Kuwait is a small country in the Persian Gulf region, with almost 9% of the world's known oil reserves. The country's economy has been dominated by oil, which is responsible for almost 50% of Kuwait's GPD, 95% of export revenues and 80% of government income. Political power remains concentrated in the hands of the Emir and the ruling Al-Sabah family, and corruption continues to pose problems for doing business. Kuwait has demonstrated an increasing openness to foreign investment and has passed several reforms in order to attract greater inflows of foreign investment, including a series of investment incentives and corporate tax reductions. The reform agenda has also included attempts to tackle corruption and to increase transparency and good governance, advocating the establishment of an independence oversight and inspection body, the strengthening of the anti-corruption legal framework and increased cooperation with civil society.

Positive developments in relation to corruption and investment:

• Kuwait ratified the United Nation Convention against Corruption in 2007 and adopted a National Anti-Corruption Strategy in 2008.
• The National Assembly has become much more active in the fight against corruption and has often questioned key ministers on public spending and contracting.
• In order to attract more foreign investment, the government reduced the tax rate from 55% to 15% for foreign companies in 2007. Furthermore, the new Direct Foreign Capital Investment Law grants new foreign investors up to 10 years of tax exemption.
• In March 2011, the govenment accepted draft laws to set up a national anti-corruption authority to investigate graft in the public sector.

Risks of corruption:

• Kuwait's bureaucracy is often inefficient, non-transparent, and can be biased in favour of domestic interests.
• While Kuwait's public procurement process is cumbersome and susceptible to corruption, and many investigations and trials involving government officials accused of wrongdoing in the procurement process are ongoing, no one has been convicted for bribery since the end of the Gulf War.
• Kuwait neither has an independent anti-corruption agency, nor laws on whistleblower protection, anti-corruption, financial disclosure, conflicts of interests or the right to examine information. These shortcomings limit the capacity to combat corruption in the country.