Foreign Direct Investment -FDI

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Introduction
Business in Kuwait
Entry Visas and Work Permits
Taxation
Foreign Direct Investment (FDI)
Offset Programme
Disclosure Law
Intellectual Property
Audit and Accounting Regulations and Practices
 
Law No. 8/2001 Regulating Direct Foreign Capital Investment in the State of Kuwait
The above law regulates the flow of FDI into the State of Kuwait. The Council of Ministers determines the economic activities and projects that the foreign investor is allowed to undertake within the State of Kuwait in conformity with the State general policy and approved economic development plans.

A license is issued to the foreign investor for undertaking an economic activity or project by the Minister pursuant to the Investment Committee's recommendation, and following the approval of the relevant authorities.

License applications must be decided within a maximum period of eight months from the date of submission. Where rejected, the decision must be justified in writing.

A license may be given by order of the Minister upon the recommendation of the Investment Committee to incorporate Kuwaiti companies where the share of foreigners therein shall be 100% of their capital in accordance with the conditions and circumstances placed by the Council of Ministers.
 
Foreign Capital Investment Committee (FCIC)
The FCIC has been formed under the chairmanship of the Minister. Committee members include experts representing the private sector as well as representatives of the Kuwait Chamber of Commerce and Industry.

FCIC is engaged in the following:
 
Studying applications for investment and submitting recommendations thereof
 
Promoting investment opportunities available in the country and taking the initiative to solicit foreign investments
 
Granting privileges to encourage foreign investors and the Kuwaiti private sector to make investments in accordance with Article No. 13 in coordination with the relevant authorities, with an emphasis on encouraging the Kuwaiti private sector
 
Facilitating the enterprise's license and registration procedures and eliminating obstacles
 
Imposing a method for monitoring, following-up and assessing the performance of foreign investments in the country, with a view to identifying any hurdles facing such investments and surmounting them
 
Investigating the complaints raised by foreign investors and other concerned parties as a result of implementing the provisions of this law, and submitting its reports thereon to relevant authorities
 
Imposing the penalties stipulated in Article No. 15
 
Preparing draft regulations required for the implementation of the stipulations of this law
 
Considering matters referred to it by the Minister in respect to the implementation of the provisions hereof
 
Preparing periodic statistical reports on foreign investment activities, as well as an annual report on licensed investment projects together with indicating obstacles facing the entry of foreign investments into the country and ways to remedy the same. Such reports are submitted to the Council of Ministers within a period not exceeding the end of March of every year.
 
Foreign Investment Capital Office (FICO)
The FICO has been set up to act as the executive staff of the Foreign Capital Investment Committee.

FICO receives license applications, completes them in conjunction with the concerned authorities, conducts the required studies and submits suggestions to be placed before the Investment Committee for a decision within a grace period not exceeding four months from the application date.

FICO acts on all matters related to foreign capital investment, particularly:
 
Informing international markets about the enterprises placed for investment and highlighting the benefits enjoyed by the foreign capital investment in the country
 
Providing all necessary information, clarifications and statistics requested by foreign investors
 
Following-up execution of licensed enterprises and eliminating the obstacles and difficulties which may confront such enterprises
 
Coordinating with the relevant authorities to facilitate a foreign investor's entry and residence in the country as well as foreign dealers having business connections with them.
 
Secured Guarantees for Foreign investment
Foreign enterprises licensed under the provisions of the law may not be confiscated or nationalized.

Expropriation may only be made for public interest in accordance with the laws applicable and against a compensation equivalent to the enterprise's real economic value at the time of expropriation. Such value is assessed according to the economic situation prior to any threat of expropriation. Compensation must be paid without delay.
 
Entitlements
In accordance with law and license stipulations, the foreign investor has the right to transfer their investment in full or in part to another foreign investor, to a national investor or relinquish it to their national partner in the case of a partnership
 
Where a foreign investment is transferred in part or entirely to another foreign investor, the latter shall substitute the former to the extent of the ownership transferred to them by the former
 
The foreign investor has the right to transfer abroad their profits, capital and compensation
 
Non-Kuwaiti employees in the enterprise may also transfer their savings and dues abroad.
 
Privileges and Obligations of Foreign Investment
The Investment Committee may grant foreign investments all or part of the following privileges:
 
Exemption from income tax or any other taxes for a period not exceeding ten years from the start of the operation of the enterprise, as well as exempting every new investment in the same enterprise from such taxes for a period equivalent to that granted to the original investment when the enterprise was established
 
Benefits from the privileges supplied under double taxation avoidance agreements, as well as investment encouragement and protection agreements
 
Total or partial exemption from customs duties on the following imports:
 
 
o Exemption from income tax or any other taxes for a period not exceeding ten years from the start of the operation of the enterprise, as well as exempting every new investment in the same enterprise from such taxes for a period equivalent to that granted to the original investment when the enterprise was established
 
o Machinery, equipment and spare parts required for construction, expansion and development
 
o Raw materials, semi-processed goods, wrapping and packaging materials and such other materials required for production purposes
 
Allotment of land and real estate required for investment purpose in accordance with the applicable laws and regulations
 
Recruitment of the required foreign labour in accordance with the laws and regulations applicable in the country.
 
Granting the privileges indicated above is dependent on the economic development plans as well as the number of Kuwaiti employees in the enterprise.

The foreign investor must undertake to protect the environment, comply with the public order and morality as well as instructions relating to security, public hygiene and third party safety.