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Law no. 16 of 2013 regarding to the Promotion of Direct Investment in Kuwait

According to Article no. 12 of the Law no. 16 of 2013 regarding the Promotion of Direct Investment in Kuwait ( PDIK Law ), a foreign investor may start a direct business in Kuwait through one of the following legal entities:-

  1. A Kuwaiti company established as per the Companies Law no. 25/2012 but the foreign company will own 100% of the shares of the Kuwaiti Company established for being used as a vehicle for the direct investment in Kuwait.
  2.  A branch for the foreign company licensed to operate in Kuwait for the purpose of direct investment in Kuwait.
  3. Representative office without commercial activities, the representative office rule will be only limited to prepare market study.

Furthermore, Article no. 15 of PDIK Law stipulated that once the foreign investor submits the required documents and information related to establishing one of the above legal entities, then the  Kuwait Direct Investment Promotion Authority “ KDIPA “ must respond to the application within thirty days only. Also if KDIPA rejected the application submitted by the foreign investor the rejection must be reasoned and in writing, then the foreign investor shall have the right to appeal the rejection decision issued by KDIPA within thirty days from its issuance date.

PDIK Law created One- Stop Shop concept where the foreign company or its attorney will be able to proceed with the required procedures through one employee only without the necessity of approaching other authorities involved in the licensing process which enhanced the efficiency of PDIK Law and accelerated the relevant procedures.

As a reflection for the Kuwait Vision 2035 which –mainly- aims to attract the information technology companies, investment companies  along with major infrastructure international entities, the legislators provided an extra protection for the confidential information of the foreign investor operating in Kuwait through expressly stipulating in Article no. 23 of PDIK Law upon the such protection in addition to criminal punishment to any employee of the foreign investor who disclosed the confidential information to third party if such employee has received the confidential information during his employment with the foreign investor.

Although that the foreign investors could invest in any activity in Kuwait, however that the Council of Ministers issued its decision no. (75) of 2015 Regarding the List of Excluded Direct Investments from the Provisions of Law No. (116) of 2013 regarding the Promotion of Direct Investment in the State of Kuwait, this decision exclusively excluded the application of PDIK Law in respect of certain activities which are:-

  1. Extraction of crude petroleum ( Class 0610).
  2. Extraction of natural gas (Class 0620 ).
  3. Manufacture of coke oven products ( Class 1910).
  4. Manufacture of fertilizers and nitrogen compounds ( Class 2012).
  5. Manufacture of gas; distribution of gaseous fuels through mains ( Class 3520).
  6. Real Estate (Level L), excluding privately operated building development projects.
  7. Security and investigation activities (Division 80).
  8. Public administration and defense; compulsory social security (Level O).
  9. Activities of membership organizations (Division 94).

In order to attract the international giant entities, PDIK Law stated that the foreign investors shall have the right to transfer abroad their profits, capital or proceeds resulting from the disposal over their shares or participation in the investment entity in addition many other incentives and exemptions which will be explained through our weekly articles.

MMA Law Office