KUWAIT CITY, 9 December 2003 — Kuwait, hungry for foreign capital to boost its sluggish economy following Saddam Hussein’s ouster in neighboring Iraq, yesterday kickstarted a drive aimed at luring foreign investments.
The campaign was opened by Commerce and Industry Minister Abdulrahman Al-Taweel who said security concerns had taken a back seat in the post-Saddam era which would bring major economic changes. “Security concerns were predominant when Saddam Hussein was in power. After the liberation of Iraq, opening the economy has become the dominant concern,” Taweel told a press conference.
The ultimate objective of the campaign is to turn Kuwait into a “regional financial, commercial and services center” for neighboring Gulf states and the Asian markets, he said. “We are not competing with anybody. We are not taking business from Dubai, Bahrain or Saudi Arabia ... We are complementing each other,” Taweel said.
In October, Kuwait issued the by-laws necessary to implement the Foreign Direct Investment Law, passed by Parliament in 2001, to open up most of the emirate’s economic sectors to foreign investments.
Under the rules, foreigners can invest in all industries, except oil and gas exploration and production, in addition to infrastructure projects in water, power, telecommunications and sewage treatment.
They can also establish companies in Kuwait and own 100 percent of the shares. They are allowed to invest in housing projects, real estate investments and the entertainment industry.
Foreigners can also invest in banking, investment firms and exchange companies, following central bank approval, in addition to insurance companies, information technology, hospitals and the drugs industry.
Taweel said the law grants potential investors with tax holidays for 10 years from the date of production, as well as exemption from customs and charges on raw materials. A government committee is currently egaged in formulating amendments to Kuwait’s 1955 income tax law to cut the maximum income tax on profits of companies from the current 55 percent, the minister said.
Foreigners are allowed to trade and own shares on the Kuwait Stock Exchange. The emirate, which served as the main launchpad in the US-led war to oust Saddam, is hoping to play an important role in Iraq’s reconstruction, in alliance with foreign partners.
Shaker Al-Saleh, head of the Foreign Direct Investment Bureau, said about 80 applications from foreign investors have been received, 30 of which are negotiating with the bureau.
The value of foreign investments under study exceeds $1 billion, said Saleh, who added that two leading international banks have bid to open branches in Kuwait.
The issue must be approved by the central bank. Only Kuwaiti banks operate in the emirate at present.
Taweel said it will take authorities a maximum of four months to evaluate applications and issue the necessary licenses.
