The Government of Kuwait launched an ambitious development plan in 2018 known as ‘Vision 2035’ which aims to transform country into an international trade hub and diversify its oil-centric economy. The goal is to increase private sector participation in Kuwait’s economy by creating a more investor-friendly environment as well as to invest in the nation’s economic infrastructure via the construction of new airports, ports, roads, industrial areas, residential developments, hospitals, a railroad, and a metro rail.  The Northern Gateway initiative, which encompasses the Five Islands or New Kuwait projects, envisions public and private sector investment in the establishment of an international economic zone that could exceed USD 400 billion over several decades. With one of the world’s largest sovereign funds with more than USD 670 billion in assets as of March 2021, minimal taxes, and low-cost labor, Kuwait provides a great opportunity for investment. However, bureaucratic red tape and the frequent changing of the government has stalled the progress of many initiatives.

Several public-private partnerships are in the pipeline in the power, water management, and renewable energy sectors. Two billion-dollar hospitals were completed in the last two years. These institutions need foreign investment to operate and train hospital staff, as well as to deliver world-class equipment and IT infrastructure.

With a view to attracting foreign investment, the government passed a foreign direct investment law in 2013 that permits up to 100 percent foreign ownership of a business if approved by the Kuwait Direct Investment Promotion Authority (KDIPA).  All other foreign businesses must abide by existing law that mandates that Kuwaitis, or other GCC nationals, own at least 51 percent of any enterprise. In approving applications from foreign investors seeking 100 percent ownership, KDIPA prioritizes local job creation, the provision of training and education to Kuwaiti citizens, technology transfer, diversification of national income sources, contribution to exports, support for small- and medium-sized enterprises, and the utilization of Kuwaiti products and services.  KDIPA has sponsored 37 foreign firms, including six U.S. companies. KDIPA also provides certain investment incentives like tax benefits, customs duties relief, and permission to recruit foreign employees.

Kuwait has also made great strides in protecting intellectual property. Kuwait’s 2019 Copyright Law addressed serious concerns about Kuwait’s intellectual property protection regime. Kuwait has continued to increase enforcement actions in 2021.

Kuwait is a country of 1.4 million citizens and 3.3 million expatriates.  It possesses six percent of the world’s proven oil reserves and is a major oil exporter.  The economy is heavily dependent upon oil production and related industries, which are almost wholly owned and operated by the government. The energy sector accounts for more than half of GDP and close to 90 percent of government revenue. The fall in oil prices after OPEC+ failed to agree on production targets in 2019 and the reduction in global demand for oil upon the onset of the COVID-19 pandemic in 2020 greatly exacerbated Kuwait’s fiscal deficit. However, the rapid increases in the price of oil since spring 2021 has allowed Kuwait to significantly reduce its deficit from KD 5.4 billion (USD 17.7 billion) in March 2021 to KD 406.4 million (USD 1.3 billion ) as of January 2022. However, reduced stress on the country’s finances has dampened support for economic and business reforms that Kuwait needs to become the investment hub envisioned in New Kuwait Vision 2035. Kuwait’s ability to implement these changes will determine whether the current financial windfall will result in an economically sustainable future.

As it develops the private sector to reduce the country’s dependence on oil, the government faces two central challenges. It must improve the business climate to enable the private sector and must prepare its citizens to work in the private sector.

More than 85 percent of all Kuwaitis with jobs work in the public sector, where they receive generous salaries and benefits. This makes public sector jobs largely preferable to careers in the private sector. Convincing young Kuwaitis that their future is in the private sector will require changing social attitudes and raising the level of local education so that Kuwaiti businesses can compete internationally in sectors other than fossil fuels.

For more information please refer to https://www.state.gov/reports/2022-investment-climate-statements/kuwait/

June 29     Kuwait’s real estate sector faced considerable challenges in 2023, marked by high borrowing costs and slow reforms. Transaction volumes saw a notable decline across residential and commercial sectors, with both sales and rental markets showing negative trends.

June 29    Kuwait has been ranked as the third-best Gulf and Arab city to live in for the year 2024, according to the latest report by the Economist Intelligence Unit. Globally, Kuwait City secured the 93rd position. The rankings were led by Abu Dhabi and Dubai. 

June 10     In its latest report, global rating agency Standard & Poor’s (S&P) has affirmed Kuwait’s ‘A+’ sovereign rating with a stable outlook. This strong assessment is primarily attributed to Kuwait’s sizeable government financial assets, which are projected to reach around 418 % of the country’s GDP in 2024.   

June 3     Kuwait's Public Authority for Housing Welfare (PAHW) has annnounced that work is moving at a steady pace on its ambitious project - Sabah Al Ahmad City - mainly the south and east sectors of the project, with power connection given to 40 of the total 60 buildings within the mega development.

May 14       The May 11 decision by Kuwaiti Emir to dissolve Parliament could lead to a more streamlined decision-making process and the advancement of economic diversification plans and energy projects that have been stalled for years by political paralysis. 

May 5       Kuwait’s economic growth (real GDP) projection for 2024 was revised by the World Bank to 2.8% y/y, higher than the 2.6% y/y forecasted earlier in January 2024 owing to expectations of phasing out of OPEC+ production cuts, according to Kuwait Financial Centre (Markaz).

April 22      Kuwait's consumer price index (inflation), on an annual basis, grew by 3.02% last March, according to the Kuwait Central Statistical Bureau (KCSB). The Bureau said the inflation rate in Kuwait rose 0.38% the same month -- on a monthly basis.

April 20     The Director General of the General Administration of Customs has issued Customs Instructions No. 21 of 2024, marking a significant development in GCC customs procedures. Effective from April 23, 2024, the new instructions introduce a direct tax transfer mechanism aimed at streamlining customs clearance processes for both new and used cars. Under the directive, vehicles can obtain customs clearance within a maximum period of two years from the date of initially collecting customs duties in the first customs declaration.

April 19      The total passenger count during March, as reported by the Kuwait Directorate General of Civil Aviation (DGCA), reached 1,067,674. In a press release, the Director General for Aviation Safety and Air Transport Affairs highlighted that Kuwait International Airport experienced an 8% decrease in passenger traffic compared to the previous year.

April 3       Business confidence in Kuwait’s non-oil sector reached record-high levels in March with a notable expansion in output and new orders. The inaugural S&P Global Kuwait Purchasing Managers’ Index (PMI) paints a promising picture for the nation’s non-oil private sector. The index revealed a marginal increase in job creation and signs of increased inflationary pressures. 

March 24     Until December 31, 2023, the number of Kuwaiti workers in the public sector reached 397,600 or 84.6% of the total workers. 

March 24     Kuwait has secured the 38th position globally and fifth in the Arab world on the Global Competitiveness Index for the year 2023, showcasing significant advancements in key competitive factors. 

March 24     According to a report by NBK Economic Research, Kuwait’s year-to-date fiscal deficit for the first 10 months of the current fiscal year (FY2023/24) has narrowed by KD635 million ($2.075 billion) from the balance in December to KD1.1 billion ($3.595 billion) in January.

March 17     The Public Authority for Civil Information issued the latest detailed data on population and employment statistics for the end of December 2023, showing that the total population in Kuwait reached 4,860,000 in the end of 2023, growing by 2.6% compared to the end of 2022 at 4,737,000 people.

March 16     The Central Bank of Kuwait said that Fitch Ratings affirmed Kuwait’s outlook, which remains stable along with a rating of AA- which is “supported by its exceptionally strong fiscal and external balance sheets”. 

Feb 29   Hotels Consider Allowing Unmarried Kuwaitis to Book Rooms Independently. Have Kuwaiti hotels lifted their long-standing ban on hosting single Kuwaiti guests, both male and female, without requiring them to be accompanied by their spouses? 

Feb 28   The Central Administration of Statistics report sheds light the number of workers in the State of Kuwait as at the end of the third quarter of 2023, putting its size to about 2.107 million workers, not counting the number of domestic workers, reports Al-Jarida daily. When adding domestic workers and the like — the family sector — whose number is about 790,000, the total rises to about 2.897 million workers, and the percentage of domestic workers amounts to about 27.3% of the total employment in Kuwait.

Feb 28   According to recently compiled statistics from the Central Administration of Statistics, Kuwait consumed 2.8,000 tons of local fish in 2023, with a total estimated value of around 6.7 million dinars, reports Al-Qabas daily. These statistics covered approximately 25 varieties of fish, with shrimp being a notable contributor, accounting for approximately one million kilograms sold during the year 2023. Additionally, the consumption of Zubaidi fish totaled around 79,000 kilograms over the same period.

Feb 21   The latest government data showed that the population of Kuwait reached about 4.859 million by the end of 2023, including 1.546 million citizens and 3.3 million expatriates — an increase of 2.6 percent or 122,700 compared to about 4.7 million in 2022, reports Al-Anba daily. 

Feb 15   Kuwait's emir Sheikh Meshal al-Ahmad al-Sabah issued a decree on Thursday to dissolve the parliament, state news agency KUNA reported.

January 31    Kuwait’s budget deficit in the fiscal year 2024/2025 is expected to hit KD 5.89 billion (USD 19.15 billion), down 13.5 percent compared to the current year, according to a draft budget bill released by the Ministry of Finance.

January 29    The Central Bank of Kuwait released statistics indicating a significant surge in consumer spending among citizens and residents in 2023. The total spending, both within and outside the country, witnessed a remarkable increase, jumping by 3.6 billion dinars to a record 45.79 billion.