Kuwait: Investing

FDI in Figures

Kuwait has always been a country open to foreign investment and is further opening to foreign capital, however, FDI is still underdeveloped in the country by regional standards. According to UNCTAD's World Investment Report 2024, FDI inflows to the country almost tripled year-on-year in 2023, reaching USD 2.11 billion. At the end of the period, the stock of inward FDI was estimated at USD 16.64 billion. The bulk of investments are directed towards the oil & gas sector, followed by real estate/construction and financial services. A significant portion of FDI is directed towards major infrastructure initiatives within the hydrocarbon sector, frequently facilitated by state or semi-state entities. The majority of FDI comes from the United States and China.

As a resource-rich economy, Kuwait is diligently looking to deploy its oil wealth to develop and diversify the economy. The nation aims to attract more than USD 200 billion in FDI between 2020 and 2035 in order to become a global centre for trade and finance. The government is taking concrete steps towards achieving its ambitions to boost private sector investment in key sectors. Kuwait Vision 2040 seeks to foster economic diversification through the implementation of various projects and initiatives. It actively promotes FDI in key sectors such as information and communications technology, renewable energy, electricity and water, tourism, healthcare, and education. Kuwaiti or GCC nationals are mandated to hold a minimum of 51% ownership in local companies, though exceptions can be made for non-GCC investors meeting KDIPA qualifications. A 2017 amendment to the 2016 Companies Law eased restrictions on limited liability companies. Council of Ministers Decision No. 75 of 2015 tasks KDIPA with excluding foreign firms from sensitive sectors. These sectors encompass the extraction of crude petroleum, natural gas extraction, coke oven product manufacturing, fertilizer and nitrogen compound manufacturing, gas manufacturing, gaseous fuel distribution, real estate, security and investigation, public administration, defence, social security, membership organizations, and labour recruitment. Under the 2013 FDI Law, incentives comprise tax benefits (with a potential waiver of the 15% corporate tax for foreign firms for up to 10 years), relief from customs duties, allocations of land and real estate, and permissions to recruit necessary foreign labour. In January 2024, Kuwait further eased foreign investment rules, allowing foreign companies to open branch offices without a local agent. Companies can now establish wholly owned branches, in addition to the existing options of partnering with a majority Kuwaiti stakeholder or appointing a local agent. Foreign companies can also now directly participate in government tenders and, if successful, execute contracts through their own branch in Kuwait. The country ranks 71st among the 133 economies on the Global Innovation Index 2024 and 88th out of 184 countries on the latest Index of Economic Freedom.

What to consider if you invest in Kuwait

Strong Points

Kuwait has several advantages for attracting FDI:

•  Abundant oil reserves (the country has the 6th largest oil reserve in the world - U.S. EIA, 2020) which provide the country with considerable and stable revenues
• A strategic role in the political sphere of the region (the country is considered a very good ally of the United States)
• A young local population with a high average income and high domestic consumption
• A well-managed financial market and a strong banking sector
• Good quality infrastructure
• A globally positive business environment: the Kuwaiti government, through its desire to diversify its economy, has embarked on a policy of economic openness to foreign investment
• Kuwait is strategically located as a thriving commercial centre in the region, close to three major markets (Iraq, Saudi Arabia and Iran)
• An open market economy allowing Kuwait to enjoy free convertibility and full transferability in the foreign exchange market.

Weak Points

Kuwait has some obstacles to its economic development. They include:

• Necessary structural reforms are hard to take hold because of a tormented political life and strong tensions between the parties
• Extreme dependence of the economy on the performance of the oil sector and in particular on the price of a barrel of oil
• A high degree of state intervention in the national economy (the civil service provides 90% of the jobs of nationals and the budget is 60% punctured by these current expenditures) weakening the emancipation of a strong private sector
• The geographical location makes the country particularly vulnerable to political tensions in the region
• A  business environment with legislation that restricts the freedom of establishment of non-nationals and that does not sufficiently protect intellectual property
• Strong dependence on the expatriate labour force.

Government Measures to Motivate or Restrict FDI

To promote the diversification of its economy, Kuwait has set up the Kuwait Development Plan (KDP) (Kuwait Vision 2035 "New Kuwait") for 2035. The main objective of this plan is to transform the country into a regional and international financial and trade hub to make Kuwait more attractive to investors. A significant investment in the country's infrastructure and human resources and regulatory reform will create an environment conducive to attracting foreign investors and promoting Kuwait as a regional service centre. In addition to seeking to further involve the private sector in infrastructure projects, the government plans annual spending of $32 billion, half of which will be spent on investments in projects considered highly strategic:

•     New refinery ($16 billion) and Clean Fuel Project ($13 billion), which will increase the refining capacity and quality of refined products in the country
•     New Mubarak Port Al-Kabeer on the island of Boubyan ($7.9 billion), which will help solve the current problems of maritime traffic in the country
•     Expansion of the international airport ($5.8 billion) and rail and metro projects will help develop the country's communication infrastructure

Procedures Relative to Foreign Investment

Freedom of Establishment

The freedom to establish a company/enterprise is very limited and controlled.  Non-Kuwaitis cannot hold more than 49% of the capital of a company.  Establishing a new office, branch or creating a new company is subject to the existence of a citizen agent.  All permits have to be established on his name.

Acquisition of Holdings

Purchasing shares from the stock market has to be done through a broker authorized by the Kuwait Stock Exchange.

Obligation to Declare

There are no special rules to declare if the acquisition is less than 5% of the capital holdings.  If the acquisition is higher, a special procedure must be followed.

Competent Organisation For the Declaration

Kuwait Stock Exchange

Requests For Specific Authorisations

Some sectors, such as pharmaceutical, telecommunications, medical equipment, etc. require authorizations from the ministries that control each specific activity.

Investment Opportunities

Investment Aid Agency

Kuwait Investment Authority
Kuwait Direct Investment Promotion Authority

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Kuwait
Globaltenders, Tenders & Projects from Kuwait
DgMarket, Tenders Worldwide

Other Useful Resources

Kuwait Chamber of Commerce and Industry (KCCI)

Any Comment About This Content? Report It to Us.