For a long time, Kuwait has caught the attention of businesses around the globe. The country has a relatively high GDP, low taxes and a business-friendly environment. Now, as it pushes to diversify its economy and implements ever-stronger incentives for foreign investment, that attention will only increase.
Please note that due to Covid-19,
some circumstances in this country may be inaccurate.
The Kuwait Vision 2035, focussing on transforming the small but powerful nation into a regional and international financial and trading hub, encourages far greater participation by the private sector and newly relaxed rules around foreign ownership. It’s a bold plan that requires great levels of public-private partnerships, innovative business behaviours and complete digital transformations.
It’s not the end of oil, just the addition of new and exciting opportunities.
HSBC’s presence in the Middle East dates back to 1889 with the bank known as ‘The Imperial Bank of Persia’. After a 34-year absence, the bank formally re-established a presence in Kuwait in October 2005. Our dedicated team of professionals is well equipped to support your trading needs in this market.
I look forward to offering my personal service as we discuss how we can support your business growth in Kuwait.
Al Hamra Tower,
Abdulaziz Al Sager Street,
1 Britannica, 2021
2 Britannica, 2021
3 Trading Economics, 2019
4 Trading Economics, 2019
5 PwC, 2022
Kuwait is located in one of the harshest deserts on Earth and, with the exception of the Al-Jahra oasis on the western tip of Kuwait Bay and small fertile areas in the south-eastern and coastal parts of the country, is incredibly dry. Additionally, with most of the population residing in Kuwait City, it is one of the world’s most urbanised countries.
In 2020, Kuwait’s oil production reached 2.7 million barrels per day, making it one of the leading oil producers in the world. Oil was first discovered in Kuwait in 1938. Production began in 1946 following World War 2.
Only slightly larger than the island state of Hawaii, the nation lies between Iraq and Saudi Arabia. Taking advantage of its deep harbour on the Persian Gulf, the country’s name means ‘fortress.’
Kuwait is a constitutional emirate with a semi-democratic political system or ‘hybrid regime.’ The nation is ruled by a hereditary emir (prince) who appoints the prime minister and is permitted to decree laws when parliament is not in session.
for ease of doing business (in a survey of 190 measured economies by The World Bank)
Kuwait’s fortunes were guaranteed when oil was discovered in the 1930s.
The emirate of Kuwait lies on the Arabian Peninsula. Bordered by Iraq and Saudi Arabia, the nation also shares maritime borders with Iran. Kuwait is one of the six members of the Gulf Cooperation Council (GCC) and is also a member of the League of Arab States. The nation’s foreign policy is founded on Gulf unity and a long-standing alliance with the United States.
Of its 3.2 million people, two-thirds are foreigners and expatriates, hailing mainly from South East Asia and the Middle East. Despite residing in Kuwait for decades, naturalisation is difficult to achieve for most non-Kuwaitis. Citizenship is forbidden to those without a Kuwaiti father and to non-Muslims.
Arabic is the official language of the country, but English is also widely spoken.
Kuwait was ruled by the Ottoman Empire between the 16th and 19th centuries until a treaty signed in 1899 with the United Kingdom made the nation an autonomous British protectorate. This gave Britain control over its foreign affairs. Until the end of World War 2, Kuwait was a poor and underdeveloped sheikdom. Its economic, technological, and educational sectors all lagged far behind the rest of the world. Then oil was discovered, and everything changed.
Although oil was found in the 1930s, the vast potential of Kuwait’s reserves was not fully recognised until the end of the Second World War. By 2021, Kuwait was ranked the 35th richest country in the world.
In 1963, Kuwait was the first member of the GCC to establish a directly elected parliament. While political parties are banned, blocs are permitted to exist. However, the government impedes their activities.
Oil production has seen Kuwait develop one of the most established and healthy economic sectors in the Middle East, boasting a stock exchange that is more than 55 years old. Kuwait allows 100% foreign ownership of inward foreign investments in most non-oil and gas sectors.
Though restrictions on foreign ownership of businesses are easing somewhat, and companies can petition for 100 per cent foreign ownership under certain circumstances, generally foreign ownership of businesses is restricted to 49 per cent.
Due to the time-consuming bureaucratic process, delayed contracts and lengthy negotiations, the cost of doing business in Kuwait can quickly grow. The requirement for foreigners to work with a Kuwaiti agent adds to the cost.
Kuwait’s economy is dominated by oil and gas – and virtually all of the country’s wealth is derived from this sector in one way or another.
Kuwait’s scorching climate means it is regularly counted among the hottest places on earth – and is increasingly vulnerable as climate change makes extreme weather more common.
1 Global Finance Magazine, 2020
2 KPMG, 2020