Thursday, December 14, 2017 | ePaper

Investment Opportunities in Kuwait

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Kuwait has always been a country open to foreign direct investment and is currently further opening up to foreign capital.
Kuwait has introduced new corporate legislation to encourage and facilitate foreign direct investment. The new regulations are part of recent measures that the Government has taken to attract investments as well as foreign companies that will generate employment and help develop their embryonic private sectors as part of the 2015-2020 National Development Plan.
The new regulations with 337 articles incorporate tried and tested measures including the creation of a 'one stop shop' for incorporation and licensing of new businesses.
In order to ease operating in Kuwait, single share holders are permitted to set up businesses for the first time and transfer shares in companies.
Following the introduction of the new Foreign Direct Investment Law in 2013 covering foreign investment in Kuwait. Executive Regulations have been issued in 2014 concerning its application.
The new law offers foreign investors several incentives, including the ability to own or increase ownership in a Kuwaiti Company to 100%, to operate through a 100% foreign owned branch and to benefit from income tax and customs duty exemptions.
The new FDI regime can be considered for both existing and new operations and investments except for, sectors included in the 'negative list'.
Kuwait Direct Investment Promotion Authority (KDIPA) which was set up as per the new regulations as a 'one stop shop' have recently issued a negative list as per the Council of Ministers Decision No. 75 (2015) which excludes the following sectors from the incentives and exemptions of the new FDI Law:
· Extraction of crude petroleum
· Extraction of natural gas
· Manufacture of coke oven products
· Manufacture of fertilizers and nitrogen compounds
· Manufacture of gas, distribution of gaseous fuels through mains
· Real Estate excluding privately operated building development projects
· Security and investigation activities
· Public administration and defence, compulsory social security
· Activities of membership organizations
The current policy to promote FDI focuses on a number of sectors like infrastructure investments, waste-water treatment, communications, banking and financial sectors, information technology and software development, insurance, hospitals and Pharmaceuticals, land and sea freight, tourism and urban development.
Kuwait has a favorable investment climate, particularly after the introduction of investment friendly regulations.
The high quality of life, its consistent oil reserves, low energy cost and a sound financial management and solid banking system make it an ideal destination for foreign investors. Further, Kuwait is blessed with a greater percentage of young consumers that guarantees a high demand for quality consumer products and services.
Availing the liberalized investment policy, US tech giant IBM became the first company to set up wholly foreign-owned operations in Kuwait and has embarked upon an ambitious expansion plans in collaboration with local industries. Giants like IBM plan to make Kuwait the hub for sales and services and reach out to the lucrative Gulf Market.

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