Kuwait tightens tender rules to favour local SMEs

Foreigners who win public projects in Kuwait must award at least 30 percent of the contract works to local contractors in line with an updated law intended to stimulate domestic business and upgrade the performance of national companies.

The updated tenders law, following on from the initial legislation in 2016 and published in the official gazette and Kuwait’s media on Sunday, gives priority to small and medium enterprise (SME) contractors who will enjoy a compulsory minimum 10 percent share of projects awarded to foreign companies.

“The concerned authorities should monitor the foreign contractor’s compliance with the requirement to subcontract at least 30 percent of the awarded contract works to local contractors registered in the country,” said a circular for the new law.

Of the 30 percent, at least 10 percent of that must be allocated to small contractors, it added.

Although previous laws permitted main foreign contractors to engage in subcontracting, the legislation was not fully enforced, according to Ali Al-Anzi, head of Kuwait’s Al-Manakh economic center.

“The new law gives authorities more teeth to enforce the 30 percent requirement and also it focuses on SMEs with the aim of stimulating this sector. I think this law will give a big push to the local contracting market, develop national skills and resources and stimulate SME businesses,” Anzi said.

Kuwait has embarked on major projects covering ports, airport expansions, roads and development of its hydrocarbon sector.

Capital spending, involving new projects and other investments, was projected at around KD3.1 billion ($10.3 billion) in the 2026-2027 budget, nearly 12 percent of total expenditure, Kuwait’s finance ministry said early this year.

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