The Kuwaiti legislator was keen, through the Direct Investment Promotion Law No. 116 of 2013, to grant the investor more advantages and exemptions, and one of the most important of these exemptions was the customs exemption for the investment entity in many imports related to its investment activity, which provides a promising investment environment supported by legislation aimed at improving the investment climate in the State of Kuwait, and it works to remove obstacles for foreign or local investors.
Customs exemption concept
Customs exemption is a feature granted by the state to economic and industrial establishments to exclude them from paying taxes and customs duties in whole or in part on some of their imports that are imported from abroad, and this is as a result of international agreements, an investment advantage, or certain activities and goods.
Request for customs exemption for the investment entity
An application for exemption from taxes and customs duties shall be submitted to the Direct Investment Promotion Authority according to the form prepared for this purpose, and a list of imports for which exemption is required shall be attached. Customs exemption requests shall be evaluated according to the principles, rules and standards set by the Authority’s Board of Directors, and a customs exemption certificate shall be issued by the Director General and invoked in the face of all concerned.
Approval of import lists of investment entities
The Direct Investment Promotion Authority is coordinating with the General Administration of Customs and other concerned parties to determine the cooperation mechanisms for arranging the technical and procedural aspects related to customs exemption requests, in terms of approving the lists of imports of the investment entities subject of the request.
Conditions for granting customs exemption to the investment entity
The investment entity shall be fully or partially exempted from customs duties and taxes in accordance with the provisions of the Direct Investment Promotion Law in the State of Kuwait and its executive regulations, taking into account the following:
- The import is made in the name of the investment entity or for its benefit.
- The imported materials, in terms of quantity and quality, must be consistent with the nature and needs of the investment entity’s activity.
Types of investment entity imports that are subject to customs duty exemption
Without prejudice to the provisions of Law No. 10 of 2003 issuing the Unified Customs Law for the Cooperation Council for the Arab States of the Gulf, the investment entity may be fully or partially exempted from taxes, customs fees or any other fees that may be due on the imports necessary for the purposes of the investment entity, including:
- Machines, tools, equipment, means of transportation and other technological devices, and spare parts and maintenance supplies necessary for them.
- Commodity requirements, raw materials, partially manufactured goods, and packaging and packaging materials and supplies.
Obligations of the investment entity that obtained customs exemption
The investment entity that obtains customs exemption is obligated to keep a register of machinery, equipment, devices, means of transportation, spare parts, supplies, materials, goods and supplies subject to customs exemption for the investment entity.
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