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Foreign Investment

During 2003, the Council of Ministers (CM) approved the implementing regulations for the foreign direct investment (FDI) law. The regulations, which were issued in CM decision number 23/2003, outline the application procedures to be followed by investors interested in doing business in Kuwait in accordance with the FDI law. The decision includes provisions for tax breaks and other incentives to attract investors.

The foreign direct investment law was passed in 2001, with implementation pending issuance of the supporting regulations. The law opens the way for 100% foreign ownership of a business venture in Kuwait for projects that promise to bring real benefits to the domestic economy. The objective is to attract advanced technology and know-how to foster economic growth. The law also establishes the legal and institutional structures for FDI investment in the country.

Pursuant to the FDI law and its implementing regulations, the Kuwait Foreign Investment Bureau (KFDI) was established as an office within the Ministry of Commerce and Industry (MCI). The office is responsible for processing applications from foreign investors and representing its recommendation to the Foreign Capital Investment Committee for its approval. The KFIB will also promote Kuwait as an attractive place for foreign investment and assist successful FDI applicants in obtaining the necessary approvals to set up their business in Kuwait.

During the year, the government issued two additional decisions necessary for the implementation of the FDI law. Decision 1006/1 specifies the eleven sectors in which foreign investors can participate in accordance with the FDI law and its implementing regulations. These sectors are:

  1. Manufacturing, excluding oil exploitation and production
  2. Construction, operation and administration of water, electricity and water treatment projects
  3. Banking, financial services and exchange services, with central bank approval
  4. Insurance, with MCI approval
  5. Information technology and computer programming
  6. Healthcare and pharmaceuticals
  7. Land, sea and air transportation
  8. Tourism, hotels and entertainment
  9. Culture, media and marketing; excluding the publication of newspapers or magazines and the establishment of publishing houses
  10. Housing development, barring real estate trading for speculation
  11. Indirect real estate investment through Kuwaiti companies in accordance with law 20/2000

The government also issued decision 1006/2, permitting the establishment of companies wholly owned by foreign investors. The establishment of such companies, which require the approval of the MCI, will be based on the recommendation of KFIB.


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