WT/TPR/S/258 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE AND FISHERIES  
(i) Main features 
1. The contribution of agriculture and fisheries to  Kuwait's GDP and employment is very limited 
(Chapter I(1)(i)), mainly because of scarce water resources and unfavourable climatic conditions.  
Nonetheless, agriculture and related activities are very important for Kuwait's food-security objective 
(section (ii) below).  Only 11% of total land area is considered as potentially cultivatable (200,000 ha 
out of 1.8 million ha), and just about 107,000 ha are suitable for irrigation development.  Moreover, 
urban development has caused significant loss of tr aditionally agricultural areas.  Soil salinization, 
resulting from the deterioration in the quality of the groundwater used in irrigation, has also led to a 
general reduction of cultivated land.  Other ke y difficulties facing agriculture include tenancy 
problems;  small farms holdings and labour shortag es, which restrict investments;  high production 
costs;  and competiti on from imported products. 
2. In general, traditional farms depend heav ily on government support, while modern 
agricultural management and production techniques are used mainly by relatively large agricultural 
holdings managed by private companies or state- owned corporations. Mode rn farming methods are 
used mainly for livestock production, poultry, fodder, f eed concentrates, and milk.  It is estimated that 
about 80% of protected agriculture is carried out in  plastic tunnels (40% cooled and 60% uncooled), 
while the remaining 20% is cu ltivated in greenhouses with internal environmental control. 
3. The main vegetables planted include aubergines,  tomatoes, potatoes, and onions, while field 
and fodder crops include wheat, barley, sunflowers and alfalfa.  Kuwait's main livestock population 
comprises cattle (around 18,000), camels (38,000), and sheep and goats (900,0 00 head).  Kuwait 
remains heavily dependent on imports to meet its do mestic demand for food, with some 98% of food 
consumed being imported.  Locally produced crops , including vegetables, satisfy less than 20% of 
domestic consumption.  Self-sufficiency ratios are:   5% for red meat;  23% for fresh milk, 37% for 
poultry meat, and 65% for table eggs.1  Kuwait has no agriculture production surplus. 
4. According to the latest available figures availa ble, Kuwait had an agricultural trade deficit of 
US$3,115 million in 2009, up from US$2,479 million in 2006.  Agricultural exports amounted to US$230.6 million (0.4% of total merchandise e xports), while agricultural imports reached 
US$3,345.5 million (16.5% of total merchandise impor ts).  Kuwait imports between 1.5-2 million live 
head mostly from Australia.  Imported agricultura l and fishery goods are distributed centrally in 
through auctions. 
5. Fisheries plays a vital role in Kuwait's herita ge, and fishing is a traditional activity practised 
along its 195 km coastline.  Nonetheless, productio n has been decreasing over time, mainly due to 
over-fishing.  Aquaculture is also being developed.   Fishing is prohibited in Kuwait Bay and within 
three miles of the coast. Kuwait imports most of its fish from Oman, Saudi Arabia, and Iran. 
(ii) Policy developments 
6. The Public Authority for Agricultural Affairs and Fish Resources (PAAF), established under 
Amiri Decree  No. 94 of 1983, is in charge of policy fo rmulation in the sector.  It also has 
responsibilities for the development of plant, animal , and fishery resources, including land allocation; 
                                                      
1 Food self-sufficiency ratios were provided by the Public Authority for Agricultural Affairs and Fish 
Resources (PAAF). The State of Kuwait WT/TPR/S/258 
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SPS measures, including issuing certificates to im port and export certain agricultural products 
(Chapter III(1)(vii)(b));  and marketing support.  Another key institution is the Kuwaiti Farmers 
Federation (KFF), a non-governmental organization, which operates co llective procurement of seeds, 
fertilizers, greenhouses, water pumps, tractors, pes ticides, drips, insect nettings, and technical know-
how. 
7. Kuwait's key policy objective in agriculture is food security, which is to be achieved mainly 
through relatively low customs tariffs (3.2%2), the allocation of land to farms, and investing in farms 
abroad.  In June 2011, PAAF allocated la nd to 60 farms in the Al-abdaly farm area3, and more land 
allocations are expected in 2012.  Kuwait is also encouraging companies to invest in farm projects 
abroad.  According to the author ities, any country with available resources and attractive investment 
regulations may be approached.  Moreover, PAAF has approved several build-operate-transfer (BOT) 
projects to encourage the participation of the private sector in agriculture and fisheries.  
8. Kuwait aims to increase its sel f-sufficiency ratios in agricultural and fishery products and 
diversify its production base.  In order to meet th ese objectives, foreign investment is allowed in 
agriculture and fisheries.  Under the Privatiza tion Law of 2010 and the Foreign Investment Law of 
2001, foreigners are allowed to participate, in the form of joint-ventures, in cultivation and processing 
of agricultural products.4 
9. Most land in Kuwait belongs to the State.  Ho wever, local and foreign companies may lease 
land for cultivation and/or livestock for a period of  25 years.  Longer leasing contract terms are 
possible upon request, subject to approval by both the PAAF and the State Properties Department of 
the Ministry of Finance.5  
10. Kuwait has applied the GCC Laws on Veterina ry Quarantine and Plant Quarantine since 
2003.  Imported, exported, and domestically produced plants and animals are subject to inspection by 
the Public Authority for Agricultural Affairs and Fish  Resources.  Importers of foods and perishable 
goods must produce a certificate to ensure that im porting goods are safe for human consumption and 
comply with Islamic law (Chapter III(1)(vii)(b)). 
11. Kuwait has signed bilateral arrangements for ag ricultural cooperation and development with 
Egypt (2001), Iran (2007), Jordan (2004), Morocco (2006), and Syria (2003).  The arrangements 
cover, inter alia:  control of diseases;  exchange of seeds and seedlings;  exchange of meat;  exchange 
of information;  technology cooperation;  fish ery resources preservation;  and encouragement of 
private investment. 
12. Kuwait has notified the WTO that it does not  provide export subsidies on agricultural 
products (Chapter III(2)(iii)).6 
13. In the Uruguay Round, Kuwait did not make any reduction commitments on domestic 
support.  According to the authorities, financial s upport to agricultural producers, as measured by the 
Aggregate Measurement of Support (AMS), was below the de minimis  level of 10% for which no 
reduction commitments were required. 
                                                      
2 Simple average applied MFN tariff for agriculture, hun ting, forestry and fishing (Major Division 1 of 
ISIC Revision 2). 
3 The Al-abdaly farm is located in the north of Kuwait and covers about 147,000 m2. 
4 One example of such joint-ventures is Kuwait Danish Dairy (KDD), which processes imported dairy 
and fruit products, supplies the domestic market, and exports to other GCC countries. 
5 Individuals are not allowed to l ease land for agri cultural purposes. 
6 WTO documents G/AG/N/KWT/1, 28 July 2010, and G/AG/N/KWT/2, 21 March 2011. WT/TPR/S/258 Trade Policy Review 
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14. No concerns have been raised in the WTO Committee on Agriculture about Kuwait's 
agricultural policies. 
15. Some of the PAAF's key objectives for fisheries are: to protect and control fishing activities, 
particularly for certain species (e.g. shrimps) due to the high demand;  preserve the marine 
environment and biodiversity; maintain fish catches at levels sufficient to support the spawning 
biomass;  ensure the sustainable development of fi sh resources;  encourage investment expansion in 
aquaculture;  establish infrastructure mainly for ma rine hatchers and stock enhancement programmes. 
16. The Kuwaiti United Fish Company and the Nati onal Fish Company are permitted to export 
35% of their total frozen production of shrimps.  Companies and establishments licensed to practice 
aquaculture are permitted to export no more than 50% of total annual pr oduction.  Exports of fish and 
crustaceans caught in Kuwaiti waters are banned.  Re-exportation of fishery products may be allowed 
subject to permission from the PAAF. 
17. While the majority of tariff lines on agricultural products have ad valorem  rates, 19 tobacco 
and tobacco-related products have mixed tariffs, and there are 50 "special" goods 
(Chapter III(1)(ii)(a)).  Moreover, alcoholic bevera ges and pork and pork produ cts are prohibited, for 
religious reasons.  The simple average applied MFN tariff for agriculture, hunting, forestry and 
fishing (3.2%) is 1.6 percentage points lower than  for manufacturing (Table III.2).  Imports of some 
agricultural raw materials and most basic food produc ts (e.g. fresh milk and meat) are duty free.  
Tobacco products are subject to the highest tariff rate of 100%. 
18. Kuwait bound its tariff lines on agricultural pr oducts (WTO definition) at 100%.  The 
authorities stated in the context of this Review that  applied tariffs have always been maintained below 
bound levels. 
19. Kuwait does not apply tariff quotas on agricultural products. 
20. The main domestic support measures provided by  the PAAF include:  production subsidies 
for agricultural producers;  feed subsidies and free veterinary services for livestock producers;  cash 
support for owners of operational fishing boats and fish  farms;  and provision of free fodders for fish 
farms. 
21. According to the latest available figures7, in 2008/09, Kuwait disbursed KD 43.9 million in 
agriculture subsidies for:  fodders (73%), plant producers (15%), milk (7%), palm (4%), fisheries 
(1%)8, and other (1%).  In addition, KD 1.6 million wa s granted as indirect agricultural support for: 
medicines and drugs (41%), pesticides (29%), rentin g of machinery and equipment (12%), control of 
bovine tuberculosis (10%), a nd numbering and vaccination (8%). 
                                                      
7 Information provided by the PAAF. 
8 Fish subsidies are given for ships and boats accordin g to their specification, an d for aquaculture in the 
form of fodder. The State of Kuwait WT/TPR/S/258 
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(2) ENERGY  
(i) Petroleum 
22. The petroleum subsector dominates the Kuwaiti economy, accounting for nearly half of GDP, 
95% of export revenues, and 84% of government income (Chapter I(1)).9  In 2010, Kuwait was the 
world's ninth-largest oil producer and the fourth-lar gest producer in the Organization of the Petroleum 
Exporting Countries (OPEC).  Kuwait's estimates of proven crude oil reserves are 101.5 billion 
barrels, equivalent to almost 8% of the world's reserves.10  In 2010, OPEC allocated an oil production 
quota of about 2.3 million barrels  per day (mmbd) to Kuwait. 
23. The majority of Kuwait's oil reserves are located  south of Kuwait City in the Greater Burgan 
area (the Burgan, Magwa, and Ahmadi onshore fields).11  Other notable fields include South Magwa, 
Raudhatain, Umm Gudair, Minagish, and Abdaliya.  In addition, Ku wait shares the oil found in the 
Partitioned Neutral Zone (Divided Zone and Neut ral Zone) with Saudi Arabia on a 50-50 basis.12 
Kuwait boasts more than 12 developed oil fields spread all over the country. 
24. In 2010, Kuwait's crude oil production increased  by 2.3% to 2.312 mmbd, compared with 
2.261 mmbd in 2009.  Kuwait exported 1.430 mmbd of  crude oil in 2010, representing around 61.8% 
of total crude oil production.  Production of refined petroleum pr oducts accounted for 979,400 b/d in 
201013, of which domestic consumption was 260,400 b/ d (26.5%) and exports 631,600 b/d, (64.4%). 
25. The Supreme Petroleum Council (SPC) is the highest policy body that oversees Kuwait's 
overall petroleum and gas sector.14  The Council sets general oil and gas policy within the framework 
of the national economic and social development plan ;  it is chaired by the Prime Minister and meets 
at least four times a year.  The Ministry of Oil is the main regulator of the oil and gas sector and 
exercises policy-making powers in conjunction w ith the SPC.  The Minister of Oil oversees the 
Kuwait Petroleum Corporation (KPC), chairs its Board of Directors, and is a member of the Supreme Petroleum Council. 
26. The KPC, established in 1980, is the main operational entity responsible for Kuwait's 
hydrocarbon interests throughout the world.  It is a state-owned holding corporation of ten specialized 
subsidiaries in Kuwait and worldwide, encomp assing all aspects of the hydrocarbon industry 
(Table IV.1).  Although state-owned, the KPC is r un by an independent management team and Board 
of Directors. 
                                                      
9 Kuwait has the highest dependence on oil in the Gulf Cooperation Council (GCC).  (Oxford Business 
Group, 2011.) 
10 OPEC (2011). 
11 The Greater Burgan area is the second largest oil field in the world after Ghawar field in Saudi 
Arabia, and generally produces lighter crudes. 
12 The Partitioned Neutral Zone (PNZ) was established in 1922 to settle a territorial dispute between 
Kuwait and Saudi Arabia. A Joint Operations Committee,  with representatives from Kuwait and Saudi Arabia, 
manages the resources of the PNZ.  Kuwait is repr esented by the Wafra Joint Operations Group, and 
Saudi Arabia is represented by Chevron.  Oil production capacity in the PNZ is currently about 600,000 barrels 
per day, all of which is divided equally between Saudi Arabia and Kuwait. 
13 Products obtained from the processing of crude oil, unfinished oils, national gas liquids (NGLs) and 
other hydrocarbon compounds. 
14 The Council of Ministers (Cabinet) is considered the highest decision-making body for investments 
and mega-projects of at least US$1 billion in the oil and gas sector. WT/TPR/S/258 Trade Policy Review 
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27. KPC and its subsidiary companies benefit fro m certain exclusive concessionary rights and 
privileges in the oil and gas subsector.  For exam ple, downstream petroleum activities (i.e. processing 
of crude oil to fuel) are fully controlled and owne d by KNPC, while the exploration and production of 
natural gas are the sole responsibility of KOC. 
Table IV.1 
Subsidiaries of the Kuwait Petroleum Corporation (KPC) 
Name Main activities 
Kuwait Oil Company (KOC) Upstream operatio ns for oil exploration and extraction 
Kuwait National Petroleum Company (KNPC) Downstream  operations of refining and distribution (local) 
Kuwait Foreign Petroleum Exploration Company (KUFPEC) Foreign upstream explorati on and extraction operations 
Kuwait Petroleum International (K PI) Foreign downstream operations 
Petrochemical Industries Company (PIC) Petrochemical industry 
Kuwait Oil Tanker Company (KOTC) Marine transportation of hydrocarbons 
Kuwait Aviation Fuelling Company (KAFCO) Oil refuelling services 
Kuwait Gulf Oil Company (KGOC) Manages  Kuwait's share of natural resources in the Partitioned 
Neutral Zone with Saudi Arabia 
Oil Development Company (ODC) In  charge of "Project Kuwait" 
Oil Sector Services Company (OSSC) Shared services provider for oil sector 
 
Source:  Kuwait Petroleum Corporati on website:  www.kpc.com.kw. 
28. Under the Kuwaiti Constitution, all natural resour ces, including oil are owned by the State. 
The State alone has the right to exploit, utilize, a nd safeguard those resources (Article 21).  The right 
to concessions and/or monopolies for the exploitati on of Kuwait's natural resources, including oil, 
may only be created by virtue of a law and for a limited time only (Article 152 and 153).  According 
to Kuwait's Foreign Investment Law No. 8 of 2001, a  foreign investor may carry out economic 
activities in industries other than oil and gas exploration and production (Chapter II(3)(i). 
29. KPC has developed a long-term strategy that  aims to (i) increase Kuwait's crude oil 
production, mainly heavy oil from its current 2.3 mmbd to 4 mmbd by 202015;  (ii) improve reservoir 
management practices;  (iii) develop technically co mplex fields in a cost-effective manner;  (iv) 
maximize the transfer of modern technology in  oil extraction and (v) create job and training 
development opportunities for Kuwaitis.  KPC pl ans to increase oil production by increasing the 
potential of existing reservoirs and by adding the production of new discoveri es.  To finance KPC's 
plan, in February 2010, the Kuwaiti National A ssembly approved a budget worth KD 35 billion until 
2013/14, where the oil and gas sector's share represents around 84% of the budget. 
30. Under KPC's umbrella, Kuwait Oil Company (K OC)'s responsibilities are the exploration, 
drilling, and production of oil and gas within Kuwait.  KOC is also involved in the storage of crude oil 
and delivery to tankers for export.  KOC is incr easing its focus on developing the more challenging 
fields in North and West Kuwait in order to preser ve the mature oil reserves in the Greater Burgan 
area. 
31. In partnership with international oil compani es (IOCs), "Project Kuwait" was set up under the 
auspices of the Oil Development Company in the early  1990s to help meet KPC's strategic objectives.  
This partnership between Kuwait and IOCs was reflect ed in an Operating Service Agreement (OSA).  
Under the OSA and consistent with the Kuwaiti Constitution, Kuwait retains full ownership of 
petroleum production, reserves, and revenue;  and strategic management of the ventures. The OSA 
                                                      
15 Oil production levels are expected  to grow rapidly over the next five years (2010-15), according to 
Kuwaiti investment firm Global Investment House. The State of Kuwait WT/TPR/S/258 
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does not involve production sharing, concessions, or the "booking" of reserves by IOCs.  However, 
the IOC maintains control over the operational management;  acts as a contractor or service provider, and employs a set quota of 30% of Kuwaiti labour.  In addition, the IOC incurs 100% of the capital 
and operating costs and is paid in return a per-bar rel fee, along with allowances for capital recovery 
and incentive fees for increasing reserves. 
32. So far and in the oil upstream subsecto r, KOC has only managed in 2007 to sign a 
memorandum of understanding with Exxon-Mobil to produce heavy crude oil.  However, an OSA 
was signed recently with Royal Dutc h Shell to develop natural gas. 
33. The majority of Kuwaiti crude oil exports (a round 83.3%) were exported to Asia in 2010, 
followed by North America (8.9%) and Europe (4.3%) (Table IV.2).  Most of the crude oil is sold on 
term contracts, with the price linked to the respec tive market benchmark crude in each of the Asian, 
European and U.S. markets. 
Table IV.2 
Exports of crude oil, and refined productsa, by region, 2009-10 
(Million barrels) 
  2009  2010  % share in 2010 
Exports to  Crude oil Refined 
products  Crude oil Refined 
products  Crude oil Refined 
products 
Africa  40 ..  42 ..  2.90 .. 
Asia and Pacific  1,162 620  1,199 582  83.80 92.0 
Europe  51 52  62 49  4.30 7.75 
The Middle East  .. ..  .. .. .. ..
North America  95 1  127 1  8.90 0.16 
Latin America  .. ..  .. ..  .. .. 
Total  1,348 673.5  1,430 632  100 100 
 
.. Note available.  
a Including liquefied petroleum and natural gas. 
 
Source:  OPEC (2010 and 2011), Statistical Bulletin 2009 .  Viewed at:  http://www.opec. org/opec_web/static_files_project/ 
 media/downloads/publications /ASB2009.pdf;  and OPEC (2011) Statistical Bulletin 2019/2011 edition .  
 Viewed at:  http://www.opec.or g/opec_web/static_files_project/med ia/downloads/publications/ASB2010_2011 
 .pdf. 
34. Kuwait's main port for crude oil exports is Mi na al-Ahmadi.  Other operational oil export 
terminals are Mina Abdullah, Shuaiba, and Mina Al  Zour.  A new terminal is planned on Bubiyan 
Island to handle increased crude oil produc tion, generated by the Northern fields. 
35. In addition to local oil production, Kuwait is e ngaged in crude oil and na tural gas exploration, 
development, and production in 15 countries in A frica, the Middle East, and Asia, through the Foreign 
Petroleum Exploration Company (KUFPEC).  A subsid iary of KPC, KUFPEC is an international oil 
company, which participates in joint ventures wi th companies in oil and gas exploration and 
production both as an operator and partner.  In 2009, KUFPEC's total operati ng revenue amounted to 
US$820.9 million, of which oil and condensate repr esented 47.7%, while gas accounted for 52.3%.  
Total investments amounted to US$760 million in 2010.   According to the au thorities, KUFPEC aims 
to produce around 100,000 barrels per day (oil equivalent) of crude oil by 2015. 
36. Procurement by oil companies is generally ex cluded from the Public Tenders Law and the 
regulatory controls of the Central Tenders Committee (CTC).  However, for the three oil companies – WT/TPR/S/258 Trade Policy Review 
Page 60 
  
KOC, KNPC, KOTC - and the Petrochemical Indus tries Company (PIC), procurements of 
KD 5 million and above and /or where there is a vari ation by more than 10% of the contact value, 
must be managed by the CTC under the Public Tenders Law. 
(a) Downstream petroleum activities 
37. Downstream petroleum activities (i.e. the processi ng of crude oil to fuel) are fully controlled 
and owned by the Kuwait National Petroleum Company (KNPC), a subsidiary of KPC.  KNPC is in 
charge of refining operations and aims to be the best  refiner in the Gulf region.  Kuwait's refining 
capacity stands at around 936,000 barrels per day (b/d).   There are three refineries in Kuwait:  Mina 
al-Ahmadi is the largest, with a capacity of 466,000 b/d, followed by Mina Abdullah (270,000 b/d) 
and Shuaiba (200,000 b/d).  A new refinery, estimated  to cost around US$15 billion, will be able to 
process ultra-heavy oil, at a refining capacity of 600,000 b/d. 
38. Kuwait's production of refined products in creased to 979,000 b/d in 2010 from 892,700 b/d in 
2009.  The majority of Kuwait's refined petroleu m products are exported;  around 92% to Asia in 
2010, followed by Europe (7.75%) and North America (0.16%) (Table IV.2). 
39. Petroleum products are shipped through pipelines from the refineries to two main storage 
depots (Sabhan and Al-Ahmadi).  They are reachi ng domestic consumers through 99 filling stations 
across the country.  The distribution and the stor age facilities are fully controlled and owned by 
KNPC.  Some gas stations have been privatized. 
40. Since 1999, Kuwait's domestic fuel supply has been unleaded gasoline. Table IV.3 shows 
theregulated prices of refined petroleum and gas products. 
Table IV.3 
Regulated prices of refined petroleum and gas products, 2011 
No. Item Current regulated price  HS classification  
1. Gasoline 114 fils/litre 27101121 
2. Diesel 87.5 fils/litre 27101130-3 
3. Kerosene 87.5 fils/litre 27101129 
4. Fuel Oil .. 27101140 
 
.. Not available.  Exchange rate:  1 US$ = 0.275 Kuwaiti dinars (KD);  1 KD= 1,000 fils. 
 
Source: OPEC (2011) Annual Statistical Bulletin  (2010/2011).  Viewed at:  http ://www.opec.org/opec_web/static_ 
 files_project/media/downl oads/publications/ASB2010_2011.pdf. 
41. Kuwait Petroleum International (KPI), known as Q8, manages KPC's refining and marketing 
operations internationally, with approximately 4,000 retail stations  across six European countries.16  A 
top ten energy conglomerate, KPI owns an 80,000 b/d refinery in the Netherlands and has a 50-50 
joint venture with AGIP in the 240,000 b/d refinery  in Italy.  According to the authorities, in 
March 2011, a new 50-50 joint-venture between KPI and China Petroleum and Chemical Corporation 
(Sinopec) was approved to build a refinery and petrochemical complex in south China.  Expected to be operational in 2014/15, the plant will process 100%  Kuwaiti crude oil, with a refining capacity of 
300,000 b/d.  Another refinery has been commissi oned by KPI to operate in Viet Nam by 2014/15, 
with a refining capacity of 200,000 b/d. 
                                                      
16 Italy, Denmark, Belgium, the Ne therlands, Luxembourg, and Sweden. The State of Kuwait WT/TPR/S/258 
 Page 61 
 
 
42. Kuwait has not bound any of its crude oil a nd petroleum-related pr oducts in its Uruguay 
Round Schedule of Concessions.  The GCC MFN applied tariffs on petroleum products, such as crude 
oil, refined petroleum oils;  petroleum coke and petroleum jelly are 5%. 
(ii) Natural gas 
43. Kuwait ranks 18th in global natural gas reserves.  In January 2010, Kuwait's estimated natural 
gas reserves stood at nearly 1,784 billion cubic metres, about 1% of the world's total.  Kuwait produces mainly dry natural gas, approximately 11.9 billion cubic metres in 2010.  According to 
OPEC, the volume of the gas that is flared is only about 1.8% of the total produced (Table IV.4). 
Table IV.4 
Gas production and utilization, 2005-10 
(Million cubic metres) 
 2005 2006 2007 2008 2009 2010 
Gross production 13,300 13,670 13,310 13,870 11,689 11,950 
Marketed production 12,300 12,410 12,060 12,700 11,489 11,733 
Flared 1 260 250 200 200 217 
Re-injection n.a. n.a. n.a. n.a. n.a. n.a. 
Shrinkage  1,000 1,000 1,000 970 n.a. n.a. 
 
n.a. Not applicable. 
 
Note: Marketed production corresponds to gross production, minus th e volumes of gas flared or re-injected into the fields, minu s the 
 shrinkage. 
 
Source: OPEC (2011), Annual Statistical Bulletin (2010/2011).  Viewed at:  http://www.opec. org/ opec_web/static_files_ 
 project/media/downloads /publications/ASB2010_2011.pdf. 
44. The majority of natural gas in Kuwait is associated gas (i.e. gas found and produced in 
conjunction with crude oil).  In 2006, non-associated  gas was first discovered in the deep Jurassic 
reservoirs in the northern fields of Sabriya, Rahiya, Mutriba, and Um Niga. 
45. Natural gas in Kuwait is a multipurpose resour ce:  while it is mainly used for domestic 
electricity generation, it is also used for water desalination, as a feedstock for the petrochemical 
industry, and to free-up additional crude oil for expor t.  Since current levels  of natural gas production 
do not meet national consumption levels, especially  with the increasing power shortages during the 
summer months, the authorities fill in the gap by imports. 
46. Kuwait imported around 25 trillion BTU (i.e. 70 mil lion cubic metres) of liquefied natural gas 
(LNG) in 2009.  It has recognized the importance of  LNG to cover the shortage in gas in Kuwait, 
especially during the summer season, from economic and environment point of views.  It has procured a long-term contract for LNG imports until 2013. 
47. The exploration and production of natural g as in Kuwait are the responsibility of KOC, and 
policy-related matters fall under KPC's ambit.  KGOC is in charge of the exploration and production 
of natural gas in the partitioned Neutral Zone a nd offshore operations.  In order to reduce Kuwait's 
dependence on gas imports  and become self-sufficient, the author ities aim to increase production to an 
estimated 19.3 billion cubic metres by 2014 by maximizing the exploration, development and WT/TPR/S/258 Trade Policy Review 
Page 62 
  
production of non-associated gas and by adopting a zero flaring policy for both onshore and offshore 
operations, targeting 1% gas flaring.17 
48. In February 2010, a five-year Enhanced T echnical Services Agreement (ETSA) was signed 
between KOC and Shell Kuwait Exploration and De velopment B.V., a subsidiary of Royal Dutch 
Shell.18  Shell aims to play a technical and advisory role in the development of non-associated gas in 
the complex northern fields of Marrat and Najma Sargelu Reservoirs. 
49. Mina al-Ahmadi GasPort is the main port for re gasification and is the Arabian Gulf's first 
regasification terminal.  Mina al-Ahmadi's capacity is around 10,300 tonnes of LNG per day. 
(iii) Petrochemicals 
50. Kuwait is active in the petrochemical industry.  The first chemical fertilizer complex both in 
Kuwait and the region, comprising ammonia, urea, ammonium sulphate, and sulphuric acid production was completed in 1966 in the industrial area of Shuaiba. 
51. The main petrochemical products include fer tilizers, olefins, and aromatics.  In 2010, 
Kuwait's total production capacity was 7,090 million tons (Table IV.5);  total sales of fertilizers 
reached US$347 million, a 65% increase over 2009.  Kuwait exports its petrochemical products 
globally. 
Table IV.5 
Kuwait's production capacity of petrochemical products, 2010 
(Million tons) 
Product  2010 
Fertilizers Urea 1,050 
 Ammonia 660 
Olefins Ethylene 1,650 
 Polyethylene 900 
 Ethylene glycol 1,000 
 Polypropylene 150 
Aromatics Paraxylene 830 
 Benzene 400 
 Styrene monomer 450 
Total  7,090 
 
Source:  Kuwaiti authorities.  
52. According to the authorities, producers of fertilizers may benefit from a regulated price of 
natural gas, which is available to all users in Kuwa it.  The feedstock of other petrochemical industries 
is linked to international crude oil prices. 
53. The Petrochemical Industries Company (PIC), a subsidiary of KPC, and a petrochemical 
conglomerate, is in charge of the petrochemical i ndustry in Kuwait.  The PIC has joint-ventures with 
several national and foreign companies to produce di verse petrochemical products (Table IV.6).  In 
addition, the PIC owns two fertilizer plants for the production of ammonia and urea and one 
polypropylene plant. 
                                                      
17 KPC has developed environment-friendly policie s such as a greenhouse gas (GHG) management 
strategy and the potential to use international carbon financing mechanisms like the Clean Development 
Mechanism (CDM).  
18 Shell is a partner with government-owned Qatar Petroleum in the Qatargas LNG project. The State of Kuwait WT/TPR/S/258 
 Page 63 
 
 
Table IV.6 
Kuwait's petrochemical companies, 2011 
Joint venture companies Ownership structure Activities/responsibilities 
Equate Petrochemical Company PIC (42.5%); DOW Chemical 
Company (42.5%) U.S. company; 
Boubyan Petrochemical Company 
(9%); Al-Qurain Petrochemical Industries Company (6%) produces polyethylene and ethylene glycol; 
operates PIC's polypropylene plant; 
operates TKOC's two plants for the 
manufacturing of ethylene and ethylene glycol; 
operates TKSC's styrene plant; 
operates TKAC's paraxylene and benzene plants 
and sea cooling towers 
 
Kuwait Olefins Company 
(TKOC) PIC (42.5%); DOW Chemical 
Company (42.5%); Boubyan Petrochemical Company (9%); Al-
Qurain Petrochemical Industries 
Company (6%) 
 owns the Olefins –II complex; 
produces ethylene glycol 
Kuwait Aromatics Company 
(TKAC) PIC (40%); KNPC (40%); Al-
Qurain Petrochemical Industries Company (20%) owns the Kuwait Paraxylene Production 
Company (KPPC); 
produces paraxylene and benzene; 
 
Kuwait Styrene Company 
(TKSC) TKAC (57.5%) and DOW 
Chemical Company (42.5%) produces styrene monomer; 
obtains benzene feedstock from TKAC and 
ethlyne from TKOC 
 
Al-Qurain Petrochemical 
Industries Company (QPIC) 
 PIC (10%)  
Gulf Petrochemical Industries 
Company (GPIC) PIC (33%); Government of Bahrain 
(33%); Saudi Arabia's SABIC 
(33%) 
 produces ammonia, urea, and methanol 
MEGlobal PIC (50%); DOW Chemical 
Company (50%) owns plants in Canada that produce monoethylene 
glycole and di-ethylene glycol; 
based in Canada  
MEGlobal BV PIC (50%); DOW Chemical 
Company (50%) markets ethylene glycol produced by the 
partners and producti on by MEGlobal BV; 
based in Dubai 
PIC-Canada Company PIC (100%) mana ges PIC's investments in MEGlobal; 
based in Canada  
Equipolymers Company PIC (50%); DOW Chemical 
Company (50%) manufactures PTAa/PET and markets PET; 
with  two PET plants in Germany 
 
a PTA is a feedstock used in the production of PET, which is us ed in making bottles and containers for soft drinks, food, and o ther 
 liquids 
Source:  WTO Secretariat. 
54. Kuwait aims to be a global petrochemicals pl ayer and attract investment opportunities 
especially in Asia.  In March 2011, a new 50-50 joint venture between KPI and China Petroleum and 
Chemical Corporation (Sinopec) was approved to build  a refinery and petrochemical complex in south 
China at a cost of around US$8.7 billion.  Expected  to be operational in 2014/15, an ethylene plant 
will have an annual production capacity of one million tons.  Moreover, a new olefins project, 
Olefins III project is under way.  The Olefins-III project will comprise a world-scale ethylene cracker WT/TPR/S/258 Trade Policy Review 
Page 64 
  
plant with a capacity of 1.4 million tons per a nnum and derivative units to produce polyethylene, 
ethylene, glycol, polypropylene and other specialty  products.  The project feasibility study is under 
development, and the Project is pl anned to be operational in 2017. 
55. The PIC is considering ways of integrating th e refinery and petrochemical operations jointly 
with Kuwait National Petroleum Company (KNPC), in order to improve the use of hydrocarbons 
resources in Kuwait. 
(iv) Electricity and water 
56. Kuwait is a large consumer of electricity;  cons umption per head is considered high even by 
regional standards.  In 2009, Kuwaitis consum ed around 47,046 GWh of electricity.  Strong 
population growth and economic expa nsion, coupled with high electricity consumption during the hot 
summer months and water desalinati on have contributed to the increase.   According to the authorities, 
70% of electricity consumption goes to air conditioning. 
57. Electricity in Kuwait is highly subsidized by th e Government.  The Ministry of Electricity and 
Water is responsible for the overall policymaking of  the electricity and water sectors as well as the 
operation, distribution, and transmission of electri city and water in Kuwait.  In addition to the 
Ministry, policies must be approved by the Council of Ministers. 
58. The Ministry of Electricity and Water owns and operates six power stations with a total 
generating capacity of 13,000 megawatts (MW) of elect ricity in 2011.  Significant capacity additions 
are needed to meet demand.  In order boost elect ricity capacity, in September 2009, the Ministry 
awarded a build operate and transfer (BOT) contra ct for a 2,000 MW plant at Al Subiya, Kuwait's 
largest power plant.  The first phase of the plant,  of 1,382 MW was scheduled to be operational in 
time to meet the summer power surge in 201 1;  it helped increase capacity by 10%. 
59. In May 2010, Law No. 39 of 2010 was newly promulgated to regulate electricity and water 
sectors in Kuwait.  According to the law, foreign in vestment will be allowed for the first time through 
public-private partnerships wh ereby independent water and power projects (IWPPs) will be 
established and BOTs no longer used.  Under the IW PPs, private companies will generate electricity 
and water and sell it to the Ministry of Electricity and Water, which will then sell it to consumers.  
Foreign investors are allowed up to  26% ownership of a project, with 24% owned by the Kuwait 
government and 50% by the public thr ough initial public offerings (IPOs). 
60. Kuwait’s first IWPP is currently under way.  The Ministry of Electricity and Water has 
enlisted a team of international advisers to prepare terms of reference for interested developers, and 
applications to pre-qualify for the project.  The IW PP will be located at Al Zour and will have the 
capacity to produce 1,500 MW of electricity and 100  million gallons/day of desalinated water. The 
Government has set a target of completing the IWPP by mid-2012. 
61. Kuwait has no natural fresh water resources.  In recent years, the Government has taken steps 
to build water desalination plants to take advant age of the available seawater and convert it into 
drinking water.  Kuwait has five water desalin ation plants, which produce around 420 million gallons 
of potable water per day. The State of Kuwait WT/TPR/S/258 
 Page 65 
 
 
(3) SERVICES  
(i) Overview 
62. Services is the largest non-oil sector of Kuwait's economy, contributing about 48% of GDP in 
2010 and accounting for over 42% of total employment.  Most services activities are controlled 
predominantly by the Government through state-ow ned enterprises (SOEs), with state monopolies in 
some sectors such as fixed-line telephone services and postal services.  In line with the Government's intention under the current medium -term Development Plan to promote a larger role for the private 
sector in the economy, greater private-sector involve ment in several services sectors or subsectors is 
being considered, and efforts are being made to improve the legislative environment and physical 
infrastructure to facilitate this (Chapter II(3)).  Ku wait has opened some services subsectors to foreign 
investment, including financial services, air tran sport, mobile telephone services, and professional 
services. 
63. Under the General Agreement on Trade in Services (GATS), Kuwait made specific 
commitments in eight services sectors:  business services, construction and related engineering services, distribution services, environmental services,  financial services, health and related social 
services, tourism and related services, and recreationa l, cultural and sporting services.  Within these 8 
sectors, Kuwait has made commitments in 61 out of a total of 151 subsectors (Table AIV.2).  Certain 
limitations have been placed on market access and national treatment in these commitments.  Kuwait has not made any commitments in telecommunications services, educational services, or transport services.  It maintains MFN exemptions under GATS Article II for air transport and the promotion 
and protection of investments. 
64. Under its horizontal commitments, national servi ces or services of national origin should have 
priority in government procurement contracts;  a ll foreign suppliers must comply with the counter-
trade offset programme.  With the exception of ba nks, financial and insurance institutions, foreign 
commercial presence should be either through a Ku waiti agent or through a partnership with a 
Kuwaiti company (in which the aggregate proporti on of foreign capital should not exceed 49%).  
Foreign commercial presence must contribute some  economic interest to the country, such as 
technology transfer, and Kuwaiti nationals must account for at least a proportion, e.g. 60% in the case 
of insurance and banking of its workforce.  W ith regard to presence of natural persons, Kuwait's 
commitments relate to the entry and temporary stay  of natural persons who are managers, specialists, 
and skilled technicians.  Self-employment of foreign nationals is not allowed. 
(ii) Financial services 
(a) Overview 
65. Financial services generate over 14% of GDP a nd employ less than 5% of Kuwait's total 
labour force.  The sector grew rapidly during 2003-07 , at an annual average rate of about 40%, but 
stagnated in 2008 and shrank by almost 5% in 2009 as  a result of the impact of the global financial 
crisis on the Kuwaiti economy.  Growth is expected  to recover quickly, based on the strong capital 
base and high liquidity levels of banks.  The late st IMF financial stability report confirmed that 
Kuwait’s banking system passed its stress tests and can withstand significant additional shocks, but investment companies have been s ubstantially more vulnerable since the financial crisis, due to the 
concentration of their activities in financial instruments and real estate.
19 
                                                      
19 IMF (2010). WT/TPR/S/258 Trade Policy Review 
Page 66 
  
66. The Government aims to strengthen the financial services sector as part of its efforts to 
diversify the economy and to develop Kuwait into a regional financial centre.  In accordance with the 
Medium-term Development Plan, th e Government intends to double the number of working banks 
and investment companies in the coming years.20  It aims to ensure that Kuwaiti banks obtain the 
highest ratings of the main in ternational ratings institutions.21 
67. The Central Bank of Kuwait (CBK) is deve loping and improving its inspection and 
supervisory systems over the whole financial sector , basing itself on international standards, including 
important modifications in the area of corporat e governance, banks' risk management and control 
standards and financial stress testing.  The CBK im plemented in full the Basel II Accord to increase 
bank capitalization from December 2005 for commercial banks and from June 2 009 for Islamic banks.  
Full implementation of the Basle III Accord on bank li quidity and leverage is planned for 2017-19.  A 
new Financial Stability Office has been created in  the CBK, and a new financial stability law was 
issued in 2009 (Law No. 2 of 2009 Concerning Enha ncing the Financial Stability in The State of 
Kuwait).  It is considered to be urgently needed  to allow precautionary and preventive action to be 
taken to safeguard the banking system from any a dverse effects of future global financial crisis. 
68. To facilitate the development of the financ ial services sector, the Government has relaxed 
foreign investment restrictions.  The Direct Foreign Investment Law (Law 8 of 2001) abolished the 
upper bound of 49% foreign ownership in fina ncial firms, and under law 28 of 2004 the CBK 
approved a set of principles, rules and controls regarding the licensing and operation of the branches of foreign banks in Kuwait.
22  Ten foreign banks have so far been  allowed to establish local branches.  
All branches of foreign banks are treated as natio nal banks and are subject to the same laws and 
regulations.  Banks, investment companies, exch ange companies, and insurance companies are 
allowed to have up to 100% fo reign ownership as long as they acquire licences from the 
corresponding regulatory authorities in Kuwait (Chapter II).  Unlike in other sectors, foreign investors 
in financial services in Kuwait do not need to employ a Kuwaiti agent. 
69. The CBK is the main regulator of the financial services sector (apart from insurance).  It was 
the regulator for both banking and financial activiti es until February 2010, when the newly established 
Capital Markets Authority (CMA) became the indepe ndent regulator of Kuwait's capital market.  The 
CBK is coordinating with the CMA to supervise the lending portfolio of investment companies.  The Ministry of Commerce and Industry (MCI) is responsible for granting licences to insurance 
companies in Kuwait. 
(b) Banking 
Banking sector development 
70. The banking sector is recovering from the global fi nancial crisis.  Some banks increased their 
capital, such as the Gulf Bank, which received a la rge new capital injection from the Kuwait Public 
Authority for Investment.  As a result of the crisis , total profitability of the banking sector fell slightly 
in 2009 to US$1.2 billion, but it increased by ove r 60% in 2010 to US$2 billion as confidence in the 
sector was restored and at the same time the cap ital sufficiency ratio increased from 16.7% to almost 
19%. 
                                                      
20 State of Kuwait (2010) Part 3, First Economic Policies, Point 2 of 4.1 "Policies for transforming to 
financial and commercial centres (financial sector)". 
21 State of Kuwait (2010) Part 3, First Economic Policies, Point 3 of 4.1 "Policies for transforming to 
financial and commercial centres (financial sector)". 
22 www.cbk.gov.kw. The State of Kuwait WT/TPR/S/258 
 Page 67 
 
 
71. Kuwait has 11 domestic banks, 7 GCC banks, and 3 banks fro m non-GCC countries, which 
are 100% foreign-owned (Table IV.7).  The CBK is  in the final approval process for an additional 
GCC bank to start operating as a branch in Kuwait. 
Table IV.7 
Banks, 2011 
 Details Note 
Domestic banks   
Commercial banks National Bank of Ku wait Kuwait's largest commercial bank 
Gulf Bank  
Commercial Bank of Kuwait  
Al-Ahli Bank of Kuwait  
Burgan Bank  
Islamic banks Kuwait Finance House (KFH) The largest Islamic bank 
International Bank of Kuwait  
Boubyan Bank  
Al-Ahli United Bank  
Warba Bank   
Specialized bank Industrial Bank of Kuwait  
  Year licence granted 
Banks from GCC countries National Bank of Abu Dhabi 2005 
Qatar National Bank 2007 
Doha Bank 2008 
Mashreq Bank 2009 
Bank of Muscat 2010 
Al Rajhi Bank 2010 
Bank of Bahrain and Kuwait 1977  
Foreign (non-GCC) banks BNP Paribas 2005 
HSBC 2005 
Citibank 2006 
 
Source:  Information provided by the Kuwaiti authorities. 
72. The National Bank of Kuwait is the largest of the domestic banks in commercial (non-
Islamic) banking, with a domestic market share of  29% (total assets), 74 branches in Kuwait and 14 
branches abroad.  Kuwait Finance H ouse is the largest Islamic bank, with a domestic market share of 
27% and 54 local branches.  All local banks ar e majority-owned privately, with a minority 
government share, except for the specialized Industr ial Bank of Kuwait, which is fully-owned by the 
Government.  Direct or indirect ownership by any single natural person or legal entity in a domestic 
Kuwaiti bank must not exceed 5% of the bank's cap ital, other than by prior authorization of the 
CBK.23 
73. Kuwait has gradually opened up its banking sector to foreign participation.  Following the 
launch of the GCC Common Market on 1 January 2008,  banks originating in other GCC countries are 
granted national treatment in Kuwait.  The thr ee non-GCC foreign banks obtained licences in 2005 
and 2006, to operate in Kuwait. 
74. One of the major challenges for banks in Kuwait is a shortage of lendi ng opportunities, since 
the economy is dominated by the oil sector and g overnment activities, which do not require bank 
financing.  Real estate and equities investments are the two major lending destinations for banks;  
other opportunities are limited. 
                                                      
23 CBK Law 32, Article 57 WT/TPR/S/258 Trade Policy Review 
Page 68 
  
Regulatory framework 
75. Under Law 32 of 1968, the Central Bank of Kuwa it (CBK) was established as the regulator of 
the banking sector, responsible for licensing and prudential surveillance.  
76. Banks are free to set their own deposit rates.  The CBK controls lending rates by setting the 
maximum permitted at a fixed margin  over the CBK discount rate.  The average weighted interest rate 
on total bank loans in June 2011 was 5.2%, and the weighted average interest rate on total bank deposits was 2.2%.  The interest rate spread has va ried narrowly around 3% for the past five years. 
77. Foreign banks must apply to the CBK for a licence to practise banking in Kuwait.  The CBK's 
decision on the application is to be taken in light of the conditions prevailing at the time, and the CBK 
has no obligation to provide reasons for rejecting an application.
24  Reciprocal treatment is taken into 
account by the CBK when considering a licence appli cation.  The licence is a general licence covering 
all banking business in Kuwait, including retail and co rporate banking.  In th is regard, foreign banks 
receive the same treatment as domestic banks.  All foreign banks branches, within three years of receiving their licence from the CBK must have Ku waiti nationals as 60% of their total workforce.
25 
78. Currently, foreign banks may not open more than one branch in Kuwait26,  The capital 
requirement for foreign banks (GCC and non-GCC)  to establish in Kuwait is KD 15 million, 
compared with KD 75 million for domestic banks. 
79. Banks may provide credit facilities to non-resident customers up to KD 40 million without 
prior approval from the CBK for the purpose of financing contracts awarded by Kuwait government bodies. 
80. Under the Bank Deposit Guarantee Law (No. 30) of November 2008, all deposits in local 
banks are fully guaranteed.  The Financial Stability  Law (Decree Law 2) of March 2009 aimed to 
stabilize Kuwait's financial system against the bac kground of the global financial crisis.  Under the 
Law, the CBK provided all banks operating in Kuwait (including foreign banks) with the opportunity 
to receive guarantees on any specific provisions that they have to make against declines during 2009-11 in the value of the financial and real estate investment portf olios they held on 
31 December 2008.  The guarantees are valid for up to 15 years, with a 1% annual guarantee fee.  
Banks are required to cover any deficits still outsta nding from 1 January 2012.  Domestic banks that 
need to raise new capital for this purpose may ask th e Kuwait Investment Authority (KIA) to step in 
and purchase convertible bonds a nd/or preferred shares if new capital cannot be raised from 
shareholders or other investors. 
81. Also under the Financial Stability Law, the Stat e guaranteed 50% of the new finance provided 
by Kuwaiti banks to domestic productive economic sect ors in 2009-10, provided that this finance is 
not used for real estate trading or shares trading on the stock exchange. 
82. There are no separate rules or policies regulating Islamic financial services in Kuwait.  
However, under CBK Law 32, conventional banks ma y not compete to provide Sharia-compliant 
services. 
                                                      
24 CBK Law 32 of 1968, Article 56. 
25 Circular No. 2/BS, IBS/160/2004. 
26 CBK Law 32, Article 56. The State of Kuwait WT/TPR/S/258 
 Page 69 
 
 
Non-bank financial services providers 
83. Ninety-five investment companies (ICs) and 39 exchange companies are licensed to operate 
in Kuwait.  They account for around 30% of total fi nancial sector assets.  They are primarily engaged 
in asset management and may not engage in banking activities. 
84. ICs are subject to CBK Law 32 of 1968, and must obtain a licence from the CBK.  Foreign 
invested ICs must also obtain a licence from the Kuwa it Foreign Investment Bureau of the Ministry of 
Commerce and Industry.  The CBK's current policy is to limit the number of licences granted to 
international financial institutions.  As in the case of applications from foreign banks, the CBK has no 
obligation to provide reasons for rejecting an application.  Foreign applicants must obtain written 
approval from the regulatory authorities of their home country to incorporate and practise asset 
management in Kuwait.  The parent company must be a renowned international financial institution in 
the field of asset management. 
(c) Securities 
85. The Kuwait Stock Exchange (KSE) is government -owned.  It was established in August 1983 
and is the third largest Arab stock market.  At end 2010, market capitalization on the KSE was KD 
33.7 billion, of which about 42% was accounted fo r by the banking sector and 14% by investment 
companies.  Information about the possible, eventu al privatization of the KSE is contained in CMA 
Law No. 7 of 2010, Article 33, Chapters 3 and 13. 
86. Currently, 215 companies and 1 fund are listed on the KSE (Table IV.8);  13 are non-Kuwaiti 
companies, of which one (Egypt Kuwait Holing Company) is a non-GCC company.  The minimum 
paid-up capital requirements for companies to be listed are KD 10 million for listing on the regular 
market, and KD 3 million on the parallel market.  Th e policies and procedures for companies to apply 
to list on the KSE are detailed in the Cap ital Market Authority Decision No. 3 of 2011.27 
87. Large institutional investors active on the K SE include the Kuwait Investment Authority 
(KIA), 52 investment companies (ICs), and 114 ac tive investment funds, of which 56 are Kuwaiti 
funds, 27 are GCC funds, and 31 are non-GCC forei gn funds.  Since 1990 (Decree No. 31), foreign 
collective investment (such as inv estment funds) have been allowed to be listed and marketed on the 
KSE if they obtain approval from the CMA.  The KSE remains highly retail oriented, with individual 
retail investors accounting for around 61% of the tota l number of transactions, 58% of traded stocks, 
and 42% of total market value. 
Table IV.8 
Securities 
 Regular market Pa rallel market Total 
Number of companies listed 216 (215 companies and 1 fund) 14 230 
GCC companies 12 0 12 
Non-GCC foreign companies 1 0 1 
Minimum paid up capital requirement KD 10 million KD 3 million n.a. 
Main features See Executive Regulations of 
the CMA Law No. 7 of 2010 See Executive Regulations of 
the CMA Law No. 7 of 2010 n.a. 
 
n.a. Not applicable. 
 
Source : Information provided by the Kuwaiti authorities. 
                                                      
27 http://www.kse.com.kw. WT/TPR/S/258 Trade Policy Review 
Page 70 
  
88. Under Law No. 20 of 2000, foreign investors are allowed to buy and sell equities on the KSE.  
All trading must take place through one of the 14 brokerage firms registered with KSE.28 
89. The Capital Markets Law (Law No. 7 of 2010) was passed in February 2010, and the Capital 
Markets Authority (CMA) was set up as the independ ent regulator for the Kuwait stock market.  The 
CMA is responsible for formulating regulati ons, granting licences, supervising mergers and 
acquisitions, and settling disputes.  The CMA issu ed the Executive Regulations for the Capital 
Markets Law on 13 March 2011. 
(d) Insurance 
90. Kuwait's insurance market has grown quickly in recent years;  between 2003 and 2009, the 
annual average growth rate of premium volume was 8.9%.  Gross written premiums reached 
KD 180.4 million in 2008, from KD 109.7 million in 2003, but dropped to KD 171 million in 2009 due to the impact of the global financial crisis. 
91. Thirty-five insurance companies and two rein surance companies operate in the Kuwait 
market.  Both insurance and reinsurance are open to foreign investment.  Two of the insurance 
companies are foreign invested from GCC countries, and ten from outside the GCC.  All insurance 
companies are privately owned and operated;  14 have been set up in the past 10 years, which has 
helped reduced prices considerably. 
92. Domestic insurers account for 87% of the ma rket, and four domestic companies account for 
about 70% of collected premiums:  Gulf Insuran ce, Kuwait Insurance Company, Warba Insurance, 
and Al Ahleia.  The two reinsurance companies are Kuwait Reinsurance and Al Fajer Retakaful 
Insurance. 
93. Under the National Insurance Law passed in 196 1, the Department of Insurance under the 
Ministry of Commerce and Industry is the regulator  of the insurance sector.  All applications for 
licences to operate insurance or  reinsurance companies in Kuwait are under the control of the 
Department, which must process applications within  60 days.  There are no policy restrictions on the 
establishment of foreign insurance companies, subject to them receiving a licence, or on the number 
of local branches they may establish.  The minimum capital requirement is KD 5 million for 
establishing a single business insurance (life or non-life) and KD 10 million for dual business (life and non-life).  The capital requirement for reinsurers is KD 15 million. 
94. A new insurance law has been under preparati on since 2008, but has not yet received Cabinet 
approval. 
95. Health insurance in Kuwait is provided by the private sector and is overseen by the Ministry 
of Health.  Health insurance is obligatory for fo reigners, but optional for Kuwaiti citizens, who have 
access to free public-sector health care. 
96. Takaful (Islamic) insurance has been developi ng quickly in Kuwait since the first takaful 
company was established in 2001.  Capital requireme nts for new takaful companies are low, and the 
potential for takaful activity has encouraged new in terest in the market. Kuwait has currently 13 
takaful companies, all Kuwaiti privately-owned.  There are no restrictions on foreign investors entering the market. 
                                                      
28 Policies regulating brokers are contained in Capital Market Authority Decision No. 9 of 2011 and 
Law No. 7 of 2010 (available on the KSE website). The State of Kuwait WT/TPR/S/258 
 Page 71 
 
 
(iii) Telecommunications and postal services 
97. Kuwait's telecommunication market has been grow ing rapidly in the past decade, but still has 
the lowest penetration rates among the GCC countries.  In 2010, Kuwait's mobile penetration rate was 
161% and the fixed-line rate was 21%.29  Internet subscription is also low, with 32 subscribers per 100 
inhabitants.  (Table IV.9).  In line with interna tional trends, penetration rates of fixed lines are in 
decline as the population shifts towards mobile usage; moreover, Kuwaitis own multiple SIM cards. 
Table IV.9 
Telecommunication statistics, 2000-September 2011 
Fixed statistics 2000 2005 2009 2010 Sept 2011a
Number of fixed telephone lines 467,067 504,806 553,500 566,300 515,645 
Number of fixed lines per 100 inhabi tants 24.07 22.30 20.92 20.69 .. 
Mobile statistics      
Active mobile subscriptions 476,000 2,277,000 3,876,000 4,400,000 4,106,016 
Mobile subscriptions per 100 inhabitants 24.53 100.57 146.47 160.78 127 
Internet statistics      
Total fixed broadband internet subscribers .. 25,000 45,000 46,000 115,727 
Broadband internet subscribers per 100 
inhabitants .. 1.10 1.70 1.68 11 
Percentage of individuals using the internet 6.73 25.93 36.85 38.25 .. 
Percentage of households with intern et access 20.00 27.00 30.63 31.61 .. 
 
.. Not available.  
 
a Information provided by the Kuwaiti authorities. 
 
Source: International Telecommunicat ion Union/ICT Indicators 2011 database.  Viewed at:  www.itu.int/ITU-D/ICT/ 
statistics. 
98. Fixed-line (including national a nd international long-distance) services are provided by the 
Ministry of Communications (MOC).  The mobile sector has three providers:  Zain, Wataniya, and 
Viva (Table IV.10).  Zain, the oldest and largest was established in 1983 as Mobile Telecommunications Company,  and now has operations in 24 countries in the Middle East and Africa, with a subscriber base of more than 70 m illion.  Zain is listed on the Kuwait Stock Exchange 
and there are no restrictions on Zain shares as th e company’s capital is 100% free float and publicly 
traded.  The largest shareholder is  the Kuwait Investment Authority (24.6%).  Zain sold the majority 
of its operations in Africa to India's Bharti Airt el (except for Sudan and Morocco) for US$10.7 billion 
in April 2010. 
99. Wataniya Telecom, the second-largest mob ile operator in Kuwait, was commercially 
launched in 1999 as the first privately owned opera tor in Kuwait.  In March 2007, Qatar Telecom 
(Qtel) acquired 52.9% of Wataniya Telecom sh ares from Kuwait Projects Company Holding KSC 
(KIPCO) group.  Wataniya has operati ons in Kuwait, Maldives, Saudi Ar abia, Tunisia, Algeria, and in 
the Palestinian Authority, with a global subscriber  base of more than 11 million.  Viva, Kuwait's third 
operator entered the market in December 2008;  it is 24% owned by the Kuwaiti Government, and 
26% by Saudi Telecom Company. 
                                                      
29 ITU (2011) statistics.  Viewed at:  www.itu.in t/ITU-D/ICT/statistics.  WT/TPR/S/258 Trade Policy Review 
Page 72 
  
Table IV.10 
Telecom services providers, 2011 
 Company Market share 
(%) Kuwait Government 
ownership (%) Private ownership 
shares (%) Main private owner 
Fixed line MOC 100 100 0 n.a. 
Mobile Zain 46 24.6 76.4 Al Khair National for Stocks 
& Real Estate Co. (9.8%) 
Wataniya 39 23.6 77.5 Qatar Telecom QTel (52.9%) 
Viva 15 24 76 Saudi Telecom (26%) 
 n.a. Not applicable.  
Source:  Information provided by the Kuwaiti authorities. 
100. The Ministry of Communications (MOC) is th e telecom services regulator.  As at October 
2011, Kuwait did not have an independent telecom regulator; although plans for such an authority to be established are under way.  MOC is also the m onopoly operator of the national fixed-line network, 
and controls Kuwait's only international gateway, as well as internet service provider (ISP) licences.  
As the industry regulator, MOC manages licensing mark et procedures, and regulates prices of mobile 
communication services.  MOC does not charge fixe d licence fees.  In the case of disputes in the 
telecoms sector, companies have recourse to local courts. 
101. There are no specific laws regulating Kuwait's telecommunications sector.  However, Law 
No. 26 of 1996, which regulates wireless communication services, states that mobile phone services 
are open to private investors, including foreigne rs.  So far, only GCC foreign investors have 
participated in the mobile phone subsector. 
102. The general policy for telecommunications, as set by the MOC, is to, inter alia , expand the 
provision of telecommunications services;  encourage private investment in the telecommunications industry; and enhance competition.  More recen tly, MOC has announced plans to improve the 
regulation and competitiveness of Kuwait's telecoms sector.  These include establishing an 
independent telecoms regulator;  intr oducing mobile number portability (MNP)
30;  setting up a 
shareholding firm to offer competitive internationa l call tariffs; privatizing fixed-line operations; and 
developing Kuwait's fibre-optic infrastructure. 
103. Domestic calls on the fixed-line network are free.   From 2009, calls from fixed-line to mobile 
phones in Kuwait became free, resulting in a decl ine in mobile-to-mobile calls.  The MOC only 
charges for international telecommunications, i.e. out going calls.  Prices for local mobile-to-mobile 
calls are set by each mobile operator.  Prices for mobile-to-fixed-line calls as well as international 
mobile and fixed-line calls are set by the MOC.  There is no interconnection system within the three 
mobile network operators. 
104. Value-added services, such as data transmission by internet services providers (ISP) and 
internet content providers (ICP) are available, but , voice-over-internet protocol (VoIP) services have 
been banned since 2008 because no billing system has b een available to the MOC.  According to the 
authorities, VoIP should be re-allowed by the end of  2012.  All operators have the right to negotiate 
deals with content providers.  Five compan ies offer ADSL services through renting lines from the 
MOC.  Six ISPs plus three mobile networks provi de mobile broadband services.  For foreign ICPs to 
operate in Kuwait a local Kuwait agent is required;  up to 49% of ownership is possible and approval 
is needed from the Ministry of Trade and Industry. 
                                                      
30 MNP allows customers to change operators without having to change their number. The State of Kuwait WT/TPR/S/258 
 Page 73 
 
 
(a) Postal services 
105. Postal services are regulated under the Law on Organizing Postal Works (Law No.1 of 1970).  
In accordance with the Law, the Mi nistry of Communications (MOC) is the monopoly operator of the 
postal network.  According to the authorities, the MOC outsources postal services to a private 
company.  A local company, known as the E astern Arab Company for General Trade and 
Construction is in charge of mail distribution to homes in Kuwait. 
106. The MOC is responsible for providing universal postal services.  There are no local courier 
services, as the law does not permit it.  However, foreign express courier services are allowed to operate in Kuwait by obtaining a licence from the transport sector, and then approval from the 
Ministry of Trade and Industry, and the MOC.  According to the authorities, a separate postal 
authority is expected to be established soon. 
(iv) Transport 
(a) Overview 
107. In 2009, transport, storage, and communications accounted for 8.3% of GDP and employed 
3.1% of the labour force. 
108. The Government has selected transport and logistics as key sectors for expansion and 
diversification in the current Medium-Term Devel opment Plan, aiming to build on Kuwait’s strategic 
geographic location.  The Government will sp end US$35 billion on improving Kuwait's transport 
infrastructure, including projects to build a new d eep-water port in Boubyan and a national centre for 
organizing ship movements, expand the internationa l airport, improve the pan-GCC/Iraq rail network, 
and build an underground metro system in Kuwait City. 
109. The MOC is the regulator of the transport servi ces sector.  Its policy objectives for the sector 
are to develop Kuwait into a regional transport centre with larger private participation.  The 
Government expects the transport sector to grow  on average at 15.5% annually between 2010 and 
2014.  It plans to establish a separate public authority to regulate transport by 2012. 
110. Transport services have been dominated traditi onally by private business.  The Medium-Term 
Development Plan sets a target to increase further the share of the priv ate sector in transport services, 
with annual average planned growth of the priv ate sector of 18% and the public sector of 7%.
31 
(b) Maritime transport 
111. Kuwait's trade and economic growth de pends heavily on maritime transport.   Kuwait is a 
contracting party to the UN Convention on a Code of Conduct for Liner Conferences, 1974.  Ships 
flying foreign flags account for about 40% of the to tal deadweight tonnage of merchant fleets using 
Kuwait's three ports (Table IV.11). 
112. The Kuwait Oil Tanker Corporation is fully ow ned by the Kuwait Petroleum Corporation and 
specializes in cruel oil, petroleum, and gas trans portation.  Foreign investors may operate in the 
maritime shipping industry subject to th e Foreign Investment Law (Law 8/2001). 
                                                      
31 Development Plan, Part 3, 5.2 Transportation Policies Point 6 it states "Continuing in allowing the 
private sector in presenting services pertaining to air transportation and shipment as well as privatizing some 
activities pertaining to the same and to sea and land transportation". WT/TPR/S/258 Trade Policy Review 
Page 74 
  
113. All ports and their facilities in Kuwait are fully owned by the State.  Kuwait Ports Authority 
(KPA) is a public authority run on a commercial basis under the Ministry of Communications to manage port facilities.  Ships are subject to KPA ch arges and fees for navigation and other services.  
Charges and fees are set by the Kuwait Council of Mini sters, and cannot be altered by KPA.  Vessels 
registered in Kuwait and other GCC countries are exempt from berthing dues and anti-pollution fees.  
Vessels registered in Kuwait and GCC countries of less than 400 tonnes, and foreign vessels of less than 25 tonnes, are exempt from port dues, marine li ght dues, pilotage, and service fees of tugs at 
Doha Port. 
Table IV.11 
Shipping and maritime transport services, 2010 
National and foreign-flag vesselsa Merchandise fleet by size 
('000 dwt) Merchant fleet by types of ship 
('000 dwt) 
Number of vessels 86 1 Jan 2005 3,811 Total fleet 3,856 
National flag 39 1 Jan 2006 3,706 Oil tankers 3,216 
Foreign flag 47 1 Jan 2007 3,442 Bulk carriers 39 
Deadweight tonnage 6,603,264 1 Ja n 2010 3,856 General cargo 76 
National flag 3,835,639 % change 2005-06 -2.8% Container ships 292 
Foreign flag 2,767,625 % change 2006-07 -7.1% Other types 233 
Foreign flag/total 42% % change 2007-10 12%   
Total / world total 0.57%     
 
a Vessels of 1,000 GT and above. 
 
Source:  UNCTAD (2010), Review of Maritime Transport 2010 .  Viewed at:  http://www.unctad.org/en/docs/rmt 
 2010_en.pdf. 
114. Pilotage services are provided by Kuwaiti nati onals employed by KPA.  All shipping 
companies, including foreign companies, must have  a Kuwaiti shipping agent licensed by the Ministry 
of Commerce and Industry (MCI).32  In order to increase comp etition, Kuwait has replaced the 
monopoly (one-contractor) system for stevedoring services and now licences three stevedoring 
companies to handle commercial (non-container) cargo and two companies to handle container cargo;  
shipping agents are free to choose between these comp anies at Shuwaikh Port.  This change in policy 
has improved the quality of services and brought down stevedoring prices. 
115. KPA runs Kuwait's two main commercial ports at  Shuaiba and Shuwaikh;  and Doha Port is 
designated for small ships and dhows.  In Janua ry 2010, the Kharafi Group from Kuwait and the 
Hyundai Engineering & Construction from Korea were jointly awarded a US$1.14 billion contract, to build a port on Boubyan Island.  This build-operate-t ransfer (BOT) project is expected to be privately 
owned and managed. 
(c) Air transport 
116. Civil aviation services are regulated by the Directorate General of Civil Aviation (DGCA) 
under the Ministry of Communications.  The DGCA is responsible for airport management, air traffic 
control, traffic rights, slots, and airline licensing.  The Parliament is studying proposals to establish an 
independent regulator of civil aviation transport in Kuwait.  
117. Kuwait's civil aviation airport, Kuwait Intern ational Airport, handled 8.33 million passengers 
in 2010.  Under the Medium-term Development Pl an, there are plans to construct a new passenger 
terminal, a dedicated air cargo village, and a third runway. 
                                                      
32 Law 80/282. The State of Kuwait WT/TPR/S/258 
 Page 75 
 
 
118. Kuwait has three domestic airlines operating re gional and international routes.  Kuwait 
Airways Company is the flag airline, owned and ma naged by the Government.  In February 2008, the 
Government announced its intention to priva tize Kuwait Airways Company and a management 
company has been appointed to oversee the pr ocess.  The monopoly of Kuwait Airways was ended 
when licences were granted to two private Kuwaiti-owned airlines, Jazeera Airways in 2004, and Al-
Wataniya in 2005, to provide commercial air services. 
119. With regard to passenger air transport services, Kuwait adopted an "open-sky" policy in 2006.  
Airlines are free to compete through prices for market  share, although the Directorate General of Civil 
Aviation (DGCA), and the laws and regulations of  the State of Kuwait will intervene if price 
competition is judged to be predatory, based on IC AO rules.  The operation of foreign airlines is 
based on bilateral air services agreements in whic h the State of Kuwait has concluded with other 
countries and states (Table AIV.1).  Traffic rights are distributed equally (or according to demand in case of excess supply) among national airlines.  Foreign (non-GCC) airlines must have a Kuwaiti agent to act for them to provide sales, marketing, and reservations.  However, GCC member states airlines are not required to have a local agent to re present them in the State of Kuwait.  Two private 
Kuwaiti companies are contracted by the DGCA to provide ground handling services for all airlines, 
including repair and maintenance. 
120. The policy of the Directorate General of Civil Av iation is to eliminate all restrictions on the 
operation of air cargo flights. 
(d) Land transport 
121. Land transport in Kuwait is regulated by the Ministry of Communications, while the Ministry 
of Commerce and Industry (MCI) is responsible for licensing transport service providers.  After 
obtaining a licence from the MCI, transport service providers must register with the MOC, and registration is only open to Kuwaiti nationals.  
122. The Medium-Term Development Plan has a targ et to add around 1,200 km of paved highways 
and internal roads. The Government proposes to build a metro system and other public transport 
systems to encourage the use of public transport.  A private partner is to be selected to design, build, 
finance, operate, and maintain the metro system.  De tailed policies have not yet been published by the 
authorities. 
123. In 2004, all GCC member governments agreed to build a pan-GCC railway network;   the 
project will cost US$25 billion.  The proposed netw ork (more than 2,000 km) is to connect countries 
in the region, including Iraq.  This network will also connect other means of transport, i.e. air, sea and 
urban metro systems.  The detailed plan of constr uction, operation, and mana gement of the pan-GCC 
rail network has not yet been published by the aut horities.  Foreign investors will be allowed to 
participate. 
(v) Foreign workers, and professional services 
124. Foreigner workers outnumber the Kuwaiti labour force, and therefore have a significant 
impact on the country's external balance.  In  2009, foreign workers’ remittances to their home 
countries amounted to KD 2.8 billion, equivalent to 9.1% of GDP. 
125. As part of Kuwait's overall policy to dive rsify its economy from the hydrocarbon-centred 
industries, Kuwait is investing to expand its servi ces sector and is anticipating higher demand for both 
skilled and unskilled foreign labour. WT/TPR/S/258 Trade Policy Review 
Page 76 
  
126. Companies apply to the Ministry for Labour fo r permits to employ skilled foreign labour.  
The number of permits granted is determined by th e Ministry on the basis of its assessment of the 
economic needs of the company concerned.  Once an  application is approved, entry visas are issued 
that are valid for three months.  After entry, the employer applies for a work permit (Iqama) which is 
valid for five years and is renewable. 
127. The Government's policy objective is to in troduce more competition into the professional 
services sector and to improve its efficiency.  At  the same time, Kuwait has no mutual recognition 
arrangements on professional qualif ications with any country. 
128. Unskilled foreign workers in Kuwait are mainly working in personal and household services.  
In February 2010, a new labour law was passed by  the National Assembly to replace three separate 
labour laws.  Unskilled labour must be sponsored by their prospective employer.  The sponsor applies 
for an entry visa, which is valid for three months, and subsequently for a residence permit, which is 
valid for two or five years depending on the contr act with the employer.  The permit may be extended 
beyond five years.  After three years of residence in Kuwait, a foreign worker may change jobs from 
one sponsor to another, and switch from domestic jobs to other jobs in the private sector.  The labour 
law sets a new minimum wage for workers in the private sector, which does not apply to domestic 
workers. The State of Kuwait WT/TPR/S/258 
 Page 77 
 
 
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