Deepening Bilateral Cooperation: The UAE and Kuwait Strengthen Ties in Various Sectors

The strong and robust UAE-Kuwaiti relations, characterized by the depth of brotherhood, history, and shared heritage, represent an exceptional model in which the two sister countries are keen to enhance cooperation in various fields, including the financial sector.

The countries are linked by a number of agreements and memoranda of understanding that contribute to increasing investment and trade to advanced levels, the latest of which is the agreement signed by the finance ministries of both countries during the 2024 World Government Summit.

It relates to avoiding double taxation on income and capital, preventing tax evasion and avoidance, and is part of the journey towards economic and financial integration and the freedom of movement of capital between the two countries.

One of the most notable memorandums of understanding in the financial sector is the memorandum of cooperation between the Securities and Commodities Authority in both countries.

Additionally, a trilateral cooperation agreement was signed in the field of securities between the Abu Dhabi Securities Exchange, the Kuwait Stock Exchange, and the Kuwait Clearing Company in February 2022.

Statistics from the Securities and Commodities Authority in the UAE indicate that the total number of Kuwaiti shareholders in publicly traded companies open to citizens of the Gulf Cooperation Council countries increased from 3 individuals in 2000 to 40,979 individuals in 2022.

According to statistics compiled by the Federal Competitiveness and Statistics Center, the cumulative number of licenses granted to Kuwaiti citizens reached 5745 licenses in 2022 out of a total of 30508 licenses for economic activities in the country designated for citizens of GCC countries, with an increase of 302 licenses from the year 2021 – 2022.

In line with the efforts of both countries to promote innovation as a working approach, the Ministry of Finance signed a memorandum of understanding in April 2017 with the Sabah Al-Ahmad Center for Talent and Creativity in Kuwait, with the aim of establishing a stimulating environment for innovation in various fields and enabling employees to practice and use innovative methods in institutional work through developing projects and achieving economic partnerships with relevant entities in the field of innovation at local and international levels.

“In order to enhance effective governance practices for listed companies in Kuwait, and raise awareness of its importance among these companies and all state institutions, the Corporate Governance Institute, affiliated with the Dubai International Financial Centre and the Capital Markets Authority of Kuwait, signed a memorandum of cooperation in October 2019.

A memorandum of understanding was also signed in September 2021 to promote investment and enhance cooperation between the Kuwait Direct Investment Promotion Authority and the Abu Dhabi Investment Office, which also signed an agreement in February 2022 with Cofy to benefit from the Innovation Program of the Abu Dhabi Investment Office and establish a Cofy application headquarters in Abu Dhabi city.”

Since the signing of the agreement establishing the “Joint Committee” for bilateral cooperation in 2006 in Kuwait City, the two countries have taken steps that have contributed to strengthening the bilateral relations between the UAE and Kuwait and have launched them towards wide horizons of cooperation and coordination.

According to the UAE Embassy in Kuwait, investments flowing from the UAE to Kuwait amounted to around 837.8 million US dollars (3.07 billion dirhams) in the period from 2016-2020, while the value of Kuwaiti investments flowing into the UAE amounted to 1.745 billion dollars (6.4 billion dirhams).

Financial and insurance activities are considered the most important sectors of Kuwaiti investment in the UAE. Conversely, the financial and banking sector is one of the most important sectors of Emirati investment in Kuwait.

Additionally, the UAE hosts two branches of Kuwaiti commercial banks out of a total of 7 Gulf banks authorized to operate in the country.

Trade between the UAE and Kuwait reached 22.3 billion dirhams in the first half of 2023. Statistics collected from the Federal Authority for Identity, Citizenship, Customs, and Port Security showed that the total trade exchange between the two countries reached 44.8 billion dirhams in 2023, compared to 44.1 billion dirhams in 2022, representing a 15% growth from 2021.

WAM