The Kuwaiti market is distinctive in nature. It is generally based on a free economy; however, the Kuwaiti Government has created a form of a luxury-based socialism since the declaration of independence from the United Kingdom in 1961. This trend had its effect on the rest of the GCC region in one way or another.
It was noble in nature; the Kuwaiti Government mainly intended to share its abundant petroleum natural resources with its citizens. And yet, the winds do not blow as ships wish. The government’s system has shown many negative side effects in the five decades since the declaration of independence.
Offshore investing is a viable income sources for many countries, but it cannot be a substitute for investing monies locally
Thanks to its economic strategy, the government has become the absolute and principal employer, giving rise to masked unemployment figures. The economy of the country has grown heavily dependent on returns from petroleum exportation, which form almost 96 percent of its income. This of course has led to the diminishing of the private sector’s role, which is only really focused on the public services sector. As a counter measure, the government took a decision to make offshore reinvestments of surplus petroleum revenues. This measure achieved revenues almost equal to those of petroleum exportation during the ’80s.
However, this achievement was short lived; the invasion of Kuwait took place in 1990, followed by several global financial crises, leading to a significant market value loss in such offshore investments. Offshore investing is a viable income sources for many countries, but it cannot be a substitute for investing monies locally and probing other options to vary income sources.
Efforts to legislate
The oil inflation witnessed by the global market, along with the steady rise of oil prices, will not last for long. Kuwait will face a massive budget deficit if oil prices drop below $75 a barrel, according to some estimates. This fact encouraged the government to try finding other solid alternatives. The Kuwaiti Government is currently attempting to vary its income sources, increase the role of the private sector in the economy, and lessen the excessive luxury aspects in the country. Yet all these attempts require patience, determination, and long-term planning.
The government has put in place certain legislations to try to revive the role of the private sector in the economy, but so many amendments have been made to them that they scarcely retain their original purpose. That said, we are now witnessing serious attempts to realign the economy and modify the basic infrastructure of all public facilities; a budget for which has been set at almost $135bn. This of course meant that the government had to revise the whole legal framework of the country, especially those economic legislations related to developmental aspects. The government also understood the necessity to involve the private sector in the process of creating and varying wealth resources.
Eventually, Law No.7 of 2008 has, along with its executive bylaw on the regulation of build, operate, and transfer (BOT) operations, brought about a law that is known as the Public-Private Partnership Law. Efforts were made to establish the Technical Bureau, whose job it is to focus on studying developmental projects and initiatives. Purviews and resolutions were established to regulate offset operations, leading to the establishment of the National Offset Company (NOC), which is mainly dedicated to implementing the National Offset Programme and try to avail the technologies and expertise of foreign investors implementing major projects in participation with the Kuwaiti Government.
Labour Law No.6 of 2010 was issued based on the concept of taking a comprehensive developmental view, which will provide a form of guarantee to encourage both foreign and Kuwaiti employers and employees. Labour Law No.7 was also issued, relating to the establishment of the stock exchange authority and regulation of stock trading. A total revision was made to legislations pertaining to the operation of legal entities and affiliated entities (companies and their types), all in order to avert the negativities of the old Commercial Companies Law. Ultimately the government issued the new Law No.25 in 2012, which was later amended by virtue of Law No.97 in 2013 along with the newly issued executive bylaw.
To complete the whole framework, the law regarding the encouraging of foreign investment was issued on June 16 2013, as well as Commercial Licenses Law No.111 in 2013, along with its executive bylaw, Ministerial Resolution No.411 on September 3 2013. In the coming period, Kuwait will witness a drastic change in the developmental sector for different fields, which will definitely be accompanied by the activation of new legislations to ensure the country benefits from foreign expertise, and can attract foreign investors.
Al-Twaijri Law Firm: A brief history
Since the company was established, Al-Twaijri Law Firm (TLF) has been striving to participate as much as possible in developing Kuwait’s legal system. This was done by publishing several studies in review of legislations pending promulgation. We also published several specialised books in certain fields of the law. What follows is a brief history of our firm.
The company was brought into the legal field in the late ’80s by its founder Mohammad Al-Twaijri. A legal office was established in Kuwait City after Al-Twaijri left his position as counsellor of a major international oil company to start his own legal business. At that time, the firm focused mainly on enforcing court orders and litigations relating to debt recovery. Eventually, we were able to gain the trust of our clients and began representing several banks and local financial incorporations.
In 1991, TLF was joined by a number of prominent legal figures to supervise and train its workforce. These legal figures cam from various fields, both local and international. As a result, our potential and experience grew larger and stronger in legal claims and local disputes.
One of the major development aspects of TLF’s history was when it supervised several transactions made in different countries, provided assistance for local and international businesses to join joint ventures, and provided legal assistance to foreign companies doing their business successfully in Kuwait and in GCC countries.
Today, TLF employs over 150 personnel who have the appropriate experience and legal skills to deal with any legal challenges
During the mid ’90s, our team grew to include over 50 personnel engaged in different specialised fields of law. By that time, our firm had its own official trade name, TLF. The 21st century saw TLF acquire its first ISO 9001:2000 certification for management-standard compliance, being the first law firm in Kuwait and of the first five law firms in the Middle East to acquire such certification. Today, TLF employs over 150 personnel who have the appropriate experience and legal skills to deal with any legal challenges. We now provide services in almost all legal fields.
We take pride in the fact that our firm has been chosen as one of the leading law firms in Kuwait and indeed the GCC region. This ranking was given by several international legal ranking firms such as Chambers & Partners, Legal-500, IFLR Euromoney, Martindale, and Hildebrandt.
The growth of TLF’s business and activities in the legal field eventually gave rise to the need to expand; thus, a branch office was established in Bahrain seven years ago. This made TLF the first law firm in Kuwait to have a branch in Bahrain without any Bahraini associates.
The continuous development of our legal services has seen TLF attract an elite group of clients, including several multinational companies and a wide group of local and international companies.
TLF’s business faced a major development in 2008 following the onset of the global financial crisis. Several companies were badly impacted, thus forcing us to dedicate a substantial part of our legal efforts towards the financial crisis and to help certain clients in the process or restructuring and incorporation or mergers.
During the last three decades, our firm has grown substantially by diverting and dedicating the skills and experience of its workforce towards serving clients effectively and comprehensively.
To keep up with the steady pace of globalisation, our firm has evolved to provide strategic legal services to local and international clients. We have assisted in the process of developing the concept of legal establishments in the GCC, and ultimately compete with other major international firms in Europe and the US.
Looking forward, TLF has taken practical steps towards establishing new branches in Saudi Arabia and Egypt; a step that will hopefully be fully achieved in the near future once we overcome certain administrative obstacles. These new offices will focus primarily on regional transactions taking place between hosting countries.
The GCC region, and the Arab region generally, are a major exporting area and a beehive for trading and offshore and inshore investments. TLF is planning to establish a legal complex for its legal activities in Kuwait; a complex that will include and cover all legal fields such as arbitration, conciliation, and other local and international legal services.
