KUWAIT CITY, 21 October 2003 — OPEC-member Kuwait has opened up most sectors of its domestic economy to foreign investors for the first time, but maintained a lid on the vital oil industry, newspapers reported yesterday.
The Cabinet said foreigners can now invest in all industries, except oil and gas exploration and production, according to a new decision, the details of which were carried by Al-Qabas newspaper.
The Cabinet decision is actually the implementation of a law passed by the emirate’s Parliament in 2001 with the aim of attracting foreign capital and technology in a bid to boost the sagging national economy.
Infrastructure projects in water, power, telecommunications and sewage treatment, in addition to housing projects, real estate investments and the entertainment industry are among the sectors now open to foreigners.
Others include banking, investment firms and exchange companies, following central bank approval, in addition to insurance companies, information technology, hospitals and the drugs industry.
In a second decision, the Cabinet allowed foreign investors to establish Kuwaiti companies in which they own 100 percent of the shares, provided such firms transform modern technology, create jobs and promote national exports.
The direct foreign investment law provides potential investors with tax holidays for up to 10 years, exemption from customs and charges on raw materials, and long-term protection against nationalization.
It also allows foreign investors to establish companies in the emirate without a Kuwaiti sponsor or partner currently needed for any business venture. Foreigners are allowed to trade and own shares on the Kuwait Stock Exchange.
The Kuwaiti Parliament, which opened a new term yesterday, is expected to pass a long-awaited privatization bill and another draft law reducing income tax on foreign firms from 55 percent to a maximum of 25 percent.
The emirate, which served as the main launchpad in the war to oust Saddam Hussein, is hoping to play an important role in Iraq’s reconstruction, in alliance with foreign partners.
