Kuwait: Business and Finance Services and Communications

Vision 2035 for positioning Kuwait as a global financial and trading hub:

The objective of the 2035 Vision is to transform Kuwait into a global financial and trading hub with the aim of attracting investments and with the private sector leading the economic and investment activity, creating competition and promoting production efficiency, under the umbrella of enabling government institutions, based on a favorable investment environment, advanced legislation and an inspired business environment. In order to achieve its objectives, the vision is based on effective governance, a diversified and sustainable economy, high-end infrastructure projects, sustainable living environment, high-quality healthcare services, and creative human capital.

Through this Vision, Kuwait seeks to raise its global competitiveness indicators to stand among the top 35 countries in the world. The mega-projects have started materializing, especially in the infrastructure setting the ground for commercial development, in terms of bridges, new cities, large road projects and new airports. As for the development of Kuwait's strategic financial center, it will rely on co-financing with the private sector and citizens, with a 50% partnership system for citizens, 26% for the strategic investor and 24% for the government.

The estimated cost of the strategic projects in the current development plan within the Vision is about $ 80 billion, of which 72% are government projects and 28% are partnership projects with the private sector and citizens[i]. The year 2017 will see citizens subscribe to the first company in this system, namely Al Zour power plant.

 

A stimulating investment environment

Kuwait enjoys an investment-friendly environment and a supportive and stimulating legislative framework for investment governed by advanced laws that provide many privileges, such as the freedom to transfer earnings and capital, tax exemptions for a period not exceeding ten years from the start date of investment projects and freedom of employment of foreign workers according to local regulations.

 

Target sectors

There are many investment opportunities in Kuwait, the most important of which being:

- Infrastructure in the traditional energy sectors, renewable energy, desalination, maritime transport and rail transport

- Environmental services for solid waste management, wastewater treatment, oil and industrial waste treatment, and waste recycling

- Chemical projects based on oil and natural gas

- Education and training in all branches and specialties

- Healthcare, specialized hospitals and clinics for various specialties

- Integrated housing projects and city development

- Warehousing and storage and logistics services

- Banks, financial services and insurance services

- Air, sea and rail transport

- Tourism, hotels, leisure and entertainment

- Information technology and development of software and applications

- Culture, media and marketing, including digital marketing, and digital content creation

 

Evolution of investment projects according to the top 10 sectors attracting foreign direct investments between 2012- 2016 (US$m)

Source: Fdi markets

 

Major countries investing in Kuwait, 2012-2016

Ibid.

 

Development requirements

In light of the World Bank's indicators of ease of doing business and gaps in the business environment in Kuwait, as shown in the figure at the end of this section, the Government has stepped up its efforts in consultation with the private sector in order to develop a series of actions aimed at improving the business environment.

Key features of the new trends include enhancing opportunities and responsibilities for the private sector and providing it with the necessary facilities to own state-owned enterprises, ensuring return of capital through privatization. It also includes incentives to invest in non-oil sectors in order to diversify the sources of income and to create employment opportunities, in addition to moving ahead with infrastructure development projects and rehabilitating ports and free zones.

A number of important legislations have already been enacted which contribute significantly to the improvement of the business environment. The most important of these are the recent amendments to the Companies Law that will streamline and reduce the procedures of incorporation to a large extent, the establishment of the “One-Window Transaction”, as well as the opening of the Kuwait Business Center that brings the time needed to issue business licenses for companies to a week. Furthermore, more legislation and regulations are expected to be passed soon.

 

Kuwait's ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017