Kuwait – new sectors open to foreign investment, new tax treaties

Kuwait – new sectors open to foreign investment

KPMG in Kuwait discusses new rules that open certain sectors of Kuwait’s economy to foreign direct investment. The Tax and Corporate Services department in KPMG in Kuwait is working closely with the KDIPA in support of their initiatives to attract international investors. Below, KPMG in Kuwait also summarizes the country’s 10 most recently effective tax treaties.

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Foreign direct investment applications in Kuwait

In December 2014, the Kuwait Direct Investment Promotion Authority (KDIPA)issued regulations1 to govern its new foreign direct investment law, but, until now, details on the application process were not available. Kuwait’s Council of Ministers recently agreed on a ‘negative list’ that excludes 10 sectors of the economy from laws allowing 100 per cent foreign ownership in Kuwait. 

The sectors are:

  • Extraction of crude oil 
  • Extraction of natural gas
  • Manufacturing of coke oven products
  • Production of fertilizer and nitrogen compounds
  • Production of domestic gas and its distribution via main pipelines
  • Real estate activities, except construction development projects for private operations 
  • Private security and investigation activities Private organizations in public administration, defense and compulsory social security 
  • Activities with a professional body (e.g. lawyers) 
  • Labor services, including domestic labor.

In all other sectors, KDIPA is encouraging foreign investors to submit concept papers for the KDIPA’s review of the application’s feasibility for a formal application.

As part of the government’s FDI promotion initiative, the Ministry of Commerce and Industry appointed KPMG Safi Al-Mutawa & Partners 

10 new tax treaties

In the last 18 months, new tax treaties between Kuwait and the following jurisdictions took effect:

Jurisdiction  Signing date  Effective date
Slovak Republic 30 November 2012 1 January 2014
Hong Kong SA 13 May 2010 1 April 2014
Slovenia  11 January 2010 1 January 2014
Portugal  23 February 2010 1 January 2014
Moldovo  15 March 2010

1 January 2014
Latvia  9 November 2009

1 January 2014
Georgia 13 October 2009

1 January 2014
Philippines  23 February 2010 1 January 2014
Japan 17 February 2010 1 January 2014
Mexico 27 October 2009 1 January 2014

Footnote

1Executive Regulations to Law No. 116 of 2013. 

 
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