Kuwait: Investing in Kuwait
Kuwait has always been a country open to foreign investment and is further opening to foreign capital, however, FDI is still underdeveloped in the country by regional standards. According to UNCTAD's World Investment Report 2024, FDI inflows to the country almost tripled year-on-year in 2023, reaching USD 2.11 billion. At the end of the period, the stock of inward FDI was estimated at USD 16.64 billion. The bulk of investments are directed towards the oil & gas sector, followed by real estate/construction and financial services. A significant portion of FDI is directed towards major infrastructure initiatives within the hydrocarbon sector, frequently facilitated by state or semi-state entities. The majority of FDI comes from the United States and China.
As a resource-rich economy, Kuwait is diligently looking to deploy its oil wealth to develop and diversify the economy. The nation aims to attract more than USD 200 billion in FDI between 2020 and 2035 in order to become a global centre for trade and finance. The government is taking concrete steps towards achieving its ambitions to boost private sector investment in key sectors. Kuwait Vision 2040 seeks to foster economic diversification through the implementation of various projects and initiatives. It actively promotes FDI in key sectors such as information and communications technology, renewable energy, electricity and water, tourism, healthcare, and education. Kuwaiti or GCC nationals are mandated to hold a minimum of 51% ownership in local companies, though exceptions can be made for non-GCC investors meeting KDIPA qualifications. A 2017 amendment to the 2016 Companies Law eased restrictions on limited liability companies. Council of Ministers Decision No. 75 of 2015 tasks KDIPA with excluding foreign firms from sensitive sectors. These sectors encompass the extraction of crude petroleum, natural gas extraction, coke oven product manufacturing, fertilizer and nitrogen compound manufacturing, gas manufacturing, gaseous fuel distribution, real estate, security and investigation, public administration, defence, social security, membership organizations, and labour recruitment. Under the 2013 FDI Law, incentives comprise tax benefits (with a potential waiver of the 15% corporate tax for foreign firms for up to 10 years), relief from customs duties, allocations of land and real estate, and permissions to recruit necessary foreign labour. In January 2024, Kuwait further eased foreign investment rules, allowing foreign companies to open branch offices without a local agent. Companies can now establish wholly owned branches, in addition to the existing options of partnering with a majority Kuwaiti stakeholder or appointing a local agent. Foreign companies can also now directly participate in government tenders and, if successful, execute contracts through their own branch in Kuwait. The country ranks 71st among the 133 economies on the Global Innovation Index 2024 and 88th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 240 | 567 | 758 |
FDI Stock (million USD) | 14,952 | 15,531 | 15,091 |
Number of Greenfield Investments* | 15 | 12 | 14 |
Value of Greenfield Investments (million USD) | 209 | 113 | 613 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Kuwait | Middle East & North Africa | United States | Germany |
Index of Transaction Transparency* | 5.0 | 6.4 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 9.0 | 4.8 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 4.0 | 4.7 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Kuwait has several advantages for attracting FDI:
Kuwait has some obstacles to its economic development. They include:
To promote the diversification of its economy, Kuwait has set up the Kuwait Development Plan (KDP) (Kuwait Vision 2035 "New Kuwait") for 2035. The main objective of this plan is to transform the country into a regional and international financial and trade hub to make Kuwait more attractive to investors. A significant investment in the country's infrastructure and human resources and regulatory reform will create an environment conducive to attracting foreign investors and promoting Kuwait as a regional service centre. In addition to seeking to further involve the private sector in infrastructure projects, the government plans annual spending of $32 billion, half of which will be spent on investments in projects considered highly strategic:
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Latest Update: May 2025