New report says Gulf state is offering a number of incentives in bid to increase the volume of foreign investment
Kuwait is offering a number of incentives in an effort to increase the volume of foreign investment coming into the country, according to a new Deloitte report.
Deloitte said Kuwait continues to create an encouraging investment climate for the private sector to invest in infrastructure projects.
Its report said benefits to foreign investors include 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 licences while earlier this year it issued a new resolution announcing that the foreign taxpayers could calculate and claim their annual tax credit for their licensed operations, the report noted.
“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,” said 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 program 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 report addresses the key tax considerations for doing business in Kuwait.
The Kuwaiti government has committed to introduce VAT by signing the main framework agreement with the GCC countries. The draft law has been approved by the Cabinet and is now with the Kuwaiti Parliament for approval.
Robert Tsang, indirect tax partner, Deloitte Middle East, said: “The introduction of VAT in Kuwait would entail increased administrative, reporting and record keeping requirements to comply with.
"VAT - being a consumption tax - would mainly impact end customers through price hike, although business may experience narrowing margins and increased price competition after the introduction of VAT. Experience from the UAE and Saudi Arabia shows that those business which prepared on time could gain competitive advantage and avoid business disruptions after VAT was introduced,” he added.