A research report has been issued by KFH about the expected improvement in the Kuwaiti economy in 2013 in light of the government’s focus on the economy, the positive political developments, and recent legislations, such as issuing the new companies law that will attract foreign investments to Kuwait. The report noted that Kuwait has improved its commercial environment through a series of governmental steps, which increases expectations that Kuwait’s current image of being unsuitable for business among its GCC counterparts will change. This will improve Kuwait’s performance rate regarding reports issued by World Bank every year; thus boosting non-oil sectors.
The Kuwait government reiterated that it will continue to follow the latest developments in the local economy closely and will not hesitate to take appropriate action to enhance elements of sustainable growth in various economic sectors.
Recently, Kuwait has introduced a new companies law, which replaces the Commercial Companies Law of 1960 and is aimed at encouraging investment. Foreign direct investment (FDI) inflows to Kuwait rose by 25.1% y-o-y to $398.6mln in 2011 from $318.7mln in 2010. We believe with this new law, FDI inflows to Kuwait will rise further in 2013 and the years ahead. Kuwait has made headway in improving its business environment in recent years, including through the introduction of a 15.0% flat rate corporate tax regime for foreign companies in 2008 and the passing of the 2001 law regulating foreign direct capital investment, which allows 100.0% foreign ownership of companies in some sectors.
With these steps, the perception of Kuwait as the least business-friendly country in the Gulf Cooperation Council (GCC) will change. At the same time, we expect Kuwait’s ranking performance in the World Bank’s Doing Business will prove in the coming years and this will give boost to the non-oil sectors.
Via : Mubashar
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