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The New Kuwait Vision – Ιts Βusiness Οpportunities and Ιnvestment Potential


Kuwait is a small emirate located between Iraq and Saudi Arabia with its shores including the Kuwait Bay, a harbor on the Persian Gulf. The name of the country translates into “a fortress built near water”.

The country’s official language is Arabic, but English is widely spoken with a minority speaking Turkish, Farsi and Hindi.

The Kuwait is well-known for its Hot Sand Dunes, Stunning Cityscape, and its enormous oil reserves.

This Arabic gem has a population of almost 4.8 million with only 40% being Kuwaiti. The rest of the country’s population includes: 35% from Middle eastern nations (i.e. Saudi Arabia, Lebanon, Oman, Jordan, etc.), 9% from India, 4% from Iran and the remaining 7% from other countries (such as the US).

It is also noticeable that the country’s demographics in relation to age indicate that the population is relatively young with approximately 2% of the population being over the age of 65.

Kuwait Long Term Plan

“Kuwait aims to be transformed into a financial and trade hub regionally and internationally becoming more attractive to investors”, according to Kuwait Ministry of Foreign Affairs.

In fact, Kuwait’s vision 2035 is based on the notion of encouraging the private sector to lead the economy, resulting in the creation of competition that will inevitably generate economic growth, maximize efficiency and productivity in all sectors of the economy.

Although, the country’s government emphasizes the importance of developing the country, it strongly supports the preservation of the national values and, social identity, while forming an environment that is attractive to current and potential businesses.

Moreover, Kuwait’s monarchy vigorously believes that the country has the main elements for achieving its aim by utilizing the country’s strategic geographical location, balanced international foreign policy, encouraging legislative body and comprehensive judicial system.

Subsequently, the development of the country requires that it achieves a number of goals i.e. increase in the development of non-oil sectors, improvement of the citizens’ living standards, involvement of the private sector into the national’s economic activity, implementation of residential policies, governments bodies restructurings and many more.

It should be noted that all the country’s development strategies need to be in line with the values of the Arab-Islamic identity.

Additionally, “Kuwait’s constitution is based on democrat principles”

In fact, the country’s parliament is the most democratic among the GCC (Gulf Cooperation Council) countries but the ruling family holds firmly the reins of power in its hands, according to   Sharmaake SABRIE and Pekka HAKALA Directorate-General for External Policies of the Union Policy Department.


Likewise, Kuwait’s development plan (New Kuwait 2035) aims to further enhance the sustainability of the country’s tourist product and attract overseas investments in the tourism sector, so as to mitigate the country’s risk dependence mostly to oil and gas sectors.

The aforementioned strategy of the government actually has started to add value to existing hotels with international recognition such as Four Seasons, Jumeirah Messilah, Hilton and other well-known brands.

Of course, the investments increase towards the hotel’s sector by the government ultimately targets the country’s GDP (Gross Domestic Product) growth through the attraction of more tourists. Consequently, this will be resulted to the decrease of unemployment rate on a national level and to the increase of the employment rate of international professionals, meaning improvement of the tourist product.

Similarly, the Kuwait’s plan includes the creation, evolution and expansion of its transport infrastructure such as Kuwait International Airport’s capacity to 25 million passengers, the railway network and Kuwait Expressway.

According to government predictions, the country’s tourism sector is expected to offer 90,000+ jobs until 2035. “The total contribution to tourism in the short-term GDP will be about two percent, with the possibility of raising it to four percent through developing the sector that will attract foreign investment.”

In 2018, the country of Kuwait acquired 3.34 million international visitors to the country and is expected to increase by 2028.

The domestic spending in 2018 was KD1.6 billion and it is expected to reach KD2.6 billion by 2028.

The foreign spending in 2018 was KD245 million and is expected to reach KD380 million in the decade ahead.

If we consider the fact that domestic outbound travel expenditure was KD3.7 billion in 2017 and increased to KD3.9 billion in 2018 and is expected to grow over KD4.9 billion by 2028; there is definitely untapped potential for growth in the domestic tourism industry and GDP accordingly.


Kuwait is geographically small but wealthy and with a relatively open economy.  The country’s economy is mainly relied on its oil and gas industry. It has one of the world’s largest oil and gas reserves reaching a total of 101.5 billion barrels.

It is considered to be one of the world’s top 10 largest oil and gas producers with significant low costs of production than any other oil province in the world. Kuwait Petroleum Corporation plays a valuable role in the country’s economy and labor market.

However, being so heavily dependent on the oil prices can have adverse results.  In the last few years, Kuwait has been experiencing economic challenges due to the drop in global crude oil prices which resulted in fiscal budget deficits.

This economic downturn has influenced the government of Kuwait to diversify the country’s economy and focus in different areas.  For example, Kuwait Petroleum Corporation’s strategy is addressing issues that affect the oil and gas industry such as the “continued long-term global demand for crude; shift of oil demand from Europe to Asia; rising global demand for refined products, petrochemicals and natural gas; and the inevitable move towards renewable energy resources”.

Furthermore, the drop in oil prices and the decline in oil production affected the GDP negatively.

According to World Bank Data, Kuwait’s GDP growth has been fluctuating for a few years now.  In 2018 the GDP growth was at 1.2%, declining to 0.4% in 2019 and expected to decline sharply in 2020 to -5.4%.

However, predictions state that the country’s GDP growth will follow an upward trend and increase significantly in 2021 to 1.1%.

GDP Growth
Source: World Bank Data

Moreover, there are various plans for progressing the performance of Kuwait’s economy.

Some of the plans soon to be and already established are the upgrade of stock exchange of the country, the investment placed in large infrastructure programs, the conversion of the country into higher value-added downstream production within the leading hydrocarbons industry as well as attracting foreign investment.

What is more, the oil exports are expected to revamp in 2021 based on the assumption that Covid-19 pandemic will decrease or even disappear and investment recovers.

In addition, the diversification programs such as Kuwaiti 2035 vision are vital to the further development of the country and economic prosperity.

It is also noteworthy to mention that Kuwait’s Silk City Madinat Al Hareer is a project that will add value to the country by introducing the Burj Mubarak Al Kabir Tower (expected to be Kuwait’s next tallest building), a nature reserve, duty-free area, new airport and five other Kuwaiti Islands.

In addition, the project involves the construction of trade zone at the Mubarak Port, logistics area for goods, railways capable of transporting both goods and people and the construction of an industrial city that embraces small and medium enterprises.


According to Santander trade, Kuwait’s Foreign Direct Investment (FDI) inflows decreased from $204 million in 2018 to $104 million in 2019.

The limited diversity in the economy and the decrease of oil prices have been the main elements influencing the drop of inflows.

The majority of foreign investments were directed towards the oil and gas sector, real estate/construction and financial services.

Although there was a significant drop of the inflows, however, the Kuwait government is now focusing on diversifying the economy and attract more foreign investments in a range of sectors.

Some of the incentives provided to attract foreign investments are:

  • allowing 100% foreign ownership in a range of sectors (such as housing projects and urban developments, hotels, investment management etc.),
  • tax breaks,
  • stock market available to non-Kuwaitis,
  • foreign banks licenses and many more.

Also, according to the 2020 Doing Business report established by the World Bank ranked Kuwait on the 83rd position which is 14 spots higher than 2019. The reason for this development is due to the valuable change made in starting a business as well as obtaining credit and construction permits.

To sum up, some of the strong points to take into account when considering to invest in Kuwait is the country’s stable and significant revenues gained through their oil reserves, its strategic role in the political sphere of the region, the young population with high average income and high domestic consumption, good quality infrastructure and a business environment that is open, positive and welcoming to foreign investments.


According to KPMG (2019), Kuwait does not charge personal/wealth tax on individuals’ income regardless their nationality.

However, Kuwait imposes corporate income tax to businesses with foreign entities, that are not Kuwait incorporated companies enlisted in the Gulf Cooperation Council.

“However, depending on the nature of the incorporated vehicle, a Kuwaiti or a GCC entity with activities in Kuwait may be subject to certain other levies such as Zakat / National Labor Support Tax (NLST) and Kuwait Foundation of Advancement of Science (KFAS) by certain types of local entities.”

Moreover, the income tax is imposed to all entities that have business transactions in Kuwait.

Furthermore, contributions to social security must be made for GCC nationality and Kuwaiti employees. The employer’s contribution is 11.5% and employee’s contribution is 10.5%. there are no withholding taxes and no value added tax (VAT). However, there are reports stating that Kuwait is considering implementing VAT but there are no firm introduction date and or regulations yet.

Kuwait’s network of double tax treaties (ratified only) includes Japan, Hong Kong, Germany, Netherlands, Italy etc.

Source: Deloitte

Real Estate

“Kuwaiti market for real estate investment properties remains subject to broader demographic factors”, according to Oxford business group.

The market of real estate in Kuwait is separated in two main categories.

The first category is the private residential housing that is accessible for GCC citizens and Kuwaiti and the second category is investment housing which is lease-driven, anyone can have them, but it is mainly for expats.

As stated in  Oxford Business Group, a significant amount of Kuwait’s population is expatriates, therefore, the growth in the investment housing (second category) plays a significant  role in the development of the country and the real estate sector, overall.

As observed, in 2019, the real estate sector of Kuwait had an outstanding growth with transactions of $12.04 billion in value. according to Kuwait Finance House (KFH).

Also, the amount of deals had an upturn of 6.4% to 6.77% over the last year.

Although there was a significant growth in the sector however, the transaction value in 2019 decreased by 1.5% in comparison to 2018.

Furthermore, according to ProTenders, there is currently 2.296 active projects valued at $445.9 billion.

It is also important to mention here that even in the fourth quarter of 2018, the investment property sales increased by 19% to reach KD470 million ($1.5 billion), “making the fifth consecutive quarter of rising figures and a year-on-year increase of more than 300%”.

Also, the real estate price index indicates a year on year rise of 3.7% while the amount of transactions increased by 127% over the same period.

Additionally, in 2019’s first quarter, Kuwait’s sales in real estate sector were moderate because of the decline in investment properties, falling by 47% to KD248 million ($816.8 million). The specific decline was also caused by the decreasing interest of foreigners to penetrate the market.

To sum up, indeed, there were fluctuations in the investment properties sales in 2020, however they do not determine or predict the future of Kuwait real estate market due to unforeseeable factors i.e. covid19 pandemic.

According to Arabian Business, in 2019 the active construction projects in Kuwait valued at $494 billion.

Nowadays, there are many projects in the design stage worth of $243.5 billion, in planning stage worth of $63 billion and in the construction stage worth of $140.9 billion, in Kuwait.

Moreover, as per Morgan Stanley Capital International (MSCI) Kuwait is about to reclassified from Frontier Market status to Emerging Markets status in November 2020 Semi Annual Index Review (SAIR) as an emerging market.

Although the current real estate market situation of Kuwait seems to be vulnerable to various national and macroeconomic health care aspects; the emirate of Kuwait has enormous potential for exponential growth.

As an emerging market, many investors who aim high investment returns will definitely invest in such a market, since high rates of economic growth are foreseen, stock prices increase and GDP growth boost.

New Kuwait Development Areas
Source: New Kuwait Summit

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