Investing in Kuwait – A wise choice

Kuwait has emerged as an attractive investment destination across a variety of sectors and industries. Here’s looking at what makes it an alluring investment destination.

When it comes to domestic and foreign investment in the GCC countries, UAE and Saudi Arabia have hitherto been the clear choice for most investors. But business environments are never complacent for long – growing economies of other GCC countries like Kuwait and Bahrain have also been competing strongly. Kuwait, particularly, is trying to shake off its dependence on crude oil and petrol earnings, and focussing on the equity capital markets, and new businesses in media and infrastructure.

To this end, the Government has also introduced new regulations and corporate legislation to usher in foreign investment in Kuwait. Over the years, Kuwait has emerged as an attractive investment port of call – its economy is fairly stable, it has a huge propensity for growth in terms of non-oil businesses, and it has several natural resources that continue to build the GDP.

Here’s a lowdown on why investment in Kuwait is a superb option for private investors and companies:

1 It has several maturing markets. Kuwait is a high GDP country with a high propensity for further growth. Far from reaching saturation levels, it is just getting started in new markets like infrastructure, construction and media. Kuwait is slated to have among the fastest growing economies in the GCC, led by increased equity capital and debt capital funding. Private equity companies are being backed by both domestic and international players.

2 The next frontier is IPO. Several high profile companies in Kuwait are now lining up to get listed on the market. This has led to increased dependence on financial advisory firms that facilitate the IPO unit distribution and acquisition. At the same time, the IPO markets are in a state of positive flux. Kuwait’s Government is completely supportive of initiatives that attract both domestic and international funding. For this, the IPO market is being restructured and streamlined for more local businesses to be able to make the listings cut.

4 A bigger reach for FDI and private equity. Saudi Arabia and the UAE have the largest performing economies in the GCC region. With Kuwait also angling for a bigger share of the FDI pie, the region is set to benefit with higher incendiary foreign funding across a variety of sectors. Kuwait is looking to emulate the successes of UAE and Saudi Arabia in terms of raising higher private equity investment as well as lower the stock percentage holdings to give the IPOs a much-needed fillip.

5 Easier licensing for businesses. Kuwait is working on over 350 new regulations that will make it simpler for new businesses to acquire licenses and incorporation. However, the clear emphasis is on transparency in operations, as stipulated under clauses demanding that the executive management be separated from the board, and that single shareholders may start new businesses by allowing company shares to be transferred. Its long overdue Companies Law may spur increased investment in Kuwait.