(Unofficial Translation)
Date: December 7, 2014
Ministerial Decision No. (502) of 2014 on Issuance of the Executive Regulations Implementing Law No. (116) of 2013
regarding the Promotion of Direct Investment in the State of Kuwait
Minister of Commerce and Industry: - After perusal of Law No. (116) of 2013 regarding the Promotion of Direct
Investment in the State of Kuwait.
- and the Companies Law as issued in Decree Law No. (25) of 2012 and as
amended by Law No. (97) of 2013.
- and the Council of Ministers Decision No. (946) of 2013 appointing the
members of the Board of Directors of Kuwait Direct Investment
Promotion Authority (KDIPA), and specifying their annual remuneration.
It is decided
Article One: Apply the rules of the Executive Regulations Implementing
Law No. (116) of 2013 regarding the Promotion of Direct
Investment in the State of Kuwait, articles of which are
attached to this decision.
Article Two: Cancel any script that contradicts the rules of these Executive
Regulations.
Article Three: Publish this decision in the Official Gazette, and all
responsible officials, each in area of concern, shall
execute this decision and abide by it as of the date of its
publication.
Dr. Abdulmohsen Al Medeij Deputy Prime Minister, Minister of Commerce and Industry The original Arabic is signed
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KDIPA Law
Executive Regulations Implementing
Law No. 116 of 2013
Regarding the Promotion of Direct
Investment in the State of Kuwait
Chapter I: Definitions
Article (1)
The following terms and phrases shall bear the meanings corresponding to
each of them:
Relevant Minister: Minister of Commerce and Industry.
Authority: Kuwait Direct Investment Promotion Authority
(KDIPA).
Board: Board of Directors of KDIPA.
Chairman of the Relevant Minister.
Board:
Director General: Director General of KDIPA.
Law: Law No. (116) of 2013 referred to above.
Investor: Natural or legal person of any nationality.
License: Investment license issued in accordance with the Law
and these Regulations.
Investment Entity: Any economic Activity that is licensed in accordance
with this Law by virtue of an investment license
which grants the legal existence in the State of
Kuwait.
Capital: What is employed or used directly for purposes of
Direct Investment through an Investment Entity that is
subject to this law, including:
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1. Funds, financial and commercial securities, be they
local or foreign
2. Machinery, tools, equipment, means of
transportation and other technological devices.
3. Raw materials and intermediate goods required for
the commencement of actual production or
operations by the Investment Entity.
4. Intangible rights such as patents, trademarks,
licenses, registered trade names and industrial and
technological designs.
5. Profits and proceeds of the invested capital if used
for the increase of the capital or if it is employed or
used for the purposes of Direct Investment through
an Investment Entity licensed in accordance with
this Law and these Regulations.
Direct Investment: An investment where the Investor, individually or
with the participation of another investor, employs his
capital directly through an Investment Entity in the
State of Kuwait licensed in accordance with the Law.
Application: The application submitted by the Investor to obtain, as
applicable, the License or incentives or to merge
Investment Entities, in accordance with principles and
rules relevant to each case.
Activity: Every Activity with economic impact through which
Direct Investment is made, with the exception of the
activities set forth in the list of investments whose
activities are excluded from the scope of the Law, and
that shall be determined by a resolution of the Council
of Ministers.
Investment The register in which all data relating to Investment
Register: Entities and changes made thereto are recorded,
including building permits and other licenses,
approvals, authorizations and permissions required for
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the commencement of operations, which are issued by
the competent authorities.
Commencement of
Execution: :
The commencement of preliminary procedures and
activities that precede the commencement of
operations by the Investment Entity.
Chapter II
Kuwait Direct Investment Promotion Authority
Article (2)
The Authority shall carry out the business achieving its objectives and
competencies stipulated in the Law, and shall undertake the execution of any
other tasks that are relevant to its objectives assigned thereto by the Council of
Ministers or the Relevant Minister, or that would encourage Direct Investment
in the country, develop and streamline the investment environment, facilitate
procedures and eliminate obstacles facing the investors.
Article (3)
Each of the Chairman and the members of the Board, and the Director
General shall commit to disclose their interests and the interests of their
spouses and of their first degree relatives in any project or service to be
presented to the Board. They shall in all cases shall refrain from participating
in the discussion or the passing of any resolution related to such project or
service; failing to do so; such resolution shall be null and void as well as all
consequences arising therefrom. Such disclosure shall be presented in writing
to the secretariat of the Board, which shall in turn refer it to the Board when
discussing the project or service. The said disclosure shall advise on the
interest referred to.
The Authority's employees shall also commit to disclose, and shall submit it
to the Director General stating the interest and its relevance to the tasks and
competencies assigned to them.
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Chapter III
One-Stop Shop
Article (4)
The Authority shall have an administrative unit called the "One-Stop Shop".
Such unit shall be staffed with a sufficient number of government authorities'
employees to be specified by the Board.
The One-Stop Shop shall be responsible for completing the transactions
relating to the Investor's establishment of the Investment Entity and any
expansions and any changes thereto, and shall issue and renew approvals,
permits and licenses relevant thereto. The One-Stop Shop shall also undertake
any further tasks assigned by the Director General.
The One-Stop Shop shall be responsible for preparing introductory guides, to
be approved by the Director General, setting out the requirements for
completion of transactions. The One-Stop Shop shall also be responsible for
responding to any queries raised in respect of such guides.
Article (5)
The Authority shall prepare a list of specialized companies, firms and offices
that are prequalified and approved to submit and follow-up on Applications in
the name and on behalf of Investor; if the Investor wish to take up such
representation.
Article (6)
The Authority and the government authorities represented in the One-Stop
Shop shall coordinate in respect of the administrative supervision of the
employees who are representing them in the One-Stop Shop.
Such employees shall be designated by the authorities they represent to
perform the duties necessary for the completion of transactions without
having to refer back to a higher authority in order to take the appropriate
decision or action; and shall be provided with all data, information, forms and
all else necessary to complete the tasks that fall within their competencies,
including the following:
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1. Receiving and delivering all the papers, Applications, documents,
contracts, permits, licenses, approvals, receipts and fees; taking all
actions, issuing g all necessary approvals and decisions relevant thereto,
and follow it up with their original authorities, if rendered necessary.
2. Providing the services that fall within the jurisdiction of their original
authorities, at the premises of the One-Stop Shop and following up with
their original authorities, if rendered necessary.
Article (7)
The Director General shall oversee the work system within the One-Stop
Shop, and shall set the rules, mechanisms, procedures and indicators that
ensure the speed and accuracy of the completion of the transactions that fall
within its jurisdictions; shall formulate and oversee a follow-up system that
shall include receiving complaints and proposals submitted by stakeholders
regarding the progress of their transactions, and shall take all actions,
measures and decisions necessary in this regard.
Chapter IV
Investment Entity and Applications to be submitted to the Authority
Article (8)
Without prejudice to the provisions of Articles (11) and (12) of the Law, the
activities of Direct Investment shall be licensed in accordance with the
provisions of the Law and these Regulations, through a specified Investment
Entity, pursuant to any of the following forms:
1) A Kuwaiti company, incorporated for the purpose of Direct Investment
pursuant to the provisions of the Companies Law referred to. The foreign
investor might obtain a 100% share of the capital of a shareholding
company, or a limited liability company, or a single-person company.
2) A branch of a foreign company licensed to operate in the State of Kuwait
for the purposes of Direct Investment.
3) A representative office having the sole purpose of preparing market
studies and production possibilities, without engaging in a commercial
Activity or Activity of commercial agents.
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Article (9)
Subject to the provisions of Article (12) of the Law, the Board shall set the
specific principles and rules for the licensing of each type of Investment
Entity referred to in the Law.
The Authority shall prepare the application forms for the various types of
transactions that fall within its jurisdiction and in particular the following:
1. Licensing of an Investment Entity.
2. Granting of incentives and exemptions.
3. Amendments to the name, address, purpose, capital or domicile of an
Investment Entity.
4. Amendments to the percentage of shareholders' equity in an Investment
Entity.
The Relevant Minister shall determine the fees for the services rendered by
the Authority.
Article (10)
The Authority shall receive the Applications, papers and documents submitted
by the Investor or his representative. Submission may occur through any other
means specified by the Authority, including registered mail or e-mail.
The Authority shall hand over to the applicant a receipt proving the
acceptance of his Application for the purposes of review, after ensuring the
fulfilment of all required conditions, information and documents.
Article (11)
The Authority shall set-up a register to record all Applications, according to
their type and precedence. The register shall in particular record the following
information:
1. The type of Application and its number.
2. The date on which the Investor received the receipt described in the
preceding article.
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3. The Investor's name, address and necessary identification particulars.
4. Type of Activity and the form of the Investment Entity.
5. The appropriate means of notification, which shall be specified by the
Authority.
Article (12)
Deciding on the merits of Applications submitted shall be made in
accordance with the provisions of the Law and these Regulations. Decisions
and any necessary correspondence in this respect shall be issued with the
signature of the Director General. The Investor shall be notified of the
approval or rejection of the Application. In the event of a rejection, the
decision for rejection needs to be reasoned and in writing.
Chapter V
Rules of License Applications
Article (13)
Without prejudice to the provisions of the Law and these Regulations, the
License Application must include the information, data and documents
required by the competent authorities, all of which shall be valid. The Investor
shall reveal the time table of both the Commencement of Execution and
commencement of operations.
Article (14)
In order to accept receiving the License Application for the establishment of
a Kuwaiti company, it shall be accompanied by an initial study, which shall
specifically include the following:
1) The type of proposed Activity or project.
2) The legal form of the company required to be licensed.
3) The size of the investment.
4) Financing structure and sources.
5) The economic and environmental impact.
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6) The experience and capabilities of the investor.
7) The needs of the Investment Entity for national and foreign labor, area
of land required, raw materials, intermediate goods and their supply
sources.
8) The estimated annual quantity of water and energy required.
9) Any further data or clarifications requested by the Authority before or
after the submission of the Application.
Article (15)
The Application for the licensing of a branch of a foreign company shall be
accompanied by an initial study of the particulars set forth in the preceding
article, in addition to a certified copy of the company's memorandum and
articles of association, the latest audited balance sheet and a certificate
evidencing its existence and performing its operations.
Article (16)
The Application for the licensing of a representative office shall include in
particular the following:
1) The purpose of the establishment of the office.
2) A certified copy of the memorandum and articles of association of the
foreign company, its latest audited balance sheet and a certificate
evidencing its existence and performing its operations.
3) Any further data or clarifications requested by the Authority before or
after the submission of the Application.
Article (17)
The Authority shall decide on the merits of the License Application within
thirty days as of the fulfilment of all conditions, data, papers and documents
required by the Authority and the competent authorities.
In case the Authority approves the License Application, the incorporation of
the Investment Entity and issuance of the commercial license shall proceed.
The License shall be issued by a decision of the Director General.
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KDIPA Law
Article (18)
The Investment Entity must obtain the necessary approvals for the
Commencement of Execution within one year from the date of issuance of the
License, unless the time table submitted to the Authority specifies a longer
period.
The Director General may grant additional time to the Investor if he submits
acceptable reasons, provided that this period shall not exceed one additional
year.
The Board may grant another time limit exceeding the time limit set forth in
the preceding paragraph.
The Investor shall notify the Authority of the actual date of the
commencement of operations within thirty days from such date.
Chapter VI
Incentives and Exemptions
First
The Procedures for Obtaining Incentives and Exemptions
Article (19)
The Investor shall submit to the Authority an Application to receive the
incentives and exemptions provided for in Article (27) of the Law on the
forms prepared for this purpose. This can accompany the License Application
or can be done after the submission thereof, upon the fulfilment of all
conditions and rules established by the Board in this regard.
Article (20)
The incentives and exemptions, including tax exemptions, granted to an
Investment Entity with multiple activities shall be limited to the Activity
approved by the Authority in this respect.
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Second
Tax Exemption
Article (21)
Each Investment Entity licensed in accordance with the provisions of the Law
shall maintain regular accounts under the supervision of one or more certified
auditors.
If an Investment Entity practices more than one Activity governed by the
provisions of the Law and these Regulations, then the tax exemption period
shall be calculated for each Activity separately as of the date of the
commencement of actual operations. Regular and separate accounts shall be
maintained for each Activity.
Article (22)
The Investor may benefit from income tax or any other tax exemptions for a
period not exceeding ten years beginning from the date of commencement of
operations of the Investment Entity; provided that the Investor shall provide a
tax return on the exempted Investment Entity in accordance with the dates to
be specified by the Ministry of Finance.
Article (23)
The tax exemption Application shall be submitted to the Authority on the
forms prepared for this purpose. The Application shall be submitted and the
exemption period and value shall be determined by the Authority, in
coordination with the competent authorities, in accordance with the provisions
of Article (29) of the Law. The Board shall develop principles, rules and
standards it deems appropriate in this regard.
The Investor shall comply with the financial and tax instructions issued by the
Ministry of Finance, especially with regard to the submission of tax returns
and any documents, data or clarifications requested for the sake of the
implementing the exemption.
Article (24)
The Director General shall within fifteen days from the date of receipt of
notification, following verification of the validity of the particulars of the
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notification provided for in Article (13) of these Regulations and of the
commencement of operations, deliver to the interested party a certificate of
tax exemption. Such certificate shall determine the scope of the Activity and
the date of commencement of actual operations. The Ministry of Finance shall
be served with a copy of such certificate, which shall be conclusive evidence
towards all relevant parties.
The foregoing provisions shall apply to the expansion of the existing
Investment Entity. The tax exemption in this case shall enter into force as of
the commencement date of production or actual operations of the expansion.
Third
Customs Exemption
Article (25)
The Application for the exemption from custom taxes and duties shall be
submitted to the Authority in accordance with the forms prepared for this
purpose. The Application shall be accompanied by a list of the materials,
which are subject of the Application.
The Application for customs exemption shall be assessed in accordance with
the principles, rules and standards to be established by the Board.
The customs exemption certificate shall be issued by the Director General and
shall be conclusive evidence towards all relevant parties.
Article (26)
The Authority, in coordination with the General Administration of Customs
and other concerned authorities, shall determine the cooperation mechanisms
for handling the technical and procedural aspects of the Applications for
customs exemption, in terms of the adoption of the lists of imports of
Investment Entities, which are the subject of the Application.
Article (27)
The Investment Entity shall be fully or partially exempted from customs
duties and taxes in accordance with the provisions of the Law and these
Regulations, subject to the following:
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1) The importation shall be made in the name of the Investment Entity or
for its account.
2) The imported materials, in terms of quantity and quality are consistent
with the nature and needs of the Activity of the Investment Entity.
Article (28)
Without prejudice to the provisions of Law No. (10) of 2003 on the
promulgation of the Unified Customs Code for the Arab Gulf Cooperation
States, the Investment Entity shall be fully or partially exempted from taxes
and customs duties or any other fees that may be due on imports necessary
for the purposes of the Investment Entity, including:
1) Machinery, tools, equipment, means of transport, and other technological
devices.
2) Spare parts and necessary maintenance supplies for what has been
described in the previous subsection.
3) Intermediate goods, raw materials, partially manufactured goods,
wrapping and packaging materials and supplies.
Article (29)
The Investment Entity enjoying customs exemptions shall commit to maintain
a register to record all machinery, equipment, devices, means of transport,
spare parts, supplies, materials and goods subject to the said exemption.
Fourth
Allotment of Land and Real Estate
Article (30)
The Board shall set out the principles, rules and standards on the basis of
which the Application for the usage of land and real estate allocated to,
supervised and administrated by the Authority, shall be assessed, as well as
the determination of the areas that can be allotted to an applicant, and the
manner of allotment.
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Fifth
Conversion of the Investment Entity
Article (31)
After obtaining the approval of the competent authorities, two or more
Investment Entities may be merged. The new merged entity shall be the legal
successor of the merged entities and shall subrogate them in their rights and
obligations.
Article (32)
The new entity shall automatically be entitled to the shortest remaining
duration of any exemption and privileges granted to any of the merged
Investment Entities.
The new entity may submit to the Authority an Application for the receipt of
other exemptions and incentives to complete the ten-year period provided for
in Article (27) of the Law.
Article (33)
In case of an Investment Entity's division into two or more Investment
Entities, the entities arising from such division shall be the successors of the
divided entity and shall subrogate it in its rights and obligations, within the
limits of the rights and obligations devolved thereto from the divided entity in
accordance with the provisions of the division resolution.
Article (34)
In case the Investment Entity converts from one form to another, or if the
licensed company converts from a legal form to another form; the conversion
decision shall not affect the rights and obligations of the Investment Entity, or
the Investor, or bona fide third parties.
Chapter VII
Grievances
Article (35)
The Board shall form a committee to receive grievances, consisting of at least
three members, from whom one shall be designated as the head of the said
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committee, which shall be competent to receive grievances from stakeholders
regarding decisions issued by the Authority.
The grievance shall be submitted to the committee within thirty days from the
date of notification or knowledge of the decision by the concerned person.
Article (36)
The grievance shall be accompanied by supporting documents, in particular,
the following:
1) The name, designation, address and contact details of the person
submitting the grievance.
2) The date of issuance of the decision that is subject of the grievance and
the date of the notification or knowledge of such decision by the person
submitting the grievance..
3) The subject of the grievance and the reasons upon which it has been
based.
Article (37)
Grievances shall be submitted to the secretariat of the Board, who shall notify
the Director General therewith upon the receipt thereof. Grievances shall be
recorded in the register prepared for such purpose, and the person submitting
the grievance shall receive a receipt indicating the registration number and
date of the grievance.
Article (38)
The grievance shall be referred to the head of the committee, who shall
determine the date of the hearing of the matter and shall notify the person
submitting the grievance therewith, to attend before the committee in person,
or by an agent or through a representative. The committee may ask relevant
stakeholders to submit the clarifications and documents it requires
Article (39)
The committee shall decide on the grievance on the basis of a reasoned
decision within thirty days from the date of its registration. The committee's
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deliberations shall be confidential and its decisions shall be passed by
majority, and shall be final.
Chapter VIII
Judicial Officers
Article (40)
All Investment Entities shall be subject to the rules, regulations and
supervisory instructions prescribed by the Authority; provided that the
Authority shall coordinate with the Ministry of Commerce and Industry and
other competent authorities in this regard.
Article (41)
The Relevant Minister shall issue a decision determining the employees who
shall have the capacity of judicial officers to monitor the implementation of
the provisions of the Law, the Regulations and implementing decisions
The persons who have the capacity of a judicial officer, in order to perform
their duties of supervision and follow-up, shall have the right to take the
following actions:
1) Access all premises of Investment Entities.
2) Access to all requested documents and data, and in particular, records,
books, exhibits, documents, tapes and computer systems and any other
means of data storage or processing.
3) Preparing written minutes documenting violations and referring the same
to the competent authorities at the Authority.
The Investment Entity shall facilitate the tasks of the judicial officers and
provide them with the foregoing as required.
Article (42)
The employees of the Authority who have the capacity of judicial officers
shall comply with the following when performing their duties:
1) The duties of the judicial officer shall be performed during the official
working hours, and at the premises of an Investment Entity.
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2) The supervision and follow-up shall be done in respect of the activities
licensed by the Authority. The goal of such activities shall be to verify
the proper application of the provisions of the Law, its Regulations and
implementing decisions.
Article (43)
The employees of the Authority who have the capacity of judicial officers
shall submit a detailed report on the results of their work immediately after the
completion thereof to the Director General, who shall transmit it to the Board
with his opinion on taking the necessary decisions or actions in this regard.
Chapter IX
Investment Register
Article (44)
A special register called "Investment Register" shall be maintained by the
Authority, in which all Investment Entities licensed in accordance with the
provisions of the Law, and all Applications, Licenses, incentives, exemptions,
sanctions and their associated data shall be recorded. All relevant documents
and data shall be attached to such register.
The Director General shall issue the decisions for the setting up of the
register, the content thereof, the mechanism of the registration therein as well
as the documents and data required therefor.
Article (45)
The Investment Entity licensed by the Authority or granted incentives or
exemptions in accordance with the provisions of the Law and these
Regulations, shall notify the Authority in writing of any judgments, decisions
or proceedings that would affect the Investment Entity's Activity or its
continuation.
Any stakeholder shall notify the Authority of any judgments, decisions or
proceedings referred to in the preceding clause, which shall be recorded in the
Investment Register.
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