Meshaal Jaber Al Ahmad Al Sabah, Director-General, Kuwait Direct Investment Promotion Authority (KDIPA): Interview

Interview: Meshaal Jaber Al Ahmad Al Sabah

How are higher minimum capital requirements and fees on commercial permits affecting the sector?

MESHAAL JABER AL AHMAD AL SABAH: The changes that have resulted from these new laws were the result of an extensive study that took into account prevalent practices in other GCC countries and best practices elsewhere, and they have improved the establishment of new forms of business entities and introduced more transparent procedures. Criticism has tended to focus on the upward adjustment in the minimum capital requirements and the commercial licensing fees, but many have overlooked the fact that both laws were enacted to better reflect current values, take into account emerging legislative developments and deal with specific technical issues.

In this regard, the Commercial Companies Law No. 97 of 2013 raised minimum capital to resolve a technical issue and avoid fractions of shares and maintain whole numbers. Under the new Commercial Licences Law No. 111 for 2013, the new licensing fee schedules became dependent on the type of economic or handcraft activity, with an extended duration of four years, instead of two, and the law introduced the concept of a temporary licence to be issued within three days to allow business operations to get under way while the licensing requirements are being completed. This is aimed at encouraging serious business applicants and also deterring fraudulent ones, which is really a breakthrough in terms of doing business in Kuwait.

How is the Kuwait Offset Programme (KOP) being reformed to reduce bureaucracy?

AL SABAH: While bureaucracy was an issue, I do not believe that it was solely responsible for KOP’s inability to unleash its full potential. Other factors might have curtailed its progress and we are analysing what these might have been in order to better determine the future path of the programme. Nonetheless bureaucracy is an issue that Kuwait needs to tackle in order to improve its investment climate. However, we strongly believe that it is an artificial hindrance that can be effectively resolved with concerted action and proper coordination. Indeed, streamlining Kuwait’s business environment is a top priority of KDIPA, as per its establishing Law No. 116 of 2013. This is in addition to its other tasks of attracting direct investment into Kuwait from local and foreign investors, promoting Kuwait among investors and establishing a one-stop shop to serve their needs and facilitate licensing procedures. To achieve this task, KDIPA was designated to head the Permanent Committee for Streamlining Business Environment in Kuwait. The initial membership of this committee included high level officials representing four other relevant government entities, namely: the Ministry of Commerce and Industry; Ministry of Justice; Ministry of Electricity and Water; and Kuwait Municipality.

Notably, in 2014, Kuwait witnessed active and consistently positive strides towards passing new economic laws, including Law No. 20 for e-transactions. Efforts were also made to amend old ones. These efforts were supported by the introduction and adoption of several regulatory measures for deepening the utilisation of e-government and multi-channel e-services to facilitate procedures and reduce administrative obstacles.

Has the relationship between the government and the private sector improved in regard to regulatory changes and the ease of access to financing?

AL SABAH: KDIPA Board of Directors has equal members from the public and private sectors, thus serving as a direct venue to hear the viewpoint of the private sector and its needs. KDIPA is assigned with several tasks that serve to strengthen the role of the private sector and contribute to diversifying the economy. As mandated, KDIPA is working diligently to join in national efforts to support the private sector, eliminating barriers for entry and financing, enhancing transparency and raising citizen-engagement. In early 2015 KDIPA launched the first of the Private Public Dialogue Series that bring together private sector stakeholders to raise their concerns with regards to doing business in Kuwait.