KUWAIT CITY, Aug 17: The Kuwait Direct Investment Promotion Authority (KDIPA) has implemented a new decision outlining the regulations for investment entities seeking to obtain benefits and exemptions available to foreign investors operating in Kuwait.

Article One of the decision allows investors to apply for an investment license and receive benefits in accordance with Law No. 116 of 2013. Investors must meet the criteria set forth in the evaluation mechanism for license applications and benefits, as approved by the Authority.

Article Two stipulates that investment entities licensed under Law No. 116 of 2013, with a minimum of one year of operation, may request benefits and exemptions. These entities must comply with several conditions, including adherence to the Authority's evaluation mechanism, submission of periodic reports demonstrating commitment to their work plans, and the provision of a detailed business plan outlining achievements and future goals. The exemption will be granted from the date of application submission, subject to the completion of required documentation and payment of fees. However, this exemption does not cover previously paid taxes and customs duties.

Article Three addresses special provisions for investors and investment entities seeking benefits and exemptions either concurrently with or after obtaining an investment license. The decision clarifies that exemptions will not apply to ongoing contracts or projects with bids submitted before the application date, even if these contracts or projects are later transferred to another entity. Additionally, investment entities must maintain separate financial accounts for the licensed investment entity, independent of any other contracts.

Article Four specifies that investment companies and entities committed to Kuwait's offset program are ineligible for the benefits and exemptions under Law No. 116 of 2013 during their commitment period.

The KDIPA law offers several advantages to foreign entities investing in Kuwait, including the ability to establish a wholly-owned Kuwaiti company, tax incentives for up to ten years, exemptions from customs duties, land allocation for projects, protection against seizure or confiscation without adequate compensation, the right to transfer capital and profits freely, and the avoidance of double taxation under bilateral agreements. Additionally, licensed investment entities may be classified by the Central Agency for Public Tenders based on their global experience, and they are permitted to employ necessary foreign labor in line with national labor requirements.

These new regulations aim to enhance the investment climate in Kuwait by providing clear guidelines for foreign investors to maximize the benefits and protections available under Kuwaiti law.