Foreign investors in Kuwait enjoy many advantages and guarantees of investment provided by the direct investment encouragement authority, whereas the authority always seek to attract foreign investors and large corporates to invest in Kuwait through granting facilities, and providing advantages, guarantees.
Among these benefits and guarantees provided by the authority are the tax exemptions for a period may exceeds ten years, and not allowing of confiscation of any investment entity, and the investor could transfer his profits, and capital abroad, also, he can make use of lands, real estates allocated to the authority, and use necessary foreign labor for investment. Besides other advantages and guarantees granted to foreign investors in Kuwait.
The direct investment encouragement authority never stopped providing facilities and support for all foreign investors in Kuwait, as the authority announced about many procedures for supporting ne investors who submitted a request of getting investment license in Kuwait, also, investment entities which are authorized from the authority, in the frame of foreign investor encouragement, in terms of supporting new investors in light of repercussions of the emerging Corona virus crises.
Below we will explain provided support to new investors who submitted the request of investment license granting in Kuwait, and provided support to investment entities licensed from the authority, and support which is provided to all of the authority investors, besides support procedures provided from Kuwait government to mitigate the negative effects of the Corona crisis.
Firstly: Supporting New Investors Who Submitted the Investment License Request
The direct investment encouragement authority granted the following exemptions for the corporates applying to investment license requirements until 31 of December 2020, and who granted a percentage of 30% to 80% according to evaluation mechanism No.329 for the year 2019:
- Exemption from income tax for the second year from the actual operating start date.
- Total exemption from custom tax on the necessary imports list for the project, for one year from the date of issuance of custom exemption certificate.
Secondly: Supporting Investment Entities Licensed from the Authority
The authority has extended the actual operating start date existed in the year 2020 for the whole investment entities licensed until January 2021, adding to postponing submitting required reports or obligations, till things return to normal, whereas at the same time it announced on tax and custom exemption on the following:
The authority announced granting tax exemption on the fiscal year 2020 for licensed investment entities the started actual operation during the year 2020 or whose actual operating date was extended.
The authority decided fully exemption of custom duties for these investment entities licensed at the authority, on imports list for investment purposes, which provided to the authority through the year 2020, while this is for one year from the date of custom exemption certificate issuance.
Thirdly: Supporting for All of the Authority Investors
The direct investment encouragement authority has reduced all of services fees which are provided by the authority, by the percentage of 50% until 31 of December 2020, also, calculating the full value of the annual benefit for investment entities spending on the sustainable development criterion, through social responsibility, environment sustainability programs and fields, which were added within the amendment tax exemption mechanism criterion.
Fourthly: Supporting Procedures Provided from Kuwait Government, to Reduce Negative Effects of Corona Crisis
Financial Procedures Activation
It has been allocated a sum of additional 500 million Dinar for supporting governmental sector budget, for emergency needs, to face Corona virus (COVID-19), in addition to accelerate the government payments cycle to private sector suppliers and contractors, also providing governmental exemptions for economic institutions, and cooperative hyper markets sector, from some of the fees and governmental dues.
The central bank has provided supervisory incentive package to raise national banks financing ability by about 5 billion Dinar (16 billion Dollar), for the sectors affected by Corona virus (COVID-19).
Steps Taken by Kuwait Central Bank
The instructions of Kuwait central bank included the following:
- Reduce discount price to 1.5%.
- Reduce the percentage of capital adequacy price from 13% to 10.5%.
- Reduce credit risks weights for small and medium enterprises from 75% to 25%.
- Raise available maximum for funding grants from 90% to 25%.
- Raise permissible percentage for funding to the real estate value or development cost.
Supporting Small and Medium Enterprises
Loan installments and banking facilities had been postponed for a time period of 6 months, also the consequent interest were cancelled, and fees on point of sale and debit machines were suspended for 3 months, adding to raising the limit of remote payments operations to 25 Kuwaiti Dinar whereas it was previously 10 Kuwaiti Dinar, and postponing of loan installment of national fund for small, medium projects, and industrial bank, besides postponing social insurance contributions for 6 months.
The government of Kuwait has secured the minimum for the labor affected by the crisis of Corona virus (COVID-19), and paid the salaries of public sector employees for the duration of the work disruption, and provided job security for national workers in the affected sector, adding to supporting the salaries of business owners registered on chapter five of social insurance in the affected sector, also paying of the contractual pension for some cases for 6 months.
Telecom companies provided 5 GB internet daily for a month from 22 of March 2020 to subscribers, for supporting them during the crisis of Corona virus (COVID-19), it also considered national calls between networks as free for a month.
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