The Kuwaiti parliament on March 13th approved a draft bill allowing direct foreign investment as part of long-awaited reforms to liberalize and jump start the emirate’s economy.
Although the bill is not directly related to the $7 billion Kuwait Project, which would allow foreign oil majors to operate domestic crude fields, it does pave the way for approval of the contentious oil legislation.
The parliament approved the 22-article law after several weeks of intense debate and is scheduled to hold a second and final vote on the measure in two weeks.
The new law will allow 100 percent ownership of Kuwaiti firms, offer investors a 10-year tax break and customs duties exemptions and establish a committee to facilitate operations for potential foreign investors.
The bill is seen as part of a larger reform package, which includes draft laws to amend tax regulations, allow privatization of some key services and modify trade laws covering operations by foreign and local firms.
The Kuwait Stock Exchange has been on a steady rise over the past week, with investors and traders optimistic that the new government, formed in mid-February, appears keen on implementing the reforms and pushing related laws through the parliament.
The parliament is scheduled to hold an extraordinary session on March 14th to discuss the controversial Kuwait Project, but the government-backed plan faces strong opposition from the assembly.
Parliamentarians have spoken out against the project, fearing that it would mean forfeiting control over the emirate’s prized oil sector.
© 2001 Mena Report (www.menareport.com)