How has Kuwait's FDI landscape evolved in recent years, and how have recent changes in FDI law incentivized foreign investment in Kuwait?
Kuwait has recently witnessed several favorable developments in its regulatory and legal framework that enhance its attractiveness as an investment destination. The issuance of new Law No. 116 of 2013 for promoting direct investment in the State of Kuwait, which replaced the previous FDI Law No. 8 of 2001, stipulated several additions that accommodated international best practices pertaining to FDI. The main additional features included establishing a public authority, the Kuwait Direct Investment Promotion Authority (KDIPA), which is mandated with the tasks of encouraging both local and foreign investors, promoting Kuwait as an attractive investment location, and streamlining the business environment to enhance the country's competitiveness. It also adopted the “negative list approach" for sectors that are excluded from licensing. This speeds up the licensing process to a maximum of 30 days by establishing a one stop shop, allowing 100% foreign ownership by selecting one of several forms of legal entities, introducing the licensing of representative offices solely to conduct marketing studies for interested investors, and extending incentives and exemptions to both privatization projects and Public Private Partnership (PPP) projects. On the other hand, the new investment law maintained incentives like tax and customs duties exemptions, and guarantees against expropriation, transfer of capital and profits, and protecting project proprietary-information.
What economic sectors are open to foreign investors in Kuwait?
The adoption of the negative list approach signaled to foreign investors that most economic sectors are open for investment, in accordance with the Council of Ministers decision issued February 2015, whereby very few sectors were excluded for sovereignty purposes, such as upstream oil and gas, or for other considerations. Furthermore, we did not place a threshold on the size of investments eligible for licensing, nor did we simply target FDI as a source of capital per se, as our objective is to attract added value and quality investments that anchor competitive advantage in the country, enhance productivity, and foster national capabilities.
What role can FDI play in promoting Kuwaitization as well as attracting know-how and innovation to add value to the domestic economy?
We are currently undertaking the necessary steps to develop our business strategy and formulate the ensuing promotional and communications strategies, with the relevant roadmap and action plan to assist us in achieving the tasks we are mandated with under our establishing law, in view of the National Vision 2035, and the strategic objectives identified in the medium-term economic development plans. In this regard, we target efficiency seeking FDI through investors who bring know-how and modern technology to Kuwait, support economic diversification efforts, and build national R&D competencies as well as innovative capabilities, in addition to creating jobs for Kuwaiti youth and providing quality training opportunities.
What upcoming government and infrastructure development projects are expected to have a significant impact on the local economy?
Kuwait offers a host of lucrative investment opportunities, including strategic projects under the current development plan in sectors pertaining to oil and gas, the North Zone development, electricity and water, urban development and housing, transport and communications, health, education, tourism and media, and the environment. There are also other opportunities under the PPP projects and the privatization program. We are looking forward to attracting FDI that will create needed linkages with our thriving SME sector and local start-ups. We have updated an investment guide that can also assist interested investors in considering various potential opportunities found on our website. We are developing three economic zones in the north, west and south of the country that offer an attractive opportunity for various competitive industries to operate in Kuwait.