The Kuwait Direct Investment Promotion Authority (KDIPA) has announced new regulations aimed at enhancing the investment climate for foreign investors in Kuwait. The updated guidelines provide a clear framework for foreign investment entities to access various benefits and exemptions, including tax incentives and customs duty relief, under Kuwait's Law No. 116 of 2013.

According to Article One of the new decision, foreign investors can apply for an investment license and access benefits as outlined in Law No. 116 of 2013. To qualify, investors must meet specific criteria established by KDIPA’s evaluation mechanism, which governs the approval process for license applications and associated benefits.

Article Two specifies that investment entities operating in Kuwait for a minimum of one year under Law No. 116 of 2013 can request additional benefits and exemptions. To qualify, these entities must adhere to KDIPA’s evaluation mechanism, submit periodic reports demonstrating their commitment to approved work plans, and provide a comprehensive business plan detailing their achievements and future objectives. The exemptions will be effective from the application submission date, provided all necessary documentation and fees are completed. However, it’s important to note that the exemption does not apply retroactively to taxes or customs duties already paid.

Article Three introduces special provisions for investment entities seeking benefits and exemptions, either concurrently with or after obtaining their investment license. It clarifies that exemptions do not extend to ongoing contracts or projects with bids submitted before the application date, even if these contracts are later transferred to another entity. Additionally, entities must maintain separate financial accounts for their licensed investments, distinct from other contracts.

Article Four outlines that investment companies involved in Kuwait’s offset program are not eligible for benefits and exemptions under Law No. 116 of 2013 during the commitment period. This exclusion ensures that the offset obligations are fulfilled without benefiting from the investment incentives.

Kuwait offers numerous advantages to foreign investors through KDIPA’s law, including the ability to establish a wholly-owned Kuwaiti company, tax incentives for up to ten years, exemptions from customs duties, and land allocation for projects. Additional benefits include protection against seizure or confiscation without adequate compensation, the freedom to transfer capital and profits, and the avoidance of double taxation under bilateral agreements. Licensed investment entities may also gain classification by the Central Agency for Public Tenders based on their global experience and are permitted to employ necessary foreign labor in line with national labor requirements.

These new regulations by KDIPA are designed to attract more foreign investment to Kuwait by providing clear, structured guidelines for obtaining and maximizing available benefits. By outlining the requirements and ensuring transparency in the process, Kuwait aims to solidify its position as an attractive destination for international investors.