Free Zones and Special Economic Zones
Kuwait’s sole free trade zone opened in 1999, offering standard free zone benefits, such as no import duties, tax-free foreign corporate income and service licences without a local sponsor
The zone is located in Shuwaikh, just west of Kuwait City, and encompasses Shuwaikh port, a power station and a desalination plant.
According to the 2013 Index of Economic Freedom from US think tank The Heritage Foundation, Kuwait’s economy is the 66th most open in the world. The country is ranked seventh of the 15 listed from the Middle East and North Africa region. Kuwait’s population stands at an estimated 3.9 million, and its gross domestic product (GDP) is $173.4bn. Figures from the Washington-based IMF show that GDP is growing by 7 per cent a year. Foreign direct investment (FDI) was $1.85bn in 2012, according to UNCTAD.
Although oil production dominates the economy, with approximately 9 per cent of the world’s oil supplies controlled by Kuwait, steps are being taken to move away from hydrocarbons revenue. In 2010, the government announced an economic development plan worth $108bn, which aimed to diversify the economy, attract more FDI and bolster the private sector. This four-year road map was one of six consecutive schemes launched at the time to help Kuwait achieve its vision of becoming a regional finance and trade centre by 2035.
The 2035 vision targets five key areas: the economy; people and population; the political system; the cultural environment; and international positioning. It also aims to:
· Reduce red-tape and the requirements for starting and operating a business
· Improve access to land by establishing a central land authority
· Create fair market opportunities by developing an anti-trust law
· Promote a sustainable fiscal position by halting the rapid increase of public sector employment and salaries
· Expand and transform the electricity sector and diversify the non-oil energy sector
· Upgrade infrastructure, including constructing a multimodal logistics hub
· Develop a niche financial centre, focusing on wealth management and capital markets
· Change the dynamics of the labour market by tightening working conditions in the private sector
· Upgrade the education and healthcare systems
· Encourage environmentally friendly initiatives
· Develop the arts and culture sector
According to the Central Bank of Kuwait, state revenue increased by 21.5 per cent between 2010 and 2011 (oil contributed 92.7 per cent of this). In terms of future sector development, the residential and investment property markets are expected to grow by 10-15 per cent, fuelled by recovery from the 2008 global economic crisis.
· The government is stimulating economic development by investing $108bn in 2010-14.
· In 2012, foreign direct investment in Kuwait totalled $1.85bn.
· The country’s revenue increased by 21.5 per cent in 2010-11.
Kuwait Free Trade Zone
Kuwait’s only free zone is at Shuwaikh port, the country’s main commercial shipping facility. The port has 21 berths with depths of 6.7-10 metres. From its establishment in 1999 until 2007, the zone was operated by the private sector National Real Estate Company. In 2007, Kuwait Ports Authority took over operations of the free zone.
· Warehouses and office units are available to rent, along with land for development.
· Exemption from corporate and personal income tax
· No foreign exchange restrictions
· 100 per cent ownership allowed
· Packing, repacking and assembly