Editor-in-chief  Prof. Badria A. Al-Awadi

In recent years, the State of Kuwait has been keen to strengthen its legislative structure with regard to the development of local and foreign investments. This included the issuance of a law establishing the Direct Investment Promotion Authority No. 116 of 2013, then Resolution No. 502 of 2014 regarding the executive regulations of the law. This is in addition to successive decisions issued by the same authority concerning the Investment Register (2014), the foundations and rules for licensing branches and representation offices of foreign companies in the State of Kuwait (2014), and the list of prescribed fees for services provided by the Direct Investment Promotion Authority (2014). Moreover, the Cabinet issued a decision regarding determining the list of direct investments that are not subject to the provisions of the law No. 116 of 2013 regarding the promotion of direct investment in the State of Kuwait (2015), followed by the decision to create a single window and its detailed terms of reference (2016), regulating the work of establishing partnerships in the Single Window Department, in addition to establishing a system for registering companies and consulting offices to submit applications on behalf of investors (2017), a measure to encourage and attract foreign investors.

In light of the continuous evaluation, a new decision was issued regarding the mechanism for evaluating investment licensing applications and granting benefits, in addition to a decision regarding the foundations, requirements and controls for licensing of representation offices of foreign companies (2019), then a decision to reduce the fees for the services provided by the Authority until December 2020 due to the Coronavirus pandemic. This is in addition to another decisions related to benefits and exemptions for investment entities with the Direct Investment Promotion Authority during the Coronavirus Pandemic (2020). Statistics published by local newspapers during February 2020 indicated that foreign investments in the country amounted to 3.4 billion dinars during the period between 2008 and 2018, while Kuwaiti investments abroad exceeded 19.5 billion dinars in the same period, which indicated an imbalance in the investment. This imbalance requires urgent intervention from the various concerned authorities to localize local investments. This also requires motivating local investors to direct their investments internally, in addition to reassessing the feasibility of the investments of the Investment Authority (Kuwait Sovereign Fund) locally and internationally, in a manner that enhances internal investments towards strengthening production, diversifying revenues, and creating economic growth in various fields.

The investment legislative structure in the State of Kuwait was strengthened in 2010 with the issuance of a law on the establishment of the Capital Markets Authority and the regulation of securities activity, which helped achieve a qualitative leap in the performance of the Kuwait Stock Exchange, and strengthen corporate management systems through governance, integrity and transparency. Some provisions of this law were amended under Law No. 108 of 2014, and then again under Law No. 22 of 2015, in order to fill gaps and avoid deficiencies indicated by the application of the law.

In addition to these legislations and decisions that are directly related to the investment field, other legislative amendments have been issued in recent years that are indirectly related to creating and developing the investment environment. It included the amendment of the Companies Law under Law No. 1 of 2016, which aims to activate the regulation of the establishment and management of companies. It also included the amendment of the Anti-Corruption Authority Law under Law No. 2 of 2016, in a manner that enhances integrity and transparency in the performance of government departments, public bodies and attached agencies. This is reflected positively on the investment environment. It encourages foreign investment in addition to domestic investment. The Kuwaiti legislative structure was also strengthened last year with the issuance of Law No. 12 of 2020 regarding the right to access information, which entered into force. This law allows citizens the right to access information, decisions and documents that affect their rights, and aims to establish the principle of transparency and integrity in administrative transactions. This includes government agencies, including the Investment Authority, the Direct Investment Authority, and others, as well as companies listed on the Kuwait Stock Exchange and others.

There is no doubt that these legislative initiatives, projects and executive decisions aimed at renewing the legislative and legal structure are a positive step that deserves praise and appreciation, and everyone hopes that they will help develop the investment environment and make it encouraging and stimulating for local and foreign investments. Certainly, this is possible to achieve, if these legislations, laws, regulations and systems are implemented by efficient administrations, with specific and clear programs and plans, in the light of transparency, integrity and responsibility, and with the cooperation of all parties.