Oil reserves in Kuwait make up 8.5% (as per latest update by OPEC) of the oil reserves in the world and its economy significantly relies on oil-based revenue. The oil prices have recently rebounded following the increase in the global demand for oil. GDP is expected to bounce this year due to stronger oil exports and private consumption as the impact of the crisis is fading and foreign demand improving. That said, uncertainty over new varian ts of the virus and political deadlock over debt financing pose risks to the outlook, The key challenges would still remain dependency on the oil sector and implementation of major structural reforms toward the non-oil sector economy.

‘Kuwait Vision 2035’ aims to transform Kuwait into a world class financial and commercial center, with the private sector leading economic activities, fostering competitiveness, increasing productivity, supported by viable public institutions, adequate infrastructure, legal framework and enabling business environment. 

In line with ‘Vision 2035’, Kuwait has streamlined its regulations to attract foreign capital and is making an intensive effort to diversify into nonhydrocarbon sectors. This is expected to help the country attract greater foreign investment.

Kuwait has acknowledged the changes happening in global and regional markets with regard to taxation and has introduced more streamlined regulatory policies. For instance, becoming stringent about matters related to Common reporting standards (CRS) and Foreign Account Tax Compliance Act (FATCA) reporting, streamlining the process of obtaining no objection letters (NOLs), and recently, giving options to obtain an advance NOL on a ‘case-by-case’ basis.  However, as Kuwaiti companies expand within the Middle East and internationally, they are increasingly facing challenges to adapt to the regulatory policies in each of these new markets.

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