Questions business people frequently ask about Kuwait - Kuwait Rebuilds - includes directory of Gulf reconstruction contacts and Persian Gulf events

Business America, June 17, 1991 by Corey Wright

ABOUT THE CURRENT BUSINESS SITUATION

IN KUWAIT:

What is the current situation in Kuwait?

Kuwait is slowly returning to normal. Services and utilities are increasingly available. Water is currently available in most parts of Kuwait City, and all hotels have water supplied for at least a part of each day. Food is available everywhee; some restaurants and one supermarket are open. Electric power is available in most parts of the city; it is still unclear, however, whether the power grid will be able to meet peak summer demand. Telephone services are improving daily, and outgoing calls are easy to make; receiving international incoming calls continues to be difficult. Business items and skilled labor continue to be in short supply.

Can I obtain a visa for travel to Kuwait?

Almost all Kuwaiti embassies have resumed issuing visas. A Kuwaiti sponsor is needed to obtain the visa, and the sponsor must request the visa in Kuwait. The sponsor provides the paperwork for the traveler. The Kuwaiti Ministry of Foreign Affairs approves the visa application, and the visa is issued at the designated foreign embassy. There are no tourist visas. Those traveling from Saudi Arabia must have a visa for Saudi Arabia, preferably multiple entry.

How do I get to Kuwait?

The Kuwait International Airport is now serving official, private, and military traffic. The only regular commercial flights are with Kuwait Airlines. Almost all inbound flights are completely booked because of Kuwaiti nationals returning to Kuwait; there are a limited number of inbound seats reserved for non-Kuwaitis. Outbound flights are 80 to 90 percent full. Flight connections are currently through Bahrain, Riyadh, London, Dubai, and Cairo. Other commercial airline service may begin as early as this month. Driving to Kuwait from Saudi Arabia is possible, but traverlers should expect a long delay at the border with Kuwait.

Where do I stay in Kuwait?

There is very limited hotel space. Many hotels are being repaired and have only a few rooms available. Waiting lists are long. However, even when hotels are fully booked a Kuwaiti sponsor can usually find a room because of cancellations. Do not expect all normal hotel services to be available. Prices for single rooms are generally $150 or more. Payment must be in travelers' checks or cash.

ABOUT MARKETING THEIR PRODUCTS IN

KUWAIT:

What do I need to do the market my product in Kuwait?

In most cases, Kuwaiti law requires foreign companies to have local representation if the product is going to be imported on a continual basis. Kuwaiti firms usually require that they be appointed as an exclusive agent, representative, or distributor. Since Kuwaiti is a small country, this does not cause problems for foreign firms because the market can be covered by one Kuwaiti firm.

Is traveling to Kuwait usually necessary to establish a Kuwaiti representative?

When travel to Kuwaiti is feasible, we strongly recommend you visit your prospective representative to facilitate good relationships.

How do I find prospective Kuwaiti representative?

Until Kuwait's private sector returns to Kuwait, it will be difficult to make contacts. Most Kuwait major merchants and business people are scattered all over the world. As soon as possible the U.S. Department of Commerce will reestablish the Agent/Distributor Service (ADS) for Kuwait to assist companies in identifying local representatives.

We are aware that some individual Kuwaitis are making contacts with our private sector directly. If you are contacted by either the Kuwait government or a Kuwait private sector individual, this contact should be taken seriously. If you are requested to quote a prices for goods and services, remember that the Kuwaitis are shopping around and that you must be competitive to get business.

In the meantime, you may want to consider making contacts in other countries in teh region that may be able to get business in Kuwait. Commerce Department services, like the ADS are available in other countries in the Gulf region.

In addition, martial law has been declared and Kuwait citizens, foreigners, and companies without a contract will not be allowed into Kuwait until the situation is more stable.

Do agency agreements need to be registered in the United States?

Kuwaitis normally require State Department and Kuwaiti consulate authentication for official representation agreements. Kuwaiti law also requires the Kuwaiti firm to be registered with the Kuwait Chamber of Commerce.

On what terms of sale should I offer my products?

Kuwait's immediate emergency recovery needs are being met on a cash basis by the government of Kuwait.

"Off-the-shelf" exports such as consumer goods, spare parts, agricultural goods, industrial raw materials, and chemicals are typically paid for within at most 180 days. Capital goods exports may require terms of up to five years.

Exporters should use normal payment terms and financing procedures. An irrevocable letter of credit confirmed by a well-known U.S. bank is the safest payment mechanism for all international business transactions. It is important to make sure that the letter of credit contains all necessary details and specifications.