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Executive Summary

Kuwait is a country of 1.4 million citizens and 2.3 million expatriate workers. With a land mass roughly 25 percent larger than the state of Connecticut, the country possesses six percent of the world’s proven oil reserves and is a global top ten 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 almost 90 percent of government revenue.

The government employs more than four out of five working-aged Kuwaiti citizens. In recent years, the size of the government workforce has expanded rapidly to accommodate young Kuwaitis entering the job market. Because half the population of Kuwaiti citizens is under the age of 21, the government would have to employ over the next 10 years approximately 40 percent more than it does today to maintain the same four-out-of-five employment ratio. When oil prices fell dramatically in 2014, government revenues also fell, putting pressure on government expenditures and creating a budget deficit. Policy makers adjusted plans to accelerate the government’s investment in economic infrastructure to stimulate the economy and support the development of a robust private sector that could employ more young Kuwaitis.

The government faces two central challenges as it seeks to develop a robust private sector: it must improve the business climate; and it must stimulate attitudes more conducive to competing in the private sector among a Kuwaiti population that has grown accustomed to assured public sector employment and extensive government benefits. In 2018, Kuwait ranked 96 out of 190 in the World Bank’s Doing Business Report when it came to the ease of doing business, an improvement from last year but still the lowest of all Gulf Cooperation Council (GCC) countries. A number of opinion leaders have focused attention on the need to improve the educational system to prepare young Kuwaitis to compete in the private sector.

In an attempt to attract foreign investment to help diversify the economy and grow private sector employment, Kuwait passed a new foreign direct investment law in 2013 permitting up to 100 percent foreign ownership of a business, if approved by the Kuwait Direct Investment Promotion Authority (KDIPA). Without such approval, businesses must be at least 51 percent-owned by Kuwaiti or GCC citizens. In reviewing applications from foreign investors, KDIPA places emphasis on creating jobs and the provision of training and education opportunities for Kuwaiti citizens, technology transfer, diversification of national income sources, increasing exports, support for local small- and medium-sized enterprises, and the utilization of Kuwaiti products and services. As of March 2018, KDIPA had sponsored 16 foreign firms, including five U.S. companies. In addition to KDIPA assistance in navigating the bureaucracy, investment incentives include tax benefits, customs duties relief, land and real estate allocations, and permission to recruit required foreign labor.

The government has remained committed to executing its long-term national vision, called NewKuwait, which involves investing tens of billions of dollars in major infrastructure projects, including new airport terminals, ports, roads, industrial cities, large residential developments, hospitals, rail and metro rail. The Northern Gateway (also referred to as the Five Islands) project envisions public and private sector investment exceeding USD 160 billion.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 85 of 175
World Bank’s Doing Business Report “Ease of Doing Business” 2017 96 of 190
Global Innovation Index 2017 56 of 128 https://www.globalinnovation
U.S. FDI in partner country (M USD, stock positions) 2016 USD 189
World Bank GNI per capita 2016 USD 34,890

Policies Towards Foreign Direct Investment

Kuwait reintroduced its national development plan in 2018 as NewKuwait. Key economic objectives in the plan include creating a business environment that will stimulate private sector growth and attract foreign investors. The Foreign Direct Investment Law of 2013 allows up to 100 percent foreign ownership in certain industries, including: infrastructure (water, power, wastewater treatment, and communications); insurance; information technology and software development; hospitals and pharmaceuticals; air, land, and sea freight; tourism, hotels, and entertainment; housing projects and urban development; and investment management. The law also established KDIPA ( ) to solicit investment proposals, evaluate their potential, and assist foreign investors in the licensing process. The government believes that providing greater access to the Kuwaiti market will encourage foreign companies to invest in the private sector elements of the Northern Gateway (also referred to as the Five Islands) and other projects that constitute the NewKuwait development plan.

In 2015, KDIPA delivered its first investment license to IBM, allowing the company to establish a 100 percent foreign-owned company in Kuwait and to benefit from the incentives and exemptions granted under the new law. Since, KDIPA has granted foreign ownership licenses to 15 additional foreign firms, including U.S. companies GE, Berkeley Research Group, Malka Communications, and Maltbie.

U.S. companies operate successfully in the country. American engineering firms such as Fluor have participated in large infrastructure development projects, including the USD 16 billion Al-Zour Refinery and Clean Fuels Project. Dow Chemical Company participates in several joint ventures in the petrochemical industry. General Electric is a major vendor to power generation and desalination facilities. Citibank operates a branch in Kuwait City. Numerous franchises of U.S. restaurants and retail chains operate successfully.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Companies Law No. 1 of 2016 simplified the process for registering new companies and has helped to reduce wait-times associated with starting a new business. This law maintained the requirement that a Kuwaiti or GCC national own at least 51 percent of a local company. If non-GCC investors qualify to invest through the Kuwait Direct Investment Promotion Authority (KDIPA), this requirement may be waived. In 2017, the law was amended to eliminate prohibitive requirements placed on limited liability companies.

KDIPA is able to assist foreign companies that want to set up branches and representative offices in Kuwait. The process requires the submission of legal and financial documents as well as a commitment to fulfill stated obligations. In screening applications, KDIPA focuses on job creation for Kuwaiti citizens, training and education for Kuwaiti citizens, technology transfer, diversification of sources of national income, increasing Kuwaiti exports, support for local SMEs, and utilization of Kuwaiti products and services.

Council of Ministers Decision No. 75 of 2015 directs the Kuwait Direct Investment Promotion Authority (KDIPA) to exclude foreign firms from sensitive sectors. Sensitive sectors include: extraction of crude petroleum, extraction of natural gas, manufacture of coke oven products, manufacture of fertilizers and nitrogen compounds, manufacture of gas, distribution of gaseous fuels through mains, real estate, security and investigation activities, public administration, defense, compulsory social security, membership organizations, and recruitment of labor.

Other Investment Policy Reviews

In the past three years, no investment policy reviews on Kuwait were conducted by the Organization of Economically Developed Countries, the World Trade Organization, or the United Nations Conference on Trade and Development.

Business Facilitation

Kuwait’s ranking in the World Bank’s Doing Business Index remained 149 out of 190 for Starting a Business in 2018. The World Bank’s Doing Business project lists the following steps required to start a business in Kuwait in the following link: ( ).

Its time-to-complete estimates may be optimistic, as anecdotal reports indicate that starting a new business in Kuwait can take up to a year. The government has been working with the World Bank to resolve doing business issues in Kuwait.

In September 2016, the Ministry of Commerce and Industry (MOCI) inaugurated the Kuwait Business Center (KBC) (visit website: ) to facilitate the issuance of commercial licenses and to start limited liability and single owner companies within 3-5 working days. However, the business center has encountered challenges in coordinating interagency cooperation. The government outlines steps for starting a business in the following website:

KDIPA also established a unit to streamline registration and licensing procedures for qualifying foreign investors. Its goal is to approve licenses within 30 days of the completed application.

The April 2013 Law No. 98 established the National Fund for the Support and Development of small- and medium-sized enterprises, which it defines as enterprises that employ up to 50 Kuwaitis and require less than KD 500,000 in financing. Financing is limited to enterprises established by Kuwaiti citizens. As of June 2017, the National Fund had financed 178 small projects.

Outward Investment

The government neither promotes nor restricts outward private investment. It is generally agreed that the largest, single outward investor is the country’s Future Generations sovereign wealth fund, managed by the Kuwait Investment Authority (KIA). By law, however, KIA may not disclose the total amount of its investments. In 2017, the Sovereign Wealth Fund Institute estimated that KIA managed the world’s fourth largest sovereign fund, with more than USD 524 billion in assets. Kuwaiti officials have indicated that KIA invests about half of its funds in the United States across a wide portfolio. The press has reported that KIA holds a significant interest in the New York City Hudson Yards project, one of the largest private redevelopment projects in U.S. history. Another large Kuwaiti investment involves MEGlobal, a subsidiary of Equate, which is a partnership between Kuwait’s Petrochemicals Industries Company and Dow Chemical Company. MEGlobal is building a billion-dollar monoethylene glycol production facility in Texas. Individual Kuwaitis find investments in U.S. securities and real estate attractive.

Kuwait has signed bilateral investment treaties with 84 countries, 67 of which are in force, and 12 other treaties with investment provisions, six of which are in force. More information about these may be found at the following website: .

Kuwait signed a Trade and Investment Framework Agreement (TIFA) with the United States in 2004. The last bilateral TIFA Council meeting took place in 2008. In October 2012, however, the United States signed a TIFA with the GCC, which the Kuwait National Assembly ratified in April 2014. The last U.S.-GCC TIFA Council meeting took place in June 2015.

Kuwait and the United States signed a bilateral agreement on investment guarantees in
April 1989 that entered into force in October 1989.

Kuwait does not have a bilateral taxation treaty with the United States. However, Kuwait and the United States signed an intergovernmental Foreign Account Tax Compliance Act (FATCA) agreement in April 2015, which can be accessed via the following website: 

Transparency of the Regulatory System

Kuwait does not have a centralized online location where key regulatory actions are published akin to the Federal Register in the United States. The regulatory system does not require that regulations be made available for public comment. The government frequently passes draft regulations to interested parties in the private sector, such as the Kuwait Chamber of Commerce and Industry or the Bankers Association, for comment.

The State Audit Bureau reviews government contracts and audits contract performance, but does not publicly share its results.

Kuwait does not participate in the Extractive Industries Transparency Initiative (EITI), nor does it incorporate domestic transparency measures requiring the disclosure of payments made to other governments related to the commercial development of oil, natural gas, or mineral deposits. However, the Kuwait economy is almost wholly dependent upon oil, the extraction of which is deemed a responsibility of the government and that is subject to close National Assembly oversight.

International Regulatory Considerations

Kuwait joined the General Agreement on Tariffs and Trade (GATT) in 1963 and became a founding member of the WTO in 1995. However, Kuwait is not a signatory to every WTO plurilateral agreement, such as the Trade Facilitation Agreement and the Agreement on Government Procurement.

Kuwait has been part of the GCC since its formation in 1981. The GCC launched a common market in January 2008 and a customs union in 2015. The GCC continues to forge agreements on regional standards and coordinate trade and investment policies. American standards and internationally recognized standards are typically accepted. For more information regarding GCC standards and policies, please refer to the following website (link to GCC website): 

Legal System and Judicial Independence

Kuwait has a developed civil legal system, based on Egyptian and French law and influenced by Islamic law. Having evolved in a historical and active trading nation, the court system in Kuwait is familiar with international commercial laws. Kuwait’s judiciary supports specialized courts, including a commercial court to adjudicate commercial law. Court decisions do not appear to be subject to government interference or biased against foreign investors or companies.

All those who have been charged with criminal offenses, placed under investigation, or involved in unresolved financial disputes with local business partners may be subjected to a travel ban. Travel bans prevent an individual from leaving Kuwait until a legal matter is resolved or a debt may remain in place for a substantial time while the case is investigated, resolved, and/or prosecuted. Failure to repay a debt can result in a prison term ranging from months to years, depending upon the amount owed.

U.S. firms are advised to consult with a Kuwaiti law firm or the local office of a foreign law firm before executing contracts with local parties. Fees for legal representation can be very high. Contracts between local and foreign parties serve as the basis for resolving any future commercial disputes. The process of resolving disputes in the Kuwaiti legal system are subject to lengthy delays and can take years depending on the complexity of the issue and the parties involved. During these delays, U.S. citizens can be deprived of income streams related to their business venture and be forced to surrender assets and ownership rights before being allowed to depart the country. Sentences for drug-related convictions can include lengthy prison terms, life sentences, and even the death penalty.

Laws and Regulations on Foreign Direct Investment

In an attempt to diversify the economy by attracting foreign investment and growing private sector employment, Kuwait passed a new foreign direct investment law in 2013 permitting up to 100 percent foreign ownership of a business – if approved by the Kuwait Direct Investment Promotion Authority (KDIPA). Without KDIPA approval, all businesses incorporated in Kuwait must be 51 percent-owned by Kuwaiti or GCC citizens and seek licensing through the Ministry of Commerce and Industry. In reviewing applications from foreign investors, KDIPA places emphasis on creating jobs and the provision of training and education opportunities for Kuwaiti citizens, technology transfer, diversification of national income sources, increasing exports, support for local small- and medium-sized enterprises, and the utilization of Kuwaiti products and services. KDIPA has sponsored 16 foreign firms, including five U.S. companies. In addition to KDIPA assistance in navigating the bureaucracy, available investment incentives include tax benefits, customs duties relief, land and real estate allocations, and permission to recruit required foreign labor.

Other recent legal measures to facilitate foreign direct investment and economic growth include Law No. 116 of 2014 regarding public-private partnerships (PPP) and a new Companies Law No. 1 of 2016. The PPP law created the Kuwait Authority for Partnership Projects [see: ]. Kuwait Authority for Partnership Projects expects to award many upcoming large infrastructure projects using the PPP framework.

Competition and Anti-Trust Laws

While Kuwait’s open economy has generally promoted a competitive market. In 2007, the government enacted the Protection of Competition Law No. 10 and by-laws in 2012 that facilitated the establishment of a Competition Protection Bureau to safeguard free commerce, ban monopolies, investigate complaints, and refer to prosecution acts determined to undermine competition, and supervise mergers and acquisitions. As of April 2018, the Competition Protection Bureau was close to becoming fully operational. U.S. investors have alleged only a few instances of discrimination.

The Commercial Agency Law No. 13 of 2016 removed exclusivity, enabling foreign firms to have multiple agents to market their products.

In 2016, the National Assembly passed a new Public Tenders Law No. 49. All bids on government-funded infrastructure projects (excluding military and security tenders) in excess of KD 75,000 (USD 250,000) must be submitted to the Central Agency for Public Tenders. The law requires that foreign contractors bidding on government contracts purchase at least 30 percent of their inputs locally and award at least 30 percent of the work to local contractors, where available. The law favors local sourcing by mandating a 15 percent price preference for locally produced items.

Expropriation and Compensation

Kuwait has had no recent cases of expropriation or nationalization involving foreign investments. The 2013 Foreign Direct Investment Law guarantees investors against expropriation or nationalization, except for the public benefit as prescribed by law. In such cases, investors should be compensated for the real value of their holdings at the time of expropriation. The last nationalization occurred in 1974.

Dispute Settlement

ICSID Convention and New York Convention

Kuwait is a signatory to the International Center for the Settlement of Investment Disputes (ICSID Convention) and to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State Dispute Settlement

The FDI law stipulates that Kuwaiti courts alone are responsible for adjudicating any disputes involving a foreign investor, although arbitration is permitted. Few contracts contain clauses specifying recourse to traditional commercial arbitration. The Kuwaiti judicial system recognizes and enforces foreign judgments only when reciprocal arrangements are in place.

International Commercial Arbitration and Foreign Courts

The recognition and enforcement of foreign arbitral awards occurs more expeditiously than the enforcement of foreign judgments. Enforcement of the former, however, must meet with the same reciprocity and procedural criteria of enforcing foreign judgments under Articles 199 and 200 of the Civil and Commercial Procedure Code No. 38 of 1980. Accordingly, an award passed by a foreign arbitral panel or tribunal may be enforced in Kuwait provided that: a) the country where the award has been rendered is a member of the New York Convention; b) the foreign award is rendered by a competent arbitrator in accordance with the laws if the country in which it was awarded; c) the parties have been promptly summoned to appear and duly represented before the arbitral tribunal; d) the award must become a res judicata according to the laws of the country in which it was awarded; and e) the award must not be in conflict with an order judgment that has been rendered by a local court in Kuwait and additionally does not contradict mandatory provisions or constitutes a criminal conduct, or violations to morality or public policy, under Kuwaiti laws.

Alternative Dispute Resolution (ADR) mechanisms include conciliation, negotiation, and mediation. These mechanisms depend on the parties’ goodwill to settle their disputes with or without the help of a third party.

Law No. 11 of 1995 on Judicial Arbitration for Civil and Commercial Articles, the relevant organizing and explanatory Ministerial Resolutions thereof, and Civil and Commercial Procedure Code No. 38 of 1980 outline the formation, operation, jurisdiction, and procedures of the arbitral panel, and the issuance of arbitral awards through the Kuwait Arbitration Center, located at the Kuwait Chamber of Commerce and Industry. They also define regulations for international conventions, free trade agreements, and the just application of the reciprocal clause between parties.

Bankruptcy Regulations

Bankruptcy is still governed under Law No. 68 of 1980, which does not meet international standards in covering the full range of companies, or in restructuring debt. While the 1980 law does not criminalize bankrupt individuals, indebtedness may result in incarceration, and a bankruptcy declaration limits political rights. A bankrupt individual may not serve as a candidate or elector in any political position, be appointed to a public post or assignment, or serve as director or chairman in any company until the individual’s rights are reinstated in accordance with law. Kuwait is working with the World Bank to draft bankruptcy legislation designed to assist businesses to recover from financial difficulties as an alternative to liquidation. As of December 2017, the Ministry of Commerce and Industry had referred this draft law to the Council of Ministers for comment and review.

Investment Incentives

Incentives under the 2013 Foreign Direct Investment Law include tax benefits (15 percent corporate tax on foreign firms may be waived for up to 10 years), customs duties relief, land and real estate allocations, and permissions to recruit required foreign labor.

Other tax benefits exist. For example, entities incorporated in the GCC that are 100 percent owned by GCC nationals are exempt from paying a tax on corporate profits. Capital gains arising from trading in securities listed on Kuwait’s stock market are exempt from tax. Foreign principals selling goods through Kuwaiti distributors are not subject to tax.

Kuwait does not have personal income, property, inheritance, or sales taxes; however, the government is preparing to implement a GCC-agreed value added tax and excise taxes.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Kuwait Free Trade Zone was established at Shuwaikh port in 1999. Many restrictions normally faced by foreign firms, as well as corporate taxes, do not apply within the free trade zone. In 2016, the Kuwait Council of Ministers resolved to transfer free-trade zone management from the Ministry of Commerce and Industry to the Kuwait Direct Investment Promotion Authority (KDIPA). KDIPA is planning to establish two new free trade zones at Al-Abdali and Al-Nuwaiseeb.

Performance and Data Localization Requirements

The government requires foreign firms to hire a percentage of Kuwaitis that varies according to sector. The percentages are as follows:

  • banking: 66 percent
  • communications: 62 percent
  • investment and finance: 40 percent
  • petrochemicals and refining industries: 30 percent
  • manufacturing and agriculture: 3 percent.

Employers must obtain a no objection certificate for a work permit for foreign employees from the Public Authority for Manpower (PAM) of the Ministry of Social Affairs and Labor (MOSAL) prior to the employee’s arrival in the country. Obtaining a no objection certificate may require submission of the employee’s criminal history and a completion of a health screening through an Embassy or Consulate in Kuwait. Upon arrival, the employee must obtain a work permit from PAM. After obtaining the work permit, the employee must obtain a residence permit from the Ministry of Interior to finalize his/her status as a resident foreign worker.

Kuwait does not require that foreign companies store data locally, or that foreign investors use Kuwaiti domestic content when manufacturing goods locally. Each company may determine whether and how it chooses to store data. Most governmental agencies follow International Organization for Standardization (ISO) certificate standards, which mandate the storage of data for five years. Banks and other financial institutions are required by the Anti-Money Laundering/Combatting the Financing of Terrorism Law 106 of 2013 to maintain transactions data for five years.

Real Property

Non-GCC citizens may own properties only under special conditions that require the Cabinet Council’s approval. Kuwait ranked 70 out of 190 in Ease of Registering a Property in the World Bank’s Doing Business 2018 report.

Intellectual Property Rights

Kuwait is a member acceded to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1995 and the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty in 2016. The government enacted the GCC Trademark Law in 2015 and the Copyright and Related Rights Law in 2016. The government is working to amend the copyright law to enhance and improve protection. Once the copyright law is appropriately amended, USTR will conduct an out-of-cycle review to consider removing Kuwait from the 2018 Priority Watch List.

During 2017, the government continued to improve its IPR regime, including: accepting commitments and legislative preparation of amendments to its copyright law, stating its intention to join the WIPO Copyright Treaty and WIPO Internet Treaties, improving the country’s IP enforcement regime, effectively engaging U.S. stakeholders, and striving towards the successful conclusion of enforcement cases. In March 2018, the Ministry of Information announced plans for a three-phase national IPR media campaign, in order to raise public awareness about protecting IPR and the risks associated with counterfeit merchandise, including medicine.

The following descriptions categorize the protection of intellectual property rights in Kuwait:

  • Trademarks: strong; trademark applications can be filed at the Kuwaiti Trademark Office, organized under the Ministry of Commerce and Industry. Kuwait adopted the GCC trademark law.
  • Patents: strong; the Kuwait Patent Office announced that it began accepting Patent Cooperation Treaty compliant national applications in March 2018.
  • Copyright: medium (improving); can be protected by the Ministry of Information/National Library of Kuwait. There are efforts underway to amend the new copyright law and join WIPO’s Copyright and Internet Treaties.

The IPR enforcement regime has improved, most notably in the following areas:

  • The Ministry of Information (MOI) has conducted raids, seized pirated goods (such as DVDs), and referred cases for prosecution. In addition, it continued blocking Internet domains that allow downloads of pirated copyrighted materials and websites that sell counterfeit goods.
  • The Criminal Investigations Department (CID) established a specialized IPR unit to combat counterfeit goods. Brand owners are able to bring complaints directly to this unit for action in cooperation with the Ministry of Commerce and Industry, usually resulting in seizures of counterfeit goods.
  • Ministry of Commerce and Industry performed raids and seizures under the direction of the Assistant Undersecretary of Trade Control, but focused more on small retail shops than more lucrative targets like sources and suppliers of counterfeit goods.
  • General Administration of Customs officials improved enforcement in part due to their close collaboration with U.S. Customs and Border Protection. Kuwaiti Customs established an IP training unit to improve its inspectors’ capabilities.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at the following website: 

Resources for Rights Holders

Mr. Peter Mehravari
Intellectual Property Attache for the Middle East & North Africa
U.S. Embassy Kuwait
Tel: +965 2259 1455

Embassy list of local lawyers: 

Capital Markets and Portfolio Investment

Foreign financial investment firms operating in Kuwait characterize the government’s attitude toward foreign portfolio investment as welcoming. An effective regulatory system exists to encourage and facilitate portfolio investment. Existing policies and infrastructure facilitate the free flow of financial resources into the capital market. Government bodies comply with guidelines outlined by IMF Article VIII and refrain from restricting payments and transfers on current international transactions. In November 2015, the Capital Markets Authority issued a regulation covering portfolio management, but it does not apply to foreign investors.

The privatized stock exchange, named the Boursa, lists 175 companies. The Boursa plans to issue an IPO on itself in 2018. In May 2017, Kuwait met FTSE Russell’s maximum three-day timeline for settlement and clearing transactions, thus becoming eligible for an upgrade in status to Secondary Emerging Market, which the FTSE Russel announced in September 2017.

While the debt market is not well developed, local banks have the capacity to meet domestic demand. Credit is allocated on market terms. Foreign investors are able to obtain local credit on terms that correspond to collateral provided and intended use of financing. The private sector has access to a variety of credit instruments. The Central Bank restricts commercial banks’ use of structured and complex derivatives, but permits routine hedging and trading for non-speculative purposes. In March 2017, the government issued USD 8 billion in five- and ten-year notes. The government has plans to issue 30-year notes, thus building out a yield curve that will serve as a useful benchmark for the financial services industry.

Money and Banking System

The Central Bank of Kuwait reported that banking sector assets totaled KD 62.7 billion (USD 208 billion) in January 2018. Twenty-three banks operate in Kuwait: five conventional local banks, five Islamic banks, 12 foreign banks, and one specialized bank. Conventional banks include: National Bank of Kuwait, Commercial Bank of Kuwait, Gulf Bank, Al-Ahli Bank of Kuwait, and Burgan Bank. Sharia-compliant banks include Kuwait Finance House, Boubyan Bank, Kuwait International Bank, Al-Ahli United Bank, and Warba Bank. Foreign banks include: BNP Paribas, HSBC, Citibank, National Bank of Abu Dhabi, Qatar National Bank, Doha Bank, Dubai-based Mashreq Bank, the Bank of Muscat, Riyadh-based Al Rajhi Bank (the largest Sharia-compliant bank in the world), the Bank of Bahrain and Kuwait (BBK), the Industrial and Commercial Bank of China (ICBC), and Union National Bank. The government-owned Industrial Bank of Kuwait provides medium- and long-term financing to industrial companies and Kuwaiti citizens through customized financing packages.

Following the global financial crisis in 2008 when large losses reduced confidence in the local banking sector, the Council of Ministers and the National Assembly passed legislation to guarantee deposits at local banks to rebuild confidence.

Foreign banks can offer retail services. In March 2013, the Central Bank announced that foreign banks could open multiple branches on a case-by-case basis. In 2017, the Al-Rajhi Bank opened its second branch. Qatar National Bank received CBK’s approval in 2014 and opened its second branch March 2018. Kuwaiti law restricts foreign banks from offering investment banking services. Foreign banks are also subject to a maximum credit concentration equivalent to less than half the limit of the largest local bank, and are prohibited from directing clients to borrow from external branches of their bank. Foreign banks may also open representative offices.

Foreign Exchange and Remittances

Foreign Exchange Policies

The Kuwaiti dinar has been tied to an undisclosed and changing basket of major currencies since
May 2007. Reverse-engineering suggests that this basket is likely made up of 70 – 80 percent U.S. dollars. Foreign exchange purchases must be processed through a bank or licensed foreign exchange dealer. Equity, loan capital, interest, dividends, profits, royalties, fees, and personal savings can be transferred into or out of Kuwait without hindrance. The Foreign Direct Investment Law permits investors to transfer all or part of their investment to another foreign or domestic investor, including cash transfers.

Remittance Policies

No restrictions exist on the inflow or outflow of remittances, profits, or revenue. Foreign investors may elect to remit through a legal parallel market, including one utilizing convertible, negotiable instruments. Nevertheless, each investor must ensure compliance with Kuwait’s anti-money laundering laws. Time limitations or waiting periods do not apply to remittances. Kuwait is not known to engage in currency manipulation. The Central Bank advises buy, sell, and middle rates on a daily basis.

Sovereign Wealth Funds

The Kuwait Investment Authority (KIA) manages the Kuwait General Reserve Fund and the Kuwait Fund for Future Generations. By law, ten percent of oil revenues must be deposited each year into the Fund for Future Generations. KIA management reports to a Board of Directors that is appointed by the Council of Ministers. The Minister of Finance chairs the board; other members include the Minister of Oil, the Central Bank Governor, the Undersecretary of the Ministry of Finance, and five representatives from Kuwait’s private sector (three of whom are not allowed to hold any other public office). An internal audit office reports directly to the Board of Directors and an external auditor. This information is provided to the State Audit Bureau which audits KIA continuously and reports annually to the National Assembly.

The 1982 law establishing the KIA prohibits the public disclosure of the size of sovereign wealth holdings and asset allocations. KIA conducts closed-door presentations for the Council of Ministers and the National Assembly on the full details of all funds under its management, including its strategic asset allocation, benchmarks, and rates of return. The Sovereign Wealth Fund Institute estimated that KIA manages the world’s fourth largest sovereign fund with more than USD 524 billion in assets (June 2017).

The energy sector is dominated by parastatals, as law precludes private participation in most sector activities. Outside the energy sector, Kuwait has few fully state-owned enterprises (SOEs). One notable exception is Kuwait Airways. No published list of SOEs exists. The government owns shares in various Kuwaiti companies through the Fund for Future Generations managed by the Kuwait Investment Authority or the Social Security Fund managed by Kuwait’s Public Institution for Social Security. The government’s stake in these companies ranges from 24 percent to 100 percent. SOEs are permitted to control their own budgets.

Privatization Program

The National Assembly has passed several privatization laws during the past eight years. One legal stipulation is that Kuwaiti employees have the right to retain their jobs in a privatized company for at least five years with the same salary and benefits. Another stipulation is that the privatization of any public service must offer shares according to the following schematic:

  • 40 percent of shares reserved for Kuwaiti citizens;
  • 20 percent of shares reserved to be retained by the government;
  • five percent of the shares to be distributed to Kuwaiti employees, both former and current; and
  • the remaining 35 percent of shares shall be sold at an auction to a local or foreign investor.

Kuwait privatized its stock exchange in April 2016. With a market capitalization of KD 26.94 billion (USD 87.8 billion) as of March 2018, the Boursa is the fourth largest stock exchange in the GCC after Qatar, UAE’s combined exchanges, and Saudi Arabia. In February 2018, Kuwait’s market regulator appointed a consortium of advisers to arrange for the placement of a minimum of 26 percent and a maximum of 44 percent of Boursa shares. The regulator declared that not less than six percent and not more than 24 percent of the shares would be allocated to public entities; any unsubscribed shares would be referred to the winning bidder.

The privatization of Kuwait Airways has been the subject of discussions, but the airline remains state-owned.

Telecommunications is the largest service sector in Kuwait. The Ministry of Communications owns and operates land lines and owns a fiber optic network. Internet providers may access both land lines and fiber optic networks. Three private mobile telephone companies provide cellular telephone and data services to the country. The government owns a significant minority interest in each, but foreign companies own majority interests in two. In 2014, the National Assembly passed legislation creating the independent Communication and Information Technology Regulatory Authority (CITRA), in part to prepare for the liberalization of mobile communications and Internet markets. Officially opened in February 2016, CITRA serves as the primary national telecom regulator and cybersecurity agency. CITRA also has a mandate to attract hi-tech investment.

Kuwaitis have a general awareness of expectations for responsible business conduct, including environmental, social, and governance issues. No specific government program is in place to require or encourage compliance. One aspect of responsible business conduct in Kuwait is commonly manifested through contributions to local charities and causes.

The Foreign Direct Investment Law obligates the investor not to violate the laws and regulations applicable in the country, especially the duty to protect the environment and regulations relating to security, public health, public order and not to expose others to risk.

The Kuwait Environment Protection Authority has been active in enforcing compliance and addressing environmental violations.

Corruption is criminalized, and several investigations and trials involving current or former government officials accused of malfeasance are underway.

Transparency International’s 2017 Corruption Perceptions Index ranked Kuwait 85 out of 180 countries. Within the Gulf Cooperation Council, Kuwait ranked behind UAE, Qatar, Saudi Arabia, and Oman, ahead of only Bahrain. According to Transparency International, Kuwait’s numeric score of 39 (out of 100) indicated that the country has a serious corruption problem. Since 2015, Kuwait has dropped from the 33rd percentile to the 53rd percentile in these rankings.

The often-lengthy procurement process in Kuwait occasionally results in accusations of attempted bribery or the offering of other inducements by bidders. In 1996, the government passed Law No. 25, which required all companies securing contracts with the government valued at KD 100,000 (USD 333,000) or more to report all payments made to Kuwaiti agents or advisors while securing the contract. The law similarly requires entities and individuals to report any payments they received as compensation for securing government contracts.

Kuwait signed the UN Convention Against Corruption in 2003 and ratified it in 2007. In January 2016, the National Assembly passed legislation to establish the Anti-Corruption Authority, also known as Nazaha (integrity). The legislation was passed in order to comply with the United Nations Convention Against Corruption. Nazaha has sent several cases to the Public Prosecution Office for failure to comply with financial disclosure requirements.

Resources to Report Corruption

Contact information for the government agency responsible for combating corruption is as follows:

Mr. Abdulrahman Al-Namash
Kuwait Anti-Corruption Authority (Nazaha)
Shamia, Block 2, Opposite Wahran Park, Kuwait City, Kuwait
Tel: +965 2464-0200

Isolated acts of terrorism have, during the past three years, targeted religious shrines, security forces, and American service members. None of the attacks specifically targeted businesses or infrastructure. Since late 2013, Kuwait has seen no large-scale, politically motivated demonstrations. U.S. citizens are encouraged to enroll in the U.S. Department of State’s Smart Traveler Enrollment (STEP) for up-to-date information from the Embassy. The Department of State shares credible threat information through its Consular Information Program, including Travel Warnings, Travel Advisories, Alerts, and Country Information for Kuwait, available at or the Embassy’s website:

Kuwait has a diverse labor force. According to the Public Authority for Civil Information (PACI), 2.3 million expatriate workers account for 50 percent of the total population (4.6 million) and 84 percent of a workforce of 2.8 million (data as of April, 2018: ). The vast majority of expatriate workers are low-paid laborers from other Middle Eastern countries, South Asia, and the Philippines. Abuse of the sponsorship system is widespread, especially with respect to visa trafficking.

A number of white-collar workers from advanced countries occupy high-skilled positions in Kuwait, while many middle management positions are occupied by Egyptian, Lebanese, and South Asian nationals. An increasing number of reports indicate that expatriate managers and their spouses are denied driver’s licenses unless they are able to show that they have a sufficiently senior position in a company and/or have a university degree. A Public Authority for Manpower decree, banning the issuance of work permits in the private sector to college degree-holders under the age of 30, is scheduled to take effect July 1, 2018.

Kuwaiti nationals occupy most of the top management positions in the private and public sectors. Unemployment among Kuwaitis is about 2.4 percent, despite the growing influx of young Kuwaitis moving into the labor force. The new entrants are reluctant to enter the private sector and cannot easily be absorbed by the government. Results of a Public Authority for Manpower survey revealed that 58 percent of unemployed Kuwaitis would prefer to work in the public sector and do not want a private sector job, even if offered. Given the fiscal deficit, IMF staff have stressed that limiting public sector employment growth should be part of broader public sector reforms and accompanied by efforts to boost private sector job and entrepreneurship opportunities for the youth.

Since 1991, the government has adopted inconsistent policies intended to limit growth of the resident expatriate population. Lower-paid, unskilled workers often suffer unfavorable working conditions. The government has a labor tracking system to allow companies only enough work permits to be issued for pre-verified positions. The tracking system is designed to protect workers, following years of visa fraud whereby Kuwaiti sponsors could create ghost positions and sell the visa for personal profit. The consequence of the fraud was the importation of workers who then found themselves unemployed. These workers often remained in country and working illegally. Unskilled foreign workers are restricted from transferring from one sponsor to another within the private sector for a minimum of two years, but college graduates may transfer after one year.

Kuwaiti workers have the right to organize and bargain collectively, but Kuwaiti law restricts the right of freedom of association to only one union per occupational trade. The law permits only one federation, the Kuwait Trade Union Federation, which comprises 15 of the 47 licensed unions. Foreign workers are permitted by law to join unions only as non-voting members after five years of work in the particular sector the union represents. Private sector workers have the right to strike; however, negotiation and arbitration are compulsory in the case of disputes.

Although public sector workers do not have the legal right to strike, several such strikes have occurred in the past four years. Kuwaiti labor law prohibits anti-union discrimination.

Separate Kuwaiti labor laws establish work conditions in the public and private sectors, with the exception of the oil sector. Kuwaiti law prohibits forced labor. Workers in industrial and dangerous jobs must be at least 18 years old; youth under the age of 18 can work part-time in some non-industrial positions. A two-tiered labor market ensures higher wages for Kuwaiti employees. In the private sector, the minimum wage is KD 60 (USD 200) per month. In the public sector, the minimum wage is KD 250 (USD 833) per month for Kuwaiti bachelors and KD 325 (USD 1,083) per month for married Kuwaitis, plus KD 50 (USD 167) for each child, compared to a standard monthly minimum wage of KD 90 (USD 300) for non-Kuwaitis in the public sector. Kuwaitis employed in both the private and public sectors receive substantial government subsidies on top of their base salaries. The amended labor law of February 2010 did not change the previous workweek limitation from 48 hours, but extended annual leave to 30 days after six months of employment. However, the law is not consistently enforced and disputes over the payment of salaries and contract switching are common, especially among unskilled workers. The labor laws do not apply to domestic (household) workers.

The International Labor Organization’s (ILO) Committee of Experts has longstanding criticisms concerning discrepancies between the Kuwaiti Labor Code and ILO Conventions 1, 30, and 87 regarding work hours and freedom of association. Areas criticized by the ILO include the prohibition of more than one trade union for a given field; the requirement that a new union have at least 100 workers; the regulation that workers must reside in Kuwait for five years before joining a trade union; the denial of the right to vote and to be elected for foreign trade unions; the prohibition against trade unions engaging in any political or religious activity; and the reversion of trade union assets to MOSAL in the event of dissolution.

The Department of State’s annual Trafficking in Persons Report highlighted the vulnerability of domestic workers to exploitation. During recent years, the Government of Kuwait has taken several measures to address human trafficking and to improve protections for domestic workers. In June 2016, the government passed several new amendments to the 2010 law that increased penalties for those involved in visa trading and illegally employing workers. In July 2016, the government implemented a new labor law for household domestic workers that provided several new protections to include a monthly minimum wage of KD 60 (USD 200), implementation of a formal grievance process, a workday limited to twelve hours with required rest periods, and increased regulations applied to domestic labor recruiting agencies.

Since 2007, labor laws have banned women from working between 8:00 p.m. and 7:00 a.m., except for sectors approved by MOSAL. The law also banned women from working in jobs that are judged to be hazardous, rough, and damaging to health, as well as in immoral jobs that abuse women’s femininity, and in places that exclusively serve men.

Kuwait’s Public Authority for Manpower assists all residents of Kuwait with employment and labor disputes. Offices assist residents according to the location of the employer and are open Sunday through Thursday, 8:00am – 1:00pm. It is recommended that residents seeking assistance be accompanied by an Arabic speaker. Following is information on Public Authority for Manpower offices:

  • Capital Business Administration: Sharq,
    Mohammad al-Haqan Street
    Tel: +965 2246-6830 and 2246-6831
  • Hawalli Business Administration: Hawalli
    Tunis Street, opposite Ahli Bank of Kuwait
    Tel: +965 266-0229 and 2266-0228
  • Al-Farwaniya Business Administration: Dajeej
    Adjacent to General Department of Criminal Evidence
    Tel: +965 2431-9555
  • Al-Jahra Business Administration: Saad al-Abdulah (Amgarah)
    Street 1, Block 10
    Tel +965 9494-5446
  • Al-Ahmadi Business Administration: Al Ahmadi
    Next to Kuwait Oil Company
    Block 1, Street 20
    Tel: +965 2398-2059
  • Mubarak Al-Kabeer Business Administration: Mubarak Al-Kabeer
    Co-op #4, beside National Bank of Kuwait and Kuwait Finance House
    Tel: +965 2543-8595

The Public Authority for Manpower offers Arabic and English responses via their Twitter handle: @manpower_KWT, or Instagram account: pr.manpower. The Authority attempts to answer inquiries within one business day.

Kuwait and the United States concluded an investment guarantee agreement in 1989, which facilitated the extension of programs from the Overseas Private Investment Corporation. There are no active Overseas Private Investment Corporation programs in Kuwait at this time. Kuwait is a member of the Multilateral Investment Guarantee Agency.

According to the 2017 World Investment Report published by the United Nations Conference on Trade and Development, Kuwait attracted USD 275 million in foreign direct investment in 2016, compared to USD 6.2 billion foreign direct investment outflows.

According to the U.S. Department of Commerce Bureau of Economic Analysis, 2016 U.S. direct investment in Kuwait was USD 189 million, down from USD 293 million in 2015. Kuwait’s FDI position in the United States totaled USD 1.1 billion in 2016 as the previous year. Kuwaiti direct investment in the United States is primarily in real estate. Embassy Kuwait estimates that total Kuwaiti investment, including securities and real estate, is at least USD 500 billion.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source

USG or International Statistical Source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data





Host Country Gross Domestic Product (GDP) (M USD)


KD 33,506



USD 110,876

Foreign Direct Investment

Host Country Statistical Source

USG or International Statistical Source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country (M USD, stock positions)




USD 189

Host country’s FDI in the United States (M USD, stock positions)




USD 1,122

BEA data available at

Total inbound stock of FDI as % host GDP






Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 14,991 100% Total Outward 30,272 100%
Qatar 4,442 30% Saudi Arabia 4,801 16%
Bahrain 1,112 7% Cayman Islands 4,079 13%
Saudi Arabia 777 5% Iraq 3,601 12%
United Arab Emirates 636 4% Bahrain 3,415 11%
Oman 481 3% Turkey 2,012 7%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 16,632 100% All Countries Amount 100% All Countries 5,302 100%
Bahrain 3,998 24% Bahrain 3,437 32% United Arab Emirates 1,384 26%
United Arab Emirates 2,644 16% Saudi Arabia 1,408 13% United States 839 16%
Saudi Arabia 1,833 11% United Arab Emirates 1,393 13% Qatar 754 14%
United States 1,678 10% United States 966 9% Malaysia 399 8%
Cayman Islands 944 6% Cayman Islands 785 7% Bahrain 374 7%

Economic Section
U.S. Embassy Kuwait
P.O. Box 77
Safat 13001
+965 2259 1001

2018 Investment Climate Statements: Kuwait
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U.S. Department of State

The Lessons of 1989: Freedom and Our Future