Identifier
Created
Classification
Origin
08KUWAIT61
2008-01-15 13:38:00
UNCLASSIFIED
Embassy Kuwait
Cable title:  

2008 KUWAIT INVESTMENT CLIMATE STATEMENT SUBMISSION

Tags:  NOTAG KU 
pdf how-to read a cable
VZCZCXRO2436
PP RUEHDE RUEHDIR
DE RUEHKU #0061/01 0151338
ZNR UUUUU ZZH
P 151338Z JAN 08
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 0583
INFO RUEHZM/GCC COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPCIM/CIMS NTDB WASHDC PRIORITY
UNCLAS SECTION 01 OF 03 KUWAIT 000061 

SIPDIS

SIPDIS

STATE FOR EB/IFD/OIA, STATE PASS TO USTR

E.O. 12958: N/A
PGOV, EINV, KTDB, USTR, OPIC, KU
SUBJECT: 2008 KUWAIT INVESTMENT CLIMATE STATEMENT SUBMISSION

REF: 07 SECSTATE 158802

UNCLAS SECTION 01 OF 03 KUWAIT 000061

SIPDIS

SIPDIS

STATE FOR EB/IFD/OIA, STATE PASS TO USTR

E.O. 12958: N/A
PGOV, EINV, KTDB, USTR, OPIC, KU
SUBJECT: 2008 KUWAIT INVESTMENT CLIMATE STATEMENT SUBMISSION

REF: 07 SECSTATE 158802


1. Per reftel instructions, the following is PostQs submission for the


OPENNESS TO FOREIGN INVESTMENT

The Council of Ministers approved the implementing regulations for its

The Direct Foreign Capital Investment Law promotes foreign investment i

Foreign firms still may not invest in the upstream petroleum sector, al

Kuwait's economy has been dominated by the state and the nationalized o

Established after the 1982 stock market crash, the Kuwait Stock Exchang

The National Assembly ratified the "Indirect Foreign Investment Law" in


On July 9, 2001, the Kuwaiti government announced an ambitious five-yea

Build, Operate and Transfer (BOT) projects are gaining increasing accep

A new BOT law was approved by the Parliament in January 2008 after BOT

There have been a number of real estate BOT projects by privately owned

Foreign-owned firms and the foreign-owned portions of joint ventures ar

Kuwaiti firms are not subject to the corporate income tax, but those re

Tax exclusions -- besides those offered under the new Direct Foreign Ca

The licensing authority of the Ministry of Commerce and Industry screen

On July 26, 1992, the Council of Ministers of the State of Kuwait estab

In January 2002, the Kuwaiti government transformed its offset program

Offset obligations are applied to military contracts of a value equal t


CONVERSION AND TRANSFER POLICIES

After 27 years of linking the Kuwaiti dinar (KD) exchange rate to a bas

There are no restrictions on current or capital account transactions in


*Source: Central Bank of Kuwait, May 2007.


EXPROPRIATION AND COMPENSATION

There have been no recent cases of expropriation or nationalization inv

DISPUTE SETTLEMENT

The Foreign Investment Law stipulates that Kuwaiti courts alone are res

Kuwait has a developed legal system and a strong trading history. It h

A feature of Kuwaiti law which U.S. business should be aware of is the

PERFORMANCE REQUIREMENTS/INCENTIVES

Government Procurement Requirements

Law No. 37 of 1964 (Articles 43 and 44) specifies the use of local prod

Boycotts

In June 1993, Kuwait publicly announced its decision to end enforcement


Shipping Requirements

The Kuwaiti government has insisted that cargoes for government project

Participation in Research and Development


There are no specific restrictions on foreign participation in governme

Visa and Work Permit Requirements

Kuwait has a stringent visa regime and most work permits require a loca


KUWAIT 00000061 002 OF 003



RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT

Rights to private ownership and establishment are respected in Kuwait,

Kuwaiti law severely restricts the types of collateral to which credito


TRANSPARENCY OF THE REGULATORY SYSTEM

Kuwait has not developed effective antitrust laws to foster competition


EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT

Kuwait has a free, but inefficient, capital market where credit is allo

BANK ASSETS
KuwaitQs banks have not yet released their 2007 annual reports. The as

BANK
KD (million)
U.S. $ equivalent
National Bank of Kuwait
7,898.300
2
(US $1 equals KD 0.274 as of December 11, 2007 - CBK)

The quality of local banks varies from blue chip, world-class to weak.

There are few defensive measures to protect against hostile takeovers,

Finally, U.S. investors should be aware that family, clan, and tribal t

POLITICAL VIOLENCE

Politically Motivated Damage to Projects and/or Installations

With the potential for terrorist actions throughout the Persian Gulf re

CORRUPTION

The often-lengthy procurement process in Kuwait occasionally results in

BILATERAL INVESTMENT AGREEMENTS

Kuwait has signed investment agreements with Germany, France, Italy, Ru

Trade and Investment Framework Agreement

Kuwait signed a Trade and Investment Framework Agreement (TIFA) with th

OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS

In 1989, Kuwait concluded an agreement with the U.S. on investment guar

LABOR

Kuwait has a diverse labor force. Kuwaiti nationals occupy most of the

Kuwaiti workers have the right to organize and bargain collectively, bu

Separate Kuwaiti labor laws set work conditions in the public and priva

The International Labor Organization's (ILO) Committee of Experts has r

On June 12, 2007, National Assembly ratified a law that bans women from

The law also bans women from working in jobs that are hazardous, rough,

The Ministry of Social Affairs & Labor will assign officers to enforce
The law stipulates a minimum penalty of 300 USD and a maximum penalty o
-QUSD300 to 1500
-QShutting down the store for one month period.

FOREIGN TRADE ZONES AND FREE PORTS

In July 1995, the National Assembly passed Law No. 26 authorizing the M

On November 26, 2006, Cabinet Council issued Resolution No. 507/2006 te

FOREIGN DIRECT INVESTMENT STATISTICS

Kuwaiti public investments abroad consist of portfolio investments held

Other major investors in Kuwait include Dow Chemical which has a 45 per



KUWAIT 00000061 003 OF 003


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