade, hope is all but watered down and no matter how strong a will power you have, I assure you our processes will systematically break it down.
ReplyDeleteIt's also worth noting that the big guys do make it difficult for the small guy to survive or even start.
I totally agree, at one time my sister wanted to open a small restaurant and they too wanted 50,000 KD as well. So she backed off and keeps working as a teacher and dreaming of being her own boss.
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