I. Economic data

A. Macro-economic data

- General data[1]

Population 2023: 4,895,000 inhabitants
Surface area: 17,818 km2
Density: 271 inhabitants/km2
GDP (nominal) 2022: $183.6bn
GDP/capita 2022: $41,079.5[2]
GDP (PPP) 2022: $249.09 bn[3]
GDP (PPP)/capita 2022: $38,123
2022 growth rate: 8.2%
GNI/capita (PPP) 2022: $67,200[4]
Literacy rate: 96.5%.
HDI (2021): 0.831 (50th)[5]
Life expectancy 2021: 79 years[6]

- Policy[7]
 
Kuwait became independent on February 22, 1961, and has been a constitutional monarchy ruled by Emir Nawaf Al Jaber Sabah since 2020. Kuwait has had a National Assembly since 1963, making it the oldest parliament in the Arab world after Lebanon and Tunisia. The parliament is made up of 50 elected deputies and sitting ministers, who also have the right to vote. The most important functions of parliament are generally allocated to members of the royal family.
 
Kuwait differs from other Gulf Arab monarchies in having relatively free elections and an active legislature, although the Emir retains the final say on most affairs of State. Moreover, political parties are banned, making it difficult to form an opposition. In 2012, the opposition boycotted the legislature in protest at controversial changes made to the electoral system by the former Emir. The 2016 elections marked the return of a diverse opposition to Parliament, including Islamists, tribal figures and leftist secularists.
 
However, the country is still often shaken by political crises linked to corruption. In 2019, the government was forced to resign after revelations of embezzlement. These internal struggles illustrate the opposition's desire for an elected Cabinet, especially as Cabinet ministers are part of Parliament, which strengthens the government's legislative power .
 
- Economic development[8]
 
Internationally, Kuwait has been a member of the UN (since 1963), the International Labor Organization (since 1961), and the World Trade Organization (WTO) since 1963.
 
Kuwait's economy is largely dominated by the oil industry, with a well-established infrastructure for exporting crude oil and refined products. Kuwait's geographical and historical location, at the tip of the Arabian Gulf and at the crossroads of the main trade routes linking Central Asia to Asia Minor and Europe, explains the preponderance of oil exports in its economy.
 
In 1953, Kuwait was the first country to establish a sovereign wealth fund, accumulating considerable reserves which had reached around $769 billion at the end of 2022.
 
In 2017, the country unveiled "Vision Kuwait 2035", a strategic plan for the integrated development of major projects in the north of the country, including the construction of a modern city in the Northern economic zone and the transformation of five islands into free zones and tourist destinations.
 
The Covid-19 pandemic had a major impact on Kuwait's economy. Nevertheless, the country did not adopt legislative measures to alleviate liquidity problems, leading to a budget deficit of $46 billion in 2020.
 
However, due to its early economic development and privileged position, Kuwait plays a crucial diplomatic role as a mediator in the region. As a founding member of the Cooperation Council for the Arab States of the Gulf (GCC), Kuwait played a significant role in resolving the Gulf crisis from June 2017 to January 2021.
 
- Resources[9]
 
Kuwait distinguished itself as the first Gulf Arab country to exploit (1938), export (1946) and nationalize (1953) its oil resources. With proven reserves in excess of 100 billion barrels, Kuwait has the world's third largest oil reserves, accounting for 8 to 10% of global reserves. It operates the world's second-largest field (Burgan) and has a production capacity of around three million barrels a day, making it the world's seventh-largest exporter. In December 2022, production stood at 2.649 million barrels per day, and the country aims to increase this to 4.75 million barrels per day by 2040.
 
Oil accounts for almost 90% of its exports and contributed around 43% of its GDP in 2022. Notably, 90% of Kuwait's government revenue comes from oil. However, due to lower oil prices, Kuwait's GDP fell by 2% in 2017.
 
- Population
 
In 2023, around 76% of Kuwait's estimated population of 4.895 million lived in the capital, Kuwait, which has a population of 3.298 million. In addition, the South-East of the country has been uninhabitable since 1991 due to oil well fires caused by Iraq's invasion of Kuwait[10].
 
The five most populous cities in Kuwait are Al Ahmadi (637,411), Allawalli (164,212), Al Farwänïyah (86,525), Al Fahähïl (68,290) and Kuwait City (60,064)[11].
 
Kuwait was the first country to observe a majority of expatriates, reaching 3.3 million, mainly of Arab and South Asian origin, exceeding the national population of 1.6 million by the late 1960s[12]. Kuwaiti society is renowned for its regional openness, with almost 70% of the population from immigrant backgrounds and non-Kuwaiti nationality in 2020, according to the Kuwait Central Bureau of Statistics[13]. The large expatriate population results from the discovery of oil in 1938 and its export in 1946. Indeed, at that time, the majority of the Kuwaiti population was young and not working, which limited their involvement in the development of the oil trade, so the country turned to immigration instead.[14]
 
The main countries of origin of migrants are India, Egypt, Bangladesh, Pakistan and the Philippines.
 
- Foreign investment[15]
 
At regional level, Kuwait is a member of GAFTA (the Grain and Feed Trade Association, the large Arab free trade zone) and the Organization of Petroleum Exporting Countries (OPEC).
 
In 2021, Kuwait's trade reached $104.6 billion, up 50% on the previous year. Exports totaled $71.4 billion, imports $33.179 billion, generating a trade surplus of $38.2 billion, or 30% of GDP. China remains the main trading partner, followed by the United States, the United Arab Emirates, Japan and Saudi Arabia[16].
 
Kuwaiti foreign direct investment dates back to the 1950s, but really took off in the late 2000s. The Kuwait Investment Authority (KIA), the world's first sovereign wealth fund created in 1953, manages a portfolio of assets estimated at around $800 billion, mainly located abroad. Kuwait is a net provider of foreign direct investment, holding a stock of $34.3 billion abroad in 2020. The Kuwaiti government has undertaken reforms to stimulate foreign investment, leading to a notable improvement in the World Bank's "Ease of Doing Business" ranking in 2020. In this respect, Kuwait was among the 10 countries in 2020 that had made the most progress, ranked 83rd[17] overall.
 
B. Economic data specific to franchising
 
- Historical background
 
The franchise business model is particularly popular in the Kuwaiti market, especially American franchises in this prosperous country. A growing number of diverse businesses are adopting the franchise model. Today, most products or services can be distributed through a franchise network in Kuwait[18].
 
- Institution
 
At the time of writing, Kuwait does not have an association specifically devoted to the franchising sector.
 
- Trade shows
 
Every year, the US Embassy in Kuwait organizes various trade events targeting international buyers. In 2018, the Commercial Section recruited a delegation of Kuwaiti purchasers to attend the International Franchise expo. This opportunity enabled them to explore new concepts and meet American franchisors interested in the local market[19].
 
The Middle East Franchise Fair (MEFF), as the first regional and travelling franchise fair in the Middle East, will take place from September 12 to 14, 2024 at the Doha Exhibition and Convention Centre. The event will be held in Kuwait in 2025[20]. The show is organized by Silvertrade, working with events company Al Maraya Public Relations[21].
 
- Statistics[22]
 
There are no official statistics for the franchise sector in Kuwait.
 
The most popular franchises in Kuwait are American food franchises (around 75 active franchises at present) and retail franchises (in this competitive market, American and European brands occupy a dominant position).
 
To be successful in Kuwait, a franchise needs to show a certain flexibility in its concept in order to tailor itself to local culture and preferences.
 
- Contract content
 
The cost of a franchise varies from one business sector to another. For example, the Eggspectation restaurant franchise requires a total investment of $1,000,000. On the other hand, for the One Touch franchise (in the digital sector), the total investment needed is $15,000[23].
 
- Economic impact
 
No precise statistics are available for the Kuwait market alone. However, in the Middle East and North Africa region, the franchise sector is estimated at $30 billion[24].
 
- International
 
Kuwait is home to a large number of international franchises. Franchise networks such as Starbucks, H&M, American Eagle Outfitters, The Cheesecake Factory, The Body Shop, MAC and Victoria's Secret are all present in Kuwait[25]. In addition, more than 50 French companies are present in Kuwait through franchise agreements, including Carrefour, Lactalis, Michelin, Renault, l'Oréal, LVMH, Dior and Sephora[26]. There are also major international fast-food franchises such as Burger King, McDonald's, KFC and Domino's Pizza.
 
On a regional level, it is estimated that international brands account for 80% of all retail sales in the member countries of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates)[27].
 
II. Legal information
 
A. Legal information directly related to franchising
 
- Applicable legislation

Kuwait recently established the Agency Act, Law No. 13 of 2016, which aims to regulate the activities of commercial agencies in the country. Although franchises are generally not categorized as agencies, Kuwaiti legislation makes no distinction between an agent and a franchisee, treating them as the same in practice.
 
In Kuwait, franchise agreements are mainly governed by two laws, the aforementioned 2016 Law and Law No. 68 of 1980 on the Regulation of Business and Commerce, commonly referred to as the "Commercial Law".
 
These rules are designed to protect the local franchisee from unjustified termination by the foreign franchisor. In order for the provisions governing commercial agencies to be applicable, registration with a local government authority, the Ministry of Commerce and Industry, is generally required.
 
To do business in Kuwait, you need to have a local branch or a duly registered local commercial agent. This restrictive formality means foreign franchisors must opt for a commercial agency as a means of accessing the market. As in other Gulf jurisdictions, once registered, a commercial agent benefits from additional protection that goes beyond the expressly specified contractual provisions, including the right to compensation in the event of termination of the contract and issues linked to non-renewal of the agreement[28].
 
- Pre-contractual information
 
There is no legal obligation for the franchisor to provide pre-contractual information to the prospective franchisee prior to signing the contract.
 
- Contract performance
 
Franchise agreements are subject to the provisions of Commercial Law No. 68 of 1980 and Civil Code No. 67 of 1980. The Civil Code sets out the general rules of law in the Kuwaiti legal system. Section 1 of the Commercial Law specifies that its provisions apply to all commercial transactions, even if the party involved is not a trader.
 
Under the terms of the Kuwaiti Civil Code, fraud is one of the grounds for annulling a contract at the request of the injured party. In this case, the affected party has the choice of either rescinding the contract or requiring performance.
 
- Jurisdiction and applicable law
 
Kuwait joined the New York Convention on Arbitration[29] on April 28, 1978, which facilitates the recognition and enforcement of foreign arbitral awards.
 
While the Agency Act specifies that Kuwaiti law applies to franchise agreements, Kuwaiti law generally recognizes the concept of freedom of contract. Thus, the parties are free to choose the law applicable to their franchise agreement and the competent jurisdiction in the event of a dispute concerning the latter[30].
 
- Trademarks
 
Trademark law is governed by the commercial law[31] in Sections 61 to 95. It includes a definition of an unregistrable trademark, the management of the trademark register, registration procedures, oppositions, trademark infringements, the competent court, and the fees specified for trademark extracts.
 
A "Trademarks Register", in which all trademarks are recorded together with the names and addresses of their owners and descriptions of their assets, as well as transmissions, transfers or assignments, is set up within the relevant ministry. The public has a right to access this Register and can obtain certified copies of entries made, in return for payment of an access fee[32].
 
Once registered, trademarks are protected for 10 years from the date of filing. Thereafter, protection is renewable for a further period[33].

Kuwait has ratified the Paris Convention, which states that each contracting State shall grant the same protection to nationals of other contracting States as it does to its own nationals in respect of intellectual property.

At the time of writing, Kuwait is not a member of the Madrid Agreement. Consequently, trademarks cannot be registered by way of an international trademark.

In Kuwait, trademark applications are only handled nationally. The trademark department examines applications before publication, and allows multi-class trademark registrations, but it is customary to accept a registration application for only one class per mark, with a low acceptance rate for multiple classes. If the trademark is not used for five consecutive years, it may be subject to cancellation. To develop a franchise in this country, it is advisable to cover "Business assistance relating to franchising" and "retail services", both of which are accepted under class 35 by the trademark office. Recording a franchising agreement is not explicitly compulsory by law, but it is strongly recommended for legal protection, third-party recognition, enforcement, and transparency. Agreements must be legalized, notarized, and accompanied by a certified Arabic translation to be recognized in Kuwait.
 
B. Peripheral legal data
 
- Competition law[34]
 
The Competition Protection Agency (CPA) is the competent authority for the enforcement of competition law in Kuwait. Its aim is to protect and promote competition in the Kuwaiti economy by enforcing a competition framework that creates a favorable environment to encourage a dynamic economy with competitive markets and innovative companies offering better deals to consumers.
 
The CPA was created in 2012 by Law no. 10 of 2007 on the protection of competition. It is an administrative body reporting to the Ministry of Trade and Industry.
 
Its responsibilities are set out in the aforementioned law: investigating suspected anti-competitive behavior, carrying out market studies and research on markets where competition issues might exist, authorizing, either with or without conditions, [or prohibiting] mergers and acquisitions of which it is notified, granting or refusing requests for waivers from the law, implementing policies and regulations to protect and promote competition in the marketplace, proposing laws and regulations related to the protection of competition and advising on projects submitted to it, implementing measures to raise awareness of the provisions of the Act and the benefits of competition, preparing reports on its activities, including an annual report for the Council of Ministers.
 
The stated aim of Kuwait's competition law is to ensure free economic activity for all without restricting, preventing or hindering competition. The law prohibits anti-competitive practices such as abuse of dominant positions and anti-competitive mergers.
 
The CPA's functions revolve around four main pillars:

- investigating possible anti-competitive behavior on the part of companies. If a company's behavior proves to be anticompetitive, the CPA can require the offending party to cease its anticompetitive activity and impose fines;
 
- assessing certain categories of potentially anti-competitive behavior, which may qualify for exemption from the general prohibitions of competition law;
 
- monitoring mergers and acquisitions to ensure that such operations do not lead to a reduction in effective competition in the markets concerned;
 
- advocating competition in markets through studies, opinions on legal texts and proposals, as well as raising awareness of the benefits of competition among political decision-makers, the business community and the general public.
 
- Personal data
 
Established in 2014, the Communications and Information Technology Regulatory Authority (CITRA) is Kuwait's authority tasked with monitoring and supervising the telecommunications field. Its role is to ensure users and service providers are protected, while regulating telecommunications network services in the country. In doing so, CITRA is committed to ensuring transparency, equality and promoting fair competition[35].
 
Personal data protection law is governed by Regulation No. 42 of 2021 on data privacy protection[36].
 
This regulation defines personal data as data relevant to a natural or legal person whose identity is disclosed or may be identified through such data directly using the person's name, identity, financial, health, racial or religious information or any information enabling the identification of the person's geographical location or personal tracking systems, personal fingerprints or genetic fingerprints, or by a combination of available data and any other data or audio file including the person's voice, and any other identifier allowing physical or online contact with the person who will be designated as the owner of the data.
 
Section 4 specifies that personal data may only be processed if the data controller informs the data subject of the conditions of processing and obtains his/her consent. Section 6 sets out all the conditions for data processing.
 
The data subject is entitled to object to the processing if it is not necessary to achieve the purpose pursued by the data controller.
 
- Special provisions for foreign investments[37]
 
Investment in Kuwait by foreign individuals and companies (i.e., non-GCC members) is mainly governed by two laws. Law No. 74 of 1979, the Real Estate Law, which prohibits foreigners from acquiring ownership of real estate located in Kuwait, and Law No. 68 of 1980, the Commercial Law, which prohibits foreigners from participating in a commercial venture in Kuwait, unless they do so through a Kuwaiti agent or a Kuwaiti company with at least 51% of its capital held by GCC nationals.
 
Income generated by foreign entities through their investments in Kuwait is subject to a 15% annual tax. Customs duties also apply to the import of goods, machinery and equipment.
 
However, in accordance with the Foreign Direct Investment Act[38], the Kuwait Direct Investment Promotion Authority (KDIPA) is empowered to grant foreign investment licenses allowing foreign individuals or entities to hold up to 100% of the capital of a company established and registered in Kuwait. The KDIPA has discretionary power to decide on the granting of such licenses. The same law also authorizes the KDIPA to grant tax and duty exemptions for a maximum period of ten years.
 
Main websites
 
 -Ministry of Trade and Industry website: https://moci.gov.kw/en/;
- Competition: https://cpa.gov.kw/en/Pages/default.aspx;
 -Intellectual property: https://www.trade.gov/market-intelligence/kuwait-ipr;
- World Bank data: https://donnees.banquemondiale.org/


[1] Unless otherwise stated, the data below are taken from https://www.tresor.economie.gouv.fr/Pays/KW/presentation-pays#:~:text=With%20a%20GDP%20of%20184,i%C3%A8th%20rank%20world%20in%202022.
[2] https://donnees.banquemondiale.org/country/KW
[3] https://donnees.banquemondiale.org/indicator/NY.GDP.MKTP.PP.CD?locations=KW
[4] https://donnees.banquemondiale.org/indicator/NY.GNP.PCAP.PP.CD?locations=KW
[5] https://fr.countryeconomy.com/pays/koweit
[6] https://donnees.banquemondiale.org/pays/koweit
[7] https://fr.wikipedia.org/wiki/Politique_au_Kowe%C3%AFt
[8]https://www.tresor.economie.gouv.fr/Pays/KW/presentation-pays#:~:text=With%20a%20GDP%20of%20184,i%C3%A8me%20rang%20world%20in%202022.
https://fr.wikipedia.org/wiki/%C3%89conomie_du_Kowe%C3%AFt
[9]https://www.tresor.economie.gouv.fr/Pays/KW/presentation-pays#:~:text=With%20a%20GDP%20of%20184,i%C3%A8me%20rang%20world%20in%202022.
https://fr.wikipedia.org/wiki/%C3%89conomie_du_Kowe%C3%AFt
[10] https://fr.wikipedia.org/wiki/Kowe%C3%AFt#:~:text=En%202016%2C%20la%20population%20du,habitants%20au%20km%C2%B2%20(FAO).
[11] https://fr.ripleybelieves.com/biggest-cities-in-kuwait-5862
[12]https://www.tresor.economie.gouv.fr/Pays/KW/presentation-pays#:~:text=With%20a%20GDP%20of%20184,i%C3%A8me%20rang%20world%20in%202022.
[13] https://www.un.org/development/desa/pd/content/international-migrant-stock
[14] https://fr.wikipedia.org/wiki/D%C3%A9mographie_du_Kowe%C3%AFt#cite_note-11
[15] Unless otherwise stated, the data below is taken from https://www.tresor.economie.gouv.fr/Pays/KW/indicateurs-et-conjoncture#:~:text=Le%20premier%20partenaire%20commercial%20du,(534M%20EUR)%20du%20pays.
[16] https://www.tresor.economie.gouv.fr/PagesInternationales/Pages/f833da09-daee-4434-83c5-91b566140dc4/files/b0e3fb21-9056-41a1-be9b-c478f260b4e4
[17]https://www.banquemondiale.org/fr/news/feature/2019/10/24/doing-business-2020-sustaining-the-pace-of-reforms#:~:text=According%20to%C3%A9study%2C%20the%20dix,G%C3%A9orgie%20(83%2C7)%2C
[18] https://www.privacyshield.gov/ps/article?id=Kuwait-Franchise-Sector
[19] https://www.privacyshield.gov/ps/article?id=Kuwait-Franchise-Sector
[20]https://franchiseassociation.org.nz/international-franchise-events/#:~:text=The%20first%20fair%20will%20take,size%2C%20and%20emerging%20franchise%20brands.
[21] https://tradefest.io/fr/event/middle-east-franchise-fair
[22] https://www.privacyshield.gov/ps/article?id=Kuwait-Franchise-Sector
[23] https://www.kuwaitfranchiseopportunities.com/home/
[24] https://www.franchisedirectmena.com/franchise-articles/franchising-in-the-mena-region-an-overview/
[25] https://www.alshaya.com/en/
[26]https://www.tresor.economie.gouv.fr/PagesInternationales/Pages/f6b4f00b-83a9-4c71-8230-c78d2bf53794/files/07585c62-fded-4698-b3ac-ac283de6f2d7
[27] https://www.franchisedirectmena.com/franchise-articles/franchising-in-the-mena-region-an-overview/
[28] https://www.dentons.com/en/insights/articles/2022/august/18/hidden-franchise-laws
[29] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958
[30]https://www.tamimi.com/wp-content/uploads/2022/04/Law-Update-Article-on-Distribution-Agency-and-Franchise-Final-Version.pdf
[31] Law n°68/1980
[32] Section 63 of law n°68/1980
[33] Section 77 of law n°68/1980
[34] https://cpa.gov.kw/en/pages/about.aspx
[35] https://citra.gov.kw/sites/en/Pages/Home.aspx
[36] https://www.citra.gov.kw/sites/en/LegalReferences/Data_Privacy_Protection_Regulation.pdf
[37] https://www.tamimi.com/law-update-articles/foreign-investment-in-kuwait/
[38] https://investmentpolicy.unctad.org/investment-laws/laws/104/kuwait-investment-law