19 September,2023
Table of Contents
The Kuwait Industrial Authority reported $524 billion in the second quarter of last year, and that has sparked rumors about a change in their business model that gets more FDI their way. While it is true that Kuwait has been looking for foreign funds to liven up their industries, recent price drops in petrol and oil have further bolstered the news.
As far as the global investment activity of the country is concerned, Kuwait has long been dabbling in matters like external fund managers who invest out of the country. For example, the Kuwait Investment Office trades directly with its counterparts in the UK and USA. The Atlanta-based Fosterlane and London-based Wren House Infrastructure are just two of the numerous foreign campaigns the country has been running for long, and that too, quite successfully. Things have thus finally started looking up for the country. It is hovering on the threshold of inviting foreign funds to its shores for industries other than oil mining and manufacture, and that is promising indeed. The dealings in the foreign counterparts and the funds in concern have also been diverse, with a wide variety of assets, equities, and bonds coming into play.
The economic planners of the country want inward investment flow to come their way from foreign shores and have highlighted the same over the last few years. With tweaks and alterations to their trade policies and laws, Kuwait is gradually welcoming a large number of foreign investors in multiple industrial sectors as part of the Kuwait Vision 2035 plan. With oil prices dropping to a new low recently, the need to diversify industries was imminent, and the economic minds in Kuwaiti governance have rightly done so.
The FDI law of 2013 (implemented in 2015) in Kuwait increases ownership in Kuwaiti companies to 100%, and that is seen as one of the most glorious business moves among foreign companies looking to invest in the country. They can operate through a 100% foreign-owned branch of a business, and customs and tax duty exemptions have also been announced. All in all, Kuwait looks like quite a favorable trade environment for foreign companies. Thus, the hopes of bringing in more FDI might as well come true! The Kuwait Foreign investment Bureau supervises all such issues and takes into account the matter of PPP or public-private partnership as well. It is a project that promises a synergy of private sectors (in the form of foreign investments) and public sectors (like government departments and centers in Kuwait) with a legislative upgrade that serves the industrial purposes a whole lot more. It is likely to feature more prominently in the country following some initial foreign investment.
Responses to Kuwait’s attempt at bringing in foreign funds have been positive, and private sectors are keener to make use of the unique trade prospects that the country presents. IBM has been one of the first ones to open shop in Kuwait, with a sales and customer service center. It is a part of the company’s program to expand into the Middle East. With Kuwait introducing new laws and revised trade strategies, it seemed like the best destination for expansion for many private sector companies. IT and telecom companies are especially interested to start up businesses in Kuwait, and the stakeholder’s framework of the country promises higher returns than ever. As the revised strategies and laws focus more on diversification and less on oil and gas, it has opened up a horizon of prospects for companies to invest in the country.
Kuwait’s government is all set to encourage growth and diversification in industrial sectors. Their sole focus is to shift from petrochemicals and oil mining that has primarily shaped their altered business strategies. As Kuwait is a member of the GCC Customs Union, it gets free trade between countries like Bahrain, Saudi Arabia, the UAE, Qatar and Oman. The country aspires to spread its wings and go for a diversified export base as well. That is what lies in the heart of bringing in more FDI for industries in the country. As it moves on to become one of the growing centers for manufacture and industry, Kuwait can hope for those foreign greens rolling in anytime now, with foreign investors keen to make the most of the untapped trade resources of the Middle East.
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