DOHA: Kuwait continues to create an encouraging investment climate for the private sector to invest in infrastructure projects, according to Deloitte’s latest report “Doing business guide – understanding Kuwait’s tax position.”
The report finds that the country offers a series of potential benefits to foreign investors including income tax holidays up to 10 years, and exemptions from custom duties for importing relevant equipment and materials into the country. The Kuwait Direct Investment Promotion Authority (KDIPA) has also introduced a scoring system that is followed when evaluating the issuance and approval of the investment licenses.
The aim of the standards is to encourage businesses who have successfully contributed to Kuwait’s economy by offering them a set of incentives on Direct Investment promotion in the State of Kuwait and Executive Regulation. KDIPA has also issued earlier this year a new resolution announcing that the foreign taxpayers could calculate and claim their annual tax credit for their licensed operations. All of this results in promoting investment opportunities in Kuwait.
“Kuwait is opening its doors to foreign investment and encouraging companies to invest in the country to be part of its future development plans. Kuwait has previously announced its “2035” vision, which includes various mega projects,” explains Ihab Abbas, Partner and Tax Leader at Deloitte Kuwait. “The plan will mainly focus on developing North Kuwait and the different islands around the country. The development programme is aimed at attracting investment, developing competitiveness, improving legislature to support the economic and social systems whilst creating more than 200,000 jobs. Kuwait has indeed become an attractive landscape for investment opportunities.”
Deloitte’s “Doing Business Guide – Understanding Kuwait’s tax position” provides an overview of the tax position of the country through it’s transition to Value Added Tax (VAT) and other tax changes affecting the GCC country. The guide addresses the key tax considerations for doing business in Kuwait, alongside key legal, economic and market drivers which impact clients who are looking to invest in the country, or those who have been present there for some time, but are looking to undertake a review of their tax exposures, which may include remedial or long term solutions.
The Kuwait Government has committed to introducing VAT through the signing of a VAT Treaty along with the rest of the representatives of the Member States of the Gulf Cooperation Council (GCC). The Treaty acts as the basis for the domestic VAT legislation by stipulating certain principles, which must be followed by all members, while allowing Kuwait to opt for different VAT treatments in relation to some supplies. The Kuwaiti government has committed to introduce VAT by signing the main framework agreement with the GCC countries.
