According to Al Qasimi, this new law will enhance the position of Kuwait as a contender in the GCC economic market and will improve its standing in terms of strength in the international business sector as well. The positive outcomes of the law will especially be evident after the current political tensions quell in the region.
The Chairman also noted that Section 3 may very well prove to be a challenging task: It states that Kuwaiti authorities have exactly one month to complete research and study upon the submission of investors’ applications. Although the Kuwaiti investment authorities are well equipped and experienced enough to deal with this in an efficient manner, this is not an easy task.
“There are a few sections that might be daunting for investors,” said the Sheikh. Section 14 for example, states that the investor must submit a financial statement every 3 months, which coincides with international regulations for accounting systems.
“However, this may prove to be trying as a three month time bracket is not necessarily the most productive time for newly established businesses and data may well be insufficient,” he said.
Al Qasimi highly commended Section 17, on the other hand, which promises to bring positive long-term effects. According to this section, taxes will be waved for projects that involve or aim to provide hi-tech facilities to the Kuwaiti market. “This is also advantageous because it will create job opportunities for Kuwaitis. This is the core element of the foreign direct investment concept,” he said.
Al Qasimi highlighted the fact that the Arab World is in need of diversifying finance sources for projects beyond bank loans, and suggested the use of bond issuing or bridge financing.
In addition, Al Qasimi mentioned that the region is weak in directing foreign investments. “While Saudi Arabia represents 30 – 35 % of the total foreign investments heading to the Arab region, mainly in the petroleum sector,” he said, “it is expected that investments will be redirected into other sectors due to the active role of SAGIA.”
Finally, Sheikh Al Qasimi said: “We welcome any collaboration between Kuwaiti investment companies and the Free Zones available in Sharjah, Al Hamriyya and Sharjah airport Free Zone. Since each of these localities has its own services and utilities, Sharjah could be considered as an ideal place for the establishment of small and medium sized businesses.”
Wednesday, March 5- 2003 @ 14:21 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.