Investing in Kuwait: a Guide for Investment Opportunities in Kuwait CONTENTS

Investing in Kuwait: A guide for Investment Opportunities in Kuwait CONTENTS

Preface 1 2.3 IndustrIal, oIl and gas, 24 2.8 b ankIng, fInancIal 39 downstream chemIcal servIces and Insurance Kuwait at a Glance 2 manufacturIng - Private equity 40 1. why Kuwait? 3 - Asset management 41 2.4 e ducatIon and traInIng 25 - Direct sales agent 42 2. Sector 10 - Tertiary education 26 oPPortunitieS - Institutes and training centers 27 2.9 aIr, marItIme and raIl 43 passenger transport 2.1 Infrastructure 12 2.5 healthcare 28 - Airport facilities management 44 - Power plant- Fuel based 13 - Specialty hospitals 29 - Rail facilities management 45 - Power plant - Renewable 14 - Lifestyle medical clinics 30 - Desalination plant 15 2.10 t ourIsm, hotel and 46 2.6 Integrated housIng 31 - Funding - Project finance 16 entertaInment projects and urban - Marine transport 17 - Branded theme park 47 development infrastructure - Budget hotels 48 - Development planning for 32 - Rail transport infrastructure 18 integrated housing projects 2.11 It and software 49 2.2 envIronmental servIces 19 - Property management 33 development - Solid waste management 20 - Facilities management 34 - Web and application 50 - Primary sewage treatment 21 - Construction contracting 35 development - Oil and effluent sludge 22 2.7 s torage and logIstIcs 2.12 c ulture, medIa and treatment servIces 36 marketIng 51 - Waste recycling 23 - Logistics 37 - Digital media marketing 52 - Warehousing 38 - Digital content creation 53 - Application stores and 54 online portals 3. SerVicinG local and 55 appendIx 7: 88 foreiGn inVeStorS Glossary 4. aPPendiceS 61 appendIx 8: 89 appendIx 1: 62 Kuwait’s Bilateral Investment Law No. 116 of 2013 Treaties Regarding the Promotion of Direct Investment in appendIx 9: 90 the State of Kuwait Kuwait’s Double Taxation Agreements appendIx 2: 69 Executive Regulations Implementing Law No. 116 of 2013 appendIx 3: 74 Economic information appendIx 4: 75 Living appendIx 5: 77 Important legislations in Kuwait appendIx 6: 84 Main Stakeholders

Images in this document are courtesy of Kuwait News Agency and the Ministry of Information Kuwait Investing in Kuwait: A guide for Investment Opportunities in Kuwait 1 PREFACE Kuwait Direct Investment Promotion Authority Director General Sheikh Dr. Meshaal Jaber Al Ahmad Al Sabah Promotion Authority (KDIPA) and in the preparation of Kuwait Investment Guide. the potential investment opportunities in the State of Kuwait on behalf of the Kuwait Direct Investment We wish to acknowledge the support provided by KPMG Advisory W.L.L., Kuwait in relation to studying against nationalization or expropriation without compensation. exemptions, allocation of land, employment of foreign labour, and guarantees including protection from up to 10 years exemption from income tax and other taxes, partial or full customs duties obtain up to 100% equity ownership in any sector (except those specified in a negative list), benefiting Kuwait offers several benefits under its new direct investment law which allows for foreign investors to commitment to attain and support the international development agenda. macroeconomic fundamentals, a transparent legal system, high quality of life, democracy, and a commodities prices, Kuwait has maintained a low risk classification and a stable outlook, with strong Despite the global adverse repercussions of the last financial crisis and the volatity of oil and agenda. with the public sector in realizing and achieving the country’s economic and social development that compliments the well established business and commercial class, with all serving as true partners human capital of young and well educated population, with a remarkably rising entrepreneurial class neighboring markets. Besides its richness in natural resources of oil and gas, the real wealth lies in its amplified by its strategic location at the Northern part of the Gulf, with easy access to dynamic tradition of openness with extensive commercial relations that Kuwait has always enjoyed further vision for transforming it into a leading financial and commercial centre. This vision is based on a Kuwait is a country that is embarking towards the future with strong resolve to attain H.H. the Emir’s available to both the local and global investor community. is to provide a profile on a host of potential investment opportunities in various sectors in Kuwait unique value proposition of Kuwait, its economy and business climate.The main purpose of the Guide This is the first edition of Investment Opportunities Guide in the State of Kuwait that highlights the +965 Country Code GMT +3hours Time Zone USD Value of Total Exports exchange ratein Kuwaiti Dinar(KWDorKD),sub-dividedinto1,000Fils.(1USDequalsapproximately Currency winters and25°Cto39°Cinsummers. Temperatures cangobelow0°Cinwintersandabove50°Csummers.Meantemperaturesrangebetween11°Cto29°C in Climate 17,818 km² Area Arabic; Englishisalsowidelyused,particularlyasabusinesslanguage Official Language 4. Population His HighnessSheikhSabahAl-AhmadAl-JaberAl-Sabah Head of State (Amir) Constitutional HereditaryEmiratewithademocraticallyelectedParliament Government Governorates Kuwait City Capital City State ofKuwait Official Name of Country Mubarak AlKabeer Hawally, Ahmadi,AlAsimah,Jahra,Farwaniya, ,VXBJUBUBHMBODF mna Drmd-aran USD 2. Annual Inflation Rate GDP USD GDP USD Value of Total Imports 18 94 Mn(June201 % (ConsumerPriceIndex,201

98 40,44 155 3 0 Per Capita

billion(201 billion (201

b illion (201 (201 2015 4 (Administrative Units) ) 5 4 4 ) ) 4 ) ) ) 4 ) 301 Filsaspertheaverage

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 2 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 3 KUW WHY 1

AIT? Source: Ministryof Planning, PublicAuthorityforCivilInformation, EIU, Kuwait. expected toprovideopportunities forforeigninvestmentin metro andnationalrailnetwork, etc.Theseinitiativesare infrastructure, water,powerand socialinfrastructure,a different sectors,suchasroads, portsandairport earmarked budgetofUSD10 plans of thecountry’sinfrastructurewith The ThirdKuwaitMasterPlanfocusesonimprovement dispite loweroilprices. projects anddrivedevelopmenteffortsinthecountry financial credit ratings (AA/ wealth The Kuwait Investment Authority, estimated at around 10 Middle East. financial trade and logistics in the into one of the leading hubs for economy and transforming Kuwait term vision of diversifying the activity aimed at realizing its long levels of infrastructure development Kuwait is promoting unprecedented barrels. 6th largest oil reserves globally, Exporting Countries. It has the the Organization of Petroleum the Gulf Cooperation Council and Kuwait is a founding member of 4VCTUBOUJBMHPWFSONFOUSFTPVSDFT lon term0vision infrastructure development Government ofuwaitwillcontinuetospendheavily tide overthepresent over the Kuwait’s economy Bn.Kuwaitenjoysastronginvestmentgradesovereign prioritizing infrastructureneedsofthecountrywithan rating agenciesglobally.TheGovernment’sstrong 4JHOJGJDBOUJOGSBTUSVDUVSFEFWFMPQNFOU fund, managesassetscurrentlyestimatedatUSD position givesittheabilitytounderwritelargescale past several ) andlowpoliticalriskratingsfrommajor benefited from lowoilprices years which isexpectedtohelpit in cominyearstorealieits Bnforprojectsacross Kuwait’s scenario record budgetsurplus uwait development #O sovereign herefore,

on ranisation ofthe Petroleum Exportinountries,

QATAR KSA KUWAIT UAE IRAN COCBSSFMT CO COCBSSFMT COCBSSFMT CBSSFMT COCBSSFMT 1 - Why Kuwait? World BankandSWF Institute

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 4 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 5 Source: the scopeofthislaw. negative listofdirectinvestments thatareexcludedfrom 100% ofbusinessentitiesinall sectorsexceptaspecifed ownership to49%byallowing foreignerstoownup principle intheCommercialCode thatlimitsforeign Law No.116of2013givesan exception tothebasic No. 116of2013. Capital intheStateofKuwait,whichwasrepealedbyLaw Regarding theRegulationofDirectInvestmentForeign was establishedinaccordancewiththeLawNo.8for2001 division undertheMinistryofCommerce&Industrythat erstwhile KuwaitForeignInvestmentBureau(KFIB),a direct investmentagenda.KDIPAisthesuccessorto of 2013)todriveandcoordinateKuwait’slocalforeign of DirectInvestmentintheStateKuwait(LawNo.116 was establishedin2013undertheLawforPromotion The KuwaitDirectInvestmentPromotionAuthority(KDIPA) investment in Kuwait. facilitating both local and foreign making concerted efforts towards The Kuwait Government is private sectorinGDP. Promotion Authorityareaimedatincreasingtheshareof for SMEsDevelopmentandtheKuwaitDirectInvestment privatization law,establishmentoftheKuwaitNationalFund The Government’sinitiativessuchasthePPPprogram, diversification program. for the Government under its the private sector is a key priority Increasing the involvement of 1SJWBUFTFDUPSJOWPMWFNFOU KDIPA CVTJOFTTFT &OBCMJOHGPSFJHOPXOFSTIJQJO Source: MEED,Kuwait MinistryofElectricityandWater,Oxford BusinessGroup,BMI,KPMGResearch andAnalysis supported byanindependentmonetarypolicy. of funds,includingrepatriation,astrongandstablecurrency restrictions onimportsandexports,unrestrictedmovement corporate taxforforeigncompanies( regime withbenefitsincludingnopersonalincometax, WEF ranksKuwaitastheworld’s SE investment projects. financial Gross The WEFreportalsorankedKuwait 3BOLFE property protectionandenvironmentalregulations. business andcommercialactivitiesincludingintellectual leading internationalstandardsandbodiesoflawgoverning a stablelegalframework.Theframeworkfollows Kuwait’s macroeconomicenvironmentissupportedby Stable legal framework One of the highest per capita income Ranked 3rd for macroeconomic environment debt andbudgetsurplus This islargelyattributabletoKuwait’slowgovernment G overall macroeconomicenvironment Kuwait at3rdpositionamong14 WEF’s GlobalCompetitivenessReport201 Kuwait alsohasarisingpercapitaincomewhichis overnment budgetbalance among thehighestglobally(USD most tax friendly country globally National Savingsglobally,indicatingitsrobust &ODPVSBHJOHNBDSPFDPOPNJDFOWJSPONFOU position andabilitytodeploypublicfundsfor OE JO(SPTT/BUJPOBM4BWJOHT es overteyears asapercentageof countriesintermsof rd , 2n

5 mostattractivetax and d intermsof %), limited st . in2 5 -1 position for 6 ranks ).

low 1 - Why Kuwait?

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 6 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 7 Source: IEA2010,EIU, MinistryofPlanning serve strategicmarkets. railway networktoimproveaccess withinthecountryandto Bubiyan island),anewairport terminal andanewnational projects suchasanewport(Mubarak AlKabirporton Kuwait hasalsoplannedanumberoftransportinfrastructure Arabian Gulfwithawelldevelopedportinfrastructure. The countryalsohasacoastlinespanning290kmonthe and Central Europe. States, Turkey, and into Eastern Commonwealth of Independent directions including Eastern Asia, access to markets in various which allows for an extended Iran across the Gulf. A location markets of KSA, Iraq and facing Arabian Gulf bordering three major Kuwait is located in the northern discounts. land isalso of The Governmentprovidesindustriallandatasubsidizedrent JNQFSJBM BOEPGGFSFEBU VTFST1PUBCMFXBUFSJTTVCTJEJ[FE 64DFOU,8IGPSJOEVTUSJBM SFTJEFOUJBMVTFSTBOEGBSNTBOE UBSJGGTBTMPXBT64DFOU,8IGPS UPCZUIF(PWFSONFOUXJUI 1PXFSUBSJGGTBSFTVCTJEJ[FECZVQ PGQPXFS XBUFS MBOEBOEMBCPS ,VXBJUJTDPTUDPNQFUJUJWFJOUFSNT 4USBUFHJDBMMZMPDBUFE $PTUDPNQFUJUJWFOFTT approximately provided bytheGovernmentatsubstantial HBMMPO US 90 cent OFBSMZ

per sq.mwhilecommercial 64 DFOUT U Q KSA KUW subsidization %, 2010 Average rate of power tariff 68% 86% 75% 76% A SAUDI ARABIA A E T AR AI IRAQ T KUWAIT Rawdatain Al Jahra KU WA Al Ahmadi IT CITY Al Wa Mina Saud frah Source: CBKandKSE ose Kwi’ srnt i te financial the industry. in strength Kuwait’s bolster The region includingthe2ndlargestIslamicbankinworld. country. Kuwaitishometosomeofthelargestbanksin commercial banks(1Islamic)currentlyoperatinginthe conventional), 1specializedlocalbankand12foreign including The Kuwaitbankingsectorhasavibrantmixof22banks businesses. establishing and growing scalable mindset of Kuwaiti businessmen in business acumen and commercial etc, demonstrating the strong aviation designing, animation, art retail, logistics, financial services, in sectors such as telecom, leading businesses in the region Kuwait is home to some of the the region. one ofthemostproactiveandsophisticatedregulatorsin The CentralBankofKuwait(CBK)iswidelyrespectedas (MENA) region. in the Middle East and North Africa stable and resilient banking markets support, making it one of the most profile and strong regulatory characterized by a robust financial Kuwait’s banking system is

Capital Markets Authority (CMA) is (CMA) Authority Markets Capital &WPMWFE'JOBODJBM4FSWJDFTTFDUPS &OUSFQSFOFVSJBMOBUVSFPG,VXBJUJDJUJ[FOT 9 localcommercialbanks( 4 Islamicand5 expected to expected services indices. including sukuks(Islamicfnancialcertifcates)andnew appropriate products,andfxedincomeinstruments, Funds (ETFs),futuresandoptions,market-makersfor services, throughtheintroductionofExchangeTraded KSE isnowpromotingawiderrangeofproductsand foreigners toparticipateintradingactivities. the frststockexchangeinGCCregion.KSEpermits Established in1983,theKuwaitStockExchange(KSE)was activities. to participate in trading KSE permits foreigners 1 - Why Kuwait?

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 8 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 9 language. is theoffciallanguage,Englishwidelyusedasabusiness the skillsandvaluetheybringtocountry.ThoughArabic comfortable placeforfamilies.Expatriatesarerespected The lowrateofcrimeandrespectforprivacymakeKuwaita acceptance of new concepts. with a progressive outlook and customs and practices combined built upon traditional Islamic moderately conservative society Kuwait offers a balanced mix of a "IPTQJUBCMFDVMUVSF Source: Public AuthorityofCivil Information place for families. Kuwait a comfortable respect for privacy make The low crime rate and Population by ethnic groups (June 201 "SBC ,VXBJUJ Others "TJBO 5 ) OPPORTUNITIES K 2 EY

SECTORS 2.6.3 2.6.2 2.6.1 2.6 2.5.2 2.5.1 2.5 2.4.2 2.4.1 2.4 2.3 2.2.4 2.2.3 2.2.2 2.2.1 2.2 2.1.6 2.1.5 2.1.4 2.1.3 2.1.2 2.1.1 2.1

Facilities management Property management integrated housing projects Development planning for and i Lifestyle medical clinics Specialty hospitals h centers Institutes and training Tertiary education e Waste recycling treatment Oil and effluent sludge Primary sewage treatment Solid waste management e Rail transport infrastructure infrastructure Marine transport Funding – Project finance Desalination plan Power plant – Renewable Power plant- Fuel based i i downstream ntegrated nfrastructure ndustrial ducation nvironmental ealthcare

urban

oil

development and housing

and chemical

training services

gas

projects

2.12.3 2.12.2 2.12.1 2.12 2.11.1 2.11 2.10.2 2.10.1 2.10 2.9.2 2.9.1 2.9 2.8.3 2.8.2 2.8.1 2.8 2.7.2 2.7.1 2.7 2.6.4

online portals Application stores and Digital content creation Digital media marketing marketing c development Web and application development it Budget hotels Branded theme park entertainment t Rail facilities management management Airport facilities passenger a Direct sales agent Asset management Private equity and Banking, Warehousing Logistics services Storage Construction contracting ourism, ir, ulture, and

maritime

insurance

software

media and

hotel financial

transport

logistics and

and and

FOR

rail

services

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 10 11 INVESTMENT Investing in Kuwait: A guide for Investment Opportunities in Kuwait Kuwait in the digital media and marketing sector. High services Demand with leading local players. 2 CULTU 12. 11. 10. A 9. DOW 3. 2. INFRAS 1. with the A number of projects have been for opportunities providing rail) and aviation (ports, infrastructure transport water, power, as such international investors.KuwaitisthefirstcountryinregiontoadoptaPublicPrivatePartnership(PPP)frameworkattractforeigndevelopers. sectors in development infrastructure for plan development USD then more earmarked has Kuwait brands Tourist arrivals are augment demand Kuwait OPPORTUNITIES EJWFSTFTFDUPST "UUSBDUJWFJOWFTUNFOUPQQPSUVOJUJFTBDSPTT EN W affinity for entertainment and media on digital platforms T IR present plans to double is OU E and solutions Government seeking from consumer V , M developing B IR NS RIS

AND O ARI an opportunity for concepts T R N .B 8. BFSI institutions to offer specialized products and services. A robust .E 4. global Kuwait’s education T for R M, HOTEL expected E, ME R ME U T

services over E A I in C ME its chemical production D AN A educational PP focused Kuwait. N TU U financial USD M - T CA DIA to grow from K A AND R D active private allied 2 IN L SE initiated E EVELOPME C 0 sectors like T .STO 7. HE 5. international for opportunities considerable presents warehousing and logistics for imports, hub on a reliance as Kuwait’s country with the combined position This, trade. to regional view a with rail and airport ports, across infrastructure transportation its developing is Kuwait affluent, growing population. an to catering clinics lifestyle and hospitals specialty establish to opportunities providing 2013-19) between growth annual (6% 2019 by Bn 1.3 USD reach to expected are investments sector Private GCC. the in expenditure healthcare total largest third the has Kuwait Bn

G, HEM AND I sector, proactive AND to O property international Kuwait has a pipeline of several large housing projects .I 6. institutions to reach

expenditure of RAI the N R FINANCIA 103 transport to address the current and future capacity constraints in critical N & T V 306,559 transport A M ICA E targeting business L P Bn in the in Bn IC sector TEG retail RA LTH and facilities management. N AR players. capacity E RAININ ASS TE L M GE S infrastructure is expected to increase from USD 6.8 Bn in 2013 to USD 10.5 Bn by 2019. Kuwait is investors to and banking participation. in 2013 to 491,000 RA N CAR KET sector. regulatory R T second AN AND T TE E L for ethylene international enrolment levels AIN N IN S E G D U GE E G such participate Kuwait Development Plan (201 Plan Development Kuwait HOU FAC travelers. LOG R along ME regime and projects R V as smartphones T IC N and polyethylene providing room TU with IT by RANS IS SIN E T in aviation 2022, creating S across the real estate RIN T rising personal and institutional

ICS AND G P transformation initiatives G PO

R S and and

INS OJE E R R T need and standards rail tablets and V U which including integrated C IC RANC for greater hotel capacity. Limited 5 T /16 E value S S will

- AND high affordability

20 chain including development planning, for international of facilitate increasing passenger transport at the E 19/20 environmental education. U wealth make Government level ) and has earmarked a similar amount for the new five year five new the for amount similar a earmarked has and ) RBAN townships. are opening investors segments

D Kuwait an EVELOPME These projects are augmenting presence to forge partnerships/ strategic alliances new such as attractive destination seeking markets and of international sanitation provide construction to attract leading N demand activity T opportunities business and waste management in for web-enabled IT budget contracting the for international opportunities country hotel for and and the publictransportationsector. respectively areintegralpartofKuwait’splantoupgrade network, withprojectvaluesofUSD The developmentofanationalrailwayandmetro likely topromotegrowthofprojectfinanceinKuwait. Private sectorinvolvementininfrastructureprojectsis desalination capacity. and drivedemandforexpansionestablishmentofnew expected toputincreasedpressureondesalinationfacilities Scarcity ofnaturalgroundwaterresourcesinKuwaitis renewable sourcesby2020. at least10%ofitselectricity(orover2,000MW)from energy tomeetgrowingdemand.Kuwaitaimsgenerate The KuwaitGovernmentisconsideringalternativesourcesof leading tolongtermopportunitiesforforeigninvestors. 2025. Theprivatesectorisexpectedtoplayamajorrole, electricity productioncapacitytargetsof25,000MWsetfor 25 Bntomeetthe investment ofapproximatelyUSD The MinistryofElectricityandWater(MEW)anticipatesan service providers. specialized globalconstructioncontractors,operatorsand are planned,presentingconsiderableopportunitiesfor A numberofportexpansionandnewconstructionprojects FUNDING – PROJECT FINANCE R MARIN DE P P S facilities at par with global standards and benchmarks. provide specialized facilities management (FM) services to maintain Kuwait’s airport Kuwait’s initiatives to position itself as a commercial hub. There exists potential to The planned upgrades to Kuwait’s aviation infrastructure are expected to support *OGSBTUSVDUVSF opportunities for foreign and local investors Government’s infrastructure plan provide significant Power and transport being the main focus areas of the E OWE OWE AI C SA L T TO L R R RANS INA E T R

G G OVE E E RANS T N N I O PO E E R N RA RA V R PL PO I EW T T T I I INFRAS AN O O R N N T T - RE – FUEL INFRAS T N R EW U BAS T C R AB 1 TU U 0 BnandUSD E C LE R D TU E R E

Bn Project value 64% 64% 'VFMCBTFEQPXFSQSPEVDUJPODBQBDJUZ 4ZTUFN UPJODSFBTFCZPWFS ,VXBJU/BUJPOBM3BJM3PBE Project value 2 - Key sectors for opportunities UFOEFSJOH .O #O JO

.8CZ

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 12 13 Investing in Kuwait: A guide for Investment Opportunities in Kuwait OPP Source: KuwaitPower Report,BMI,GCCEnergySector– Quarterly Review,Zawyaprojects,MEW increasing demand from consumers. projects to strengthen Kuwait’s electricity and water supply situation in or generation in Kuwait. The Ministry of Electricity and Water has announced several large Conventional fossil fuels are expected to remain the dominant fuel mix for electricity investors to participate in Kuwait’s power sector. participation through the PPP model creating significant opportunities for international meet this expected increase in power demand, the Government is inviting private sector Government is the sole producer and distributor of power in Kuwait. However, in order to the peak load demand of 1 Demand for power in Kuwait is expected to grow at a rate of 2.1.1: Power Plant - Fuel based power until2015. next twotothreeyearscatergrowthindemandfor approximately USD2.5Bnofinvestmentproposedoverthe plants inKuwaitisprojectedatUSD25Bnby2025with demand. Theestimatedmarketsizeoffuel-basedpower MW ofpower 201 Kuwait’s powergenerationcapacitystoodat1 international frms. to providesubstantialbusiness opportunitiesforlocaland and watercapacityinthecountry. Theseprojectsarelikely including throughthePPProute,tostrengthenelectricity The MEWhasrecentlyannouncedseveralpowerprojects, Kuwait Hybrid Kuwait Kuwait Kuwait Kuwait Kuwait North IWPP - Phase 4 North IWPP - Phase 3 North IWPP - Phase 2 North IWPP - Phase 1 4 anditisestimatedthatanadditionalcapacityof O Power Plant RTUNITY KAPP

KAPP KAPP KAPP KAPP KAPP - Al Khiran IWPP - Al Zour - Al Zour - Al Zour - Al Zour - Al Abdaliya is planned O VERVIEW by2025tomeettheexpected 1,000 g/day 800 MW (power) and 50 million (desalination) 2,500 280 million g/day 1,500 million g/day 1,500 MW MW MW and 125 (desalination) MW MW , 00 (power) (power) (desalination) (desalination) .8 5,990 and million and in 201 MWin 102 102 12 g/d , 170

to reach 25,000 MW by 2025. Currently, the • • • infrastructure projectsbeingundertakeninthecountryand Kuwait’s growingeconomycombinedwithlargescale Demand forelectricityisexpectedtogrowasaresultof has ledtohighelectricityconsumption. Rapid populationgrowthandsubsidizedelectricityprices cooling systems. occurring duringthesummermonthsduetoheavyuseof drivers forpowerusage,withpeakdemandusually Seasonal variationsandextremetemperaturesaremajor planned developmentoftheindustrialsector. . % per annum (p.a) from der to meet the international participationinthissector. and renewableenergysources,highlightingthescopefor Japanese frmstobuildpowerplantsusingalternativefuels MEW hasalsoreceivedoffersfromUS,Europeanand renewable energy. approximately 2,000MW,istargetedtobemetthrough 10% ofthetotalelectricitygenerationby2020,or

Source: KuwaitPowerReport, BMI,GCCEnergySector–QuarterlyReview 2011,ZawyaProject,MEW,KAPP,KISRand KPMGAnalysis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ower Plant – Renewable O ISCC plant at Al-Abdaliya 2,000 MW Al Shaqaya Renewable Energy Project Project Name Renewable sector projects JTJOHQPQVMBUJPO HSPXJOHDPOTVNFSJTNBOEMJNJUFEBXBSFOFTTPSJODFOUJWFTGPSFOFSHZ PPO R TU NI TY OVE R V I EW #OQFSBOOVNUPNFFUUIFFMFDUSJDJUZSFRVJSFNFOUTPGUIFDPVOUSZ Capacity 280 MW • • • • targets ofatleast10%totalpowerproductionby2020. Kuwait Governmenthassetambitiousrenewableenergy energy canfreeupoilforothercommercialuses.The Shifting fromfuel-basedpowerplantstorenewable sources neededtogeneraterenewableenergy. taking advantageofabundantheat,windandsunlight support candriverenewableenergyinitiativesinKuwait, Increased environmentalawarenessandGovernment the saleofgreenhousegasesreductionunits. conserving/environmentally effcientplantstobeneftfrom greenhouse gasescanprovideanopportunityforenergy RatifcationoftheKyotoprotocolforcontrolemission generation. is anurgentneedtoexplorealternativemeansofpower As Kuwaithasbecomeanetimporterofnaturalgas,there 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 14 15 Investing in Kuwait: A guide for Investment Opportunities in Kuwait OPP Source: ZawyaProject, MEW,Meed Estimates for water consumption in Kuwait, 2011-2020 Plant and Subiya Plant, to name a few. several projects to add new capacity, including the Al-Zour South Plant, Doha West Water and Power Plants (IWPP) through the PPP model. all desalination plants in Kuwait. However, the MEW is seeking to establish Integrated driving Kuwait to expand its desalination facilities. Currently the Government operates Continuously increasing demand for water and scarcity of natural water resources is (from It is estimated that water consumption in Kuwait will rise to 780 Mn imperial g/d by 2020 2.1.3: Desalination Plant 2014 e 201 2015 2020 Shuaiba South Plant Doha East Plant Subiya Plant Doha West Plant Al Khiran IWPP Al-Zour North IWPP Plant Shuwaikh Plant NOJNQFSJBMHBMMPOTEBZ NOJNQFSJBMHBMMPOTEBZ NOJNQFSJBMHBMMPOTEBZ NOJNQFSJBMHBMMPOTEBZ O f RTUNITY f Mn imperial g/d in 201 O VERVIEW an Planned Capacity Mn Imperial g/d 50 36 42 100 110 125 276 K approximately • • • • • have nearly highest intheworld.Percapitaconsumptionreached Kuwait’s per-capitaconsumptionofwaterisamongthe new desalinationfacilities. high levelsofwaterconsumption,drivingthedemandfor Populationgrowthandrisingurbanizationareleadingto source ofwatersupplyinKuwait. increases dependencyondesalinatedwaterastheprimary The scarcityofnaturalwaterresourcesinthecountry consumption. industrial sectorarelikelytoincreasedemandforwater Government-led initiativesforthedevelopmentof developers, operatorsandinvestors. represent potentialopportunitiesforinternational Theplannedandupcomingdesalinationprojects reach % y-o-y). Kuwait has planned 3 8 ,000 ed imperialgallonsin20 44,611 imperialgallonsby2015. 13 andisestimatedto OPP GCC- Project Finance Market high-growth market for project finance. Bn are expected to be implemented over the next 15 to 20 years, presenting an attractive, models especially in core sectors such as power and water. Projects worth over USD 358 However, this scenario is set to change with the Kuwait Government adopting PPP Source: in private sector participation in infrastructur transactions were in the utilities sector with KSA and United Arab Emirates attracting were funded through project finance in the GCC. Over Over a period of six years (200 2.1.4: Funding – Project Finance • • • 20 Mn banks andotherlongterminfrastructureinvestors. fnance, presentingasizeableopportunityforinternational PPP modelisexpectedtogiveriseaneedforproject Private sector led development of these projects under the projects. PPP lawtocreatewiderprivatesectorownershipinlarge The KuwaitGovernmentispursuingprojectsunderthe signifcant constructionactivity. large infrastructureprojects,whichareexpectedtodrive The KuwaitDevelopmentPlanincludesanumberof Kuwait. % of total project finance lending among GCC countries. Historically, the lack of O IJGlobal RTUNITY 64%.O 64%.O 64% 64%.O 64% USD .O Mn O VERVIEW -201 ), over USD e has hindered the growth of project finance 2 - Key sectors for opportunities Bn of infrastructure projects % of these project finance

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 16 17 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: enterprises in Kuwait. considerable long-term potential for international engineering and construction development of new ports and expansion work on the existing ports present led to several global companies establishing direct regional presence. The planned The prioritization of marine infrastructure development across GCC countries has Construction & Engineering 2.1.5: Marine Transport Infrastructure –

project. need fornewmarinefacilitiestheAlZourrefinery construction andengineeringcompaniesinaddition Port Shuaiba the redevelopmentofexistingthreeports-Shuwaikh, developing plansforsixadditionalportsinKuwaitbesides equivalent units)in201 and Shuwaikhhadreached Kuwait’s portvolume O Doha Port Shuaiba Port Shuwaikh Port Bubiyan Island Mubarak Al Kabir Port – Kuwait ports PPO alone constitute Central Statisticalbureau, Zawyaand R and Doha. The construction TU NI TY OVE s aUSD for thetwoprimaryportsofShuaiba 3 R . Thegovernmentiscurrently V

I 840,149 EW 4 Bnopportunityformarine Expansion and development plans handling facilities. of warehousing and cargo ample space for the expansion as the port is endowed with handle more commercial cargo Plans to develop Doha port to Shuaiba port. plan to redevelop and expand 2009 to draw up a master international consultants in Kuwait had invited investment in its infrastructure. Shuaiba Port could see further terminals. allow larger ships to use the of the approach channel to to the deepening and widening are in the pipeline, in addition of enhanced computer systems stacking areas, and installation equipment, redevelopment of New gantry cranes and yard TEUs. will in 3 phases, once port is The development of the new Middle EastEconomic Digest(MEED) have a capacity TEUs(Twenty-foot of expected Mubarak Al Kabir to be executed completed of 2 Mn to the it • • • and expansionofexistingports. for developmentofnewports,aswellthemaintenance The KuwaitGovernmenthasundertakenmajorinitiatives infrastructure. trade andsupportsthedevelopmentofKuwait’slocalport demographic balancepositivelyimpactsinternational Kuwait’s economicgrowthandfavorablesocio- and otherconsumables. from vehicles,electronics,buildingmaterialstofoodstuff translates toadependencyonimportsforitemsranging The limitedlocalproductioncapacitiesacrosssectors

disciplinary and integrated service providers. and metro networks in Kuwait. These two are expected to require specialized multi- To address these challenges, the Government is planning the development of rail activity. additional movement of people and goods arising from higher domestic economic infrastructure in order to support Kuwait’s increasing population as well as to service Development Plan. There is a need to significantly develop Kuwait’s transport Transportation infrastructure constitutes a major area of focus under the Kuwait Construction, Engineering and Maintenance 2.1.6: Rail Transport Infrastructure – • • • Source: O equipment frms,amongothers. rolling stockmanufacturers,signalingandcommunication engineering servicesproviders,constructioncontractors, for ahostofindustryplayersincludingintegrated Both theseprojectsareexpectedtoprovideopportunities operational by2018. the GCCrailnetwork.Thisprojectistargetedtobecome industrial installationsaswelllinkingthecountrywith integrated railnetworkconnectingKuwait’skeyportand The USD Bn. PPO The valueoftheMetroprojectisestimatedatUSD

The projectistargetedtobeoperationalby2020. R TU 1 NI 0 Bnrailwayprojectcomprisesofanew TY OVE R V I EW

on environmentalsustainabilityindicatestherequirement on anannualbasis.Kuwait’sincreasedfocusandawareness market ofUSD100-150Mnforoperationsandmaintenance of aroundUSD The plannedrailandmetroprojects,withacombinedvalue opportunities for specialized, experienced frms. opportunities forspecialized,experienced for “greenarchitecture”theseprojectsandpresents 2 - Key sectors for opportunities 17 Bnareexpectedtogenerateanannual

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 18 19 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

under-capacity in critical segments such as sanitation and waste management. The Government is undertaking a series of projects to address the current situation of gas sector and an emerging industrial sector. resources, the fast-growing population, the environmental needs of the thriving oil and long term requirement of safeguarding Kuwait’s natural environment and limited land The growth of Kuwait’s environmental services sector is expected to be driven by the 2.2: Environmental Services S UP c )BZN 5S "M 6NN 500,000 sq. m Expected land area for the facility USFBUNFOUGBDJMJUZ,BCE 1MBOOFE#05NVOJDJQBMTPMJEXBTUF environmental services sector in Kuwait. in key segments is expected to drive the growth of and the need to address current under-capacity situation Implementation of stricter environmental regulations $BQBDJUZ DNE E o C F mmence operations by 201 TO BU FU 1MBOU NFOU R OVE R V I EW B 8TF 8BUFS 8BTUF O o Ex p ected to waste producedinKuwait. capacity totreatapproximately50%oftotalmunicipalsolid Kuwait Municipality.Theplantisexpectedtohavea will beawardedasa30yearlongtermcontractfromthe project atKabdareaofKuwaitonaPPPbasis.The The through thePPProute. Most oftheseprojectsareproposedtobeundertaken existing 947,300cm/dto to increaseKuwait’ssewagehandlingcapacityfromthe and initiationofnewprojects.Theseprojectsareexpected addressed throughacombinationofcapacityexpansions The currentcapacityconstraintsareproposedtobe services. effuents increasingthedemandforenvironmentalremedial (KEPA) havedirectedfocustowardstreatmentofindustrial directives bytheKuwaitEnvironmentPublicAuthority signifcant opportunitiesforoilsludgetreatment.Recent effuents. Kuwait’soilandgasexplorationindustryprovides Sludge treatmentinvolvesofoilorindustrial capacity andenvironmentalissues. is currentlydisposedoffatlandfllsiteswhicharefacing with onlyafewactiveplayers.Mostofthesolidwaste Waste recyclingasaconceptisrelativelynewinKuwait SOL

EFF WAS PRI KAPP M LUE ID TE RE AR

WAS N isseekingtodevelopasolidwastetreatment Y SEW T SLU C TE Y C MANA A L D GE IN GE G TR TR GEME approximately E E A A TME TME N T N N T T 1,500,000 cm/d. 04 08 100 80 60 40 20 0

(‘000 tonnes) Municipal than drive construction activities, increasing population and rapid urbanization are expected to highest in the GCC region. Factors such as strong growth in the energy sector, growing Kuwait’s solid municipal waste generation of 1.4 kg/day per capita is among the Source: Annualstatistical abstract,realtimedelphi.com,KPMG Analysis BRI N D GE KUW 2.2.1: Solid Waste Management waste disposal method Kuwait vs. other developed markets, 1,532 O 54 E ETHE C L H PPO 1 N A R R T A GR ECYC O OUS M M AIN AI

N & annual solid waste generation from an estimated N R AN AR D T I R S C TU F EH TR L 201 UL ILL K Y L 56 Mn tonnes by 201 ANDS NI waste E/C U OLD T TY OVE U CT R OM

f IO AL

SOLID N 201

P estimates, 201 A INC 580 AL OS R N V D W G E I C EW I

D AS NER A f OMM / RB O TE 201 THER 59 A A T GE ERC IO

N . f IAL 4 201 -201 61 G A RB 9

f , G A GE 63 household solidgarbage construction waste.Organicwaste,consistingof inorganic wasteperannum,primarilycomprisingof By 201 • • • existing landfills. facilities aswellforremediationofaccumulatedwasteat Opportunities existforestablishingsolidwastetreatment to constituteanother1. This isexpectedtoencouragebettermanagementofsolid towards strictcompliancewithenvironmentalregulations. The KEPAandtheKuwaitMunicipalityaretakinginitiatives effciencies. to bringininternationalexpertiseandprivatesector sector intheareaofsolidwastetreatmentwithaview The KuwaitGovernmentisseekingtoinvolveprivate the needforadditionalwastemanagementfacilities. dominant method of solid waste disposal in Kuwait, driving In comparisontoEuropeancountries,landfllsremainthe untreated wasteatlandfllsites. waste, movingawayfromthepastpracticeofdumping 2 - Key sectors for opportunities 9 , Kuwaitisexpectedtogenerate Mn tonnes in 201 8 and Mntonnesperannum. agricultural waste 14.6 to more Mntonnesof isexpected

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 20 21 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: MEED, million cm/d with private developers set to control over 80% of the capacity by 2016. be 2.2.2: Primary Sewage Treatment Hayman. By Considerable capacity expansion is planned for the plants at Sulaibiya and Umm Al under the PPP route through the Sulaibiya, Jahra Government has earlier successfully utilized the BOT model for WWTP projects at wastewater, thereby creating demand water consumption contribute to (IG) Kuwait’s per population. In addition, there are three small-scale plants at Khiran, Wafra and Failaka. design capacity of these five major plants was 947,000 cm/d, servicing over 98% of the at Al Jahra, Sulaibiya, Kabd, Al Riqqa and Umm Al Hayman areas. In 201 Kuwait is primarily served by five major wastewater treatment plants (WWTP) located

facilities forthenext35years. expanding Kuwait’swastewaternetworkandtreatment thestrategyfor Master Planprojectthatseekstodefne private sector.TheGovernmentispreparinganewSanitary (Sulaibiya, UmmAlHaymanandKabd)beingoperatedbythe reach 1.5Mncm/dperday,withallthreeplants The marketsizeofsewagetreatmentplantsisexpectedto WWTPs. construction, operationandmaintenanceactivitiesforthe to participateinthePPPprocessandcarryoutdesign, There existsasizeableopportunityforinternationalfrms O Total Al Khiran Al Jahra Al Riqqa Kabd Umm Al Treatment Plants Waste Water uaby 425,000 Sulaibiya PPO decommissioned. The treatment capacity will have increased by in 201 R

Hayman TU Centralstatisticalbureau and NI

TY OVE and 2016, capita consumption of fresh water 947,300 300 65,000 180,000 250,000 27,000 development plans Expansion and is estimated to reach approximately 45,000 IG by 2015. High levels of and Kabd while the Umm Al Hayman WWTP project has been floated R the V I EW older plants at Al Riqqa, Al Jahra and Al Khiran are planned to MinistryofPublicWorks Approx - - - 250,000 500 600,000 (cm/d) Planned capacity ,000 ,"11 a to700,000 corresponding increase in generation of 1,500,000 for additional treatment capacity. The .

• • defcit. with bothenvironmentalpollutionandwaterresource Wastewater reuseisseenasameanstoaddressissues affects thequalityofcoastalwaterandmarinelife. friendly andcontributestowastewaterdischargesthat Desalination, anexpensivepractice,isnotenvironmentally gallons. Umm AlAish)havingestimatedreservesof40billion groundwater islimitedtotworeservoirs(Rawdatainand ground water,desalinationandwaterreuse.Fresh limited rainfall,Kuwaithasonlythreesourcesofwater- In theabsenceofnaturallakesorperennialriversand SFBDIFE OFBSMZ 3 , 00 imperial gallons OFBSMZ , the total 60% to 1.5 discharge, there are opportunities for specialist service providers. With the Government tightening regulations on adequate treatment of effluents prior to effluents which used to be discharged into public sewer systems without treatment. The growth of the manufacturing sector is leading to increased generation of industrial of oil. prevention of environmental contamination and potential for recovery 1991. The Kuwait Oil Company is undertaking pilot projects to explore technologies for as a result of oil spills from damage caused to oil wells by the retreating Iraqi army in pits. Separately, there are around 114 square kilometers of oil wells that were created as part of the oil extraction process has traditionally been deposited in large sludge (bpd) in 2014 to 3.5 Mn bpd in 2021. The considerable amount of oil sludge generated Kuwait’s oil production levels are expected to increase from 2.9 Mn barrels per day 2.2.3: Oil and Effluent Sludge Treatment Source: Annualstatistical bulletin,2012OPECandFlottweg separationtechnology,technicaldocument, KPMGAnalysis

2011 (Mn gallons/year) f 2011 Oil sludge estimates, 2011-2016, (Mn bbl/year) O Effluent

850 29.1 PPO R 2012 2012 TU

902 estimates, 2011-2016, 28.5 NI TY OVE 2013 2013

957 29.2 R 2014 2014 V I EW 1,015 29.9 F F 2015 2015

1,077 30.6 f f 2016 2016 1,143 31.3 f • issues inKuwait. comprehensive technologysolutionstoaddressthese is anopportunityforinternationalspecialiststobringin reach approximately1,143Mngallonsby2016.There The risingindustrialeffuentvolumesareexpectedto reusable crudeoil. there isapotentialtorecoveraround16Mnbbl/dayof generated peryear.Withthetreatmentofthisoilsludge of approximately36Mnbbl/dayoilsludgewouldbe Mn barrelsperday(bbl/day)by2030,willleadtogeneration Kuwait’s plantoincreaseoilproductioncapacitynearly4 • • the amountofeffuentgeneratedisexpectedtoincrease With thegrowthinindustrialandpetrochemicalsectors, demand fortreatmentofsludgeandeffuents. towards conservationoftheenvironmentaredriving heightened awarenessofcorporatesocialresponsibility Increased regulatoryandpublicscrutinycombinedwith stimulus tothedemandforsludgetreatment. recovering crudeoilfromsludgeprovidesadditional Further emergenceoflowcostnewtechnologiesfor demand foreffuenttreatmentfacilities. considerably resultinginacorrespondingincrease 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 22 23 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: LifeCycleAssessment (LCA)ofMunicipalSolidWaste ManagementintheStateofKuwait *Note: Othersinclude Metals,Glass,Fibers,WoodandPlastic 2.2.4: Waste Recycling typically comprises metals, plastics, wood and other materials. for Construction waste is the major contributor to solid waste in the country, accounting is disposed at landfill sites, creating potential public health and environmental issues. as (21%) Kuwait produces over By Type, 2010-2020 - ‘000 tonnes Forecasted Municipal Solid Waste Production

2010 2015 f 2020 f PPO O P scrap plastic products, flakes, and other scrap materials. The remaining solid waste LAS RG 222 662 273 167 R is being recycled and used to produce various types of reusable products such A T TU N I C I C NI of total solid waste produced between 20 S TY OVE P R O A V THER PER I EW S * tons of total solid waste per day of which only • • • • Kuwait’s abilitytorecyclewaste. technological expertiseandexperienceinenhancing privately owned.Thereissignifcantpotentialforintroducing of theexistingwasterecyclingcompaniesinKuwaitare estimated atoverUSD350Mninannualrevenues.Most The sizeofthedomesticwasterecyclingmarketis plastic. component of growth inpopulation.Organicwasteisthe as comparedwith waste isexpectedtoreach of solidwasteinthecountry.Generationmunicipal Municipal solidwastecomprisesthesecondlargestsource materials arealsodrivingdemandforwasterecycling. Lower manufacturingandenergycostsforrecycled components suchasfbers,wood,glassandpaper. of complexcomponentssuchasplasticandlowervalue there isaneedtoestablishfacilitiesaddressrecycling metals haveattractedinterestfromrecyclingcompanies, While somehighvaluecomponentsofwastesuchas facilities. expected todrivedemandforadditionalwasterecycling Environmental regulationscontrollingdisposalofwasteare –201

municipal solidwaste,followedbypaper . Construction waste 1 milliontonsin201

over

5 milliontonnesin2020 5 onaccount second tons largest

and polyethylene seek todoubleKuwait’sproductioncapacityforethyleneand participate intheOlefnsIIIandPET/PTAprojectswhich There couldbeopportunityforinternationalinvestorsto Source: BMI,Equate, PIC

turn strengthen Kuwait’s petrochemical sector. Kuwait’s refining capacity from the current upgrade of the Mina Abdullah and Mina Al-Ahmadi refineries are expected to increase The construction of the 615,000 b/d Al-Zour refinery project, together with the planned Kuwait’s production capacity from 7.6 Mn tons in 201 proposed to undertake the Olefins III project and a PTA/PET project to increase Kuwait’s largest petrochemicals manufacturer, the Petroleum Industries Company, has driven by increase in polyethylene and ethylene glycol capacity. domestic demand for chemicals. industry primarily services Asian markets such as China and India which have strong ethylene, polyethylene, urea, ethylene glycol and chemical catalysts. Kuwait’s chemicals Chemicals constitute Kuwait’s second largest manufacturing industry. Kuwait produces .BOVGBDUVSJOH *OEVTUSJBM0JM(BT%PXOTUSFBN$IFNJDBMT O Total Ethylene Ethylene Xylenes Urea Ammonia Benzene Polypropylene Polyethylene Ethylene in ‘000 tpa PPO R oxide glycol TU NI TY OVE R V I EW 1,000 1,040 1,700 2014e 7,567 822 885 370 160 825 765 10,542 1,600 1,040 1,800 3,100 2019f 765 822 885 370 160 • • • alleviating concernsaroundshortageofgasfeedstock. be usedasanalternativefeedstockforpetrochemicals, are expectedtoincreaseavailabilityofnaphthawhichcan The projectsatAlZour,MinaAbdullahandAl-Ahmadi output. focus onthemanufacturingsectorandincreasingindustrial it isexpectedtoincreasesasaresultofGovernment’s Though domesticdemandforchemicalsiscurrentlylow, manufacturing industryinKuwait. export marketsisexpectedtodrivethechemical Increasing demandforchemicalsinKuwait’skeyAsian 2 - Key sectors for opportunities b/d to over to 10.3 Mn tons by 2016, mainly . n b/d and in

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 24 25 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: 2.4: Education and Training

University City which will accommodate the new campus of Kuwait University. includes several education focused projects including the Sabah Al-Salem as expected to increase from USD development and social progress. Education expenditure in the country is The 2013-201 Education for investment in Kuwait’s education and training sector favourable demographics form a conducive environment Government support, private sector participation and S

G2018f 2017f 2016f 2015f 2014e2013 E a C Kuwait Government has identified education as a key to achieving economic TO Ministry offinance, CBK, result of significant spending in this sector. The Kuwait Development Plan R OVE expenditure:

(USD Bn) R V I EW Central StatisticalBureau AnnualStatisticalAbstract201 . Bn in 2013 to USD global enrolmentlevelsintertiaryeducation. offerings inhighereducation,asKuwaitattemptstoreach to setupbranchesinthecountryandprovideniche to students.Growthpotentialexistsforforeignuniversities has anumberoflocaluniversities,offeringselectcourses private universitiesin2013.ThetertiaryeducationKuwait approximately Kuwait hasadiversifiedsystemofhighereducationwith opportunities fornewentrants. to improvethequalityofvocationaltraining,andprovide companies andinstitutionsareseenasapreferredapproach university education.Partnershipswithreputedforeign of corporatesectorandstudentswhoareunabletopursue for vocationaltrainingismainlydrivenbytheneeds being themostnotedamongothers.InKuwait,demand Public AuthorityforAppliedEducationandTraining(PAAET) by establishingseveraltraininginstitutesintherecentpast, development ofitstechnicalandvocationaltrainingsector The KuwaitGovernmenthaslaidastrongemphasison

I T by 201 FYQFOEJUVSF 1MBOOFEFEVDBUJPO USD NS E R T T 3 I , BusinessMonitor International IAR TUTE Y ED S 106,680

AND U Bn in 201 CA

TRAININ T studentsenrolledinbothpublicand I Education O N Bn G CE TFDUPS ( N % y-o-y), TE expenditure RS

provide international standards of higher education. Significant potential exists for foreign universities to setup branches in the country and regional education operators compelling students to go abroad for higher education. The private universities segment has been a subject of active interest from global/ sector. offering high quality accredited education presents strong potential for growth in this participation in management of schools and limited presence of international schools with leading international brands. The Government’s efforts towards private sector interest from local investors to establish educational institutions in partnership Tertiary education is a key focus area for the Kuwait Government and there is high Source: CentralStatistical BureauAnnualStatisticalAbstract andPUC 2.4.1: Tertiary Education students (‘000) Private and Public University enrolled 2013 2012 2011 2010 2009 O PPO PR P U 65 89 12 I B V R LI A TU TE C NI U U N TY OVE N I VER I VER SI SI R TY TY V I EW • • • leading internationalbrands. graduate andpostcoursesinpartnershipwith Opportunity existstoestablishtertiaryinstitutionsoffering increase ofapproximately8%and1 Public andprivateuniversitieswitnessedayearon 105 crossed USD 2009 to2013,respectively.EducationexpenditureinKuwait High GDPpercapitaandstatesubsidyforcitizens mix, drivesthegrowthoftertiaryeducationsector Healthy populationgrowthandanattractivedemographic private sectorparticipationinmanagementofbusiness. seeking toestablishbranchesinKuwaitandalsopromotes The Governmentissupportiveofforeignuniversities education inKuwait represents considerablepotentialtospendonquality Bnby201 2 - Key sectors for opportunities 68 . Bnin2013andisexpectedtoreachUSD 1 % duringtheperiod

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 26 27 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: CentralStatistical BureauAnnualStatisticalAbstract market requirements. of recruits consider upgrading their skill levels and better aligning themselves to job by private companies are expected to drive demand in the sector as increasing number Expansion of a relatively young workforce in Kuwait together with initiatives undertaken university education. the training needs of the corporate sector and students who are unable to pursue strong emphasis on the technical and vocational training sector which seeks to address its young workforce and address rising requirements of the job market. This has put a Kuwait Government is keen to make a concerted effort towards skill enhancement for 2.4.2: Institutes and Training Centers Vocational training (‘000) training inthecountry. requirements. Currentlythereislimitedprovisionforquality engineering andbusinesswhicharealignedwithjobmarket Opportunities existtoprovidetrainingindisciplineslike providers includingestablishedvocationaltraininginstitutes. Kuwait isseekingtoattractregionalandglobaleducation O

201 2013 2012 2011 2010 2009 PPO 5 53 42 43 40 40 R TU NI TY OVE R V I EW , C andPUC • • • further demand. segment forvocationaltrainingandisexpectedtodrive population betweentheageof15-29years,formskey Kuwait’s youngdemographicprofile,with2 levels. vocational programsandre-skillorupgradetheirskill there isalikelypotentialforthepopulationtoenrollin age groupof20to34years)andrisingunemployment, relatively youngdemographicprofile(targetworkforce– Considering theexpansionofworkforceinKuwait, Several privatesectorcompanieshavebeguntoestablish driving growthinthissegment. education programstothegrowingpopulationofKuwait, vocational traininginstitutes,offeringhighquality 5 % ofthe

2.5: Healthcare part 1. Private sector USD infrastructure and a growing private sector. The Government has spent approximately near term. Kuwait’s evolving healthcare industry is characterized by a large public sector after UAE and Qatar and demand for healthcare is expected to rise significantly in the Kuwait recorded the third largest total healthcare expenditure across the GCC region Source: BusinessMonitor International Healthcare (USD Bn) healthcare sector and specialities treatments support will drive the overall development of the per capita expenditure on healthcare and Government Stable economic growth, increasing population, high O

G2018f 2017f 2016f 2015f 2014 2013 PPO

Bn by 201 of the overall healthcare landscape. 5. 5. R TU Bn in 2013 on healthcare and is expected to spend over USD 6 NI expenditure TY OVE indicating the potential growth and rising share of private sector as investments are expected to increase from USD 0.9 Bn in 2013 to USD R V I EW in Kuwait - 2013-201 9 , developing adedicatedhealthcaresystem. manage thehealthcareneedsofexpatriatesinKuwaitby Company in2011asapublic-privatepartnershipinitiativeto The GovernmentestablishedtheKuwaitHealthAssurance ,68"*5)&"-5)"4463"/$&$0.1"/: rates ofobesityanddiabetesgloballywithoverhalfthe individual healthandlifestyle.Kuwaithasoneofthehighest the objectiveofenhancingqualitylifeandimproving follow aproactiveapproachtohealthandwellness,with There isanincreasingdemandforlifestyleclinicswhich end specialityhospitals. develop inboundmedicaltourismmarketbydevelopinghigh opportunities toreducetreatmentsperformedoverseasand This trendislikelytogrowfurther,especiallyintapping Private sectorhospitalsinKuwaitoffermultiplespecialities. specialty hospitals. specialties isexpectedtostimulatemarketdemandfor availability ofqualitytreatmentforhigh-endhealthcare Concentrated effortsbytheGovernmenttoensure treatment. highlighting thegrowingneedforlifestylerelateddisease female populationandtwo-ffthsofmalesreportedobese,

SPE USD 1MBOOFEIFBMUIDBSFFYQFOEJUVSFJO LIF E CIA 2 - Key sectors for opportunities S TYLE ME LTY H O DICA S P I T A Bn L L C S L INICS Bn in .

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 28 29 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: MOHKuwait private sector. specialties such as gastroenterology and neurosurgery that did not exist earlier in the Private sector OPD has rapidly emerged during the last 5 years, with the introduction of reducing the need for outbound medical tourism. infrastructure and expertise to provide specialty healthcare treatment in Kuwait, participation is likely to help foster growth in this segment through development of Most private hospitals in Kuwait offer multiple specialties. Increasing private sector 2.5.1: Speciality Hospitals O Maternity Allergy K Ibn Psychological Infectious Chest (PPP Physical Med. Al-Razi Hospital uwait Cancer Control PPO Sina model) Diseases Centre Hospital R Name Hospital Diseases TU Medicine & Rehabilitation NI Hospital (Al TY OVE andI C e Sabah) ntre R V I EW Infectious Chest Spinal Allergies Cancer Psychiatric Maternity Rehabilitation Physical Orthopaedic Speciality Diseases Surgery Med Diseases Surgery & Current No. 290 (240) 199 (618) 364 764 173 (255) 329 441 (617) 75 36 of Beds (new) • • as constructingnewhospitals. investing incapacityexpansionatexistinghospitalsaswell To addressthegrowingdemand,Governmentis hospitals andclinicscateringtolifestylediseases. and presentopportunitiesforestablishmentofspecialty growing specialtiesinthehealthcaresectorKuwait Obstetrics, gynecology,cardiology,areamongstthefastest diseases and especially given demand for reach 4.8 2015 and Kuwait’s populationreached Insurance coverageisoneofthekeydemanddrivers procedures andtreatmentswithinthecountry. penetration drivesthedemandforspecialtymedical the compensationpackage.Increasinglevelofinsurance Kuwait provideprivatehealthcareinsuranceaspartof for allexpatriates,whilemultinationalcorporationsin for healthcare.Publichealthinsuranceismandatory

healthcare. demand drivers for is one of the key Insurance coverage Mn by2019.Thisrepresentspotential is expectedtogrowannuallyatnearly3%

healthcare facilitiesandinfrastructure,

treatment.

the highincidenceoflifestylerelated around 4. 2 MnbyJune

demand for advanced treatment services. in Kuwait, highlighting the growing need for lifestyle disease treatments and a greater incidence of lifestyle related diseases including diabetes and cardiovascular ailments A combination of an indoor, sedentary lifestyle and poor diet habits is leading to a high hypertension and obesity, beauty and anti-aging and weight loss and fitness solutions. preventive and personalized healthcare, solutions for lifestyle related diseases such as Lifestyle clinics include spas, alternative medicine, nutrition and diet solutions, 2.5.2: Lifestyle medical clinics Source: MOHKuwait O for healthcare services in Kuwait. series of advanced medical clinics that meet the growing demand an opportunity for specialized health care providers to set up a advanced private clinics in various areas. Consequently, there is “The private sector is highly fragmented with a number of Lifestyle related PPO Prevalence of diseases R TU NI TY OVE andEIU GROWTH DRIVERS demographics R Favorable V I EW Socioeconomic conditions • • inpatient andoutpatientservices. clinics cateringtothegrowingdemandforhighquality healthcare providerstosetupachainoflifestylemedical governorates inKuwait.Opportunityexistsforspecialized a numberofprivatelifestyleclinicspresentacross owned. Theprivatesectorishighlyfragmentedwith Lifestyle clinicsinKuwaitarepredominantlyGovernment- lifestyle clinics. 201 (projected togrowannuallyat3%reach4. Increased lifeexpectancyandrapidpopulationgrowth address highincidenceofobesityandotherlifestyle personalized healthcareprogramsatlifestyleclinicsto Rising healthawarenessisdrivingthedemandfor diseases. 9 2 - Key sectors for opportunities ) areexpectedtoleadincreaseddemandfor 8 Mnby

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 30 31 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: CentralStatistical BureauAnnualStatisticalAbstract 201 construction contracting to real estate services like property and facilities management. investors to participate across the real estate value chain from development planning, are expected to propel growth of the real estate sector and provide opportunities for housing projects to address the housing needs of its growing population. These projects Kuwait has outlined plans for development of a number of large scale integrated development sector 2.6: Integrated housing projects and urban business andoutsourcepropertymanagementservices. expected toincreaseasownersseekfocustheircore across residential,commercialandretailsegmentsis Demand forspecializedpropertymanagementservices property managementaspartoftheirserviceportfolio. managed andseveralrealestateservicescompaniesoffer A largeproportionofpropertiesinKuwaitareowner- such services. increase inrealestateassetsislikelytodrivedemandfor services andcompetentprofessionalresources.Theplanned and thereisaneedforspecialistfacilitiesmanagement The facilitiesmanagementmarketinKuwaitisfragmented in thecountry. international constructioncontractorstoestablishpresence and oilgas.Thisconstitutesasizeableopportunityfor across sectorslikerealestate,infrastructure,power,water Kuwait hasastrongpipelineofplannedconstructionprojects design andfeasibilitystudiesforrealestateprojects development planningservicessuchasconceptplanning, 13 integrated housingprojectswithanestimatedvalueofUSD The Governmentisseekingtodeveloplargescale F CO DEVELOPME PR the real estate value chain. demand for services across projects is expected to drive townships and housing of large scale integrated The planned construction ACI E Bn.Theseprojectsarelikelytodrivethegrowthof OPE C NS TO L I T T R R R OVE I E TY U S C

MANA MANA T I N O R T V N P I CO EW L GEME GEME ANNIN N T RAC N N T G T T IN G 3 , BusinessMonitor International 2009 Real USD USD Project value USD Project value Project value 1JQFMJOFPGDPOTUSVDUJPOQSPKFDUT Expected operations by 2023 – .BEJOBU"M)BSFFS 4JML$JUZ QSPKFDU VSCBOEFWFMPQNFOU JOUFHSBUFEIPVTJOHQSPKFDUTBOE %FWFMPQNFOUPGMBSHFTDBMF Estate Sector contribution to GDP, -201 + 2 projects, Bn

Bn Bn -

providers to offer such services in Kuwait. demand for local and international development planning firms and real estate service City. Development planning for such large scale projects requires specialists and creates Al Hareer (Silk City) project, Khairan Residential City and the Sabah Al Ahmad Future Kuwait has planned a number of large integrated housing projects including the Madinat for such projects. development planning services such as concept planning, design and feasibility studies stages and several others yet to be initiated, there exists considerable opportunity for With a number of large projects for housing and urban development currently in the initial housing projects 2.6.1: Development planning for integrated Source: Zawya*Select realestateproject Note: Allprojectsare residentialandongoing to establishpresenceinthecountry activity wouldcreateopportunities forinternationalinvestors The plannedconstructionand infrastructure development model. offce presenceinthecountrywhichisnotaveryeffcient work donebyforeignplayerswhodonothaveaphysical development planningfrmsinKuwaitwithmostofthis Currently, thereisalimitedpresenceofspecialized is approximatelyUSD900Mn The potentialmarketsizefordevelopmentplanningservices O Total Residential City PAHW - North West Sulaibikhat - PAHW - Sabah Al Ahmad Future City – PAHW - North West Sulaibikhat Residential City B PAHW - Sabah Al Ahmad Future City - Area Sulaibikhat PAHW - North West - PAHW - Sabah Al Ahmad Future City project KIPCO - Daiya real estate PAHW - Sabah Al Ahmad Future City PAHW - Khairan Tamdeen - Madinat Al Hareer 310 Apartments Package Area Dahiya PPO Public C - Area Public Buildings R Buildings TU A4, A5 Residential NI TY OVE - 396 House Package Residential City R V City I EW 135,124 27,000 14,000 88,000 5,000 121 130 136 274 452 11 • • • for developmentplanningservicesinthenextfewyears. residential andinvestmentsectorswillcreateopportunities the Governmenttoaddresscurrentundersupplyin The largescaleintegratedhousingprojectsplannedby banks andinvestorsrequireforevaluatingprojects. and fnancialfeasibilitystudiesduediligencethat such asdevelopmentplanning,mastertechnical These projectsareexpectedtodrivedemandforservices be undertakenwithprivatesectorparticipation. large scaleintegratedhousingprojects,manyofwhichwill Obtaining fnanceisexpectedtobeacriticalaspectfor 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 32 33 Investing in Kuwait: A guide for Investment Opportunities in Kuwait contributed a In 201 offer specializedservices. opportunities forglobalandregional propertymanagersto expansion ofretailandcommercial spacewouldprovide Development oflargescaleresidential projectsand 2011, withcommercialrealestatebeingthekeysegment. The marketsizeforPMwasestimatedatUSD350Mnin

Source: KuwaitReal EstateAssociation,KFH,KPMGResearch andAnalysis in leading practices in this sector. specialized third party, pure play property managers to establishto specializedtheir presenceprofessional and managementbring firms. This would result in corea strongbusiness potentialof real for estate development and outsource property However,management servicesas the real estate market matures, asset managers will need to focus onthese services theirbeing offered in-house by owners/ asset operators owners. Property management is still relatively underdeveloped in Kuwaitliaise withbetween mostowners of and tenants to manage property related servicesresources on or behalf expertiseof necessary for day-to-day management of the Propertyproperty. management PM (PM)firms firms are often used when the asset owners lack the time, 2.6.2: Property Management O Class B+ Class A Class A+ Category Kuwait - Residential real estate market (2011) space Malls - operating Category Kuwait - Retail market(2011) Total Other Class C Class B PPO 4 , theRealEstateandConstructionsector R TU round NI TY OVE

o fbidnsPotential annual property No. of buildings % and (SQM ‘000) R Total GLA V 11,069 I 5,182 3,578 1,195 EW 618 657 435 22 % ofthenominalGDP management fees (USD ‘000) management fees (USD ‘000) Potential annual property 132,438 50,792 42,157 15,865 11,760 10,825 1,040 31 • • Category Kuwait-Office and mixed-use real estate market (2011) oa ,9 18,359 1,098 4,292 549 Total Other Class C Class B Class B+ Class A+ for PMfrmstomanageassetsonbehalfoftheoperators. planned bytheKuwaitGovernment,anopportunityexists With severalrealestatedevelopmentinitiativesbeing and correspondingopportunityforPMservices. has ledtoadditionaldemandforrealestatedevelopments growing populationandincreasingnumberofexpatriates Kuwait’s economicgrowth,togetherwiththesteadily buildings ,0 6,311 6,000 1,803 1,200 No. of 0 2,400 2,550 400 340 (SQM’000) Total GLA management fees (USD’000) Potential annual property 197,421 67,137 66,662 27,554 28,556 7,513

to specialized FM service providers is likely to further augment demand for FM. Additionally, a change in mindset of asset managers to outsource this non-core activity a growing need to manage these facilities and requirement for FM service providers. estate activities. Several large infrastructure projects initiated in Kuwait will result in Facilities Management (FM) services are mainly driven by an increase in available real 2.6.3: Facilities Management infrastructure assetownersandoperatorsinKuwait. benchmarks andenterintolongtermcontractswith frms toenterKuwait,establishindustrystandardsand providers. Thereisanopportunityforsuchspecialized there islimitedpresenceofspecializedglobalFMservice by 2013.Localplayerscurrentlydominatethemarketand in 2011,andisexpectedtohavereachedUSD430Mn The FMindustryinKuwaitwasestimatedatUSD270Mn O sustainability PPO Focus on R TU NI TY OVE GROWTH DRIVERS Growth in real estate sector Outsourcing R V I EW demographics Favourable • • • resulting ingrowingdemandforprofessionalFMservices. further expectedtooutsourcetheirnon-coreactivities, Companies focusingonreducingoperatingcostsare resulting inademandforhighqualityFMservices. in theresidentialrealestatesectorisexpectedtogrow, demand forhigherqualityresidentialoptions.Investment income ofitsrelativelyyoungpopulationareleadingto Kuwait’s expandingrealestatesectorandhighper-capita to demandforspecializedFMserviceproviders. developments conformingtogreen/LEEDstandards,leads Rising focusonsustainabilityandgrowingnumberof 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 34 35 Investing in Kuwait: A guide for Investment Opportunities in Kuwait (by value) in % Proposed construction projects by sector

Source: Zawya the GCC region. potential market for international contractors to consider Kuwait as a key market within to be more than what can be absorbed by domestic players which further highlights the point for international companies. Additionally, the scale of announced projects is likely and experience in executing large scale complex projects, thereby creating an entry Construction contractors in Kuwait face constraints in terms of technological expertise construction activity in the country. along with large scale integrated housing projects is expected to drive a large volume of Kuwait Government’s focus on development of infrastructure (roads, ports, airport, rail) 2.6.4: Construction Contracting and majority of the planned construction activities, followed by oil and gas, infrastructure considerable opportunity for construction activity. Real The stretched. where localcontractingcapacityandexpertisemaybe particularly inlarge,complexortechnicallychallengingareas opportunities forinternationalconstructioncontractors hospitals inthecountry.Theseprojectsoffersignifcant Ministry ofHealthisundertakingconstruction8additional initiated bythePublicAuthorityforHousingWelfare.The a periodof6to7yearsunderthevarioushousingprojects Over 90,000housingunitsareproposedtobeaddedover O PPO 1PXFS8BUFS power and water. pipeline of current projects is valued at R TU NI TY OVE *OGSBTUSVDUVSF R V 0UIFST I EW 0JM(BT 3FBM&TUBUF PWFS • • • signifcant constructionactivity. airports, railandGovernmentbuildingswhichwillleadto large infrastructureprojectssuchasroads,bridges,ports, The KuwaitDevelopmentPlanincludesconstructionof services. augment thedemandforconstructionmanagement The plannedintegratedhousingprojectswillfurther additional residentialunitsandconstructionactivity. A growing,youngpopulationisdrivingtheneedfor USD estate projects account for a Bn in 201 . This provides S regulations. center with excellent multimodal logistic infrastructure supported by favorable trade Kuwait’s Third Kuwait Master Plan seeks to develop Kuwait as a regional transport 2.7: Storage and Logistics services for foreign trade and Kuwait’s central location in the Gulf make logistics a strategic priority annually at Imports constitute a key component of Kuwait’s economy and are expected to increase Source: BusinessMonitor International City andotherprojects. warehousing facilitiesthroughdevelopmentoftheCargo The Governmentisseekingtoaddressthedemandfornew facilities. goods, requiringthedevelopmentofadditionalwarehousing are expectedtoacceleratedemandforvariouskindsof Kuwait’s increasingpopulationandconsumerspending increased demandforlogistics. to serveinternationalairfreight,areexpectedsupportthe Projects suchastheproposedCargoCity,whichisintended the GCCrailroadnetwork. and anewnationalrailroadnetworklinkingthecountryto port attheBubiyanIsland,upgradeofairportinfrastructure projects aretheinitiativestoupgradeexistingports,anew as partoftheKuwaitDevelopmentPlan.Keyamongthese several transportationinfrastructureprojectsbeinginitiated Logistics servicesinKuwaitareexpectedtobeneftfrom

Kuwait’s import and exports, 20 WAR L logistical and warehousing hub in the region. developments have the potential to promote it as a key the GCC is relatively small, the proposed infrastructure Though Kuwait’s current share of the logistics sector in OG

E N NOMI C the OMI IS TO EHOU T R OVE ICS country. N N AL AL SIN

EXP IM R G P V O I O % during 2014-201 EW RT RT S S , , US US $ B $ B n n 14 -201 to reach USD 9 USD USD Estimated project value .VCBSBL"M,BCJS1PSUJO#VCJZBO*TMBOE Project value JOGSBTUSVDUVSF *OWFTUNFOUQMBOGPSSPBE 2 - Key sectors for opportunities Bn in 201 Bn . The importance of Bn

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 36 37 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: BusinessMonitor International 2.7.1: Logistics of these ports. 40 two key commercial ports of Maritime transport is transport. north ofKuwaitwhichwillenhance overlandfreight new andexistingroad planned overthe regional markets.Investmentof capacity ofadditional2.5MnTEUsandfacilitateaccessto Bn by201 an averagerateof Imports inKuwaitareprojectedtoincreaseannuallyat O (Mn tonnes) Maritime freight

G 2018 f 2017 f 2016 f 2015 f 2014 e 2013 PPO Saudi Arabia and Iraq Mn P P O O 4 10 1 4 11 11 1 1 1 R RT RT tonnes of freight in 201 TU 9. O O

NI The plannedMubarakAlKabirPortwilladda F F TY OVE S S HU H Kuwait’s trade activities with next fiveyearsinthedevelopment of 4. UAI W % during2013-201 throughput, 2013-201 infrastructure, particularlyinthe B AIK R A V THR H I EW THR the OU over

OU GHP generate considerable volumes of road freight primary mode of commercial freight movement in Kuwait. The USD GHP U Shuaiba and Shuwaikh handled a combined throughput of 9 T toreachUSD6 . Plans are underway to expand the capacities of both . U T Bnis 9 , 2 SFHJPOBMDPVOUSJFT QBSUJDVMBSMZ

• • • (‘000 tonnes) Air freight Arabia andIraqinacosttime-effcientmanner. ports andtransportingoverlandtotheKingdomofSaudi opening upopportunitiesforbringinggoodstoKuwait’s key industrialareasandwiththeGCCrailroadnetwork, The nationalrailroadnetworkseekstoconnectportswith and giverisetore-exportopportunities. Kuwait’s strategiclocationwithintheArabianPeninsula port infrastructureupgradesareexpectedtoleverage The upcomingMubarakAlKabirportandotherplanned renewed focusonindustrialdevelopment. manufactured goods,oresandmetalsaswella be drivenbythegrowthintradeofagriculturalmaterials, The domesticdemandforfreightlogisticsisexpectedto G2018 f 2017 f 2016 f 2015 f2014 e 2013 189 19 throughput, 2013-201 the 9 Kingdom ,

planned Cargo City which will cater to air cargo. Warehousing capacity is also expected to be added through projects such as the needed additional port warehousing capacity. upcoming Mubarak Al Kabir Port at the Bubiyan Island is expected to provide much ports have remained static resulting in significant un-met/ pent up demand. The While freight throughput has increased steadily, warehousing capacities at Kuwait’s 2.7.2: Warehousing Source: InchcapeShipping Services,DeskResearch warehousing relatedvalue-addedservices. presenting sizeableopportunitiesforwarehousingand for localandinternationalinvestorsisexpectedtoremain, Kuwait’s warehousingcapacity,considerablemarketspace While Governmentinitiativesareexpectedtoexpand O hab otWrhue: 14,500 sq. m Airport Kuwait International Warehouses: Doha port Shuaiba port Shuwaikh port Current stock of Warehousing in Kuwait at sea ports and airport PPO R TU NI TY OVE Export warehouse: Import warehouse: Warehouses: Open storage area: Covered sheds: Warehouses: Outside the port area Open storage area: Covered sheds: Warehouses: Within the port R V I EW 100,000 sq. m 500,000 sq. m 78,000 sq. m 40,000 sq. m 15,000 sq. m 70,000 sq. m 2,300 sq. m 5,600 sq. m 8,110 sq. m

• • • space inKuwait.Providingconnectivitybetweentheports considerable partofthesupplyinlandwarehousing Private sectorlogisticsservicesproviderscontrola further strainonthelimitedwarehousingfacilities. The ongoingandplannedinfrastructureprojectsareplacing imports furtherdrivesthedemandforstoragefacilities. need forwarehousingservices.Thecountry’srelianceon Kuwait’s increasingimportandexportvolumesindicatethe the demandtoanextent. and thesewarehousescanbeexpectedtohelpaddress 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 38 39 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: CentralStatistical Organization,CBK,Markaz likely to further support development of the banking and financial services sector. affordability. Kuwait Government’s planned infrastructure development projects are policies of mandatory medical insurance for expatriates and nationals along with rising interests. The growing insurance industry is also expected to benefit from the favorable The banking environment has witnessed tighter regulations governing stakeholder Industry market activities. The insurance industry is governed by the Ministry of Commerce and The CBK oversees banking and financing activities and the CMA regulates securities 2.8: Banking, Financial Services & Insurance investment funds and regional and international banks, 8 over Kuwait has investors. especially forfundraisingduetohighliquidityamong as anattractivedestinationforPrivateEquity(PE)frms, contribution continuoustogrow,Kuwaitislikelyemerge the stockexchange.Asprivatesector’seconomic with onlyarelativelysmallnumberofbusinesslistedon The publicsectoraccountsformorethan50%ofGDP, demand forDSAservices. preference forpersonalattentionareexpectedtocreate for sophisticatedfnancialinvestmentinstrumentsanda between thefnancialcompaniesandclients.Demand Direct salesagents(DSA)actasanintermediary management productsandservices. and aburgeoningmiddleclassaredrivingdemandforasset increased numberofHighNet-WorthIndividuals(HNWIs) Rising wealthintheKuwaiteconomy,coupledwithan management (USD4.1Bn)in2013. second behindKSAintermsoftotalassetsunder income intheMiddleEastregion(USD As of201

D A PRI growth of the financial services sector in the country. are indicative of increasing wealth in Kuwait, driving the Robust GDP growth and high GDP per capita income SS IR E C V E ET TO A C TE T S MANA R OVE 4 , Kuwaithadoneofthehighestpercapita % E A QU LE of total a I S GEME R TY AGE V well developed banking and financial services sector, accounting for I EW N N GDP T T S over in 201 37,821 3 local, regional and international insurance companies . The local financial services sector consists of 23 local, ), andranks local investment and finance companies, 11 local

advisory alongside PE. multiple financial services including asset management and investment banking players ranging from private firms to publicly listed companies, most of which offer there is renewed interest in Private Equity (PE) opportunities. Kuwait has several PE assets such as real estate and listed securities falling out of favor with many investors, and private investors are looking for avenues to invest surplus capital. With traditional Kuwait’s economy is witnessing high liquidity, owing to increasing oil prices. Institutional 2.8.1: Private Equity development ofthePEmarket. Medium Enterprises(SME)growtharefavorabletothe involvement intheeconomyaswellfosteringSmalland Government initiativestowardspromotionofprivatesector O PPO Improving economic scenario R TU NI TY OVE GROWTH DRIVERS family business High per capita R Dominance of V income I EW Increased liquidity • • • • • • Increasing liquiditywiththeGovernmentandsovereign HNWIs providingimpetustogrowthofPE. Kuwait hasanaffuentpopulationandarisingnumberof opportunity forPEinvestments. substantial businessopportunitiesandcreatessignifcant Kuwait’s strongeconomicenvironmentpresents confdence amonginvestors. governance standardsinKuwaitareleadingtoincreased Stricter regulatoryrequirementsandimprovingcorporate growth. experienced PEfrmswhocanguideandsupportsuch and professionalsectorexpertise,drivingdemandfor ambitions forgrowthandareseekingcapital Mid-sized family-ownedbusinessesinKuwaithave wealth fundsiscreatingopportunitiesforfundraising. underpenetrated comparedtodevelopedeconomies. However, theKuwaitmarketremainssignificantly 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 40 41 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: MarkazGCC AssetManagementreport entrants and more sophisticated products. respectively. This indicates strong potential for growth supporting introduction of new economies such as China and India, which exhibit a penetration level of 25% and 14% However, Kuwait has a relatively low level of penetration compared to other emerging average of 1.9% making it one of the more developed markets across the GCC region. Kuwait’s Asset Under Management (AuM) to GDP ratio of 2.3% surpasses the GCC 2.8.2: Asset Management emerging economies Comparison of penetration (AUM/GDP) across management companies. sector, theinvestmentopportunitylookspromisingforasset and limitednumberofspecializedserviceprovidersinthe management (AUM).Withapositiveeconomicenvironment in theGCCwithanestimatedUSD4.1Bnofassetsunder In 2013,Kuwaitwasreportedasthesecondlargestmarket O PPO China 25% R TU NI TY OVE India 14% R V I EW Kuwai 2.3% tG Kuwait -Longwaytocover Management Businessin Potential forAsset 1.9% CC • • • to enactandamendregulationssafeguardinvestor The CMAandKuwaitGovernmenthavetakensteps asset managementservicesinKuwait. High numberofHNWIsislikelytopropelthedemandfor products. deployment ofsurpluscashinvariousinvestment management servicesinthecountryasinvestorsconsider in themarketisexpectedtoincreasedemandforasset A strongeconomicoutlookleadingtoincreasingliquidity supporting thegrowthofAMserviceproviders. confdence inthelocalassetmanagementindustry,

fragmented with presence of multiple channels which compete with DSAs. the growth of business for DSA. The financial services distribution market remains with the demand for sophisticated financial investment instruments will support base investment decisions based on their advice. Growing wealth in Kuwait, coupled services and individual attention. Investors place trust in their financial advisors and The growth of DSA’s is driven by the demand among Kuwait’s investors for personalized 2.8.3: Direct Sales Agents O Higher confidence & comfort level PPO with DSA R TU NI TY OVE GROWTH DRIVERS demographics R Favorable V I EW of sophisticated Development instruments financial banking and financial sector Kuwait has a well developed • • • products, willprovidegrowthopportunitiesforDSAs. The launchandusageofmoresophisticatedfnancial Kuwait hasawelldevelopedbankingandfnancialsector. in makinginvestmentdecisions. of complexfnancialproductsincreasetheneedforadvice The sophisticationoffnancialmarketsandtheintroduction with theirinvestmentneeds. more comprehensivefnancialsolutionscommensurate increasing numberofexpatriates,isexpectedtodemand Kuwait’s youngandaffuentpopulation,coupledwiththe foster growthinthissegment. strength ofrelationshipenjoyedbyDSAscontinuesto Despite growthofalternativedistributionchannels,the 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 42 43 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: within the country. redevelopment of the airport, maritime facilities and development of rail infrastructure The Kuwait Government is seeking to enhance the transport infrastructure including development of the country’s transport infrastructure. Kuwait’s strong economic growth and a steady population growth are driving the Air and road are the primary modes of international passenger transport in Kuwait. 2.9: Air, maritime and rail passenger transport passengers isexpectedtoleadgrowthofthissector. The plannedintroductionofasingleGCCvisaforcruise Cruises andCrystaladdingKuwaitasaport-of-call. number ofcruiselinersincludingStarCruises,Silversea Growing demandfromKuwaitbasedtouristshasseena freight. rail connectivityacrosstheGCCregionforpassengersand Kuwait withtheGCCRailwayNetwork,providingseamless the KuwaitNationalRailwayNetworkseekstoconnect Kuwait City to ease road congestion. Another railway project, The Governmentisplanningametrorailnetworkprojectin through twolargerailwayprojects. The GovernmentintendstointroducerailtransportinKuwait as atransitpointwithintheGCCregion. congestion. ThenewterminalwillhelpKuwaitpositionitself to raisethecapacity25Mnby2025andhelpease An expansionoftheairportisunderwaywhichexpected 201 A country. The the onlycivil/passengerairportofsevenairportsin The KuwaitInternationalAirportistheprimaryairportand MARIN R A IR AI E C L P P

compared TO KAPP ASS ASS E P R OVE , DGCA E ASS E N N GE GE R E R V N R T has I GE EW

T its officialcapacityof7.2Mn. RANS RANS R T RANS PO PO R

R T PO T . Mnpassengers R

K T in USD 1 USD Project value "WJBUJPO %($" ,VXBJUCZ%JSFDUPSBUF(FOFSBMPG$JWJM 1MBOOFEBWJBUJPOTFDUPSQSPKFDUTJO Project value Expected operationsby2018 /BUJPOBMSBJMXBZOFUXPSL Bn Bn

par with global standards and benchmarks. specialized facilities management (FM) services to maintain Kuwait’s airport facilities at Kuwait’s initiatives to position itself as a commerce hub. There exists potential to provide The planned upgrades to Kuwait’s aviation infrastructure are expected to support 2.9.1: Airport Facilities Management Source: contracts withairportauthorities/operatorsinKuwait. experienced FMserviceproviderstoenterintolongterm infrastructure. Therecouldbeasimilaropportunityfor long-term multi-yearcontractsformanagementofairport FM contactsacrosstheGCCaviationsectortendtobe revenues. with anestimatedmarketsizeofUSD30-40Mninannual growth inrequirementforFMservicestheaviationsector new terminalisoperational,therelikelytobeamulti-fold of 710,000sq.mforthefacilitiesmanagement.Once under developmentisexpectedtoaddanadditionalarea measures approximately190,000sq.m.Thenewterminal The currentterminalattheKuwaitInternationalAirport O ua ipr Integrated facilities management Dubai Airport Airport International Sharjah Airport (KFIA) international King Fahd Al Ain Airports Abu Dhabi and 15 year contract to manage facilities at Bahrain Airport FM Contracts in the GCC Aviation sector PPO KAPP R TU , DGCA,Euromonitor, Frost&Sullivan,MEED NI TY OVE contract for Terminal 3. International Airport. facilities management services at Sharjah 2009 for multi-technical and specialized (SDCA) signed 3 year FM contract in Sharjah Department of Civil Aviation operations including FM services. management of KFIA’s maintenance and 5 year contract in initiated in 2008 for International Airport. Dhabi International Airport and the Al Ain more than 260,000 sq.m areas at the Abu Comprehensive contract to manage management for an area of 70,000 sq. m. includes technical & infrastructural building Bahrain Airport in 2008. Scope of work R V I EW

• • • new specializedFMservices. environment sustainabilitywhichcouldpotentiallyrequire There isincreasedfocusandawarenessgloballyon nascent stage. providers astheFMservicesmarketinKuwaitisata There isexistentdemandforaviationfocusedFM for FMservicesinKuwait. Expansion ofairportinfrastructurewillaugmentdemand 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 44 45 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: providers. (FM). Rail FM is a new segment in Kuwait and presents opportunities for specialized FM are expected to expand the market for rail service delivery and facilities management The proposed rail and metro projects under the Kuwait Transportation Masterplan 2.9.2: Rail Facility Management O PPO sustainability Focus on KAPP R TU , MEED,dubaimetro.eu, Frost&Sullivan,Picturesoucedfrom theBerlinMetroProject NI TY OVE GROWTH DRIVERS Development of Reducing traffic Rail Networks R congestion V I EW GCC wide rail Impetus from initiatives • • • sizeable addressablemarketforFMservices. of USD7Bn.Theenvisagedrailandmetronetworksoffera km. Themetroprojectisexpectedtoentailaninvestment 2020, increasingto69stationswithatotallengthof160 50 kmand28metrostationsinthefirstphasebyyear of aroundUSD with 511kmdoubletracktotallengthinvestment National RailRoadSystemwillbeanintegratedrailnetwork approximately USD90Mnp.a.inrevenues.TheKuwait The RailFMmarketinKuwaithasthepotentialtogenerate environment friendlystationsandalliedinfrastructure. to requirementofpotentiallynewFMservices,build Focus onsustainabilityandresourceoptimizationwilllead in Kuwait. System isplannedtosignifcantlyenhancepublictransport Metropolitan Area.TheKuwaitRapidTransit of theroadinfrastructure,especiallyinKuwait Automobile traffcinKuwaithasoutgrownthecapacity the broaderGCCRailwaysproject. benefts itoffersthecountryandaspartofintegrationwith interest totheGovernmentinviewofpotentialtrade The KuwaitNationalRailRoadprojectisofstrategic 10

Bn. Themetronetworkseekstocover S Bn and thereafter rise by 5.4% per annum to USD 1.9 Bn by 2024. Business travel spending in Kuwait is expected to grow by 8.9% in 2014 to reach USD 1.2 As a business hub, transit arrivals into Kuwait comprise primarily of business travelers. 2.10: Tourism, Hotel and Entertainment related account of planned infrastructure projects, economic expansion and tourism Tourist arrivals are expected to increase to 491,000 by 2022 from Source: AlpenCapital HospitalityReport201 purposes. of GDPpercapitawasdirectedtowardsrecreational entertainment andculturalservicesannuallyimplying8.5% approximately USD4, During the entertainment optionsinKuwait. are expectedtodrivedemandforamusementand propensity tospendonleisureandentertainment amusement centers.Highpercapitaincomeanda Kuwait hasalimitednumberofthemeparksand and the rates intheregion,estimatedatUSD Hotels inKuwaithaveamongthehighestaveragedaily and hotelapartmentsarepreferredforextendedstays. result inincreaseddemandforhotelrooms.Budgethotels The growthinbusinessactivitiesKuwaitisexpectedto HOTEL

NO. O Hotels in Kuwait (2013) EN HOTEL expected to create investment opportunities in this sector. Economic growth and demand for entertainment options are E room capacityisconcentratedinthefour-star,five-star TE C resort categories. TO F R HOTEL A T S P TH R OVE AIN FOU AR initiatives. year 2013 TWO O F R R I N TME VE ST EE E ME R E S S

O R S S S S N N R T T T T V AR AR AR AR AR T T I T EW S S , theaveragehouseholdspendwas 0 00 13 10 10 per annum 12 2 3 43 4 , MinistryofPlanning on leisure, 4 in201 NO. O 1,057 82 1,854 1,381 62 2,120 . Mostof 2,017 F

R OOM S &TUJNBUFE USD 4.2 Bn TFDUPS 4QFOEJOHPOMFJTVSFBOEUPVSJTN 7-8% Expected y-o-y growth over 2011–2015 3FWFOVFPGCSBOEFEUIFNFQBSLT 2 - Key sectors for opportunities

value by 2015 195 in 201 on

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 46 47 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: CentralStatistical BureauAnnualStatisticalAbstract 2013,EIU,AlShall,KUNA 2.4 Mn in 2013. Kuwait Government entity. The footfalls for recreational and cultural attractions reached square meters. This was established in 1984 by the Touristic Enterprises Company, a Entertainment City is the largest theme park in Kuwait and covers an area of one million water parks, as well as other concepts like a zoological park and cultural attractions. The Kuwait has a number of relatively small recreational concepts, including amusement and 2.10.1: Branded Theme Park Footfalls in recreational places in Kuwait O Branded Theme Amusement Indoor Water Theme Park Aquarium Zoo

in Mn PPO 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Entertainment R TU 2009 Park 2.60 NI TY OVE Park 2010 .0 2.80 2.80 R Recreational places in Kuwait Cartoon 99 Village Sha’ab Leisure Hawally Entertainment Play Marah Lagoons Kuwait Kid Land Infunity Future Messila Aqua The Scientific Center Kuwait V I EW Land Park Kid Land Magic Zoo Zone Network World Beach Park 0121 2013 2012 2011 City Park 2.45 Trampo Kidzania Magic Planet 2.42 annual growthof approximately USD Kuwait • • • conditions. family-oriented themeparkconducivetoKuwait’sclimatic is signifcantpotentialforintroducingalarge,branded In viewofthelimitedoptionsavailableinKuwait,there sizable marketforbrandedthemeparks. with morethan and children.Kuwaithasayounggrowingpopulation, Amusement parkstendtoattractfamilies,youngadults are expectedtoincreasedemandforentertainment with arisingnumberoftouristsfromotherGCCcountries Increased tourisminvestmentsinthesectoralong the brandedthemeparks. disposable incomealsopositivelyimpactthedemandfor Lifestyle preferences,andtherelativelyhighlevelof options inthecountry. pennnraeanurm 2 58 % belowtheageof35,presentinga % . Bnin201 un 20 2 5. 3 , withanexpected isestimatedat

overall hotel capacity. more budget hotels. Budget hotels currently constitute less than one-fourth of Kuwait’s along with the development of new commercial hubs in Kuwait will augment need for demand for hotels. An increasing global trend towards cost-conscious business travel to stimulate business travel in Kuwait over the foreseeable future, creating additional The planned infrastructure projects and economic development plans are expected 2.10.2: Budget Hotels Source: WTTS2012 ReportandRespectiveHotelsWebsites indicating considerablepotentialfornewbudgethotels. higher averagehoteloccupancyratesandrevenueperroom, etc.) andrisinginfowofbusinesstravelerscouldyielda City, MubarakAlKabirportdevelopment,airportexpansion, The plannedinfrastructureprojectsinKuwait(e.g:Cargo only afewbudgethotelbrandsoperateinKuwait. is expectedtohavereachedUSD1.2Bnin2014.Currently, international players.SpendingonbusinesstripsinKuwait which makesitanattractiveentryopportunityforlocaland country and100%foreignownershipisallowedinthesector Mn by2016.Thelowpresenceofbudgethotelsinthe Kuwait’s hospitalitymarketisprojectedtoreachUSD500 O uatHtl opn Safir International Hotel Kuwait Hotels Company Corporation Limited Rotana Hotel Management Estate Company Al Argan International Real Salhia Real Estate Accor Hotels Key Players PPO R TU NI TY OVE R V I EW Hotel Brands Rimal Hotel & Resort Bida’a Movenpick Al Manshar Rotana Courtyard Marriott Hotel IBIS Hotel Kuwait – Salmiya IBIS Hotel Kuwait – Sharq Hotel & Resort Al • • • • rates inKuwait,willfurtheraugmenttheneedforbudget Growth inbusinesstravelandprevailinghighaverageroom business hub,providinganopportunityforbudgethotels. sectors aremajordriversfordevelopingKuwaitasa Government incentivestopromotenon-oilindustrial oil industrystimulatedemandforbusinesstravel. Economic growthinthecountry,supportedbyagrowing the demandforbudgethotelsinKuwait. curtailment oftravelexpenditureisexpectedtostimulate Shift ofcorporatemind-setfromluxuryhotelstothe hotels. 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 48 49 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: BusinessMonitor International,Ipsos,EIU,Cisco, KPMG analysis electronic services by Government organizations and the general public. has initiated many e-governance projects which are expected to drive the use of technologies and associated software. On the institutional front, the Kuwait Government The country’s young and affluent population also supports demand for emerging quick technology adoption and supporting development of software and IT businesses. region, such as internet penetration (62%) and mobile penetration (138%) reflecting Kuwait ranks high on key IT and mobile infrastructure related benchmarks in the MENA 2.11: IT and Software Development in The Software and service sector sales limited extent,bysomeregionalplayers. been traditionallyservedbyinternationalplayersand,toa wider GCCregionisrelativelynewasthesesectorshave The opportunitytoofferwebbasedservicesinKuwaitand especially thosewhicharewebenabled. further developmentofdigitalapplicationsandsolutions month by2016.Thisoveralldevelopmentwillinducethe driven byprivateconsumers,reaching45.4petabytesper historical growthtrendovertheforeseeablefutureprimarily Kuwait’s internettraffcingeneralisexpectedtocontinueits expectations onservicequality. businesses strivetomeetcustomerdemandsand Web andappdevelopmentisgainingimportanceas

O W and app development. expected to drive the need for IT services such as web Favorable demographics and digitization of content are

USD Mn PPO 2013 and is expected to grow annually at E B 100 200 300 400 500 market size for software and IT related services amounted to around USD

0 AND R TU 188 0321e21f21f21f2018f 2017f 2016f 2015f 2014e 2013 APP DEVELOPME NI 340 TY OVE 204 364 otaeServices Software R V I 222 EW 390 N T 238 416 260 450 281 481 % over the period 2013 to 201 . Mn

players with local and regional presence. web-enabled IT services and solutions. This provides opportunities for international with IT transformation initiatives at the Government level are augmenting demand for businesses in Kuwait. Demand from consumer focused sectors like retail, banking along Web and app development is becoming increasingly important for customer-centric 2.11.1: Web and App Development Source: BusinessMonitor International,InternationalData Cooperation localized andArabiccontent. other marketsintheregion.Therealsoexistspotentialfor with mostrequirementsbeingcurrentlyservicedoutof annum. ThemarketinKuwaitisstillatanascentstage 2013, withaprojectedgrowthratebetween and appdevelopment)wasestimatedatUSD340Mnin The marketsizeoftheITservicessegment(includingweb O PPO High internet penetration R TU NI TY OVE GROWTH DRIVERS R population Young and V educated I EW 7 spending on IT % per Government • • • Kuwait hasoneofthehighestinternetpenetrationrates expansion ofwebandappdevelopment. Kuwait’s e-governmentinitiativesareexpectedtodrivethe applications, onlinevideos,etc.). digital tools(includingsocialnetworkingplatforms,mobile drive consumptionofcontentandengagementviamultiple Kuwait’s youngandeducatedpopulationisexpectedto smart phones. phones, withmorethan64%ofKuwaitinationalsusing of thepopulationhasaccesstointernetovermobile for mobileappsandinternetbasedservices.Around41% using internetmorethanonceaday,resultingindemand within theMENAregionwith62%ofadultpopulation 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 50 51 Investing in Kuwait: A guide for Investment Opportunities in Kuwait S Source: PACI,BMI. opportunity in the space of media and marketing especially in the digital segment. of broadband, mobile phone and television also indicate the magnitude of the potential considering majority of its population is young and affluent. Kuwait’s high penetration Kuwait has demonstrated a high affinity for entertainment and media especially entertainment and media. backgrounds, which generates demand for diversified advertising, marketing, Kuwait has a diverse population, reflecting a wide range of cultures and ethnic 2.12: Culture, Media and Marketing providers. provide growthopportunitiesforonlineretailersandservice coupled withrisingincomelevelsinKuwaitareexpectedto enabled devices(smartphones,tablets,smarttelevisions) across awideraudience.Thegrowingpenetrationofweb presence throughonlineformats,thusprovidingreach Kuwait isleadingtomanyconsumerbusinessesconsidering The prevalenceofinternetandbroadbandpenetrationin providers offeringlocalizedArabiccontent. market fordigitalcontentinKuwaitespeciallyservice phones, tabletsandsmarttelevisions,islikelytodrivethe audio-video). Increasingadoptionofdigitaldeviceslikesmart development (text,animation,graphics,images,designand tools suchasgames,e-books,appsandwidgets,web/blog Digital ContentCreation(DCC)includescreationofdigital a keydriverofdigitaladvertisinginKuwait. High penetrationofbroadbandandmobilebasedinternetare computers, tablets,smartphonesandgamingconsoles. platforms connectedviainternettodevicessuchas Digital mediamarketingisalignedwithnewage APPL D D I I culture, media and marketing sectors. and cultural diversity offer opportunities in the A wealthy population with high living standards G E G C I I T T TO A A ICA L L CO R OVE M T E I O DIA N N TE R STO

V MAR N I EW T C R E KET R S E & A IN T ON I G O N L IN

E P O R T A L Population by ethnic groups ( "SBC ,VXBJUJ 0UIFST "TJBO June 2015 )

Economies specialized international players in Kuwait. catering to in-house digital marketing requirements indicating room for presence of dominated by international firms who are primarily operating through local tie-ups and The sector comprises of global, regional and local boutique players but is largely 5% of the total advertising spend. population is fueling the growth in digital advertising, which currently accounts for only traffic on social networking sites and increased time spent online by the resident multiple services such as marketing, advertising, analytics, technology etc. Growing marketing industry is however at a nascent stage in Kuwait, with players offering Kuwait has the fourth highest advertising expenditure in the MENA region. The digital 2.12.1: Digital Media Marketing Source: Arabmedia outlook digital marketingofferingsacrossneighboringmarkets. Middle Easterncountriesprovidepotentialforreplicating Additionally, linguisticandculturalsimilaritieswithinthe in theKuwaitmarket. signifcant opportunitiesforcompaniesinthissectortogrow (nearly USD61Mn)by2015.Thisisexpectedtoprovide advertising risingfrom5%in2011toapproximately13% around USD470Mnby2015,withshareofdigital The advertisingmarketinKuwaitisexpectedtoreach total advertising expenditure (2011) Digital advertising expenditure as % of Developed Developed O PPO region GCC R TU NI TY OVE Netherlands South Korea emrk Denmar Australia arin Bahrai Kuwait China Qatar (2015) UA KSA UK US E R V . I EW 5% 5% 6% 7% 8% 17% 18% 21% 21% 23% 27% 32% • • • formats includingsocialmedia. rates ofinformationconsumptionacrossmultiplemedia literacy ratesandpercapitaincome,translateintohigh Kuwait’s favorabledemographics,coupledwithhigh propelling thegrowthofdigitalmediamarketing. easier foradvertiserstotargetnicheaudiencesthereby Cost effectivenessofthedigitalmediumalsomakesit marketing space. adoption, whichsupportsopportunitiesinthedigital (138%) andTV(99%),henceisquickintechnology The countryhashighpenetrationofinternet(62%),mobile Digital 2 - Key sectors for opportunities 20 40 60 80 0 advert advertising 01e21 03f21 2015f 2014f 2013f 2012f 2011 e 5% 20 i sing Proportion ofDigitalAdvertising(%) Digital Advertising(US$mn) 8% 31 expenditure expenditure as % of 10% 41 12% 51 in 13% 61 Kuwait 0% 5% 10% 15% total

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 52 53 Investing in Kuwait: A guide for Investment Opportunities in Kuwait

Source: IFPIDigital Music Report2012,DFCIntelligence,Mahmoud Khasawneh-GameDevelopers Conference localized Arabic content. the market for digital content in Kuwait especially for service providers who can offer adoption of digital devices like smart phones, tablets and smart TVs is likely to drive development (text, animation, graphics, images, design and audio-video). Increasing content market especially in areas like games, e-books, apps and widgets, web and blog Kuwait is, however, still in the early stages of development with regards to digital Bn by 2016, recording an annual growth of around 5% per annum. USD 49 Bn in 2012 in terms of revenues. This industry is poised to grow to over USD 62 The size of the global consumer digital content industry was estimated at approximately 2.12.2: Digital Content Creation variously estimatedintheregionatUSD1Bn. is reportedtohavethefastestgrowthwithasizethat For instance,thegamingmarketinMiddleEastregion e-publishing, localcomicseriesandgamingapplications. opportunity inareaslikemobileapplications,Arabic established internationalplayerstoexplorethisuntapped nascent marketwithfewnicheplayersindicatingroomfor In Kuwait,thedigitalcontentcreationmarketremainsa O High potential of from advertisers digital platform PPO Sponsorship Sponsorship R TU NI TY OVE GROWTH DRIVERS entertainment and media content localization of R population Young and educated Need for V I EW capita income High rates of penetration and mobile broadband High per

• • • • drives demandforentertainmentandmediacontent. A young,well-educatedandrelativelyaffuentpopulation of digitalcontent. designed forthesedigitaldevicescanleadtomonetization Encouragement fromadvertiserstosponsorcontent social networkingandonlinegaming. provides largepotentialopportunitiesinsegmentssuchas The increasingadoptionofsmartphonesandtablets in digitalcontentcreation. television, flmandmusicislikelytopropeldemandtrends localization ofcontentandregionaltrendsPan-Arab With Kuwait’shighpenetrationofTV,mobileandinternet, localized Arabiccontent. expected tohavehighdemandalongwithpreferencefor and subscriptionbasedwebsites(e.g.:Zawya,MEED)are Category specifconlineportals(e.g.:electronics,fashion)

portals along with increasing acceptance of online payment systems. coupled with rising income levels in Kuwait will further augment the market for online region. Growing penetration of web enabled devices (smart phones, tablets, smart TV’s) examples of online portals some of which are expanding across the GCC and the wider market for application stores and online portals. Kuwait has witnessed many popular High levels of internet penetration and technology adoption are likely to stimulate the 2.12.3: Application Stores and Online Portals O PPO mobile penetration High literacy levels Young population R broadband and High rates of TU GROWTH DRIVERS NI TY OVE R V I EW initiatives initiatives in this capita income Government Supporti measures Successful High per space ve

• • infrastructure, educationandGovernmentservices. to promoteITacrossnumeroussectors,suchas Kuwait Governmentisimplementingvariousmeasures region. e-commerce andonlineplatformsinKuwaittheGCC country isleadingtosuccessfuladoptionofthemedium The broadreachofsocialmedia,internetandmobileinthe 2 - Key sectors for opportunities

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 54 55 Investing in Kuwait: A guide for Investment Opportunities in Kuwait LOCAL FOREI S 3 ER v ICIN g IN N AND g v ESTORS Commerce &Industry. The KDIPAisapublicauthorityheadedbytheDirectorGeneralreportingtoBoardofDirectorschairedMinister own upto100%ofequityinterestinaninvestmententity. The DirectInvestmentLawenablesforeigninvestorstopursuebusinessopportunitiesinKuwaitwithoutalocalsponsorand direct investment in the country by offering a range of incentives (Direct Investment Law), with a view to attract, promote and encourage Regarding the Promotion of Direct Investment in the State of Kuwait The KDIPA was established to implement Law No. 116 of 2013, the Law Facilitating direct investments in Kuwait 5IF,VXBJU%JSFDU*OWFTUNFOU1SPNPUJPO"VUIPSJUZ BU “ OFFS SIN A COMPET B D COU SSIS O G DEP DEP E DEP I PR P N D SE DEP ET” DEP SS L VE N ANNIN T OMOT AR AR DEVELOPME AN TE AR S AR I CR TME T TME TME R T D I TME VE TME T AR I G & RAD ET O G N N N N N TME

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Investing in Kuwait: A guide for Investment Opportunities in Kuwait 56 57 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 5IF,VXBJU%JSFDU*OWFTUNFOU1SPNPUJPO"VUIPSJUZ having thesolepurposeofpreparingmarketstudiesorproductionpossibilities. Companies Lawwithupto100%foreignequity;asalicensedbranchofcompany;orrepresentativeoffce Ability topursuebusinessopportunitiesinoneofthreedistinctforms:asaKuwaiticompanyaccordancewiththe or remittanceoftheircapitaland profts. Investors arealsoguaranteed protection fromseizureorexpropriationwithoutcompensation andguaranteedfreetransfer Allocation oflandtocarryouttheproposedprojects. Exemptions fromcustomsduties. Avoidance ofdoubletaxationandbeneftsunderbilateraltreaties fortheprotectionandencouragementofinvestment. projects. Tax Responding toinvestorsinquiriesandprovidingrequestedinformation. Identifying andpromotinginvestmentopportunitiesinKuwait,coordinationwithotherstakeholders. sector, exceptthosespecifedinthenegativelist. Granting attractiveincentivestoinvestorspursueprojectsthatarealignedKuwait’sinterests.Projectscanbeinany application supportedwithrequesteddata,documentationandconditions. Providing adecisiononthemeritofapplicationswithinmaximumduration30dayssubmissioncompleted with relevantgovernmentalministriesandauthoritiestoattendneedsofforeigninvestors. network withvariousGovernmententities.KDIPA’sInvestorServiceCenterfunctionsasaOne-StopShopincoordination Streamlining thelicenseissuanceprocessandfacilitatingmarketentryofinvestorsbyestablishinganeffective T A UN I I ON NVE N incentives for HE KDI V VE AIL D E-STOP SHOP Taxincentivesmayalsobe ER THE D S S

T O TME M F THE F P ENT A A N uptotenyearswithrespect non-Kuwaitishareholders’shareoftheprofitsfromqualifying CT MA I T RECT INVE OLLO S INC

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DI RECT 0UIFSDPOTJEFSBUJPOTGPSJOUFSOBUJPOBMJOWFTUPST • incentives: Foreign companiescanalsobeneftfromthefollowingtax Other tax incentives and theirshareholders. and grantsafve-yeartaxholidaytonon-Kuwaitifounders allows theformationofinvestmentandleasingcompanies Leasing andInvestmentCompaniesLawNo.12of1998 3 - Servicing Foreign • • • • • Investors shouldseektoobtaininformationregarding: processes willhelpanticipateandaddresssuchdelays. A thoroughunderstandingofapplicableproceduresand industrial land. face additionalconstraintsintermsoflimitedavailability can takeaprolongedperiod.Landintensiveprojectsmay In certaincases,obtainingtherequisitelicensingapprovals Points for consideration investment projects. three economiczonesthatwillaccommodatenew KDIPA isintheprocessoffnalizingastudyfordeveloping concerned governmentauthorities. or suggestionsthatitcanhelpfollowthoughwiththe Investors canalsoinformtheISCregardinganycomplaints Investment intheStateofKuwait. Law No.116of2013RegardingthePromotionDirect issue theinvestmentlicensesorgrantingincentivesunder manner, andtoensurefollowingtheproceduresrequired equipped torespondinquiriesinatimelyandeffcient KDIPA hasateamofqualifedstaffmembers,whoare encountered. assists theminovercominganyobstaclesthatmightbe investors inestablishingtheirbusinessKuwait,and KDIPA’s InvestorsServiceCentre(ISC)seekstosupport processes andaddresssuchchallenges. KDIPA canhelpinvestorsinnavigatingthroughtheoffcial Typical timerequiredtoobtainallclearances. Process andproceduresinvolvedintheapprovalprocess. authorities involved. Information abouttherelevantGovernmentandregulatory and permits. Understanding theprocessofobtainingbusinesslicenses Prerequisites, ifany,includingdocumentationrequired. BOE-PDBM Investors

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 58 59 Investing in Kuwait: A guide for Investment Opportunities in Kuwait business forms are set out below. options for establishment of businesses in Kuwait. The prominent The Companies Law and the Commercial Agencies Law provide flexible #VTJOFTTGPSNTJO,VXBJU Source: Ministryof Commerce &Industry,KPMGAnalysis Description

capital. interest in the membership extent of their only to the shall be liable Each partner fifty partners. a maximum association of A WLL is an company Limited liability (KSCC Closed) company Closed joint stock 116 of 2013 and under Law No. be established investors could for foreign ownership up to 100% companies with joint stock while a closed general rule This is as a authorities. the concerned approval of attaining company after KSCC Closed capital of a of the share own up to 49% foreigners may However, company. of a joint stock shareholders citizens may be only Kuwaiti As a rule, a non-Kuwaiti. established by firm can be A KSCC Closed therein. contained conditions terms and with the rules, in accordance company (KSCP) Public joint stock the law. prescribed by in the manner of equal value tradable shares is divided into whose capital a company A KSCP is Partnership assets for all their personal liable with all shall be jointly partners who General namely: of partners categories There are 2 the capital. contribution to of their to the amount the company obligations of liable for the shall only be and who contributions with cash of the company in the capital shall participate partners: who Limited the company. obligations of Joint venture (JV) between the relationship be restricted to company shall partners. The two or more between agreed is a company A JV company parties. respect of third operate in and shall not the partners agency Commercial the principal’s to promote undertakes by contract, local agent, agency: The Contract agencies: 3 types of There are permission. without his be disclosed name may not principal’s name. The in his/its own into contracts agent enters agency: The Commission the profit. percentage of in return for a defined territory product in a the principal’s distributor of is the Local agent agency: fee. Distributor in return for a the principal in the name of transactions to enter into territory and basis in the a continuous business on Branch do so through activities can commercial business and to conduct in Kuwait open an office wishing to company A foreign therein. contained conditions terms and with the rules, in accordance 116 of 2013 and the Law No. in Kuwait under open branches companies may foreign exception, while ,as an general rule, This is as a carried out. the operation is whose name agent under by a Kuwaiti be sponsored branch must a branch. The owner andtheliabilityofsuchislimitedtoextent ofthecapital. The CompaniesLawalsointroducedtheconceptofaSingle PersonCompanywhereinthecapitalisfullyheldbyasingle of members Minimum no. participation company Foreign Incorporation

2 116 of 2013. under Law No. be exceeded This quota may stake. Up to 49% Register. Commercial with the Registration of Association. a Memorandum application for Through company Limited liability (KSCC Closed) company Closed joint stock 116 of 2013. under Law No. be exceeded This quota may stake. Up to 49% five years. within the next remainder and the incorporation shares upon value of their the nominal 20 percent of minimum of have to pay a Founders incorporation. authorizing require a decree Does not - company (KSCP) Public joint stock 5 own shares. Permitted to incorporation. to be paid upon of the capital of 20 percent and a minimum subscription, the public paid for before which must be of capital, least 10 percent subscribe for at required to Founders are required. incorporation authorizing Decree is Partnership stake. Up to 49% 2 Registrar. Commercial with the of Association and Articles Memorandum registering a preparing and Established by Joint venture (JV) member. the Kuwaiti license of through trade Allowed, 2 procedures. establishment no formal Requires agency Commercial - - agents. commercial can act as nationals only Kuwaiti Register; Commercial with the registration Requires Branch 116 of 2013. under Law No. Exceptions Kuwaiti agent. Through a - -

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 60 61 Investing in Kuwait: A guide for Investment Opportunities in Kuwait 4 APPENDICES in the State of Kuwait Regarding the Promotion of Direct Investment • • • • • • • • • • • • • • • • Having reviewedtheConstitution; "11&/%*9 and Decree Law No. (105)of1980regardingthe and DecreeLaw No. (68)of1980asamended; byDecreeLaw Lawpromulgated and theCommercial Service Systemissuedon4April1979asamended; Service asamendedandtheDecreeregardingCivil No. (15)of1979regardingtheCivil and DecreeLaw and FinalAccountsasamended; for PreparingPublicBudgets,MonitoringtheirExecution No.(31)of1978regardingtheRules and DecreeLaw Commercial Storesasamended; and LawNo.(32)of1969regardingtheLicensing Business asamended; Central BankofKuwaitandtheOrganizationBanking and LawNo.(32)of1968concerningCurrency,the amended; and LawNo.(37)of1964regardingPublicTendersas Commercial Agencies; and LawNo.(36)of1964regardingtheRegulation amended; and TemporaryPossessioninthePublicInterestas and LawNo.(33)of1964regardingExpropriation Audit Bureauasamended; and LawNo.(30)of1964ontheEstablishment 2001; Diagrams andDesignsasamendedbyLawNo.(4)of and LawNo.(4)of1962regardingPatents,Industrial by LawNo.(17)of1960asamended; and TrialsLawpromulgated Procedures and theCriminal 1960 asamended; byLawNo.(16)of Lawpromulgated and theCriminal Tax asamended; (3)of1955regardingKuwaitiIncome and DecreeNo. Law No.(61)of1982; Adjudicating AdministrativeDisputes asamendedby of aDivisionintheCourtFirst Instancefor No. (20)of1981ontheEstablishment and DecreeLaw in theAuditingProfessionasamended; No. (5)of1981regardingthePracticing and DecreeLaw Properties oftheStateasamended; -BX / P • • • • • • • • • • • • • • • and LawNo.(8)of2001regardingtheRegulation Governmental Entitiesasamended; Promotion ofNationalLabourtoWorkintheNon- and LawNo.(19)of2000regardingtheSupport the IndustrialLaw; and LawNo.(56)of1996regardingthepromulgation Establishing theWorldTradeOrganization; and LawNo.(81)of1995onApprovingtheAgreement and LawNo.(26)of1995regardingFreeTradeZones; which wehaveratifedandissued : Assembly hasapprovedthefollowinglaw The National Medium Enterprises; for theEnhancementandDevelopmentofSmall and LawNo.(98)of2013regardingtheNationalFund Companies LawasamendedbyNo.(97)of2013; No. (25)of2012regardingthe and DecreeLaw Privatization ProgramsandOperations; and LawNo.(37)of2010regardingtheRegulation Developmental PlanfortheYears2011-2012/2013-2014; and LawNo.(9)of2010ontheIssuanceState of theState; Decree LawNo.(105)of1980regardingtheProperties Systems andtheAmendmentofsomeProvisions Operations ofBuild,OperateandTransferSimilar and LawNo.(7)of2008ontheRegulation Competition asamendedbyLawNo.(2)of2012; and LawNo.(10)of2007regardingtheProtection Companies intheState’sBudget; Contribution ofPublicandClosedShareholding and LawNo.(46)of2006regardingZakatthe Council Countries; Unifed CustomsCodefortheArabGulfCooperation and LawNo.(10)of2003onthepromulgation Countries; Economic AgreementbetweenGulfCooperationCouncil and LawNo.(5)of2003ontheApprovalUnifed Kuwait; Direct InvestmentofForeignCapitalintheState PG

Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 62 63 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Direct Investment: Capital: Investment Entity: License: Investor: Regulations: Director General: Chairman oftheBoard: Board: Authority: Relevant Minister: corresponding toeachofthem: The followingtermsandphrasesshallbearthemeanings Article 1: Definitions Application:

accordance with this Law. accordance withthisLaw. the StateofKuwaitlicensedin through anInvestmentEntityin employs hiscapitaldirectly participation ofanotherinvestor, Investor, individuallyorwiththe An investmentwherethe Law. licensed inaccordancewiththis through anInvestmentEntity purposes ofDirectInvestment is employedorusedforthe increase ofthecapitalorifit invested capitalifusedforthe Proftsandproceedsofthe 5. designs. industrial andtechnological registered tradenamesand patents, trademarks,licenses, Intangiblerightssuchas 4. Investment Entity. production oroperationsbythe the commencementofactual intermediate goodsrequiredfor Rawmaterialsand 3. technological devices. transportation meansandother Machinery,tools,equipment, 2. local orforeign commercial securities,bethey Funds,fnancialand 1. to thislaw,including: Investment Entitythatissubject Direct Investmentthroughan directly forpurposesof What isemployedorused State ofKuwait. activity legalexistenceinthe which grantssuchenterpriseor virtue ofaninvestmentlicense accordance withthisLawby activity thatislicensedin Is aneconomicenterpriseor accordance withthisLaw. Investment licenseissuedin nationality. Natural orlegalpersonofany Law. Executive Regulationstothis Director GeneraloftheAuthority. Relevant Minister. Authority. Board ofdirectorsthe Direct InvestmentPromotion Industry. Minister ofCommerceand The application submittedbythe Authority.

which shallincludethefollowing: both foreignandlocalDirectInvestmentinthecountry, The Authorityaimstoattractandpromoteencourage Article 3: Aims of the Authority the countryandabroad. Kuwait, anditshallhavetherighttoestablishoffceswithin The headquartersoftheAuthorityshallbeinState be attachedtotheRelevantMinister. under thename“DirectInvestmentPromotionAuthority”to A publicauthoritywithlegalpersonalityshallbeestablished Article 2: Establishment of the Authority objectives, andthefollowinginparticular: The Authorityshallperformalltasksnecessarytoachieveits Article 4: Tasks of the Authority this regard. accordance withthebestinternationalstandardsadoptedin professional skillsbyimplementingthelatesttechnologyin the nationalworkforce,andincreasingitsproductivity of Kuwait,thecreationemploymentopportunitiesfor diversifcation ofnationalrevenuesourcesintheState plans, thedevelopmentofproductionsectors, policy ofthestate,approvedeconomicdevelopment The Authorityshallperformitsactivitiesinlightofthepublic .Developingandimprovingtheinvestment 1. 3. 2. 1. Encouraginginvestorstotransfer,settleanduse 3. Raisingawarenessregardingtheimportance 2. country. and supporttoencourageDirectInvestmentinthe well astheprovisionofvariousmeansassistance removal ofhurdlesencounteredbyinvestorsas environment, thefacilitatingofproceduresand coordination with theconcernedauthorities. locations withinthegeneralstructural planin and suggesttheir zones To establisheconomic Regulations. in accordancewiththislawand itsExecutive to takethenecessaryactionsregarding them applicationsand To receiveandassessinvestors’ statistics toinvestors. providing availableinformation,clarifcationsand necessary studies,researchandstatistics granted toinvestors,inadditionpreparingany present theincentives,exemptionsandguarantees in thecountry,promotesuchopportunitiesand opportunities Direct Investment To screenpossible investors thatfostertheobjectivesofdevelopment. encourage and technicalmarketingexpertiseto modern andsophisticatedtechnologies,meansof means ofmarketing,orientationandpromotion. available DirectInvestmentopportunitiesbyall of theKuwaitiinvestmentenvironmentand especially foreigninvestment,andthepromotion importance ofDirectInvestment, production and operations, management methods, operations,management production and partnerships between Kuwaiti and foreign rules relevanttoeachcase. accordance withprinciplesand merge InvestmentEntities,in the Licenseorincentivesto Investor toobtain,asapplicable,

courts. the Authorityinitsrelationsto thirdpartiesandbeforethe shall signonbehalfoftheAuthority andshallrepresent The ChairmanoftheBoardor his authorizedsignatory determined byaresolutionof the CouncilofMinisters. renewal. TheBoardmembers’ remunerationshallbe The termoftheBoardshallbe fouryears,subjectto Relevant Ministerandamembershipof: The Authorityshallhaveaboardofdirectorschairedbythe Article 5: Board of Directors of the Authority 9. 8. 7. 6. 5. 4. 3. 2. 1. Direct Investmentinthecountry. that relatetoitsobjectivesorwouldencourage the CouncilofMinistersorRelevantMinister thetasksandmandatesassignedby To implement authorities. such hurdlesincoordinationwiththecompetent they mayencounterandattempttoovercome Investments inthecountryandidentifyanyhurdles ofDirect To overseeandmonitortheperformance encourage investmentsneededbythecountry. in coordinationwithconcernedparties,orderto and creditfacilities, To securepotentialfnancing work andactivities. prepare, printandpublishonalltopicsrelevanttoits to participateininternalandexternalevents, training programsinlinewithitsobjectives,and and workshopsaswellprovideservices exhibitions, To organizeconferences,seminars, of Kuwait. encouragement ofDirectInvestmentsintheState standards andreports,soastoensurethe the investmentfeldonbasisofinternational competitive positionandperformanceindicatorsin enhance itscompetitiveadvantageandmonitorthe investment environmentintheStateofKuwaitand and servicesrequiredtoimprovestreamlinethe authorities tosimplifyandfacilitatetheprocedures andcompetent withallrelevant To coordinate by theBoardinthisregard. accordance withtheprinciplesandrulesestablished the approvalofCouncilMinisters,andin that meettheobjectivesofAuthority,following management ofbusinessincubatorsforprojects companies specializedintheestablishmentor capitalof contributetothe To establishor of theBoardwithnorighttovote. attendthemeetings The DirectorGeneralwhoshall equivalent. is atleastthatofanassistantundersecretaryor the RelevantMinisterprovidedthattheirseniority of theCouncilMinisters,uponproposal Authority whoshallbenominatedbyaresolution government agenciesrelatedtotheactivitiesof representing members Three the ChairmanofBoardinhisabsence. amongst themwhoshallbegrantedthepowersof resolution shalldesignateavice-chairmanfrom upon theproposalofRelevantMinister.The appointed by a resolution of the Council of Ministers, matters assignedtotheAuthoritywhoshallbe members experienced Three theministriesand specializing inthe including theirrespectivespousesorrelativesofthefrst Members oftheBoard,employeesAuthority Article 7: Conflict of Interest committees. resolutions andtheorganizationofworkitssub- of itsmeetings,thetermsimplementation its affairs,defningtherules,procedures,andscheduling The Boardshallissuethenecessaryresolutionsregulating side favoredbytheChairmanshallprevail. of thevotesitsmembers.Whereareequal, The resolutionsoftheBoardshallbepassedbymajority matter withouthavingtherighttovote. individual toparticipateinthediscussionofanyparticular issued resolutions.TheBoardmayinvitetoitsmeetingany of theBoardandrecorditsminutesfollowupon secretary shallundertakethepreparationofmeetings of theBoardandselectedfromAuthority’sstaff.The The BoardshallhaveasecretaryappointedbytheChairman Chairman oftheBoardorvice-chairman. if attendedbythemajorityofitsmembersincluding the Boardorvice-chairmanandsuchmeetingshallbevalid The BoardshallconveneattheinvitationofChairman Article 6: Meetings of the Board same, includingthefollowinginparticular: general policyandsupervisetheimplementationof the objectivesofAuthorityandshallformulateits The Boardshallhaveallthepowersnecessarytoachieve Article 8: Powers of the Board all itseffectsandshallbeconsiderednonexistent. this provision,therelevantresolutionshallbevoidincluding making regardinganyproject.Intheeventofaviolation from participatingindiscussionsabout,orthedecision and shallbeboundtodisclosetheirinterestsabstain interest inanyprojectorservicesprovidedbytheAuthority degree areprohibitedfromhavinganydirectorindirect 9. 8. 7. 6. 5. 4. 3. 2. 1. To issue the resolution regarding the To issuetheresolution regarding and exemptionsinaccordance withthislaw. fromtaxincentives To setthecriteriaforbeneftting within thecountryandabroad. oftheAuthority To approvetheopeningofoffces penalties assetforthinthisLaw. and disciplinary administrative To imposethe this Law. assetforthin merger applications To resolveupon to therelevantauthorities. Authority anditsfnalaccountpriortoreferringthem budgetofthe To approvetheproposedannual in conductingitsbusiness. fnancial andtechnicalregulationsthatarerequired of theAuthorityandtoissueadministrative, To setthebylawsandorganizationalstructure management. or thosewhicharesubjecttoitssupervision land, realestateandplotsallocatedtotheAuthority fortheuseof principlesandrules To defnethe Executive Regulations. assessed inaccordancewiththisLawandits which basisvariousinvestors’applicationsare andstandardsupon principles,rules To defnethe Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 64 65 Investing in Kuwait: A guide for Investment Opportunities in Kuwait The Boardmaydelegatesomeofitspowerstothe Chairman oftheBoardortovice-chairman. cases: Investment Entity specifedaccordingtothefollowing in accordancewiththeprovisions ofthisLawbyan The ApplicationfortheLicense shallbesubmitted Article 12: Type of Investment Entity the StateofKuwait. regarding theinvestmentsofforeign corporateentitiesin The CouncilofMinistersshallsettheprinciplesandrules this regard. of thestateanditsplansproposalsBoardin Law andwhichshallbeupdatedinlightofthegeneralpolicy Investments thatwillbeexcludedfromthescopeofthis the CouncilofMinistersshallpreparealistDirect Within thelimitsofArticles152and153Constitution, Article 11: Negative List The Authority’sresourcesshallconsistofthefollowing: following fnancialyear. this lawcomesintoforceandshallendattheclosingof state .Thefrstfnancialyearshallcommenceonthedate year commencesandendswiththefnancialof The Authorityshallhaveanannexedbudget.fnancial Article 10: Financials of the Authority powers toanyofhisassistants. renewal. TheDirectorGeneralmaydelegatesomeofhis of theRelevantMinisterforfouryearsandissubjectto undersecretary appointedbydecreeupontheproposal assistants holdingatleastthepositionofassistant The DirectorGeneralshallbeassistedbyoneormore reasons forsuchrejection. the projectsapprovedandrejectedwith of theAuthorityincludingnumberprojectssubmitted, submitted totheCouncilofMinisters,regardingactivity shall furtherprepareanannualstatisticalreport,whichis fnancial functionsoftheAuthority.TheDirectorGeneral Board andshallsupervisethetechnical,administrative The DirectorGeneralshallimplementtheresolutionsof years andsubjecttorenewal. a decreeupontheproposalofRelevantMinisterforfour least thepositionofundersecretary,appointed,pursuantto The AuthorityshallhaveaDirectorGeneralwhoholdat Article 9: Director General 10. 3. 2. 1. subject toitssupervisionormanagement. of thefundsallocatedtoAuthorityorthatare provisions anditsExecutiveRegulations. of theobjectivesthisLawinaccordancewithits provisions ofthisLaw. committees inrespectoftheimplementation recommendations submittedbythecompetent Returns or revenues resulting fromtheinvestment Returns orrevenuesresulting Board inthisregard. the affairsofDirectInvestment,asresolvedby workshops ortrainingprogramsforthoseinvolvedin Authority’s activities,services,organizedevents, resultingfromthe Returns, revenuesorallowances budget. allocatedtoitintheannual state funds Financial To issue resolutions necessary forthefulfllment To issueresolutionsnecessary The ExecutiveRegulationsshallestablishtheprinciples, Article 13: Rules of Application lack ofresponse shallbedeemedarejection of theappeal. thirty daysfollowing thedateofreceipt appeal,such rejection. Inthe eventthereisnoresponseto theappeal be reasonedandinwriting.The applicantmayappealthe In theeventApplicationis rejected, therejectionshall Article 16: Rejection of Application the Authority. Application withthedata,documents andconditionssetby within thirtydaysfromthedateofsubmissionacomplete A decisiononthemeritsofApplicationshallberendered Article 15: Term for Decision on Application the provisionsofthisLaw. branches andrepresentativeoffces,whicharesubjectto and issuanceofLicensessupervisioncompanies, Ministry ofCommerceandIndustryontheincorporation In allevents,theAuthorityshallcoordinatewith implementation ofitsprovisions. of 1968,andtothedecisionsinstructionsissuedin Law, withoutprejudicetotheprovisionsofLawNo.(32) their branchesshallbesubjecttotheprovisionsofthis The Licensefortheincorporationofforeignbanksand Code. provisions ofArticle24theaforementionedCommercial to theprovisionsofparagraph1Article23and This Licenseshallnotbesubject,withregardstoforeigners, submission oftheApplicationtoAuthority. Investor shallbenotifedofsuchrequirementspriortothe regarding eachofthecasessetforthinthisLaw,and principles andassessmentrulesestablishedbytheBoard the DirectorGeneral,ifApplicationfulfllscriteria, The Licenseshallbeissuedpursuanttoadecisionof Article 14: Issuance of Licenses notifcation andthefeesforissuanceofLicenses. by theapplicant,appropriatemethodsofnoticeand attached totheApplicationandconditionsbemet information andstatementsthatmustbecontainedin,or cases setforthinthisLaw.Theyshallfurtheroutthe of ApplicationstoobtaintheappropriateLicensein rules andproceduresforthesubmissionregistration 3. 2. 1. shall settheprinciplesandrulesinthisregard. activity orofcommercialagents.TheBoard possibilities, withoutengaginginacommercial of preparingmarketstudiesandproduction thesolepurpose Representative offceshaving procedures forthecommencementofoperation. the offcialauthoritieswithrespecttonecessary between thebranchofforeigncompanyand the principlesandrulesregulatingrelationship the proposalofBoard,aresolutionclarifying Investment. TheRelevantMinistershallissue,upon within theStateofKuwaitforpurposeDirect licensedtooperate A branchofaforeigncompany and rulessetforthundertheCompaniesLaw. of thecompanyinaccordancewithprinciples in suchcompanymayamountto100%ofthecapital purpose ofDirectInvestment.Foreignparticipation No. (25)of2012,whichwillbeincorporatedforthe promulgated bytheaforementionedDecreeLaw forms ofcompaniessetforthintheCompaniesLaw ofthelegalentity A Kuwaiticompanyhavingone savings andentitlements abroad. in theInvestment Entityshallhavetherightto transfertheir compensation set forthinthisLaw.Moreover, employees his sharesorparticipationinthe InvestmentEntityorthe profts, capitalorproceedsresulting fromthedisposalover The Investorshallhavetheright totransferabroadhis Article 22: Transfer of Monies Abroad the mergedInvestmentEntities. remaining forexemptionsandincentivesgrantedtoanyof The new entity shall automatically enjoy the shortest periods entities intheirrightsandobligations. successor tothemergedentitiesandshallreplacesuch the newentityresultingfrommergershallbealegal joint requestsubmittedtotheAuthorityinthisregard,and carried outwiththeconsentofBoard,followinga The mergeroftwoormoreInvestmentEntitiescanbe Article 21: Merger of Investment Entities obligations. or assigneeshallreplacetheoriginalownerinrightsand the InvestmentEntity,inwholeorpart,newowner In theeventoftransferorrelinquishmentownership regulations inthisregard. Kuwaiti investor.TheBoardshallestablishtheprinciplesand over itinwholeorpart,forthebeneftofaforeign ownership ofthelicensedInvestmentEntity,ordispose The Investorhastherighttotransferorrelinquish Article 20: Disposal of the Investment Entity paid assoonthesaiddecisionistaken. any threatofexpropriation.Theduecompensationistobe estimated inaccordancewiththeeconomicsituationpriorto of theexpropriatedprojectattimeexpropriation, against compensationequivalenttothetrueeconomicvalue interest andonlyinaccordancewiththeapplicablelaws Law norbedeprivedofitspropertyexceptinthepublic provisions ofthisLaw,shallbeconfscatedpursuantto No InvestmentEntity,licensedinaccordancewiththe Article 19: Compensation for Expropriation with separately. Investment Entity,eachEntityshallbedealt Where theInvestorisgrantedlicensesformorethanone supervised byanauditorormoreamongthelegalauditors. provisions ofthisLaw,shallmaintainregularaccounts Each InvestmentEntity,licensedinaccordancewiththe Article 18: Accounts of the Investment Entity Authority. in accordancewiththeprinciplesandrulessetby qualifed consultingfrmsthatareapprovedbytheAuthority The applicantmayappointspecializedcompaniesor coordinating betweenthemandtheAuthority. method tobeadoptedforcallingupontheiremployeesand to identifythementionedgovernmentauthoritiesand The Boardshallestablishtheprinciplesandrulesnecessary the periodsetoutinthisLaw. in ordertoensurethecompletionofprocedureswithin procedures andtheestablishmentofInvestmentEntity authorities toproceedwithresolvinguponthelicensing employees designatedbytherelevantgovernment Authority calledthe“One-StopShop”whichshallinclude An administrativeunitshallbeestablishedwithinthe Article 17: One-Stop Shop incentives: The Investorshallbeentitledtosomeorallofthefollowing Article 27: Incentives and Exemptions also agreetorefersuchdisputesarbitration. and thirdparties,whoevertheymaybe.Theparties consider anydisputesarisingbetweeninvestmentprojects The Kuwaiticourtsaretheonessolelycompetentto Unless thereisaspecialprovisioninthisLaw,thelawsand Investments Article 24: Legislative Framework of Direct issued byajudicialauthority. permitted bylaworpursuanttoajudgmentanorder that issubjecttotheprovisionsofthisLaw,exceptwhere technical, economicorfnancialaspectsofaninvestment any ofitsdivisions,relatingtoinvestmentinitiativesorthe to hisparticipationinanactivityinitiatedbytheAuthorityor gained knowledgeofasaresulthisemploymentordue divulges orbeneftsfromanyinformationthathemighthave thousand dinarsoreitheroneofthesetwopenalties,who not lessthanonethousanddinarsandexceedingten imprisonment foratermnotexceedingoneyearandfne for inanyotherlaw,apersonshallbepunishedwith Without prejudicetoamoreseverepenaltyprovided country. the provisionsoflawsandregulationsinforce investment andtosafeguardinitiativesinaccordancewith technical, economicandfnancialinformationrelevanttohis the basicprinciplesofconfdentialityinrespect By virtueofthislaw,theInvestorshallbeentitledto Article 23: Confidentiality of Information Article 26: Competent Courts and howtolicensethesame. the regulationsinrelationtoexpansionsandmodifcations which thisLawcomesintoforce.TheBoardshallestablish expansion ormodifcationoccursfollowingthedateon or modifcationofanexistingInvestmentEntityifthe The provisionsofthisLawshallapplytoanyexpansion for inthisLawtheAuthority’sconsideration. implementation. Investorsmayapplyforprivilegesprovided this Lawshallbenolessthanwhatwasgrantedbeforeits the incentives,exemptionsandguaranteesgrantedunder such DirectInvestmentstoanydamage,providedthat prior tothisLawcomingintoforce,withoutsubjecting Investments andthoseinvestmentsthatwerelicensed The provisionsofthisLawshallapplytoexistingDirect Article 25: Scope of the Law’s Application observed. investments andtheavoidanceofdoubletaxationshallbe international conventionsinforcethecountryrelatedto Investments fallingwithinthepurviewofthisLaw,andall regulations applicableinthecountryshallgovernDirect 2. 1. of theexemption grantedtotheoriginalInvestment paragraph, fora periodofnolessthantheduration this Law,fromthetaxessetforth inthepreceding Entity, licensedinaccordance with theprovisionsof anInvestment anyexpansionof Exemption of investment entity. actual commencementofoperations ofthelicensed period notexceedingtenyears fromthedateof anyothertaxesfora income taxor Exemption from Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 66 67 Investing in Kuwait: A guide for Investment Opportunities in Kuwait for theimportationattimeofdisposal. and shallpaythetaxesfeesthatwouldhavebeendue the principlesandrulesdecidedbyBoardinthisregard, for whichtheywereimported,exceptinaccordancewith utilize thegoodsinanyothermannerthanforpurpose assignment. Duringthesameperiod,Investormaynot described inthisclause,includingbywayofsale,swapor in thisarticle,fromdisposinganymanneroverthegoods date notifyinghimofexemptionsfromthedutiesdescribed The Investorisprohibited,foraperiodoffveyearsasthe criteria: nature, shallbeconnectedtoall orsomeofthefollowing granted forinvestments,each accordingtoitstypeand The value,typeanddurationof incentivesandexemptions state andeconomicdevelopment plans. in thisregardlinewiththeapproved generalpolicyofthe principles, rulesandprocedures establishedbytheBoard by the Authority with the goal of ensuring that it satisfes the following theapplicationforLicense,consideration the incentivesprovidedforinthisLaw,simultaneouslyor The InvestorshallapplytotheAuthorityforallorpartof of Incentives Article 29: Application and Criteria for Granting establishes therelevantrulesandprinciples. of 2008andLawNo.(37)2010providedthattheBoard including companiesandprojectsstipulatedinLawNo.(7) sectors establishedforthepurposeofDirectInvestment, types ofpartnershipsbetweenthepublicandprivate The provisionsofthepreviousarticleshallapplytoall Private Sectors Exemptions to Partnerships of the Public and Article 28: Applicability of Incentives and 5. 4. c. b. a. 3. 6. what hasbeendescribedintheprevioussubsection. Spare partsandnecessarymaintenancesuppliesfor transport andothertechnologicaldevices. andmeansof Machinery, toolsandequipment Direct Investment: be payableonimportsrequiredforthepurposesof taxes, customsdutiesoranyotherfeesthatmay following shallbewhollyorpartiallyexemptedfrom for theGulfCooperationCouncilCountries, of 2003promulgatingtheUnifedCustomsCode ofLawNo.(10) totheprovisions Without prejudice production oractualoperationoftheexpansion. Entity asofthedatecommencement exemptions, whicharenotmentionedinthisarticle. some casesandgroupscertainadvantages Ministersmaydecidetogrant The Councilof national employmentthatmustbeprovided. Ministers inrespectoftheminimumproportion restrictions establishedbydecisionoftheCouncil investment, inaccordancewiththeprinciplesand required forthe offoreignlabor The employment rules establishedbytheBoardinthisregard. management, inaccordancewiththeprinciplesand Authority orthatissubjecttoitssupervision The useoflandandrealestateallocatedtothe goods, wrappingmaterialsandpackaging. rawmaterials,partiallymanufactured Merchandise, of theStateandapprovedeconomicdevelopmentplans. aforementioned criteria,inaccordancewiththepublicpolicy The Boardmayamendoraddothercriteriatothe impose oneofthefollowingsanctions: this LawortherequirementsofLicense,Boardmay In caseofaviolationbytheInvestorprovisions Law or the License Article 32 : Sanctions in Case of Violation of the Council ofMinisters. projects, within30daysfromthedateofsubmissionto a copyofthestatisticsrelevanttoitsactivitiesand a copyoftheannualreportissuedbyAuthorityand The RelevantMinistershallsubmittotheNationalAssembly Article 31: Annual Report required documentationanddata. content aswellthemechanismforregistrationand specifying themethodofsettingupregisterandits The DirectorGeneralshallissueanydecisionsrequiredfor related datashallbeattachedtotheregister. and penaltiesconnectedthereto,alldocuments well asallApplications,Licenses,incentives,exemptions accordance withtheprovisionsofthisLawarerecorded,as be preparedinwhichallInvestmentEntitieslicensed A specialregistercalledthe“InvestmentRegister”shall Article 30: Investment Register 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 3. 2. 1. consulting services. Use ofnationalproducts. practiced. the specifcprojectoreconomicactivitythatisbeing the communitythatareoutsideframeworkof offersservicesto The extenttowhichtheproject impact. Favorable environmental similar projectsoractivities. ofareasthatlack thedevelopment Contribution to national workforce. andtrainingofthe opportunitiesfor, Creation ofjob Increase innationalexports. diversifcation. Investment anditscontributiontoeconomic marketforDirect The needofthelocalandGulf offered. productsandservices The amountandqualityofthe the StateofKuwait. advanced technicalandmarketingexperienceinto modern managementmethodsaswellpractical, technologyand The transferandsettlementof Temporary administrativedetention. Temporary addressed. may bereconsiderediftheviolation hasbeen exemptions granted.Thedecision ofwithdrawal and Partial ortotalwithdrawalofincentives warning. Investment Entitywithinoneyear ofthefrst been addressedtothesameInvestor orthesame can bedecidedintheeventthreewarningshave Written warning,andamoreseveresanction Use of national technical, professional and Use ofnationaltechnical,professional to theprovisionsofthisLaw,shallundertakefollowing: investment wasgrantedincentivesorexemptionspursuant The Investor,whohasbeengrantedaLicenseorwhose Article 34: Obligations of the Investor decision inthisregard. refer ittotheBoardwithhisopinioninordertakea following itscompletiontotheDirectorGeneral,whoshall detailed reportontheresultsoftheirworkimmediately The relevantemployeesoftheAuthorityshallsubmita end ofmyservice.” available tomeinthecourseofmydutiesevenafter will safeguardtheconfdentialityofinformationmade with honesty,impartiality,integrityandtruthfulness,I “IswearbyAlmightyGodthatIwillperformmywork following oathbeforetheMinister: the performanceoftheirduties.Theyshallalsotake of InvestmentEntitiesreceivedbytheminthecourse the obligationnottodiscloseconfdentialinformation work withhonesty,integrityandimpartialityshallhave and decisions.Thesaidemployeesshallperformtheir implementation of this Law and its implementing regulations the capacityofjudicialoffcersinordertomonitor by virtueofadecisionissuedhim,shallbegranted Specialist employees,whoaredesignatedbytheMinister Officers Article 33: Appointment and Powers of Judicial criminal liability. imposition ofsuchsanctionsdoesnotprejudiceanycivilor relevant totheInvestmentEntityassociatedtherewith.The Investment RegisterstipulatedinthisLawthesection date ofnotifcationtotheInvestorshallberecordedin Sanctions imposedinaccordancewiththisarticleandthe appeal, thedecisionshallbewrittenandjustifed. be decidedwithinthirtydaysandincaseofrefusalthe date ofnotifcationthesanctiondecision.Theappealshall subsections 2and3ofthisarticlewithinthirtydaysfromthe The Investormayappealagainstthesanctionssetforthin request. submitted bytheAuthorityprovidingjustifcationfor President oftheCourtFirstInstancebasedonapetition terminated exceptaccordingtoanorderissuedbythe cases, theLicensemaynotberevokedorInvestment out theprinciplesandrulesnecessaryinthisregard.Inother acceptable justifcation.TheExecutiveRegulationsshallset the timeofrequestLicenseApplication,without to thetimetableprovidedbyInvestorAuthorityat from thedatesetforactualoperationstobeginaccording justifcation, orinthecaseofadelaymorethanoneyear and businessformorethanayearwithoutacceptable law intheeventInvestmentEntityceasesitsactivities The Licenseshallbeconsiderednullandvoidbyforceof 3. 2. 1. regulations issued bytheMinistryofFinance, andtax Comply withthe rulesandfnancial said date. within aperiodnotexceeding thirty daysfromthe actual operationofthelicensed InvestmentEntity, ofthedatestart Notify theAuthorityinwriting from thedateofeachthem. thereof, withinaperiodnotexceeding thirtydays Investment Entityandthedateofcompletion steps necessarytostarttheworkoflicensed the beginningofmeasuresandoperational ofthedate Notify theAuthorityinwriting Sabah Al-Ahmed Al-Jaber Al-Sabah Amir ofKuwait publication intheOffcialGazette. shall comeintoforcesixmonthsfollowingthedateofits respective capacity,shallimplementthisLawwhich The PrimeMinisterandtheMinisters,eachintheir Article 38: Implementation of the Law of thisLawisrepealed. Law No.(8)of2001andanyotherarticlewhichisinbreach Article 37: Repeal of Law No. (8) of 2001 date ofitspublicationintheOffcialGazette. implementation ofitsprovisionswithinsixmonthsfromthe to thisLawandtakethedecisionsnecessaryfor The RelevantMinistershallissuetheExecutiveRegulations Article 36: Executive Regulations from theaforementionedbureautoAuthority. for thetransferofemployeeshedeemsappropriate the datethisLawcomesintoforce,decisionsnecessary The RelevantMinistershallissue,withinsixmonthsfrom the remunerationgrantedinkindandcashtoemployees. Directors, whichshallincludetherulesofappointmentand appointed accordingtotheregulationssetbyBoardof system issuedon4April1979,theAuthorityshallhavestaff (15) of1979andthedecreeconcerningcivilservice Without prejudicetotheprovisionsofDecreeLawNo. No. (8)of2001shallbetransferredtotheAuthority. the ForeignInvestmentBureauestablishedpursuanttoLaw All funds,assets,obligations,rightsandanythingrelevantto Authority Article 35: Funds, Assets and Employees of the 6. 5. 4. not toexposeothersrisk. relating tosecurity,publichealth,orderand duty toprotecttheenvironmentandregulations regulations applicableinthecountry,especially performance ofhisworknottoviolatethelawsand In allcases,theInvestorisobligedduring what hedeemsappropriateinthisregard. completion totheDirectorGeneral,whoshalldecide results oftheirworkimmediatelyfollowingits employees shallsubmitadetailedreportonthe the Investoragainstactualpractices.TheAuthority’s information, statisticsanddocumentssubmittedby this Lawaswellverifyingthecontentofdata, following upinaccordancewiththeprovisionsof Investment Entity,forthepurposeofmonitoringand sites andfacilitiesassociatedwiththelicensed by theDirectorGeneral,toenterallbuildings, authorized Allow anyoftheAuthority’semployees this Law. the Authorityinordertoimplementprovisionsof documents requestedanddeemednecessaryby Provide anyinformation,data,statisticsor returns andissuingofthetaxcard. especially thoserelatedtothesubmissionoftax Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 68 69 Investing in Kuwait: A guide for Investment Opportunities in Kuwait in the State of Kuwait Regarding the Promotion of Direct Investment Ca Investment Entity: License: Investor: Law: Director General: Chairman oftheBoard: Board: Authority: Relevant Minister: corresponding toeachofthem: The followingtermsandphrasesshallbearthemeanings Article (1) Chapter I: Definitions *NQMFNFOUJOH-BX/PPG "11&/%*9&YFDVUJWF3FHVMBUJPOT pital:

for pur What isemployedoruseddirectly designs. and industrialtechnological registered tradenames patents, trademarks,licenses, Intangible rightssuchas 4. Investment Entity. production oroperationsbythe the commencementofactual intermediate goodsrequiredfor technological devices. means oftransportationandother local orforeign commercial securities,bethey Funds,fnancialand 1. is subjecttothislaw,including: through anInvestmentEntitythat Kuwait. the legalexistenceinStateof investment licensewhichgrants with thisLawbyvirtueofan is licensedinaccordance Any economicActivitythat these Regulations. accordance withtheLawand Investment licenseissuedin nationality. Natural orlegalpersonofany above. Law No.(116)of2013referredto Director GeneralofKDIPA. Relevant Minister. Board ofDirectorsKDIPA. Promotion Authority(KDIPA). Kuwait DirectInvestment Industry. Minister ofCommerceand .Rawmaterialsand 3. Machinery,tools,equipment, 2. poses of Direct Investment

Direct Investment: Commencement ofExecution:: MinistersInvestment Register: Activity: Application:

another investor,employs or withtheparticipationof the Investor,individually An investmentwhere Law andtheseRegulations. licensed inaccordancewiththis through anInvestmentEntity purposes ofDirectInvestment it isemployedorusedforthe the increaseofcapitalorif the investedcapitalifusedfor Proftsandproceedsof 5. the InvestmentEntity. commencement ofoperations by activities thatprecedethe preliminary proceduresand The commencementof competent authorities. which areissuedbythe commencement ofoperations, permissions requiredforthe approvals, authorizationsand permits andotherlicenses, recorded, includingbuilding and changesmadetheretoare relating toInvestmentEntities The registerinwhichalldata Ministers. resolution oftheCouncil that shallbedeterminedbya from thescopeofLaw,and whose activitiesareexcluded forth inthelistofinvestments exception oftheactivitiesset Investment ismade,withthe impact throughwhichDirect Every Activitywitheconomic rules relevanttoeachcase. accordance withprinciplesand merge InvestmentEntities,in the Licenseorincentivesto Investor toobtain,asapplicable, The applicationsubmittedbythe with theLaw. of Kuwaitlicensedinaccordance an InvestmentEntityintheState his capitaldirectlythrough

within theircompetencies, includingthefollowing: forms andallelse necessarytocompletethe tasks thatfall or action;andshallbeprovided withalldata,information, a higherauthorityinordertotake theappropriatedecision completion oftransactionswithout havingtoreferback they representtoperformthe duties necessaryforthe Such employeesshallbedesignated bytheauthorities representing themintheOne-Stop Shop. administrative supervisionofthe employeeswhoare in theOne-StopShopshallcoordinaterespectof The Authorityandthegovernmentauthoritiesrepresented Article (6) representation. behalf ofInvestor;iftheInvestorwishtotakeupsuch submit andfollow-uponApplicationsinthename frms andoffcesthatareprequalifedapprovedto The Authorityshallpreparealistofspecializedcompanies, Article (5) raised inrespectofsuchguides. shall alsoberesponsibleforrespondingtoanyqueries The One-StopShop setting outtherequirementsforcompletionoftransactions. introductory guides,tobeapprovedbytheDirectorGeneral, The One-StopShopshallberesponsibleforpreparing General. also undertakeanyfurthertasksassignedbytheDirector and licensesrelevantthereto.TheOne-StopShopshall thereto, andshallissuerenewapprovals,permits Investment Entityandanyexpansionschanges transactions relatingtotheInvestor’sestablishmentof The One-StopShopshallberesponsibleforcompletingthe be specifedbytheBoard. suffcient numberofgovernmentauthorities’employeesto the “One-StopShop”.Suchunitshallbestaffedwitha The Authorityshallhaveanadministrativeunitcalled Article (4) Chapter III: One-Stop Shop assigned tothem. interest anditsrelevancetothetaskscompetencies and shallsubmitittotheDirectorGeneralstating The Authority’semployeesshallalsocommittodisclose, disclosure shalladviseontheinterestreferredto. the Boardwhendiscussingprojectorservice.Thesaid the secretariatofBoard,whichshallinturnreferitto therefrom. Suchdisclosureshallbepresentedinwritingto shall benullandvoidaswellallconsequencesarising to suchprojectorservice;failingdoso;resolution in thediscussionorpassingofanyresolutionrelated Board. Theyshallinallcasesrefrainfromparticipating relatives inanyprojectorservicetobepresentedthe and theinterestsoftheirspousesfrstdegree the DirectorGeneralshallcommittodisclosetheirinterests Each oftheChairmanandmembersBoard, Article (3) eliminate obstaclesfacingtheinvestors. the investmentenvironment,facilitateproceduresand Direct Investmentinthecountry,developandstreamline Ministers ortheRelevantMinister,thatwouldencourage relevant toitsobjectivesassignedtheretobytheCouncilof shall undertaketheexecutionofanyothertasksthatare objectives andcompetenciesstipulatedintheLaw, The Authorityshallcarryoutthebusinessachievingits Article (2) Authority Chapter II: Kuwait Direct Investment Promotion Article (8) to be submitted to the Authority Chapter IV: Investment Entity and Applications and decisionsnecessaryinthisregard. of theirtransactions,andshalltakeallactions,measures proposals submittedbystakeholdersregardingtheprogress follow-up systemthatshallincludereceivingcomplaintsand within itsjurisdictions;shallformulateandoverseea accuracy ofthecompletiontransactionsthatfall procedures andindicatorsthatensurethespeed the One-StopShop,andshallsetrules,mechanisms, The DirectorGeneralshalloverseetheworksystemwithin Article (7) proving theacceptanceofhis Application forthepurposes The Authorityshallhandoverto theapplicantareceipt by theAuthority,includingregistered mailore-mail. Submission mayoccurthrough anyothermeansspecifed documents submittedbytheInvestor orhisrepresentative. The Authorityshallreceivethe Applications,papersand Article (10) services renderedbytheAuthority. The RelevantMinistershalldeterminethefeesfor and inparticularthefollowing: various typesoftransactionsthatfallwithinitsjurisdiction The Authorityshallpreparetheapplicationformsfor Law. licensing ofeachtypeInvestmentEntityreferredtointhe Board shallsetthespecifcprinciplesandrulesfor Subject totheprovisionsofArticle(12)Law, Article (9) pursuant toanyofthefollowingforms: these Regulations,throughaspecifedInvestmentEntity, licensed inaccordancewiththeprovisionsofLawand (12) oftheLaw,activitiesDirectInvestmentshallbe Without prejudicetotheprovisionsofArticles(11)and .Providingtheservicesthatfallwithinjurisdiction 2. Receivinganddeliveringallthepapers,Applications, 1. .Amendmentstothepercentageofshareholders’ 4. Amendmentstothename,address,purpose,capital 3. Grantingofincentivesandexemptions. 2. LicensingofanInvestmentEntity. 1. Arepresentativeoffcehavingthesolepurpose 3) Abranchofaforeigncompanylicensedtooperate 2) AKuwaiticompany,incorporatedforthepurposeof 1) authorities, ifrenderednecessary. One-Stop Shopandfollowingupwiththeiroriginal of theiroriginalauthorities,atthepremises rendered necessary. and followitupwiththeiroriginalauthorities,if necessary approvalsanddecisionsrelevantthereto, receipts andfees;takingallactions,issuingg documents, contracts,permits,licenses,approvals, equity inanInvestmentEntity. or domicileofanInvestmentEntity. Activity orofcommercialagents. possibilities, withoutengaginginacommercial of preparingmarketstudiesandproduction Investment. in theStateofKuwaitforpurposesDirect or asingle-personcompany. shareholding company,oralimitedliability might obtaina100%shareofthecapital Companies Lawreferredto.Theforeigninvestor Direct Investmentpursuanttotheprovisionsof Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 70 71 Investing in Kuwait: A guide for Investment Opportunities in Kuwait shall includeinparticularthefollowing: The Applicationforthelicensing ofarepresentativeoffce Article (16) operations. a certifcateevidencingitsexistence andperformingits articles ofassociation,thelatest auditedbalancesheetand to acertifedcopyofthecompany’smemorandumand particulars setforthintheprecedingarticle,addition company shallbeaccompaniedbyaninitialstudyofthe The Applicationforthelicensingofabranchforeign Article (15) include thefollowing: accompanied byaninitialstudy,whichshallspecifcally for theestablishmentofaKuwaiticompany,itshallbe In ordertoacceptreceivingtheLicenseApplication Article (14) Execution andcommencementofoperations. reveal thetimetableofbothCommencement authorities, allofwhichshallbevalid.TheInvestor information, dataanddocumentsrequiredbythecompetent Regulations, theLicenseApplicationmustinclude Without prejudicetotheprovisionsofLawandthese Article (13) Chapter V: Rules of License Applications reasoned andinwriting. event ofarejection,thedecisionforrejectionneedstobe notifed oftheapprovalorrejectionApplication.In signature oftheDirectorGeneral.TheInvestorshallbe correspondence inthisrespectshallbeissuedwiththe and theseRegulations.Decisionsanynecessary be madeinaccordancewiththeprovisionsofLaw Deciding onthemeritsofApplicationssubmittedshall Article (12) register shallinparticularrecordthefollowinginformation: Applications, accordingtotheirtypeandprecedence.The The Authorityshallset-uparegistertorecordall Article (11) conditions, informationanddocuments. of review,afterensuringthefulflmentallrequired .TypeofActivityandtheformInvestment 4. TheInvestor’sname,addressandnecessary 3. ThedateonwhichtheInvestorreceivedreceipt 2. ThetypeofApplicationanditsnumber. 1. )Acertifedcopyofthe memorandumandarticles 2) Thepurposeoftheestablishment oftheoffce. 1) Anyfurtherdataorclarifcationsrequestedbythe 9) Theestimatedannualquantityofwaterandenergy 8) TheneedsoftheInvestmentEntityfornationaland 7) Theexperienceandcapabilitiesoftheinvestor. 6) Theeconomicandenvironmentalimpact. 5) Financingstructureandsources. 4) Thesizeoftheinvestment. 3) Thelegalformofthecompanyrequiredtobe 2) ThetypeofproposedActivityorproject. 1) Theappropriatemeansofnotifcation,whichshallbe 5. Application. Authority beforeorafterthesubmissionof required. intermediate goodsandtheirsupplysources. foreign labour,areaoflandrequired,rawmaterials, licensed. specifed bytheAuthority. Entity. identifcation particulars. described intheprecedingarticle. period shallnotexceedoneadditionalyear. Investor ifhesubmitsacceptablereasons,providedthatthis The DirectorGeneralmaygrantadditionaltimetothe submitted totheAuthorityspecifesalongerperiod. the dateofissuanceLicense,unlesstimetable for theCommencementofExecutionwithinoneyearfrom The InvestmentEntitymustobtainthenecessaryapprovals Article (18) General. The LicenseshallbeissuedbyadecisionoftheDirector commercial licenseshallproceed. incorporation oftheInvestmentEntityandissuance In casetheAuthorityapprovesLicenseApplication, Authority andthecompetentauthorities. conditions, data,papersanddocumentsrequiredbythe Application withinthirtydaysasofthefulflmentall The AuthorityshalldecideonthemeritsofLicense Article (17) with thedates to bespecifedbytheMinistry ofFinance. tax returnonthe exemptedInvestmentEntity inaccordance Investment Entity;providedthat theInvestorshallprovidea from thedateofcommencement ofoperationsthe exemptions foraperiodnotexceeding tenyearsbeginning The Investormaybeneftfrom incometaxoranyother Article (22) Activity. Regular andseparateaccountsshallbemaintainedforeach of thedatecommencementactualoperations. calculated foreachActivityseparatelyas Regulations, thenthetaxexemptionperiodshallbe governed bytheprovisionsofLawandthese If anInvestmentEntitypracticesmorethanoneActivity the supervisionofoneormorecertifedauditors. provisions oftheLawshallmaintainregularaccountsunder Each InvestmentEntitylicensedinaccordancewiththe Article (21) Second TaxExemption respect. be limitedtotheActivityapprovedbyAuthorityinthis granted toanInvestmentEntitywithmultipleactivitiesshall The incentivesandexemptions,includingtax Article (20) and rulesestablishedbytheBoardinthisregard. the submissionthereof,uponfulflmentofallconditions can accompanytheLicenseApplicationorbedoneafter (27) oftheLawonformspreparedforthispurpose.This receive theincentivesandexemptionsprovidedforinArticle The InvestorshallsubmittotheAuthorityanApplication Article (19) and Exemptions First The Procedures for Obtaining Incentives Chapter VI: Incentives and Exemptions such date. the commencementofoperationswithinthirtydaysfrom The InvestorshallnotifytheAuthorityofactualdate limit setforthintheprecedingparagraph. The Boardmaygrantanothertimelimitexceedingthe )Anyfurtherdataorclarifcationsrequestedbythe 3) Application. Authority beforeorafterthesubmissionof existence andperformingitsoperations. audited balancesheetandacertifcateevidencingits of associationtheforeigncompany,itslatest or anyotherfees thatmaybedueonimports necessaryfor fully orpartially exemptedfromtaxesandcustoms duties Arab GulfCooperationStates, the InvestmentEntityshallbe on thepromulgationofUnifed CustomsCodeforthe Without prejudicetotheprovisions ofLawNo.(10)2003 Article (28) following: provisions oftheLawandtheseRegulations,subjectto from customsdutiesandtaxesinaccordancewiththe The InvestmentEntityshallbefullyorpartiallyexempted Article (27) Application. imports ofInvestmentEntities,whicharethesubject customs exemption,intermsoftheadoptionlists the technicalandproceduralaspectsofApplicationsfor shall determinethecooperationmechanismsforhandling Administration ofCustomsandotherconcernedauthorities, The Authority,incoordinationwiththeGeneral Article (26) all relevantparties. Director Generalandshallbeconclusiveevidencetowards The customsexemptioncertifcateshallbeissuedbythe established bytheBoard. in accordancewiththeprinciples,rulesandstandardstobe The Applicationforcustomsexemptionshallbeassessed subject oftheApplication. shall beaccompaniedbyalistofthematerials,whichare with theformspreparedforthispurpose.TheApplication duties shallbesubmittedtotheAuthorityinaccordance The Applicationfortheexemptionfromcustomtaxesand Article (25) Third Customs Exemption production oractualoperationsoftheexpansion. case shallenterintoforceasofthecommencementdate the existingInvestmentEntity.Thetaxexemptioninthis The foregoingprovisionsshallapplytotheexpansionof towards allrelevantparties. copy ofsuchcertifcate,whichshallbeconclusiveevidence operations. TheMinistryofFinanceshallbeservedwitha of theActivityanddatecommencementactual tax exemption.Suchcertifcateshalldeterminethescope operations, delivertotheinterestedpartyacertifcateof (13) oftheseRegulationsandthecommencement of theparticularsnotifcationprovidedforinArticle of receiptnotifcation,followingverifcationthevalidity The DirectorGeneralshallwithinffteendaysfromthedate Article (24) the implementingexemption. documents, dataorclarifcationsrequestedforthesakeof with regardtothesubmissionoftaxreturnsandany instructions issuedbytheMinistryofFinance,especially The Investorshallcomplywiththefnancialandtax regard. principles, rulesandstandardsitdeemsappropriateinthis provisions of Article (29) of the Law. The Board shall develop with thecompetentauthorities,inaccordance value shallbedeterminedbytheAuthority,incoordination Application shallbesubmittedandtheexemptionperiod Authority ontheformspreparedforthispurpose.The The taxexemptionApplicationshallbesubmittedtothe Article (23) )Theimportedmaterials,intermsofquantityand 2) Theimportationshallbemadeinthenameof 1) the ActivityofInvestment Entity. quality areconsistentwiththe natureandneedsof Investment Entityorforitsaccount. the purposesofInvestmentEntity,including: Fifth Conversion of the Investment Entity applicant, andthemannerofallotment. determination oftheareasthatcanbeallottedtoan by theAuthority,shallbeassessed,aswell and realestateallocatedto,supervisedadministrated on thebasisofwhichApplicationforusageland The Boardshallsetouttheprinciples,rulesandstandards Article (30) Fourth Allotment of Land and Real Estate supplies, materialsandgoodssubjecttothesaidexemption. equipment, devices,meansoftransport,spareparts, commit tomaintainaregisterrecordallmachinery, The InvestmentEntityenjoyingcustomsexemptionsshall Article (29) decision bytheconcernedperson.. thirty daysfromthedateofnotifcation orknowledgeofthe The grievanceshallbesubmitted tothecommitteewithin regarding decisionsissuedby the Authority. shall becompetenttoreceive grievances fromstakeholders be designatedastheheadof saidcommittee,which consisting ofatleastthreemembers,fromwhomoneshall The Boardshallformacommitteetoreceivegrievances, Article (35) Chapter VII: Grievances the Investor,orbonafdethirdparties. affect therightsandobligationsofInvestmentEntity,or form toanotherform;theconversiondecisionshallnot another, orifthelicensedcompanyconvertsfromalegal In casetheInvestmentEntityconvertsfromoneformto Article (34) resolution. entity inaccordancewiththeprovisionsofdivision the rightsandobligationsdevolvedtheretofromdivided subrogate itinitsrightsandobligations,withinthelimitsof shall bethesuccessorsofdividedentityand Investment Entities,theentitiesarisingfromsuchdivision In caseofanInvestmentEntity’sdivisionintotwoormore Article (33) Article (27)oftheLaw. incentives tocompletetheten-yearperiodprovidedforin for thereceiptofotherexemptionsand The newentitymaysubmittotheAuthorityanApplication to anyofthemergedInvestmentEntities. remaining durationofanyexemptionandprivilegesgranted The newentityshallautomaticallybeentitledtotheshortest Article (32) obligations. merged entitiesandshallsubrogatethemintheirrights new mergedentityshallbethelegalsuccessorof two ormoreInvestmentEntitiesmaybemerged.The After obtainingtheapprovalofcompetentauthorities, Article (31) )Intermediategoods,rawmaterials,partially 3) Sparepartsandnecessarymaintenancesuppliesfor 2) Machinery,tools,equipment,meansoftransport, 1) materials andsupplies. manufactured goods,wrappingandpackaging what hasbeendescribedintheprevioussubsection. and othertechnologicaldevices. Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 72 73 Investing in Kuwait: A guide for Investment Opportunities in Kuwait performing theirduties: of judicialoffcersshallcomply withthefollowingwhen The employeesoftheAuthority whohavethecapacity Article (42) offcers andprovidethemwiththeforegoingasrequired. The InvestmentEntityshallfacilitatethetasksofjudicial shall havetherighttotakefollowingactions: order toperformtheirdutiesofsupervisionandfollow-up, The personswhohavethecapacityofajudicialoffcer,in the Regulationsandimplementingdecisions to monitortheimplementationofprovisionsLaw, employees whoshallhavethecapacityofjudicialoffcers The RelevantMinistershallissueadecisiondeterminingthe Article (41) competent authoritiesinthisregard. with theMinistryofCommerceandIndustryother the Authority;providedthatAuthorityshallcoordinate regulations andsupervisoryinstructionsprescribedby All InvestmentEntitiesshallbesubjecttotherules, Article (40) Chapter VIII: Judicial Officers and shallbefnal. confdential anditsdecisionsshallbepassedbymajority, of itsregistration.Thecommittee’sdeliberationsshallbe of areasoneddecisionwithinthirtydaysfromthedate The committeeshalldecideonthegrievancebasis Article (39) clarifcations anddocumentsitrequires. committee mayaskrelevantstakeholderstosubmitthe person, orbyanagentthrougharepresentative.The grievance therewith,toattendbeforethecommitteein of thematterandshallnotifypersonsubmitting committee, whoshalldeterminethedateofhearing The grievanceshallbereferredtotheheadof Article (38) the registrationnumberanddateofgrievance. submitting thegrievanceshallreceiveareceiptindicating the registerpreparedforsuchpurpose,andperson upon thereceiptthereof.Grievancesshallberecordedin Board, whoshallnotifytheDirectorGeneraltherewith Grievances shallbesubmittedtothesecretariatof Article (37) documents, inparticular,thefollowing: The grievanceshallbeaccompaniedbysupporting Article (36) )Thesubjectofthegrievanceandreasonsupon 3) Thedateofissuancethedecisionthatissubject 2) Thename,designation,addressandcontactdetails 1) )Thesupervisionandfollow-up shallbedonein 2) Theduties ofthejudicialoffcershallbeperformed 1) Preparingwrittenminutesdocumentingviolations 3) Accesstoallrequesteddocumentsanddata, 2) AccessallpremisesofInvestmentEntities. 1) at theAuthority. and referringthesametocompetentauthorities of datastorageorprocessing. tapes andcomputersystemsanyothermeans in particular,records,books,exhibits,documents, which ithasbeenbased. submitting thegrievance.. or knowledgeofsuchdecisionbytheperson of thegrievanceanddatenotifcation of thepersonsubmittinggrievance. premises ofan Investment Entity. during theoffcialworkinghours, andatthe the registrationthereinaswelldocumentsanddata up oftheregister,contentthereof,mechanism The DirectorGeneralshallissuethedecisionsforsetting documents anddatashallbeattachedtosuchregister. and theirassociateddatashallberecorded.Allrelevant all Applications,Licenses,incentives,exemptions,sanctions licensed inaccordancewiththeprovisionsofLaw,and maintained bytheAuthority,inwhichallInvestmentEntities A specialregistercalled“InvestmentRegister”shallbe Article (44) Chapter IX: Investment Register this regard. his opinionontakingthenecessarydecisionsoractionsin the DirectorGeneral,whoshalltransmitittoBoardwith of theirworkimmediatelyafterthecompletionthereofto judicial offcersshallsubmitadetailedreportontheresults The employeesoftheAuthoritywhohavecapacity Article (43) which shallberecordedintheInvestmentRegister. decisions orproceedingsreferredtointheprecedingclause, Any stakeholdershallnotifytheAuthorityofanyjudgments, continuation. that wouldaffecttheInvestmentEntity’sActivityorits in writingofanyjudgments,decisionsorproceedings of theLawandtheseRegulations,shallnotifyAuthority incentives orexemptionsinaccordancewiththeprovisions The InvestmentEntitylicensedbytheAuthorityorgranted Article (45) required therefor. Regulations andimplementingdecisions. proper applicationoftheprovisionsLaw,its The goalofsuchactivitiesshallbetoverifythe respect oftheactivitieslicensedbyAuthority. of currenciestoavoidinfationfromtheweakenedUSdollar. it againrevertedtopeggingtheKDanundisclosedbasket to peggingitscurrencytheUSdollar,however,post2007 the USdollarhadlargestweight.In2003,Kuwaitshifted currencies, representingitsmaintradingpartnersofwhich controls. Over1975-2002,theKDwaspeggedtoabasketof currency whichisfreelyconvertibleandhasliberalexchange divided into1,000unitscalledfls.Kuwaithasastable The Kuwaitiunitofcurrencyisthedinar(KD),which Monetary indicators Exchange rates (KD vs. USD) Monetary Indicators network integrated housingdevelopments,ametroandnationalrail of existingroads,portsandairportinfrastructure,largescale infrastructure anddevelopmentprojectssuchasexpansion USD In 201 distinction ofsurplusfunds. foreign investmentinnon-oilsectorsandmoreequitable by encouragingprivatesectorparticipation,promotingof to achievegreatereconomicdiversifcationbeyondoil Additionally, thereisarenewedeffortbytheGovernment Key Economic Information "11&/%*9&DPOPNJD*OGPSNBUJPO for thecountry. between 2014and201 record anaverage Government expenditure.ItisanticipatedthatKuwaitwould sustained surplusesfortheGovernmentdespiteincreasein ( Oil revenueremainsakeydeterminantofKuwait’seconomy Source: Source: CentralStatistical BureauAnnualStatisticalAbstract, EIU 60 % of 103 4 TheIslamicFinancial ServicesBoard(IFSB),CBK , theGovernmentearmarkedinvestmentsof . nominal Bnforthe GDP nominal second in201 providingarobusteconomicoutlook GDP growthof Kuwait DevelopmentPlanon 4) andhascontributedto over 3. % which isexpectedtoincrease4. In 201 remained fairlystableover2013and2014atKD0.284. to aweightedbasketofcurrencies. Dollar asthecurrencypegwasswitchedfromUS 2007, whentheKDroseto0.273from0.289againstUS Consequently, theKDwitnessedasuddenappreciationin for investmentsintheeconomy. stable interestrateregimeleadingtofurtherencouragement On theinterestratefront,CBKensuredarelatively positive developmentsinthisarea. Kuwait adoptsproactivemonetarypoliciesandresultant their investmentsagainstforeignexchangevolatility. Kuwaiti Dinar is attractive for investors looking to safeguard much in the recent years. The relatively strong and stable regime, however, the value of the currency has not fuctuated The monetary system in Kuwait is based on the foating rate Nominal GDP and economic growth 4 , Kuwaitrecordedaninflationrateof2. 4 Theexchangeratehas % by201 Appendices . percent

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 74 75 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: MOE,PAHW, MOH universities inUS,UKandEurope. educational programsinalliancewithvariousinternational A numberofprivatepost-secondarycollegesexist,offering nationals. University butadmissionsaregenerallyrestrictedtoKuwaiti The apexofthepubliceducationsystemisKuwait educational systems. of British,American,French,Indian,Pakistaniandother serve thegrowingexpatriatepopulationofferingcurriculum Several internationalschoolshavebeenestablishedto heavily subsidizedbytheGovernment. all Kuwaiticitizens.EvenprivateinstitutionsinKuwaitare tertiary level,arefullyfnancedbythestateandfreefor to fourteenyears.Alllevelsofeducation,includingthe Education ismandatoryforallchildrenagedbetweensix involving fouryearsofstudy. intermediate, andsecondarylevels,witheverylevel In Kuwait,educationisdividedintoelementary, towards advancementofthesystem. education infrastructureandvariousGovernmentincentives over recentyearsowingtolarge-scaleinvestmentsin The educationsysteminKuwaithasdevelopedsignifcantly Education "11&/%*9-JWJOH Education and Health education ofwomenacrossthecountry. numerous initiativeshavebeenimplementedtofurtherthe Women aregrantedequalrightstoeducation,and developed publichealthcaresystem. hospitals andninespecialisthospitalunits,Kuwaithasawell With morethanseventyprimarycarecenters,sixregional Health include developmentofeightadditionalhospitalsby2016. improve Kuwait’shealthcarestandards.Governmentplans Kuwait ispartneringwithworldleadinghospitalstofurther package. health-care plansaspartoftheircompensationandbeneft Employers usuallyofferexpatriateemployeesprivate waiting periods. and clinics,whichofferwidermedicalservicesshorter schemes, whichallowsfortheuseofprivatehospitals Expatriates generallyprefertobeapartofprivateinsurance which providefreeorlow-costhealthcaretoallresidents. accessible throughalargenumberofclinicsandhospitals, in 1960to Life expectancyratioinKuwaithasimprovedfrom59years over 7 yearsin201 . Publichealthcareiseasily Source: MOP,MOFA being issuedandarevalidforthirtydays.Visitvisaswhere Visas andentrypermitscanbeusedwithinninetydaysof Foreign Ministrywebsiteforadetailedcountrylisting). nationalities entryvisasuponarrival(pleaserefertoKuwait entry permitforKuwait.Since2004,Kuwaithasgranted34 All visitors,exceptforGCCnationals,requireavisaor Entry visas and work permits living inthecountry. others whichformapartofthesociallifeexpatriates Westerners-Arab Relationscenter,IndiansinKuwaitamong support servicesincludingassociationslikeAdvocatefor Kuwait alsohasanumberofexpatriatecommunity ranges isparticularlypopularamongyouthinKuwait. Jet-Skis, diving,Quad-bikesandshootingonspecialized competitors. number ofstadiumscapablehostinginternational There isawellequippedsportsinfrastructureandlarge generously, makingitanintegralpartofKuwait’ssociety. The Governmentsupportsthedevelopmentofsports as popularAsiansportslikecricketandhockey. sports ofWesternsocieties-footballandbasketballaswell camel andhorseracingfalconry-withcontemporary Kuwait’s sportsculturecombinesthetraditional- Museum, DicksonHouse,SaduHouse). history, theArabcultureandtraditionalarts(e.g.National There areseveralmuseumswhichfocusonKuwait’s Park arealsopopularfamilydestinations. outdoor themeparksliketheEntertainmentCityandShaab is particularlypopularamongchildren.Notwithstanding, Kuwait offersazoologicalparkandanaquarium,which Failaka andWarbaIsland. located tothemainland–Kuwait’smostpopularislandare enjoy visitinganyofKuwait’snineislands,whichareclosely During thespringandautumnmonths,peopleparticularly sports forsportenthusiasts. from welldevelopedfacilitiesforfamiliestoadventure Kuwait offersawidearrayofrecreationalfacilities,ranging Recreational activities Recreation and visas terrorism orviolence. potential criminals.Kuwaitdoesnotsupportanykindof a strongpoliceforce,andstrictcriminallawwhichdeters crime rateslowerthanmostwesternsocieties.Kuwaithas Kuwait strivestomaintainsafetyforitsresidentswith Security more closelyinformedaboutthebusinessenvironment would liketopresenttheirinvestmentproposals,orbecome visitor’s visapermitforinterestedforeigninvestors,who KDIPA providesacomplimentaryserviceofissuing residency visaisissuedoncetheexpatriateentersKuwait. who isthenissueda“NoObjectionCertifcate”.Theactual apply fortheresidencyvisaonbehalfofexpatriate, Government organization.TheKuwaitiemployerhasto employment offerfromaprivatecompanyorKuwaiti visa, whichcanbeissuedonthebasisofavalid Working inKuwaitrequiresaworkpermitandresidency company duringtheirstayinthecountry. immigrants havetobesponsoredbyaKuwaitinationalor Kuwait’s immigrationsystemisbasedonsponsorship- involve anominalcostofUSD10.7(KD3). required areusuallyissuedwithintwoworkingdaysand either acceptanceordenial,anddulyinformtheinvestor. authorities toassesstherequestandobtainresponse, Upon receipt,KDIPAwillcoordinatewiththecompetent should sendacopyoftherequireddocumentsbye-mail. the issuanceofvisitor’svisaintoKuwait.Theinvestor with KDIPA’sstatedcriteriaandconditions,canapplyfor foreign investors,whohavecredibleprojectsthatcomply granted undertheDirectInvestmentLaw.Inthisregard, in theStateofKuwait,orinquireaboutincentives Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 76 77 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: http://us.practicallaw.com, ICDT’sMemberStates BusinessGuides:www.icdt-oic.org • • • • aspects ofthenewCompaniesLawinclude: replacing theCommercialCompaniesLawof1960.Key proftability andtoencourageforeigninvestmentinKuwait, practices intheprivatesector,improvecompetivenessand as amendedbylawNo.97/2013)toenhancebusiness Law (NewcommercialcompaniesdecreelawNo.25/2012 In December2012,KuwaitintroducedanewCompany "11&/%*9*NQPSUBOUMFHJTMBUJPOTJO,VXBJU to franchiseagreements. payments. Provisionsregardingagenciesmaybeapplicable laws donotprescribeafxedformorlimitofroyalty conditions astheydeemftandappropriate,Kuwait’s The partiesarefreetonegotiatethecommercialtermsand the parties. agreements asperthetermsandconditionsagreeduponby 67/1980). Royaltypaymentsarestructuredinthefranchise Franchise agreementsaregovernedbytheCivilCode(No. Franchise agreements Franchise agreements and exchange controls The Company Law stock companies,introducinggreaterfexibilityintermsof security sharesformembersoftheBoardDirectors Elimination ofminimumshareholdingrequirementsand commercial entities; more transparent,fairandrobustmanagementof Managers andDirectors,whichisexpectedtoencourage Management andanexpansionofthepowers Separation oftheBoardDirectorsfromExecutive governance; Adherence tobestpracticesrelatedcorporate (KDIPA); namely theKuwaitDirectInvestmentPromotionAuthority department attheMinistryofCommerceandIndustry, incorporation andlicensingofacompanythroughsingle Introduction oftheconcepta‘onestopshop’for • • • out ofKuwaitwithoutanyrestrictions. fees, personalsavingsandothercanallbetransferredin Equity, loancapital,interest,dividends,profts,royalties, licensed foreignexchangedealer. exchange purchasesneedtobemadethroughabankor transactions inKuwait,beyondarequirementthatallforeign There arenorestrictionsoncurrentorcapitalaccount refecting Kuwait’stradeandcapitalfows. exchange rate,whichisbasedonabasketofcurrencies, The KuwaitDinarisfreelyconvertibleattheprevailing transferability applies. restriction; theconceptoffreeconvertibilityandatotal Exchange regulationsinKuwaitdonotimposeanyparticular Exchange Controls advantages fortheIslamicfnancesector; convertible bonds,whichisperceivedtocreate Corporate regulationsregardingSukuks,bondsand limited liabilitycompanies;and Simplifcation ofthetransfermembershipinterestsin of Boardmembers; Adoption ofthecumulativevotingsystemforelection shareholding; young adultsaswellcreatejobopportunities. sector andexpectedtopromoteentrepreneurshipamong new lawisexpectedtodrivedevelopmentoftheprivate 98/2013 tosupportandpromoteSMEdevelopment.The Kuwait enactedaSmallandMediumEnterpriseslawNo. • • • • • • operations. regulating build, operate and transfer (BOT) and similar The PPP sector law in Kuwait is covered in Law 116 of 2014 Public Private Partnerships (PPP) Public Private Partnerships and Privatization Law SME Law Source: DLAPiperMiddle EastLLP, from thedateofcompletionconstruction. The maximumtermofaPPPcontractwillbe50years on behalfofcitizensKuwait;and The PPPAuthoritymaysubscribetosharesintheprojects 250 Mn); projects withatotalcostnotexceedingUSD880Mn(KD The CouncilofMinisterswilladvisethestructurePPP project; process andaninvestorcanholdtheentirecapitalofsuch (KD 60Mn)willbeofferedthroughacompetitivetender PPP projectswithatotalcostnotexceedingUSD210Mn the newAuthority; with thefunctionsandpowersofBoardDirectors A SupremeCommitteeonPPPprojectswillbeformed “Partnerships TechnicalBureau” A newPublicAuthoritywillbecreatedtoreplacethe KAPP , UnitedNationsDevelopment Programme,business-anti-corruption.com • KSE orcompaniesapprovedbytheSCP; At least35%needstobeofferedcompanieslistedonthe such companyisallocatedasfollows: manages theprojectgoingforward.Theshareholdingof company, whichholdstheassetstobeprivatisedand The PLrequirestheestablishmentofashareholding with theprivatisation. sought fromtheCouncilofMinisterspriortoproceeding for Privatization(SCP),afterwhichanapprovalneedstobe Projects needtobefrstselectedbytheSupremeCouncil framework fortheprivatisationofpublicenterprises. The PrivatisationLaw,Law37of2010,defnesabroad The Privatisation Law • • • No morethan20%shouldbeallocatedtoGovernmental established. SCP, maybidforsharesintheprojectcompanybeing include foreigninvestorswho,onceapprovedbythe the publicinterest.Privatesectorparticipationmayalso the boardandgeneralassembly,inordertoprotect the statevotingrightstoobjectanyresolutionsof ownership oftheshareholdingcompany,whichwillgrant The Governmentwillretainamajorityshareinthe by Kuwaiticitizens. No less than 40% should be offered for public subscription employees transferredtotheshareholdingcompany;and No morethan5%shouldbeallocatedtoKuwaiti bodies nominatedbytheSCP; Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 78 79 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: KuwaitTax Authority, www.ecbg-kuwait.com,www.state.gov, www.ecbg-kuwait.com,www.knowyourcountry.com Source: www.kuwaitlaborlaw.com, www.arabtimesonline.com, www.kuwaitiah.net to theextentofforeignownership. companies withforeignownershiparesubjectedtotaxation Kuwaiti/GCC citizensarenotsubjecttotax.However,GCC GCC citizensorbycorporationswhicharefullyowned Bahrain, UAEOmanandQatar)fullyownedbyKuwaiti/ Council (GCC)countries(comprisingofKuwait,SaudiArabia, Kuwait. EntitieswhichareregisteredinGulfCooperation only toforeignentitiescarryingontradeorbusinessin Executive by-lawsandcirculars.TheDecreeisapplicable of 1955andthenewTaxLawNo.22008,alongwithits Income taxcomplianceisgovernedbyAmiriDecreeNo.3 Corporate IncomeTax the practicesofKuwaitTaxAuthority. The Kuwaittaxenvironmentisconstantlyevolvingthrough Ministerial OrderNo.44of1985. with theLawisenforcedbyMinistryofFinancethrough There isnowithholdingtaxinKuwait,however,compliance from businessactivities. income taxesdonotapplyeitheronsalariesor Kuwait taxratesareamongthelowestworldwide.Personal Taxation employees beforemakinganypaymentstoothercreditors. any outstandingsalariesandterminationbeneftstohis In caseofbankruptcy,theemployerisobligedtopay per monthisspecifedforexpatriates. Kuwait. However,aminimumsalaryofUSD890(KD250) There isnominimumwageforKuwaitiemployeesin Remuneration andDeductions such ashealthcare. not encouragedtoworkatnights,apartfromcertainsectors accordingly equallyappliestomenandwomen.Womenare The lawdoesnotdistinguishbetweengender,and origin applies. case thelabourlawgoverninginemployer’scountryof of Kuwait,withouthavingabranchoffceinwhich employees whoseemployer’sheadoffceislocatedoutside The privatesectorlabourlawsalsodonotapplyto contracts, andthosewithatenureoflessthansixmonths. which applytoallemployeesexceptforthoseontemporary labour lawsintheprivatesector,(LabourlawNo.6/2010) Kuwait’s MinistryofSocialAffairsandLabourregulates Labour laws and regulations Labour laws Taxation to helpresolvelabourdisputedamicably.Failingthis, The MinistryofSocialAffairsandLabouractsasamediator Individual LaborDisputes based onlastdrawnsalaryandnumberofyearsservice. lump sumpaymentcalledterminationindemnitycomputed Upon employmenttermination,anemployeeisentitledtoa Employment terminationbenefts their inabilitytowork. days giventhattheypresentamedicalcertifcatestipulating Thereafter theymaybeabsent,beingunpaid,forupto100 of 30dayspriortodeliveryand40afterdelivery. Women areentitledtomaternityleaveofupamaximum Maternity leave periods arenotincludedinthecalculationofworkinghours. must beallowedafterfveconsecutivehoursofwork.Rest day and48hoursaweek.Arestbreakofatleastone-hour The standardworkinghoursarelimitedtoeighta Standard workinghours • • • corporate incometax: The followingcategoriesofincomearesubjecttothe entities. resulted insignifcantdecreaseoftaxliabilityforeign maximum taxrateof55%wasapplicable.Thefat direct investmentinthecountry2008,priortowhicha Kuwait Taxationlawwasamendedtoboostforeign They areliabletopayincometaxatafatrateof15%. shareholder inalocallyregisteredshareholdingcompany. either throughanagentorjointventureasaminority Foreign companiescancarryonbusinessinKuwait disputes arereferredtothelabourcourt. attributable toforeigncorporatepartners. The proportionofthenetproftaKuwaitijointventure entity attributabletoforeigncorporateshareholders;and The proportionofthenetproftaKuwaiticorporate with, orrelatedtoitsoperationswithinKuwait; outside Kuwaittotheextentthatproftsareconnected The netproftsofaforeigncompanyoperatingwithinor Source: KuwaitTax Authority, www.ecbg-kuwait.com,www.state.gov, www.ecbg-kuwait.com,www.knowyourcountry.com tax oncashdividendsreferredtoabove. portfolios fortheircustomersarerequiredtodeduct15% Kuwait, Investment Trustees and Funds Managers managing KSE areexemptfromtax.Accordingtocurrenttaxlawin by aforeigncompanyfrommeretradinginshareslistedon (KSE) issubjectto15%tax,however,capitalgainsderived entity asaresultofinvestmentinKuwaitStockExchange under thetaxlaw.Acashdividendreceivedbyanyforeign assets andsharesaretaxableasnormalbusinessprofts Gains derivedbyaforeigncompanyonthedisposalof provision ofaTaxClearanceCertifcate. 5% fromcontractorandtoreleasetaxretentiononlyonthe by documentation.Contractownersarerequiredtoretain incurred outsideKuwait,providedtheyarefullysupported income tax,withadeductionforthedirecttechnicalcosts Kuwait, incomefromthewholecontractissubjecttoKuwait technical work,designorresearchisperformedoutside onshore activity.Inthecaseofcontractswherepart out outsideKuwaitunderacontractwhichalsoinvolves Place ofperformanceisinterpretedtoincludeworkcarried place ofperformancetheservicesiswithinKuwait. The sourceofincomeisconsideredtobeinKuwaitifthe without limitationsastoperiod,butcannotbecarriedback. be carriedforwardanddeductedfromsubsequentprofts management fees,technicalservicesorinterest.Lossescan taxation, includesanyamountsreceivableforroyalties, The foreignparty’sproportionofnetproft,subjectto paid asonedeposittogetherwiththeTaxDeclaration. possible topaythetaxdueinfourequalinstalments,ifnot is taxableincomelessthanUSD18,700(KD5,250).It through subsidiarycompanies,incomefromallactivities line ofbusinessinKuwait,eitherdirectlyorindirectly If aforeigncompanyhasmorethanoneactivityinsimilar • • • • groups: Income Taxlawdividesallowabledeductionsintofourmain expenses shouldbewellsupportedanddocumented.The legitimate, necessaryandreasonable.Legitimatecosts incurred outsideKuwait,aredeductible,providedthey All expensesincurredbyabusiness,including Deductions considering theintroductionofavalue-added-taxsystem. as partofaregion-wideGCCplan,theGovernmentis of profts)andNationalLaborSupportTax(NLST).However, required topayZakat(areligioustithewhichisonepercent the country.Localshareholdingcompaniesarehowever Sale Tax/ValueAddedTaxandStampDutyisnotleviedin assessed valueofthegoods. are liabletocustomdutyatafatrateof5%theinvoice/ France andCanada.Further,goodsimportedintoKuwait signifcant numberofcountries,includingtheUK,Germany, The StateofKuwaithasDoubleTaxationTreatieswith of CommerceandIndustry. in practiceKuwaitwhoisalsoregisteredwiththeMinistry and The DirectorofIncomeTaxesrequiresthatthedeclaration statements andotherspecifeddocuments. in aspecifedformat,accompaniedbyauditedfnancial to besubmittedinArabictheDirectorofIncomeTaxes to amaximumperiodof18months.Ataxdeclarationis approval foraperiodshorterorlongerthan12monthsup frst andlastaccountingperiods,itispossibletoobtain consecutive monthsasthefrstaccountingperiod.For A taxpayermayfollowonecalendaryearcomprising12 Taxes within30daysandapplyforaTaxCard. required toregisterthemselveswithDirectorofIncome Upon commencementofbusiness,foreigncompaniesare the trade. destruction orlossofinventoryotherpropertyusedin against thetaxpayer,andlossesduetodamage, include, inparticular,baddebts,claimsfordamages covered byinsurancepaymentsorotherwise.These Losses sustainedinthetradeorbusinessthatarenot equipment; and depreciation andobsolescenceofproperty,machinery A reasonableamountineachtaxableperiodfor establishment expenses; in Kuwaitsuchasadministrative,overheadand Other expensesthatrelatetothetradeorbusiness Cost ofgoodssoldorservicesrenderedbythetaxpayer; the supporti ng statements are certifed by an accountant Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 80 81 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: http://uk.practicallaw.com trade, oraredetrimentaltofreetradeinKuwait. in Kuwaitorabroad,whichrestrictcompetitionandfree Law No.10of2007appliestoviolationsthatarecommitted • • dominant market/monopolyposition,if: Under LawNo.10of2007,companiesaredeemedtoholda • • • • The keypillarsaresummarizedunderneath: and Industry. of acompetitioncouncilundertheMinistryCommerce addition, theamendedlawNo.2/2012ledtoestablishment was enactedtofurtherregulatecompetitioninKuwait.In Law No.10of2007(asamendedbylaw2/2012)which detrimental tofreetradeorcompetitionareprohibitedby All agreements,contractsandpracticeswhichare transactions andtradeagreements. illegal competition,aswellmonopoliesincommercial Kuwait’s CommercialLawaimstoregulateunfairand Competition regulation competition There isnocompetition,ineffectiveorsmall-scale Prices arecontrolledand/orcompetitionisevaded;and three aforementionedareasoffocus Competition, whichinvestigatesanycomplaintsaboutthe Establishment oftheAuthorityforProtection Supervision ofmergersandacquisitions; Prevent theabuseofdominantmarketpositions; Free tradeandfaircompetition; • • • • • • as prohibitive: Law No.10of2007).Thefollowingpracticesareregarded engaging infurtherpracticesthatlimitcompetition(Article4, more than35%ofthemarketshareisalsoprohibitedfrom the marketpriceofaproductorservicethroughcontrol Any naturalorartifcialpersonwhoiscapableofinfuencing maximum ofthreeyears. and suspensionoftheproductsfrommarketfora confscation ofgoods,adoublefneforrepeatedoffences, include (Articles19to22,LawNo.10of2007):fnes, Criminal penaltiesassociatedwithviolationofthislaw Penalties • Selling productsatapricelowerthantheiractualcostwith Concealing goodsandservicesavailableinthemarket; commercial activityinthemarket; Preventing orimpedingapersonfrompractisingany an artifcialmarketpricewhichaffectsothercompetitors; Creating asuddenabundanceoftheproduct,resultingin without justifcation; goods byconcealingorwithholdingtherelevant Totally orpartiallycontrollingthefreedomoffow to competition; decreasing, orfxingpricesbyanyothermeansharmful Limiting thefreefowofgoodsorservicesbyincreasing, distribution ormarketingprocess. Totally orpartiallysuspendingthemanufacturing, the intention of causing harm to competing producers; and Source: www.e.gov.kw terms (Article42). for fveyearsandrenewabletwoadditionalconsecutive Department (Articles36and37).Theregistrationisvalid registration needstobesubmittedtheTrademarkControl Industrial Designs&ModelsRegisterandanapplicationfor Similarly, industrialdesignsmustberegisteredinthe be renewedforanadditionalfveyearterm(Article12). date oftheapplication(Articles10and12).Thepatentmay right tousethatpatentbyanymeansfor15yearsfromthe Once registered,theownerofpatentisvestedwith • • • to: For patentstobeeligibleforregisteringtheinventionsneed patents inKuwait(Article5). as companiesandotherjuristicpersonalities,toregister in countrieswhichprovideKuwaitreciprocity,aswell The lawpermitsforeignerswhoarenationalsoforlive Ministry ofCommerceIndustry(Article4). Patents OffceattheTrademarkControlDepartmentof Patent protectionisobtainedthroughregisteringwiththe Patents (1962). intellectual properties,whicharegovernedbyLawNo.(4)of acknowledges thenecessitytosupportandprotect Kuwait aimstodevelopaknowledgesociety,andhence Property Rights(TRIPS)agreement. (WTO), andsignedtheTradeRelatedAspectsofIntellectual Kuwait isamemberoftheWorldTradeOrganization Intellectual property rights methods. Be newapplicationsofexistingindustrialprocessesor Relate tonewindustrialprocesses/methods;or Relate tonewindustrialproducts;or • • Copyrights fornon-Kuwaitisarelimitedtothefollowing: for copyrightinfringement. which providescopyrightprotectionanddefnespenalties Copyrights inKuwaitaregovernedbyLawNo.(64)of(1999) Copyrights years accordingArticle(77)oftheLaw. application isapproved.Itmayberenewedforanother10 The trademarkwillbeprotectedfor10years,assoonthe registration ofhistrademarkattheRegisterTrademarks. According toArticle(64),anypersonmayapplyforthe (1980) asamendedbyLawNo.1of2001. governed bytheCommercialCode,whichisLawNo.(68)of Trademark registrationandpenaltiesforinfringementare Trademarks 20 and50years,dependingonthekindofcopyright. The periodofcopyrightprotectiontypicallyrangesbetween • provided thattheirworksarepublishedinanyofthose the ArabAgreementforProtectionofAuthor’sRights, Works ofArabauthors,whoarecitizensanycountry Works thatarepublishedforthefrsttimeinKuwait. states. their worksarepublishedforthefrsttimeinoneofthose the WorldIntellectualPropertyOrganization,providedthat Works ofauthors,whoarecitizensmemberstates countries; and Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 82 83 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: EIU,www.bryancave.com • • • • • following: protection. ThemainobjectivesoftheKEPAare necessary activitiesandfunctionstoensureenvironmental Public Authority(KEPA),withtheaimtocarryoutall the lawNo.16/1996toestablishKuwaitEnvironment In 1995,thelawNo.21/1995wasissuedandamendedby Kuwait Environment Public Authority Environmental protection law affairs. and internationalconventionsrelatedtoenvironmental Study andreviewaccessiontoratifcationofregional society asawhole;and sustainable developmentoftheenvironmentand Set andimplementstrategiesactionplanstoensure safety, protectionanddevelopment; and promulgateregulationstoensureenvironmental organizations todraftlaws,setenvironmentalstandards, Cooperate andcoordinateactionswithallrelevant Combat andcontrolenvironmentalpollution; safeguard theenvironment; Set andimplementstrategies,policiesplansto resident companiesneedtocomplywith. areas. Industrialareasmayhavefurtherregulations,which Industrial areasaregenerallyseparatedfromresidential may notonlyfaceajailterm,butalsoseizureoftheirassets. have tocarryoutremedialactionattheirownexpenseand particular groundwater,areevenmoresevere.Offenders Regulations regardingthepollutionofnaturalresources,in damages athisexpense. of uptothreeyears.Thepolluterisalsoobligedrectify face fnesofuptoUSD35,600(KD10,000)orajailterm that violatesenvironmentalstandards,andoffendersmay The KEPAhasthepowertosuspendworkonanyproject environmental impactassessmentmonitoredbytheKEPA. if itperceivesnecessary,newprojectsneedtoundergoan Kuwait’s Municipalityscreensalllicensingprocesses,and requirements, aswellnewstandardsforenvironmental emission limits,settingnewoperatingstandardsand March 2012,withtheprimaryfocusondefiningnew The KEPAissuedsomerevisedairqualityregulationson New andrevisedairqualityregulation which willbesignedandratifiedglobally. taken onDecember2015underPOC21orCMP11and 2005 andagreedonParisGlobalEnvironmentAgreement Kuwait isasignatoryofKyotoProtocolonenvironmentin some provisionsofthatlawthroughLawNo.992015. environmental protectionLawNo.42of2014andamended record keepingandreporting. Kuwaithasadoptedanew 31

transaction projects. cooperation, monetaryinvestment andcompensatory (public andprivate),feldsofinternational economic assumes supervisiononthepublic treasury,statedomains The MOFisresponsibleforKuwait’s publicfnance.It Source: KuwaitDirect InvestmentPromotionAuthoritywebsite Ministry of Communications (MOC) Ministry of Public Works (MPW) Industry (KCCI) Kuwait Chamber of Commerce and (MOCI) Ministry of Commerce and Industry Public Authority for Industry (PAI) Ministry of Finance (MOF) services inKuwait. functioning oftelephone,postal,wirelessandcommercial The MinistryofCommunicationsisresponsibleforthe cost housing. It alsopursuesprojectsbasedonpublicneedsuchaslow of Kuwait’sinfrastructureincludingroads,portsandairports. MPW isresponsibleforthedevelopmentandmaintenance Established throughtheWorksDepartmentin1945, counseling andbusinessnetworkingservices. participation ofpromotionaleventsandexhibitions,business business andmanufacturingopportunities,organization development throughtheidentifcationandpromotionof The KCCIplaysanactiveroleintheeconomicandindustrial commercial registration. research andpolicyrelatedadvisory,promotionalevents development, includingthecollectionofinformation, The MOCIperformsanumberoftasksrelatedtoindustrial national incomesources. national andnutritionalsecurity,aswelldiversifying and expandingtheproductionbaseofgoodsrequiredfor objectives includeencouraginglocalindustries,protecting and supervisingindustrialactivityinKuwait.PAI’skey The PAIisthecentralbodyfordeveloping,promoting "11&/%*9.BJO4UBLFIPMEFST and Governmentalorganizations. also executesalldecisionsissued fromKuwait’sministries established inKuwait,whichhandles allcustomswork,and KGAC isoneofthefrstGovernmental departments (KGAC) Kuwait General Administration of Customs industrial andeconomicdevelopmentofthecountry. demand fortechnicalskilledemployees,drivenbythe developing andupgradingmanpowertomeetthegrowing PAAET hasbeenestablished,withtheobjectiveof Ministry of Electricity and W Kuwait Port Authority (KPA) facilities. (commercial maritime),andundertakesinitiativestoupgrade operating Kuwait’sShuwaikh,DohaandShuaibaports KPA operatesonacommercialbasis,managingand supply. meet Kuwait’sincreasingdemandforelectricityandwater desalination, licensingandinfrastructuredevelopmentto generation, theirtransmissionanddistribution,water across thecountry.Itsprincipalactivitiesincludepower MEW isresponsiblefortheprovisionofpowerandwater information technology,media,anddesign. sector. TheFundiscomprisedoffourhubs-manufacturing, productive jobsforKuwaitiprofessionalsintheprivate Development wasestablishedtosupportthecreationof Law No.98/2013,theKuwaitNationalFundforSMEs Established undertheSmallandMediumEnterprises (KNF) Kuwait National Fund for SMEs Development services toaddressthehealthcareneedsofresidents. healthcare system,alongwithprovidinghealthrelated MOH isresponsiblefordesigningandgoverningKuwait’s Ministry of Health (MOH) and Training (PAAET) Public Authority for Applied Educational ater (MEW) Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 84 85 Investing in Kuwait: A guide for Investment Opportunities in Kuwait exploitation ofnaturalresources. regulates industrialandbuildingexpansion,includingthe defning environmentalandemployeehealthstandards, development inKuwait.Theauthorityisalsoresponsiblefor as strategieswiththepurposetoachieveasustainable public policyfortheprotectionofenvironment,aswell KEPA hasbeeninstitutedforinstitutingandapplying Kuwait Environment Public Authority (KEPA) Assembly fordiscussionandapproval. plans forKuwait,whicharethenforwardedtotheNational This Governmentbodyfocusesoncreatingdevelopment Planning & Development General Secretariat of Supreme Council for controlling thebankingsysteminKuwait. progress, assistingthegrowthofnationalincome,and directing ofcreditpolicytoassistsocialandeconomic objectives includetheissuanceofKuwaitiDinar, monetary fnancialsysteminKuwait.TheCBK’smain The CBKofKuwaitaimstomaintainafexibleandstable Central Bank of Kuwait (CBK) like BP,CitibankandDaimler. under management,withprominentstakesincompanies KIA hascurrentlyaroundUSD290billionworthofassets Minister ofFinance,forandonbehalftheStateKuwait. Fund (FGF),aswellanyotherfundsentrustedtoitbythe General ReserveFund(GRF)andtheFutureGenerations oversees themanagementandadministrationof The KIAisanautonomoussovereignwealthfund,which Kuwait Investment Authority (KIA) required educational,religiousandsocialservices. citizens, aswellexpatriates,alongwithprovidingall providing housingandsettlementstoaccommodateKuwaiti The PublicAuthorityforHousingWelfareisresponsible Public Authority for Housing Welfare (PAHW) related safetystandards. and meteorology,includingthesupervisionofcivilaviation for internationalairnavigation,suchastelecommunications of aviationrelatedfacilities,providingnecessaryservices furthermore supervisestheconstructionandmaintenance operation ofKuwaitInternationalAirport.Theauthority The GDCAoverseesthemanagement,supervisionand Directorate General of Civil Aviation (DGCA) Source: SovereignWealth FundInstitute,KuwaitDirectInvestment PromotionAuthoritywebsite with theentitytowhichprojectisaffiliated. the projectsandhelpovercomeobstaclesincollaboration performance ofprojects,followuptheimplementation determine methodsforfollowingupandevaluatingthe studies andproviderecommendationsforpotentialprojects, and studies,evaluateeconomictechnicalfeasibility KAPP assiststheGovernmenttocarryoutinitialsurveys various megaprojectsinKuwaitthroughthePPProute. bodies andtheGovernmentforimplementationof objective ofprovidingassistancetothevariouspublic known as“PartnershipsTechnicalBureau)withthe The KuwaitiGovernmentestablishedtheKAPP(formerly ( ,VXBJU"VUIPSJUZ'PS1BSUOFSTIJQ1SPKFDUT Projects inKuwaitandthelocalregion. and DirectInvestmentstoinitiatestimulateTechnology investment toolssuchasPrivateEquity,VentureCapital of aTechnologyProjectsDevelopmentcompanyutilizing with theirtechnologyneeds.NTEC’sbusinessmodelisthat play avitalroleinservicingmajorstakeholdersKuwait the KuwaitInvestmentAuthority(KIA)andwascreatedto Established in2002,NTECisafullyownedsubsidiaryof (NTEC) The National Technology Enterprises Company Oversight and control over the oil sector plans and related oil Ministry of Oil (MOO) effciency andfairness. increasing foreignparticipationthroughbettertransparency, enhancing marketperformance,investorprotectionand and securitiesbusinessinKuwaitisresponsiblefor The CapitalMarketsAuthorityregulatescapitalmarkets Capital Markets Authority (CMA) related toinformation,broadcastingandpressmedia. formulation andadministrationofrules,regulationslaws The MinistryofInformationisresponsibleforthe Ministry of Information (MOI) security matters,aswellsocialandculturalpromotions. other countries,suchaspoliticalrelations,economicaffairs, responsibility toconductKuwait’sforeignrelationswith The MinistryofForeignAffairsbearsthemandateand Ministry of Foreign Affairs (MOFA) oil companiesworkinginthecountry. Petroleum Corporation,theaffliatedcompanies,foreign companies, programsandactivitiesrepresentedbyKuwait ,"11 ) Useful addresses Directorate General Ministry Kuwait Customs Kuwait Ministry Ministry Development Kuwait National Industry Kuwait Central Kuwait Investment Ministry Public Authority Authority Kuwait Port Authority General Administration of Chamber of Commerce & Direct Investment Promotion Bank of Kuwait of Commerce & Industry of Public Works of Electricity and Water of Finance for Industry Fund for SMEs Authority of Civil Aviation Postal Shuwaikh, Gamel Kuwait City Safat 13001 Al Assimah, P.O. Box 12 South Ministry PO Box 9 Safat 13001, Ministries Complex, 9th Street, Shuhada Sharq, Tower, Floor, Global Safat 13008 Kuwait Ali Salem Street P.O.Box. 775 Kuwait P.O. Box 526 - Safat - 13006 Salem Al Mubarek Street, Kuwait P.O. Box. 64, 13001 Ministries Complex, Kuwait P.O. Box 2944 - Safat - 13030 Block 1/ 2 Ministries Complex, 6th Ring Road, Ministries Public Authority Abdulaziz AlSaqrStreet, Al 13001 P.O .Box 17 Safat - Postal Kuwait Airport Kuwait. 6th Ring Road Ministries Ministry Safat 13001 - Kuwait Kuwait Ports P.O Nasser StreetShuwaikh Area 3874, Kuwait Hamra Business Tower, .

Box Al Sourra Street, State Code M.B 16 Kuwait

City

3690 of Electricity and Water of Public Works Building of Kuwait Authority BuildingJamal

Safat for Industry Building Abdul Nasser Str. 13037, Safat, AlMurqab, AlMurqab, AlMurqab Kuwait Ministries Area Floor Cose Area. 4690, Sharq Kuwait Kuwait City, Kuwait 44, South Surra 8. Building City Area Kuwait Kuwait Abdul Website: www.dgca.gov.kw Fax: Tel :24319829 Fax: +965 2402715 +965 Fax: 1814444 +965 Tel: www.kia.gov.kw 22454059 +965 Fax: 22485600 +965 Tel: Email: Fax:+965 Tel: +965 22415563 www.pai.gov.kw 2190 530 2 +965 Fax: 2222 2530 +965 Tel: Website: www.kpa.gov.kw Fax: Telephone: NA www.kuwaitchamber.org.kw E-mail: Fax: Tel: +965 2433854/5 www.cbk.gov.kw Website: Email: Fax:+965 2224 Tel: Website: http://www.mew.gov.kw/en/ 2537-1422 Fax: Tel: +965 2537-1000 Website: www.customs.gov.kw Fax: Tel: 24843490(965) http://en.mof.gov.kw Email: Tel: +965 2480000 www.mpw.gov.kw E-mail: Fax: Tel: +965 2538 5530 +965 24744396 +965 4819714 +965 2404110/2460693 +965 2537-1420, +965 2537-1421, (965)24838056 +965 2538 0829 [email protected] [email protected] [email protected] Website: [email protected] pr@ mpw.gov.kw Website: 22420207 http://www.KDIPA.com.kw 22 +965 4812622, +965 05 4050 0735 Appendices 4812712 +965

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 86 87 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Enterprises The National Technology Public Authority Council General Secretariat Kuwait Environment Public Ministry Ministry Ministry Ministry Education and The Public Projects Kuwait AuthorityforPartnership for Planning & Development of Information of Foreign Affairs of Health of Communications Authority Company Training for Housing Welfare of Supreme for Applied Authority Adailiya 13023 Building Kuwait Chamber of Commerce & Industry Serra Public Authority Kuwait P.O Box 15 Safat – Postal Next to the Grand Mosque Sharq Kuwait P.O. Box 193 - Safat - 13002 Salhiya, Arabian Area 5. Kuwait Abdul Ministry Shuwaikh Jamal Ministry P.O Box 23167 - Safat Code 13092, Kuwait Al-Jahra Street 2nd Floor, Al-Shuwaikh Administrative Zone, Touristic Enterprises Company Kuwait Authority for Partnership Projects P.O. Box Abdul Kuwait Port StreetMinistries – Arabian Gulf Street – Nasser Street, Al Solaibeykhat Nasser Street , Shuwaikh Kuwait Abdul Nasser Street Gulf St Kuwait City, Kuwait Al Soor Street, Media Complex - 8th Floor, P.O.Box – Block 4 Opp. Third Ring Road 243950 of Health of Communications Complex , 318. Kuwait Authority Building, Housing Welfare Building Al . Safat (13104), Kuwait Building Area, 23385, Kuwait Code JJamal 2294 Building, 130001 Jamal Safat - www.moh.gov.kw/ Email: Fax: Tel: +965 4 862541 http://www.ptb.gov.kw/ Website: Fax: Tel: www.epa.org.kw Website: Tel: +965 2483 9971 www.scpd.gov.kw Website: Fax: Tel: + 965 22428200 Website: www.ntec.com.kw Fax: Tel: +965 2223 0300 Website: www.media.gov.kw Fax: 2464460 Tel: 2431682 Website: http://www.paaet.edu.kw Fax: Tel: +965 1806611 www.mofa.gov.kw Fax: Tel: + 965 2242 2041 www.moc.kw +965 24814448 Website: Tel: +965 24840606 www.housing.gov.kw Fax: Tel: + 965 2530-1000 +965 +965 4 863714 +965 +965 22427588 +965 2259 8572 +965 22528915 + 965 245 7476 Website : +965 2538-7464 [email protected] Website: 2496 2496 5901 - Tlx : 46151

5900 Fax: Website: "11&/%*9(MPTTBSZ KAPP IMF ILO HRC HNWI GLA GIC GHG GDP GCC GAFTA F FM FDI FCIC ETFs EPA EIA EFTA DSA DGCA DFCIL DCC CMA CIF CBK bpd BOT Bn BFSI B2C B2B AUM AM ADR KIC KIA KDIPA KFH KEPA KD KCCI KAC IWPP IPO T A Kuwait Authority for Partnership Projects Kuwait Airways Corporation Integrated Initial public International Monetary International Labor Human Rights Committee High Net-Worth Individuals Gross Leasable Area Gulf Insurance Company Green House Gases Gross Domestic Product Gulf Cooperation Council Greater Arab Free Trade Area Free Trade Agreement Facilities Foreign Foreign Capital Investment Exchange Environment Public Energy Information European Free Direct Sales Agents Directorate General Direct Foreign Digital Capital Cost, insurance Central barrels Build Billion Banking Financial Services Business-to-consumer Business-to-business Assets Under Management Asset Management Average Daily Rate Kuwait Insurance Company Kuwait International Airport Kuwait Direct Kuwait Finance House Kuwait Environment Kuwait Dinar Kuwait Chamber of Commerce & Industry Operate Transfer Content Creation per day Markets Authority Bank of Kuwait Direct Investment Management Traded Funds Water and Power Plants offering Investment Promotion Capital Investment Trade Association and Organization Administration Authority freight of Civil Aviation Public Fund Insurance Committee Authority Law Authority MOPW MOH MOFA LEED KUCAS MoC MOCI MEW MENA MCI KSA KUCAS KSA KSE KPC WTO WIC USD UNEP UN TRIPS TIR TIFA TEU TER sqm SCP P PPP PM PJSC PET PE PAI PAAET OPEC OPD OIC NTEC NPL NOC NLST MW Mn T A Ministry Ministry Ministry Leadership in Kuwait Conformity Ministry Ministry Ministry Middle Ministry Kingdom Kuwait Conformity Kingdom Kuwait Stock Exchange World Trade Organization Warba Insurance Company United United United Trade Related Technical Trade and Twenty-foot Technical Square Supreme Council Purified terephthalic Public Private Property Public joint Polyethylene Private Public Authority Public Authority Organization of Petroleum Exporting Out Patient Department Organization of National Non-performing No Objection Certificate National Labor Mega Watt Million Kuwait Petroleum Corporation States Dollar Nations Environmental Program Nations Equity East and North Africa meter Management of Public Works of Health of Foreign Affairs of Communications of Commerce and Industry of energy and water of Commerce & Industry Technology of Saudi Arabia of Saudi Arabia Inspection Evaluation Investment Framework stock company Equivalent terephthalate Energy and Partnership Aspects Support Tax the Islamic Conference for Industry for Applied loan for Privatization Assurance Assurance acid Report Report Enterprises of Intellectual Property Rights Unit Environmental Education and Scheme Scheme

Appendices Company Agreement Countries Design Training

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 88 89 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Japan Ethiopia Egypt Denmark Czech Republic Croatia China Bulgaria Bosnia and Herzegovina Belgium-Luxembourg Belarus Austria Armenia France Finland Poland Netherlands Morocco Mongolia Moldova, Republic of Malta Mauritius Macedonia, The former Yugoslav Republic of Lithuania Lebanon Latvia Italy Iraq India Hungary Hong Kong, China SAR Germany Portugal Serbia Russian Federation Romania Canada Iran Source: UNCTAD 5SFBUJFT "11&/%*9,VXBJUT#JMBUFSBM*OWFTUNFOU 29-May-01 10-May-10 21-May-91 22-Mar-12 10-Mar-96 15-Mar-98 29-Mar-02 30-Mar-94 23-Nov-85 16-Nov-96 17-Dec-87 27-Nov-01 21-Nov-94 14-Sep-96 28-Sep-00 27-Sep-89 17-Jun-97 13-Jun-01 25-Jun-10 21-Jan-01 19-Jan-04 26-Sep-09 17-Apr-01 18-Apr-13 16-Feb-99 19-Apr-95 25-Oct-64 13-Feb-06 8-Mar-97 10-Jul-01 5-Mar-90 23-Jul-07 8-Nov-89 1-Jun-01 8-Jan-96 5-Jun-01 8-Apr-08 5-Oct-01 24-Jan-14 21-May-97 31-May-02 21-May-90 16-May-91 30-May-96 28-May-11 14-Mar-11 21-Mar-04 24-Dec-86 23-Dec-02 12-Nov-98 15-Nov-97 18-Dec-93 16-Sep-98 22-Sep-98 14-Sep-13 29-Jan-02 21-Jan-97 14-Jun-03 24-Jul-14 25-Jun-96 15-Jan-03 28-Jun-03 19-Feb-14 26-Apr-02 19-Apr-02 7-May-01 1-May-00 1-Mar-94 26-Jul-92 8-Dec-03 2-Nov-11 4-Sep-13 7-Jun-66 6-Apr-04 1-Apr-05 2-Jul-98 Uzbekistan Ukraine Turkey Tajikistan Syrian Arab Republic Switzerland Sweden Spain Slovenia Singapore 16-Aug-01 19-Jan-04 12-Jan-02 18-Apr-95 26-Apr-02 27- 31-Oct-98 7-Nov-99 5-Nov-09 8-Sep-05 May - 10 10-May-02 23-Mar-04 17-Dec-00 11-Jun-13 12-Jun-98 08 15-Apr-13 6-Mar-06 8-Mar-08 28-Jul-04 - May - 13 Source: www.ibfd.org Bosnia &Herzevogina Benin Azerbaijan Austria Armenia Algeria Hungary Djibouti Italy Ireland Iran Indonesia India Hong Kong Greece Germany France Ethiopia Egypt Denmark Czech Republic Cyprus Croatia China (People's Rep.) Canada Bulgaria Brunei Belgium Belarus Albania Malaysia Lebanon Latvia Korea (Rep.) Jordan Japan "HSFFNFOUT "11&/%*9,VXBJUT%PVCMF5BYBUJPO Thailand Mauritius Malta Zimbabwe Yemen Vietnam Venezuela Uzbekistan United Kingdom Ukraine Turkey Tunisia Syria Switzerland Sudan Sri Lanka Spain South Africa Slovenia Slovak Republic Singapore Seychelles Russia Romania Portugal Poland Philippines Pakistan Netherlands Morocco Moldova Serbia andMontenegro Senegal Tajikistan Appendices

Investing in Kuwait: A guide for Investment Opportunities in Kuwait 90 This Investment Guide (“Guide”) has been prepared by KPMG Advisory W.L.L., Kuwait (“KPMG”) on behalf of the Kuwait Direct Investment Promotion Authority (“KDIPA”) for the sole purpose of giving investors an overview of investment opportunities in Kuwait. The name and logos used are the respective trademarks of KDIPA and KPMG International, a Swiss cooperative. This Guide is intended for general guidance on matters of interest only, and does not purport to be all-inclusive nor to contain all the information that a prospective investor may require in deciding whether or not to invest in Kuwait. The Guide does not take into account the specifc purpose of any reader and is not intended to replace the need for professional advice. Before acting or relying on any information contained in the Guide, readers should consider whether it is appropriate for their circumstances with regard to their objectives or requirements. Whilst every effort has been made to ensure the accuracy and completeness of the material in this Guide, KDIPA, KPMG and the Government of Kuwait give no warranty in that regard and accept no liability for any loss or damage incurred by using or relying on this Report or the information contained herein. Readers of this Guide are cautioned to carry out an in-depth research and obtain professional advice prior to placing any reliance whatsoever on the information presented in this Report. This Guide does not constitute an offer or invitation for the sale or purchase of securities or any of the businesses or assets described herein or to invest any named sector and does not constitute any form of commitment or recommendation on the part of KDIPA or KPMG. The views expressed in this Report do not necessarily represent those of KDIPA, KPMG or the Government of Kuwait. www.KDIPA.com.kw RRD-280819