Expert Insight


The State of Kuwait is one of the wealthiest, and it has a very sophisticated business people in the private sector. The country is witnessing a steady growth by diversification of its economy. There is significant expansion in various sectors:

- Oil & Gas, Oilfield Services and Energy

- Infrastructure, PPP/BOT Projects

- Health Services

- Education

- Environment

- Information Technology and Security

 - Construction and Infrastructure Projects Sector


The government of Kuwait approved more than USD 150 billion for its National Development Plan, this leads the private sector companies seeking and pursuing cooperation with international and foreign companies


Investment in the State of Kuwait is articulated around its strategic position in the North Arabian Gulf region, ensuring its transformation into one of the world's prominent financial and trade centers within an economic and commercial passage that is free and safe for the region, and linking it to the Chinese initiative. Therefore, the Kuwaiti leadership is concerned with activating the Chinese-Kuwaiti exchange in several fields.


At the political level, Kuwait plays a pivotal role in the Middle East under the wise leadership of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Sabah, who always strives to promote love and peace among the Arab peoples by convergence of the brotherly views of the Gulf region by virtue of the special status of His Highness at the global level, through adopting a policy that is based on moderation and conciliation.


The State of Kuwait has shown significant interest in promoting foreign investment through the enactment of a specialized law regulating their work, in addition to the establishment of a specialized Authority under Law No. 116 of 2013 concerning the Promotion of Direct Investment in the State of Kuwait. This Authority acts as an executive economic arm of the State of Kuwait and plays several roles including, without limitation, attracting and promoting foreign direct investments to Kuwait, which have added value and incentives for innovation. In addition, this authority undertakes a regulatory procedural role to facilitate the work of foreign investors, and through which the applications for investment license are received and approved. As well as granting incentives in accordance with the criteria stipulated in the provisions of the law of its establishment through cooperation with the relevant authorities to continue to provide subsequent facilities for foreign licensed projects.


The law, referred to above, has tackled the main considerations for the approval of foreign investment, as Article (12) thereof stipulates that the application for investment license shall be submitted by an investment entity set forth in accordance with the following:


A Kuwaiti company as one of the types of companies stipulated in the Kuwaiti Commercial Companies Law No. 25 of 2012 (One Person Company – Joint Stock Company – Limited Liability Company – Professional Company – Holding Company – Solidarity Company – Limited Partnership Company – Partnership limited by shares – Joint-venture Company). The foreign investor's share may be up to 100% of its capital, provided the said Company is established for the purpose of direct investment.

A branch of a foreign company licensed to operate within Kuwait for the purpose of direct investment. The competent minister shall issue a decision clarifying the bases and rules regulating the relationship between the foreign company's branch and the official bodies in respect of the transactions necessary for its operation.

Representation offices whose objective is to study the markets and the possibility of production without engaging in any commercial activity or the activity of commercial agents.



Article (15) of the said law deals with the time frame for approving the license application for the foreign investor, which is (30) days from the date of submission of the license application subject to fulfilling all the data, documents and conditions specified by the Authority. In case of rejection of the license application, the rejection decision must be in writing and justified, and the applicant has the right to appeal within (30) days. This is considered as a decision to reject the appeal pursuant to Article (16) of the same law.


An administrative unit facility, called the “single window”, was established to facilitate the process of foreign direct investment in the State of Kuwait, pursuant to Article (17) of the law. This Unit includes commissioners from the governmental bodies related to the procedures of licensing the investment entity to ensure proper completion of transactions within the time period set by the law, which is (30) days. The applicant is also entitled to appoint a qualified consultancy firm approved by the Authority in accordance with the bases and rules determined thereby.


As for the issue of expropriation, it was regulated by Article (19) of the law, which states that, “No investment entity licensed under the provisions of this law may be subject to requisition or expropriation except for public utility in consideration for a compensation equivalent to the economic value of the expropriated project at the time of expropriation. Such value is to be estimated based on the economic condition prior to occurrence of any threat of expropriation and the compensation value shall be paid immediately after issuance of that decision”.


Moreover, Article (20) of the same law regulates the issue of transfer of ownership by giving the investor the right to transfer, renounce or dispose of the ownership of the licensed investment entity, in whole or in part, whether the transfer is in favor of the foreign investor or a Kuwaiti investor. In case of transfer of ownership, the new owner or transferee shall replace the original owner in the respective rights and duties.


With respect to the merger process, pursuant to Article (21) of the law, the approval of the Board of Directors of the Kuwait Direct Investment Promotion Authority is permissible for the merger of two or more investment entities based upon a joint request. The new entity resulting from the merger process becomes a legal successor to the merged entities and replace them with respect to the rights and obligations, subject to a decision by the Ministry of Commerce and Industry concerning the procedures, conditions and terms of the merger. The investor may also, under the provisions of Article (22), transfer its profits or capital produced from disposition of its shares or equity in the investment entity.


The merger or acquisition processes are considered significant solutions in the economic process, but there are some obstacles and challenges, most notably the legal legislative environment in Kuwait to help companies to adopt a clear way in the merger process. Thus, there must be specific conditions for the merger process in addition to the current routine procedures that limit the merger in Kuwait. Nevertheless, Kuwait is looking forward to a new economic birth and the enactment of a set of modern and sophisticated economic laws in the future.

With regard to the restrictions on foreign investment, there is complete flexibility, but it should not be contrary to Law and order, public morals and Islamic religious constants.

There are some minor restrictions on foreign exchange that foreign investors must familiarize themselves with, as follows:

1)            The maximum limit for cash transfer is KD 3,000/-, while the maximum limit for transfer by ATM debit card to a bank is KD 40,000/-.

2)            There is no ceiling limit for transfers between banks, but it is a condition to prove the source of funds.

3)            Kuwait enjoys free movement of capital and profits to abroad if the source of funds is a legitimate and legal source.

4)            In case of transporting a cash amount into Kuwait in foreign currencies in excess of KD 3,000, the source of the money must be confirmed and the documents proving the origin of the funds must be confirmed by the customs of the foreign country. And upon the investor's arrival to Kuwait, it must obtain another approval from the Kuwaiti customs

-              With regard to the issue of settling disputes of foreign investors within the State of Kuwait, pursuant to the Kuwaiti economic laws, as well as the Direct Investment Promotion law, Kuwaiti courts are the competent judicial authority to settle disputes arising out of this. Unless there is a clear and direct agreement to choose arbitration as a judicial body to resolve and settle foreign investors disputes, whether it is local or international arbitration.

-              The Kuwaiti Judiciary is a stronghold fortress for the protection and preservation of the rights of citizens and foreigners. Kuwait has a fair and independent judiciary that is well worth praise and appreciation for the landmark judgments in all the branches of law inscribed in the Books of History of Kuwait. The State of Kuwait is established on the principle of constitutional legitimacy and through its Constitution and its concern for the rule of justice in society. The Constitution has established a judicial authority operated by the courts in the name of the Amir of the State, for which the Constitution guarantees full independence. In accordance with the Constitution, judges, in administering justice, are not subject to any authority to enforce the rules of justice and equity, given that “Justice is the basis of rule” and to safeguard and guarantee the rights and liberties.

-              The Kuwaiti courts of all types and degrees exercise their functions in resolving disputes where the right of litigation is guaranteed to all and every person based on procedures, and controls set forth by the law for exercising such right. There is Court of First Instance (the Plenary Court), the Court of Appeal in its various circuits, which considers the challenges of appeal filed before it, and the Supreme Court (the Court of Cassation), which is competent to adjudicate appeals against the judgments rendered by the Court of Appeal filed on basis of valid legal grounds.

-              The legislator has been keen to establish the Constitutional Court to adjudicate disputes over the constitutionality of the laws. There are several judicial rulings have been rendered to the effect of invalidating some laws. By virtue of the procedures set forth by the law, it ensures facilitation of the litigation process in order to achieve security and stability in Kuwait. The Ministry of Justice in Kuwait has a number of e-services that help facilitate litigation procedures through the Kuwait Courts e-portal, where the lawsuit can be filed electronically, and followed up without the need for personal follow-up within the courts.

-              It is preferable to seek the services of local law firms, as they are more familiar with the legal and executive procedures.

-              As for the matter of enforcement of foreign judgments, this was regulated by Article (199) of Law No. 38 of 1980 promulgating the Code of Civil and Commercial Procedures, by authorizing the execution of judgments and orders rendered by a foreign country in Kuwait, in accordance with the conditions prescribed in that foreign country to implement those judgments rendered in Kuwait. The enforcement order shall be filed before the Plenary Court. The enforcement order may not be executed until after the verification of the following:

1)            The said judgment or order is rendered by a competent court in accordance with the laws of the issuing country.

2)            The parties to the litigation subject of foreign judgment have been duly announced to attend and legally represented in the sessions.

3)            The said judgment or order acquires force of res judicata in accordance with the laws of the issuing court.

4)            That it does not conflict with a judgment or order previously rendered by a court in Kuwait, and does not contain anything contrary to morals or public order in Kuwait.

In addition, this provision shall also apply to the awards of arbitrators rendered in a foreign country. However, the arbitrators' award shall be made in a matter permissible for arbitration under the Kuwaiti law and enforceable in the country in which it was rendered, subject to Article 200 of the same law.

Moreover, the documents approved in a foreign country may be ordered for enforcement in Kuwait under the same conditions stipulated in the law of that country for the enforcement of the approved documents in Kuwait. As stated in Article 202 of the aforementioned law and vice versa with regard to Kuwaiti judicial rulings where international treatment is based on the principle of reciprocity.

With the new economic birth in Kuwait, a specialized law has been enacted to promote and attract foreign direct investment. The said Law No. (116) of 2013 included several advantages for the benefit of the foreign investor within Kuwait, which are provided for in Article (27) as follows:

1)            Exemption from income tax or any other taxes for a period not exceeding ten years from the date of actual operation of the licensed investment entity.

2)            Exemption of every expansion of the licensed investment entity in accordance with the provisions of this law from the same taxes set forth in the previous paragraph for a period not less than the period of exemption granted to the original investment entity, from the date of commencement of production or actual operation of that expansion.

3)            The foreign investor under direct investment system shall be exempted inside Kuwait- in whole or in part - from taxes, customs duties or any other charges, which may be imposed on the imports required for direct investment purposes as follows:

a.            Machinery, tools, equipment, means of transport and other technological devices.

b.            Spare parts and maintenance supplies for the items mentioned above.

c.             Commodities, raw materials for partially manufactured goods, and packing and packaging materials. The investor may not perform any kind of disposition thereof, by either 

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