Improving Kuwait’s investment climate

Kuwait

Faisal A. Alfahad, founder and managing partner of Alfahad & Partners, talks to The Energy Year about the state of Kuwait’s investment climate and the evolution of the country’s IPO market. Alfahad & Partners is a law firm that aims to provide advisory and legal services to companies in the financial and business sectors.

What is your assessment of Kuwait’s investment climate?
Kuwait has improved significantly in terms of its attractiveness to foreign companies. Its taxation is very competitive compared to GCC countries. In addition, Kuwait leads the way in the GCC area in terms of its legal system, which is well-established, and its adherence to the rule of law. Because of this, international companies feel comfortable doing business here, as they know they can always recourse to the courts to protect their rights.

How has the Kuwait IPO market evolved over the last few years?
With the market infrastructure and stock market improvements following Boursa Kuwait’s privatisation, the IPO market in Kuwait has witnessed a period of growth. Under the guidance of the Capital Markets Authority (CMA), many private companies, particularly family businesses, are undergoing IPOs. The family-owned Alghanim Industries, which is weighing an IPO, is a great example of success, and we believe more family companies will follow suit. As a law firm, we encourage family businesses to embark on this journey. Several studies show that family-owned companies are collapsing and faltering as they reach the third generation due to business succession problems and divergent views. Being listed in the market comes as a solution: family members can liquidate their shares if they are not interested in the company.
Another dynamic area in Kuwait is M&As, especially in the financial and banking sector. We participated in the Ahli United Bank (AUB) acquisition by Kuwait Finance House (KFH), and we believe more M&As will occur in this sector.

What is the competitive edge of Alfahad & Partners over its competitors?
We have extensive experience in the public sector because we collaborated with the Central Bank of Kuwait (CBK) and the CMA. We have participated in setting up all IPOs and M&A-related regulations and procedures, which characterise the current Kuwait market and contributed to milestone transactions, such as the Boursa Kuwait IPO and the KFH and AUB merger. That gives us a competitive advantage in assisting businesses to navigate the legal intricacies of the local market.

What is the firm’s vision for the future?
Our key objective is to be the leading firm in the market. Our knowledge, experience and client satisfaction prove that we are well positioned to be at the top of the market. The goal will be to provide foreign companies wanting to enter Kuwait with the best services possible. To this end, we are also collaborating with the government, offering insights on making Kuwait more attractive to foreign investors.

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