Investment in Kuwait | Kuwait’s Foreign Direct Investment (FDI)

Kuwait has been lagging in attracting the foreign direct investment (FDI) in the GCC countries and MENA. Also, Kuwait has one of the lowest percentages in the whole MENA region. Based on these facts, what is the outlook for the investments for 2012/2013?

First of all, I would like to thank you for this interview. To go ahead and answer your question, let me start with the outlook before I answer you the other part of your question.

We do believe that the outlook has always been to fulfill His Highness the Emir`s vision of turning Kuwait into a financial and commercial center for the area. The government has a long-term plan to achieve this vision. Based on the plan, we are working very hard to fulfil His wish.

As for the second part of your question – the number of FDI in Kuwait is low compared to the neighbourhood countries – we have always believed there is a misunderstanding of these numbers.

In Kuwait, each international entity uses the Government or one entity to take their number from. We don’t have a unified, reference number for everyone. Some international entities use the Central Bank for that reference number, others use the KFIB for the same purpose. Some go to the Ministry of Commerce and use theirs. The issue at hand is nobody takes the actual total amount in order to give the real number. Hopefully, that problem will be solved very soon and we will be able to collect all the numbers regarding the FDI in Kuwait.

In your opinion, what is the outlook for 2012?

As I said before, we have a very positive outlook about the future. A lot of good things will happen. There is a very high interest in coming to Kuwait, as the previous three years have shown. There have been a lot of enquiries and visits. Many people think of Kuwait as a hope for their projects, as an emerging market much like Iraq and Iran.

There is a project under way of a railway that connects the country with the northern part of Asia; there is also a harbour project that is aiming to reduce costs for investors to put their products in manufacture in Kuwait.

What are the most promising projects investors should be looking at?

In KFIB, we focus on 13 specific areas and very much encourage investors to consider the possibility of investing in those fields, to determine what sector fits them best, what value they can bring to Kuwait’s economy, where they can best use their technology. I do believe that Kuwait is full of opportunities and that investors can be innovative and add to the country.

From the investors’ perspective, what are the best sectors to invest in?

Again, I think the investor knows this better than anyone. He is smart and knows what to choose. Since I believe that all sectors are equal, I cannot give you one or two that outperform the others. They are very specific and it is all up to the investor; it depends on each one of them. All thirteen of those particular sectors are needed, according to us, and are in need of investment.

If we take infrastructure, for instance. Is it something to grow tremendously in the years to come?

Certainly. Development plan, new cities… If we take manufacture, it is the same issue. Tourism, too. All of them are so different and yet very important and could reap good benefits for investors.

What is your assessment of the current investment laws in Kuwait?

Investment laws in Kuwait are good, but not good enough. However, we are always aiming for it to become better and better. Hopefully, in 2012, there will be a lot of economic laws and some major changes aimed at every investment laws in Kuwait, to attract investors and increase the FDI.

Concerning KFIB, we are going straight ahead to have the laws changed to make it easier and a lot more effective for investors. It is not that we believe our laws are not good, but there is always room for improvement. On that subject, we have the support of all entities in Kuwait. We have tried to cover the gaps we face with the current laws during the past ten years. We have also considered all the new laws that came up in the past years to make sure that we conform to them.

What are the risks when investing in Kuwait? What are the current investors complaining about?

There are no risks when investing in Kuwait. We have a transparent legal system and at the end of the day, the investors know how to get their rights. Everything is clear to them.

The only obstacle they may face, I think, is bureaucracy, but the government is taking that into consideration heavily and working on it. We are noticing the progress; we are noticing changes in the government agencies. They are really trying to reduce their steps and enhance electronic linking between the agencies, so we are very optimistic and we have the best of feelings about this.

How is it to do business in Kuwait?

If you are an investor and you are planning to enter Kuwait, there are many options available for you. It depends on what you want to invest in, what kind of projects you are interested in… It is all for the investor to choose from. He can decide to go through the KFIB, the Ministry of Commerce, one of the investment opportunities in an offset company… Maybe some investor wants to bid into one of the existing projects. The possibilities are truly endless, but in the end, it is the investor’s decision to make.

If you compare Kuwait to Saudi, Bahrain, Qatar, which are other options for investors… How competitive is Kuwait in regards to those countries?

In my view, each country has its own characteristics, goals, mission and vision. Here in GCC, we are compatible and we form a unit. We complete each other more than compete with each other. If we take the railway project, which aims to connect the members of the GCC, it will improve the economy, so any investment done in a GCC country will positively affect Kuwait.

Some investors will come to Kuwait because they have certain needs. Others will go to Saudi, for example, because they want to be in the center of the GCC. Others will go to Dubai. It depends.

Is there something you would like to add?

The government is committed to developing Kuwait economy and turning it into a friendlier environment for investors. It is also trying to diversify its dependency on oil and attract investors. What Kuwait is looking for is not so much money as it is technology, innovation, job creation. It is fair to say that we have a high number of human resources in Kuwait. What we started a few years ago is still going on and we expect a lot of good things to come from this.

Also, this feedback does not only come from the government, but also from the investors. They have seen the changes in the country and they are aware that it is going in the right direction, so hopefully, there will be great benefits for investors and Kuwait, in general.