Kuwait enacts law cutting tax on foreign firms

GULF TRADING: The Kuwaiti stock market is the second largest in the Arab countries. (Getty Images)

Kuwait has enacted a bill cutting taxes on the earnings of foreign firms to 15 percent from up to 55 percent and exempting gains of foreign investors from trading on the bourse.

A 48-article memorandum detailing how the new law will be implemented was published in the official gazette, eight months after the bill was approved by the Gulf Arab state's parliament.

A copy of the gazette was obtained by newswire Reuters on Sunday.

Profit from trading on the second-largest Arab bourse, will be tax-free, whether "directly or through portfolios or investment funds", the measure stipulated.

In May 2006, the government had approved the tax bill, in an attempt to attract more foreign investment and prepare Kuwait for the time when its large oil reserves dry up.

Under a law issued about half a century ago when Kuwait was British protectorate, foreign firms had to pay up to 55 percent tax, although this was rarely enforced in full.

The new law also stipulates that individuals trading or working in Kuwait will be exempt from paying tax except if they are representing an institution, it said.

In May 2006, state media reported that the cabinet will study a proposal to introduce income tax for the first time in the world's seventh-largest oil exporter.

Several other bills aimed at attracting more foreign investors have been delayed such as a plan to create a stock market regulator. (Reuters)

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