Foreign Direct Investment
FDI in Kuwait was guided by the Foreign Direct Investment Law or the FDI Law (Law No. 8 of 2001). The FDI law was introduced as a part of the Kuwait 2035 Plan which aims to diversify the economy by reducing its dependence on oil and oil-related resources. In 2013, the government further amended the FDI law to address the various concern of the investors. The new FDI law (Law No. 116 of 2013) was implemented in 2015 and replaces the older restrictions such as difficulty in obtaining a license. The new law also allows a foreign company to own 100% of an entity except a few industries placed on the negative list. The law also allows a foreign company to operate through a 100% owned foreign office and introduces numerous customs duty and income tax exemptions. The FDI legislative framework also includes other laws such as the PPP law (Law No. 116 of 2014) which are crucial for the successful formation of a company. Though the process has been made less difficult, there are still many legal and regulatory nuances to consider and abide by.
One Stop Solution for ALL FDI Legal Consultation and Assistance
The New Tenders Law (Law. No 49 of 2016) replaced the Tender Law No. 37 of 1964 which regulated the public tenders in Kuwait. Through the new laws, the system has been modernized to make it more flexible and hassle-free. Even foreign businesses are now able to take part in government contracts in a bid to make Kuwait a leading commercial and financial hub by the year 2040.
But still, there are many considerations to keep in mind while going for a government project. Other laws such as the Direct Investment Law (Law No. 116 of 2013) also come into play and have to be considered. There are also many regulations to follow for both domestic and foreign businesses.
For example, a foreign contractor must source at least 30% of the contractual requirements from local suppliers and the domestic market. On top of that, you have to consider and abide by all 97 Articles detailed in the Public Tenders Law.
One Stop Solution for ALL FDI Legal Consultation and Assistance
Kuwait has made amendments to its laws so that foreign companies can be attracted for investment. In the first quarter of 2018, foreign direct investment (FDI) increased by a significant 1 KWD million. The all-time high of 721 KWD million was reached in the last quarter of 2012 while the average between 2012 and 2018 had been around 67.77 KWD million. Kuwait has been known for its favorable FDI opportunities, and the lower price of oil has driven it to look for foreign capital that could boost its GDP. There has been an increased number of recent innovations to attract foreign investment, and this provides a wonderful opportunity for foreign companies to set up their base in Kuwait and neighboring countries.
Implications of FDI in Kuwait
Lawyer Sultan Al-Shemali Law Firm offer full consultation to clients regarding company formation, corporate governance, negotiation with other stakeholders and drafting and evaluation of different types of agreements and contracts. We keep our clients abreast with all matters and information that impact their investment. We also provide sound advice on employment and labor regulations, tax issues, offset related issues and other compliance and regulatory issues. Our experienced lawyers are well aware of the implications of the law and perform diligent work and study of the market to offer you effective solutions. With our help and guidance, you can obtain your license on an expedited pace and set up your office. We will go all the way so that you can utilize the One-Stop Shop to get your license application approved by the Direct Investment Promotion Authority (DIPA). We also assist you to exploit all the incentives and advantages offered by the government such as land grants and tax holidays for ten years if possible. We can help you successfully set up your business in Kuwait and other GCC countries following all norms and regulations.
