OBG talks to Anas Khalid Al Saleh, Minister of Commerce and Industry

Interview: Anas Khalid Al Saleh

In what ways will the New Companies Law (NCL) reduce the obstacles faced by businesses and investors seeking to operate in Kuwait?

ANAS KHALID AL SALEH: The NCL has incorporated several significant amendments and introduced new concepts that have brought it into harmony with a host of laws that were introduced in the last decades. The NCL replaces the old Commercial Companies Law of 1960 and will contribute to improving the overall legal and regulatory landscape. One of the important achievements of the NCL was to introduce the One-Stop-Shop (OSS), which was created to facilitate and speed up the necessary procedures for establishing a legal commercial entity in the country. The OSS is established as a separate department within the Ministry of Commerce and Industry and includes designated representatives from all concerned government entities in order to fast track for licensing procedures. The OSS is concomitant with the establishment of another One-Stop-Shop that will operate under the Kuwait Direct Investment Promotion Authority (KDIPA). KDIPA is a newly established authority tasked with the promotion of investments into Kuwait and which will have the exclusive right to grant investment licenses allowing 100% foreign ownership for approved investments.

The NCL has also streamlined the process of corporate valuations, such as the valuation of in-kind contributions to the company’s share capital. Instead of reverting to the courts, as previously was the case, such valuations can be performed by an auditing firm certified by the Capital Market Authority (CMA). Also under the NCL, a public joint stock company can now be established by a ministerial decision only, while previously a Council of Ministers’ decision was required. Another important change is the introduction of the single person company, whereby one person can incorporate a company and limit liability to the assets of such company as well as the professional partnership and the not-for-profit company. With the rising significance of Islamic finance, the NCL caters to sharia-compliant companies and allows the issuance of Islamic instruments like sukuk for joint stock companies.

How is Kuwait working to ease access to industrial lands for private companies?

AL SALEH: There are plenty of ongoing and planned initiatives to tackle the issue of easing access to industrial land for private companies, be they local or foreign. Several industrial, technological, and other economic zones are planned. These are aimed at addressing the issue of land scarcity. Among those are the establishment of an integrated industrial city in Naayem, the Al Shadadiyeh Industrial City, as well as major improvements to the Sabhan and Amghara industrial areas.

The Public Authority for Industry, KDIPA and the Ministry of Commerce and Industry are jointly working on these initiatives within a strategic framework of creating competitive clusters in priority sectors.

What do you feel is the scope for Kuwait’s industrial base to serve internal and regional demand?

AL SALEH: Kuwait offers a host of opportunities for all kinds of industries. Oil-related industries such as, petrochemicals, chemicals, plastics and pharmaceuticals have a natural competitive advantage due to the easy access to raw materials and the country’s integration into the global supply chain for such products. IN addition, and as stated in Kuwait’s economic development plan, there is scope to develop a range of industries, including manufacturing and technology. A specific focus exists on the promotion of high added value and advanced technologies such as the consumer electronics, fibre optics and silicon-based industries. We believe that the expansion and diversification of the industrial base is necessary to bring about significant positive changes to the Kuwaiti economy. Encouraging private investment to satisfy local demand and promote exports will raise the industrial sector’s contribution to GDP. Easing the way business is done and bringing down other hurdles to investment will achieve this.