Law No. 98 of 2013 on the National Fund for the Care and Development of Small and Medium Enterprises

Law No. 98 of 2013
on the National Fund for the Care and Development of Small and Medium Enterprises

Article 1

In applying the provisions of this Law, the following words and expressions shall have the meanings set out opposite each of them:
Fund: the National Fund for the Care and Development of Small and Medium Enterprises.
Competent Minister: the Minister designated by the Council of Ministers.
Board of Directors: the Board of Directors of the Fund.
Executive Regulations: the Executive Regulations of this Law.
Director General: the Director General of the Fund.
Project: any project benefiting from one of the programmes or services provided by the Fund.
Small and Medium Enterprise: a small or medium-sized project that contributes directly to developing and diversifying the sources of national income, meeting the needs of the local or foreign market and providing job opportunities for citizens. The Executive Regulations shall set the criteria for classifying a project as small or medium-sized.
Industrial Activity: the process of converting raw or primary materials into finished, semi-finished or intermediate products, or converting manufactured or intermediate products into finished products.
Agricultural Activity: an activity that includes agricultural land reclamation, flower production, the development of livestock, fisheries and apiaries, and related activities, with the continuation of the activities financed by the Agricultural Portfolio established by Decree-Law No. 48 of 1988.
Craft Activity: any activity that uses manual or vocational skills and in which machinery is used to a simple extent.
Service Activity: any activity in maintenance work or in technical, professional or intellectual services.
Supporting Institutions: institutions that provide training, scientific, technical or financial support, such as universities, research centres, the Kuwait Foundation for the Advancement of Sciences or financial institutions.
Electronic Activity: any information technology activity in which electronic means are used, including audio information, voice and visual data, and the production, storage, conversion, processing, retrieval, extraction or making available to others of information, and all projects related to the World Wide Web and the Internet.
Project Incubator: an entity that provides services to owners of small and medium enterprises and to initiators in accordance with the provisions of this Law, by providing a suitable working environment for them during the first years of the project, as determined by the Executive Regulations, with the aim of increasing their chances of success and growth.
Initiative: an integrated study submitted by the initiator applying for the project, or by the Fund, based on an idea that involves implementing one of the projects referred to in this Law, together with its economic, environmental and technical feasibility study.
* Amended by Law No. 2 of 2014 (definition of Agricultural Activity; Kuwait Al-Youm, Issue No. 1169, 2 February 2014), and then by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Chapter One
Establishment of the Fund

Article 2

A fund shall be established under the name (the National Fund for the Care and Development of Small and Medium Enterprises), which shall be a public institution with an independent legal personality and shall be attached to the Competent Minister.

Article 3

The Fund aims to care for and develop small and medium enterprises, to enhance the capabilities of their owners to carry them out, and to plan, coordinate and promote their spread, and shall work to achieve the following:
1- Developing the national economy by following policies to create job opportunities and diversify sources of income, in order to ease the financial burdens on the State’s general budget.
2- Spreading awareness of the advantages of private enterprise, and coordinating and promoting initiatives for small and medium enterprises.
3- Providing information and technical support.
4- Providing economic and environmental feasibility studies for projects and evaluating them, and creating profitable and innovative opportunities by providing continuous information.
5- Developing and training human resources through the Supporting Institutions.
6- Financing projects in accordance with the provisions of this Law.
7- Increasing the competitive capabilities of the project, all of the foregoing with a commitment to achieving the maximum possible support for the project and the minimum interference in its activity.
8- Supporting local products and encouraging the creation of Kuwaiti intellectual property.

Article 4

A capital of (two billion Kuwaiti Dinars) shall be allocated to the Fund to achieve the objectives of this Law.
The funds necessary for this Fund shall be taken from the State’s General Reserve, and the Minister of Finance shall be authorised to pay them in instalments in the manner agreed between the Minister of Finance and the Competent Minister, taking into account the invested financial surpluses. Any amendment to the capital of the Fund shall be made by decree.
The Board of Directors shall set the terms and rules for managing the Fund and the rules for financing projects, in a manner consistent with the instructions of the Central Bank of Kuwait and achieving the objectives of this Law.
The Board of Directors may, in its annual plan, decide to invest surplus amounts in short-term, low-risk bank deposits, so as to achieve self-financing for the Fund in the long term.
The net profits of the Fund shall revert to the Kuwait Investment Authority after deducting 10% as a general reserve. This percentage may be amended by a resolution of the Council of Ministers issued on the recommendation of the Competent Minister, as proposed by the Board of Directors. The Kuwait Investment Authority shall cover the losses of the Fund, if any.

Article 5

The Director General shall set an annual plan for the number of projects targeted for annual support, classified according to their types of activity, and shall submit a report thereon stating their number, their types of activity and the number of Kuwaitis working in them, for presentation to the Board of Directors, which shall approve it before its implementation. Eligibility to benefit from the Fund shall be subject to the following conditions:
1- The project owner shall be a Kuwaiti citizen not less than 21 years of age (Gregorian calendar).
2- No final judgment shall have been issued against him or against any of the partners convicting him of a felony or of a crime involving dishonour or breach of trust, unless he has been rehabilitated.
3- The owner shall devote himself fully to managing the project.
If he is an employee, he shall be granted, at his request, a leave of absence for this purpose not exceeding three years, and in this case he shall be exempted from the prohibition on participating in the founding of commercial companies provided for in the Civil Service Law and the Civil Service System, provided that he hands the project over to the Fund if he abandons the project and returns to public employment.
4- The economic feasibility of the project shall be established.
5- The terms and rules of financing, whether by lending, partnership or contribution, shall be fulfilled in accordance with the programmes approved by the Board of Directors.
6- Priority in benefiting from the land allocated by the Fund shall be given to project owners who have not previously obtained plots from the State.
7- The project owner shall have a usufruct right over the land allocated by the Fund on which the project is established, provided that the market value of the usufruct right is not included in the project’s assets. He may not assign this right or sell, lease or mortgage the land on which the project is established, and any such act shall be void. His usufruct of the land shall continue as long as the project exists, by way of exception from Decree-Law No. 105 of 1980 concerning the State Property System and its amending laws.
8- During the period of the Fund’s sponsorship of the project, the project owner may not take any decision affecting its fate except in accordance with the rules set by the Executive Regulations, and any act made in violation thereof shall be void. The Fund shall be entitled, by virtue of a final court judgment, to take possession of the project and recover it in full in the event of violation. Decisions affecting the fate of the project include reducing the project’s capital, merging it into another project, liquidating or selling it, assigning all or part of the contract to others, or changing the legal form of the investor. If the Fund approves a request to assign the contract, the new investor shall replace the original investor in all the terms, rights and obligations stated in the contract.
9- More than one Kuwaiti citizen may apply to the Fund with a single project, provided that they meet the foregoing conditions set out in this Article. In this case, and after the Fund approves the project, a company shall be established among them, the Fund shall deal with the legal person, and all the provisions of this Law shall apply to the partners therein. If any of the partners are employees, the number of those who are to devote themselves full-time shall be determined in accordance with the economic feasibility study.
10- The project owners shall undertake to employ Kuwaitis in accordance with the timetable set by the Board of Directors of the Fund.
11- The amount of financing shall not exceed (KD 500,000) five hundred thousand Kuwaiti Dinars.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 6

The Director General shall prepare model contracts, to be approved by the Board of Directors in accordance with the provisions of this Law, setting out the method of financing and the bases on which the Fund shall collect any consideration from the project owner in return for any right it grants him or any assets it provides to him for use in the project. The contract concluded with him shall state, clearly and without ambiguity, all the matters referred to throughout the term of the contract.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 7

The Fund shall have an independent budget comprising its revenues and expenditures, prepared on the pattern of commercial budgets and managed on a developmental basis.
It shall be certified by the auditors and submitted, together with the final account, to the Council of Ministers, accompanied by the annual report on the Fund’s activities, within no more than four months from the end of each financial year.
The financial year of the Fund shall begin with the beginning of the financial year of the State budget and end with its end; by way of exception, the first financial year of the Fund shall begin from the date of entry into force of this Law and end at the end of the State’s following financial year.
The funds necessary for the work of this Fund shall be taken from public funds and included in Chapter Five of the State budget.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 8

The Fund shall keep proper accounting records that give a true picture of its position and show its transactions, and the internal audit report and the report of the statutory auditors shall be submitted to the Board of Directors for approval.

Article 9

All contracts concluded in accordance with the provisions of this Law shall be subject to the subsequent control of the State Audit Bureau.

Article 10

The State shall allocate to the Fund lands with an area of not less than five million square metres, distributed over areas, as of the date of issue of this Law, which may be increased – at the request of the Fund – to serve its activity, and geographically distributed according to its plans, provided that each area includes an incubator, a marketing complex and plots for practising the activities prescribed in this Law.
The State shall prepare these lands with utilities and infrastructure, subdivide and plan them, and allocate them for use and for establishing such projects on unified developmental terms set by the Board of Directors. The Board of Directors shall determine the extent and location of the land allocated to each project according to its needs and the nature of its activity.
The Board of Directors may engage the private sector, in accordance with the rules set by the Executive Regulations, to prepare the lands with utilities and infrastructure and to subdivide and plan them.
Sufficient areas for the purposes of this Law shall be allocated in all residential city projects, and these areas shall be determined by agreement between the Board of Directors of the Fund and the Board of Directors of the Public Authority for Housing Welfare.
These lands shall revert to the Fund if the project is liquidated or obtains alternative land from the State for the same activity.
The Executive Regulations shall determine a percentage of the sites in the new industrial and agricultural areas of the Public Authority for Industry or the Public Authority for Agriculture Affairs and Fish Resources to be allocated to the Fund, to meet the applications submitted in accordance with the provisions of this Law.
The Executive Regulations shall also determine a certain percentage or number of the commercial premises allocated by the State to cooperative societies and their branches, for the benefit of the projects supervised by the Fund.

Article 11

In evaluating applications and selecting the projects submitted to it, the Fund shall be guided by the following considerations:
1- Preference for projects that best achieve added value and the development of the national economy and the diversification of sources of income, and that provide the most job opportunities for Kuwaitis.
2- Releasing the creative energies of citizens and exploiting the patents they submit.
3- Encouraging self-employment and contributing to the development of the workforce.
4- Selecting the projects that make the most use of local products and of technology, so as to increase their added value.
5- Preference for projects that best preserve the environment.

Chapter Two
Management of the Fund

Article 12

The Fund shall have a Board of Directors chaired by the Competent Minister and composed of:
1- Three members with experience and expertise in the affairs of the Fund, to be appointed by the Council of Ministers upon the proposal of the Competent Minister. The decision shall designate one of them as Vice-Chairman, who shall exercise the powers of the Chairman in his absence. The members shall be Kuwaiti nationals and shall not have been the subject of a final judgment declaring bankruptcy or a final conviction for a felony or a crime involving dishonour or breach of trust.
2- Three members representing ministries and government bodies related to the activity of the Fund, which shall be designated by a resolution of the Council of Ministers upon the proposal of the Competent Minister, provided that their grade is not lower than Assistant Undersecretary or its equivalent.
The Director General of the Fund shall attend the meetings of the Board of Directors without taking part in voting.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 13

The term of membership of the Board of Directors shall be four years, renewable for one term. The Board of Directors may invite any specialists it deems fit to attend its sessions, without the right to vote. A member’s seat shall become vacant by death, incapacity or resignation.
A member shall also forfeit membership, and his seat shall become vacant, in the following cases:
a- If a final judgment declaring his bankruptcy is issued.
b- If he is convicted by a final judgment of a crime involving dishonour or breach of trust.
c- If he fails to attend three consecutive meetings or six non-consecutive meetings in a year without an excuse accepted by the Board of Directors.
d- If he breaches the provisions of Article 15 of this Law.
The Board of Directors shall hold its meetings in the presence of a majority of its members, including the Chairman of the Board of Directors or his deputy, and shall issue its decisions by a majority of the votes of its members; in the event of a tie, the Chairman shall have the casting vote.
The Board of Directors shall meet at least six times a year, and whenever convened at the request of three of its members or of the Chairman. The remuneration of the members of the Board of Directors shall be determined by a resolution of the Council of Ministers.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 14

The Board of Directors shall set the bases for evaluating the projects submitted to the Fund, the bases for determining the contribution percentages, and the time limits for issuing a decision on a project, which shall not exceed 45 days. This period shall not apply to the programmes exempted by the Board of Directors, for which the period shall not exceed 90 days. The Board of Directors may seek the assistance of specialised bodies in this regard.
* Replaced by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 15

Members of the Board of Directors, members of the Fund’s committees and employees of the Fund’s general administration are prohibited from having any direct or indirect personal interest in any project or in the services provided by the Fund. They shall disclose their interests and shall refrain from participating in the discussion of, or taking, any decision concerning a project in which any of them, or his spouse or first-degree relatives, has an interest. In the event of violation, the decision shall be void, and everything resulting from it shall be void and deemed never to have existed.

Article 16

The Board of Directors is the supreme authority in the Fund and is competent to supervise its affairs, management and the conduct of its business. It shall have all the powers necessary for the Fund to exercise its competences and achieve its purposes and objectives, and in particular the following powers and competences:
1- Approving the general policies of the Fund within the framework of the general policy of the State and the strategies for the growth and development of projects, and supervising and following up their implementation.
2- Approving the rules that protect the ideas of initiators and project owners and secure their retention of the intellectual property rights in these initiatives, in accordance with the legal rules established in this regard.
3- Approving the rules of control and follow-up of the project to ensure its compliance with the provisions of this Law, its Executive Regulations, the decisions of the Board of Directors and the other applicable laws and regulations. In doing so, it shall observe the commitment not to interfere directly in the management of the project, subject to the provisions of Article 28 of this Law.
4- Approving the technical, administrative and financial regulations of the Fund and approving a system for the delivery of the Fund’s services.
5- Approving the organisational regulations for the activity of incubators and other supporting centres prepared by the executive management.
6- Approving the draft annual budget and the final account of the Fund before submitting them to the competent authorities.
7- Considering the matters that the Chairman of the Board of Directors, his deputy or any of its members deems important to present to it.
8- Appointing the auditors and determining their remuneration.
9- Forming, from among its members or others, permanent or temporary technical committees to study the matters within its competence, which shall submit their recommendations thereon to it.
10- Approving the organisational structure and administrative divisions of the Fund and the bodies affiliated to it, provided that the approval of the Civil Service Council is obtained if any additional financial burden results from approving or amending the organisational structure.
11- Adopting the policies and plans that achieve the objectives of the Fund.
12- Approving the establishment of branches and offices of the Fund within the State.
13- Approving and adopting the incentives and privileges for small and medium enterprises.
14- Determining the fees charged by the Fund for the services or programmes it provides.
15- Accepting gifts, subsidies, grants, bequests and endowments after presenting them to the Council of Ministers and in accordance with the applicable rules.
16- Contributing or participating in improving and developing the business environment and identifying obstacles and working to remove or address them.
17- Establishing companies related to small and medium enterprises, or contributing to them, for the purpose of achieving the objectives of the Fund.
18- Establishing portfolios and funds dedicated to small and medium enterprises, or contributing to them, for the purpose of achieving the objectives of the Fund.
19- Approving the rules and terms of financing projects, whether by lending, partnership or contribution.
The Board of Directors may delegate some of its powers to its Chairman or whomever he designates, to any of the members of the Board of Directors it deems fit, or to the Director General.
20- Approving the administrative and financial regulations for the affairs of the Fund’s employees, provided that the approval of the Civil Service Council is obtained if any additional financial burden results from approving or amending these regulations.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 17

The Board of Directors shall form an advisory committee to evaluate and develop the work of the Fund, and the remuneration of the committee members shall be determined by a resolution of the Council of Ministers. The committee shall consist of five members drawn from international advisers, to benefit from international expertise and experience in small and medium enterprises, and from local Kuwaiti experts with specialisation and experience, and it shall be chaired by the Competent Minister.
The advisory committee shall conduct an annual evaluation of the Fund’s performance and propose improvements to its performance, and shall issue an annual report containing this evaluation, the extent to which the Fund has achieved its objectives and the obstacles to its activity, provided that this report is submitted to the Board of Directors.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 18

The administrative apparatus shall be headed by a Director General of the Fund, to be appointed by decree based on a resolution of the Council of Ministers upon the nomination of the Board of Directors, for a term of four years renewable once, provided that he is not one of the members of the Board of Directors.
He shall be responsible before the Board of Directors for implementing the decisions and regulations it issues.
The Director General shall be the legal representative of the Fund before the courts and in its dealings with others.
* Replaced by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 18 bis

The Director General of the Fund shall manage the affairs of the Fund, and shall in particular have the following competences:
1- Deciding on the initiatives approved by the relevant committees, in accordance with the investment and environmental strategy after studying their economic feasibility and in accordance with the controls set by the Board of Directors; announcing the details of these initiatives and inviting applications for them through the various means of advertising and publication. Applications for the projects offered by the Fund may not be submitted before ninety (90) days from the date of their last publication.
2- Approving the projects whose economic feasibility is established and that are approved by the relevant committees, in accordance with the controls and conditions set by the Board of Directors.
3- Signing the financing contracts for the beneficiary projects, as well as the contracts concluded by the Fund with the bodies supporting or contributing to the projects, in accordance with the provisions of this Law.
4- Contributing to facilitating the government procedures for establishing the project and obtaining the licences necessary to commence the activity, and working to avoid overlapping and duplication of the competences of administrative bodies in this regard, within a period not exceeding thirty days from the date of approval of the project.
5- Proposing the rules that protect the ideas of initiators and project owners and secure their retention of the intellectual property rights in these initiatives, in accordance with the legal rules established in this regard.
6- Proposing the controls that ensure that the financing obtained by the project is proportionate to its financial capacity to repay it.
7- Proposing the rules of control and follow-up of the project to ensure its compliance with the provisions of this Law, its Executive Regulations, the decisions of the Board of Directors and the other applicable laws and regulations, refraining in doing so, to the greatest extent possible, from direct interference in the management of the project.
8- Coordinating with local, foreign and international bodies concerned with the care of small projects regarding the services they provide to projects in the areas of access to local and foreign markets through exhibitions and of acquiring new technologies and developing innovation and quality, and taking whatever he deems appropriate to benefit from them locally.
9- Preparing and submitting an annual report to the Board of Directors on the progress of work at the Fund and on the development projects for the previous year, including the financial statements certified by the auditors and a detailed explanation of all the activities during the past financial year, in preparation for presenting it to the Council of Ministers and the National Assembly, provided that it includes the report of the advisory committee formed by the Board of Directors.
10- Preparing the draft annual budget and the final account and presenting them to the Board of Directors.
11- Contributing or participating in improving and developing the business environment and identifying obstacles and working to remove or address them.
12- Contracting or cooperating with specialised scientific, technical, financial or legal bodies, entities, institutions or companies to carry out some of the functions or tasks of the Fund.
13- Establishing a database of small and medium enterprises.
14- Developing a risk management system.
15- Exercising the tasks delegated to him by the Board of Directors.
* Added by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 19

The Board of Directors shall form a permanent grievance committee to consider the grievances submitted to the Fund by initiators and project owners, provided that such grievances are submitted within fifteen days from the date the aggrieved party is notified of the Fund’s decision. The committee shall consider the grievance and submit its recommendation to the Board of Directors within one week from the date the grievance is submitted. The Board of Directors shall decide on the grievance within thirty days and shall notify the aggrieved party of its decision as soon as it is issued; if the decision rejects the grievance, he may challenge it before the competent court.
Failure to reply within the foregoing period shall be deemed a rejection of the grievance.

Article 20

The Fund shall have an administrative apparatus comprising a sufficient number of experts and specialised competent staff capable of studying, evaluating and managing projects and verifying their economic feasibility.
The employees shall undergo specialised training programmes to qualify them and develop their capabilities in achieving the Fund’s development programmes, provided that the results thereof are taken into account in their performance appraisal.

Article 21

The Director General shall have one or more deputies, to be appointed by decree upon the nomination of the Board of Directors for a term of four years renewable once.
The Director’s deputies shall, under his supervision, implement the technical, administrative and financial regulations of the Fund.
The Director General may delegate some of his competences to one or more of his deputies.
The Director General and his deputies shall be Kuwaiti nationals and shall not have been the subject of a final judgment declaring bankruptcy or a final conviction for a felony or a crime involving dishonour or breach of trust.
* Replaced by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 22

Subject to the provisions of Articles 5 and 38 of Decree-Law No. 15 of 1979 concerning the Civil Service, the Fund shall issue organisational regulations applicable to its employees, by way of exception from the provisions of the said Decree-Law and the Civil Service System, provided that the provisions of the said Decree-Law and the Civil Service System shall apply where there is no specific provision in the Fund’s regulations.
All the rules, regulations, financing programmes and decisions issued by the Board of Directors and the Director General, and their equivalents, shall be published on the official website of the Fund.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Chapter Three
Project Incubators and Stages of Support

Article 23

A special department within the organisational structure of the Fund shall be formed to undertake the establishment or accreditation of Project Incubators that observe international standards, and part of the Fund’s budget shall be allocated to it to carry out its activity.
The incubators shall provide the following services during the stages of supporting the project, in accordance with the provisions of Article 24 of this Law:
– First stage:
a- Training support, through cooperation with the Supporting Institutions and the institutions specialised in the Fund’s fields of work, to provide suitable training and development programmes for project owners.
b- Research support, through preparing the research and studies that help project owners turn their ideas into projects capable of practical application.
– Second stage:
a- Technical and advisory support, through providing all technical advice to the project owner during the period of incubation.
b- Incubation shall be of two types, either internal or external:
1- Internal incubation: logistical support takes the form of a place to host the project for a certain period of time, which the Fund determines together with the incubator according to the project’s development and growth, and everything the project needs in terms of facilities is provided during the period of incubation, after which it moves to external incubation.
2- External incubation: the project owner establishes his own project outside the incubator’s hosting premises, while benefiting from all forms of material support and technical and advisory support provided by the Fund, including the provision of the land necessary for the project to continue.
– Third stage:
a- Linking projects with one another and with existing projects, in a way that benefits the growth of the projects and their service to the national economy.
b- Holding seminars, exhibitions and conferences aimed at the growth and development of projects.
c- The Fund may entrust the incubator with managing the project on behalf of the project owner if a temporary impediment prevents him from managing the project properly.

Article 24

The Fund shall follow a timetable for establishing and developing the project through the following stages:
First: the pre-incubation stage, which includes:
1- Evaluating the initiative or project from the technical, financial and administrative aspects after their approval, and setting the timetable necessary to commence their activity.
2- Determining the integrated training and educational programme that the initiator or project owner needs, with the assistance of the Supporting Institutions, covering the administrative, marketing, financial and economic aspects, in line with international standards.
Second: the stage of incubating the project, in both its internal and external forms, which includes:
1- Providing financial support to the project in accordance with the provisions of this Law.
2- Allocating to full-time project owners a salary equal to what their peers with the same qualifications and experience appointed to a State post receive, in accordance with the provisions of the Civil Service Law and the Civil Service System, to which an achievement incentive shall be added, deducted from the profits made by the project, for a period not exceeding three years from the date the project commences operation.
The Executive Regulations shall set the controls for determining and disbursing these incentives.
3- Effective supervision and follow-up during implementation, by providing the necessary advice during the implementation stage through specialised consultants appointed by the Fund.
4- Providing the assistance necessary to market the project’s products in accordance with the means set by the Executive Regulations.
Third: the post-incubation stage, which includes:
Supplying the project with the information that helps it develop its capabilities and achieve the internal and external expansion of its activity so as to reach the international level, by means including, in particular:
– Direct linking with international projects in accordance with the commercial partnership system.
– Benefiting from the services provided by international organisations concerned with developing entrepreneurs and establishing similar projects.

Chapter Four
Project Financing and Application Procedures

Article 25

The Fund shall finance the project at a rate not exceeding 80% of the project’s cost, and the project owner shall repay it in accordance with the financing, collection and follow-up procedures set by the Executive Regulations, over a period not exceeding fifteen years.
Without prejudice to the instructions of the Central Bank of Kuwait, the total financing that the project may obtain from the banking system and from all other financial institutions may reach the value of the paid-up capital contributed by the owner to the project’s account.

Article 26

The Board of Directors shall set the rules of financing and the method of repayment, taking into account the following:
1- To cover the Fund’s expenses, the financing shall bear a one-time cost-recovery fee not exceeding 2% of the value of the financing. Applicants shall have the right to obtain financing in a manner compliant with the provisions of Islamic Sharia, in accordance with rules set by the Board of Directors.
2- The financed project shall be granted grace periods ranging from one to three years, as determined by the Executive Regulations.
3- Collateral shall be assessed on the basis of the project’s fixed and movable assets, which may be mortgaged as security for the debt referred to in the second paragraph of Article 25.
4- The Executive Regulations shall determine the conditions, limits and percentage of loss on the basis of which the project shall be liquidated.
5- The initiator shall repay the financing obtained from the Fund after the end of the grace period granted to him, and repayment shall be in semi-annual, quarterly or monthly instalments, as agreed.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 27

In order to support the Fund’s projects, State institutions shall set a mandatory percentage in their government contracts for preferring the products and services of the Fund’s projects, to be determined in the Executive Regulations. This percentage shall be approved by the Council of Ministers.

Article 28

The Board of Directors shall set the rules, controls and legal and accounting procedures that ensure the preservation of the rights of the Fund and of the investor, to be followed where a project defaults, and shall also set the bases for calculating provisions in the light of credit and financing risks.
The criteria of default shall be determined in the Executive Regulations.
* Replaced by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 29

Applications by those wishing to benefit from the services provided by the Fund shall be submitted to the Fund, or to any of the bodies it accredits to receive applications, in accordance with the procedures set by the Director General and approved by the Board of Directors, and the Fund shall allocate the incubator unit or the plot necessary for the project, in a manner that meets its requirements in accordance with the economic feasibility study.
The application shall be submitted at a service hall in which all the procedures for completing the application form are carried out, and the applicant shall be given a dated receipt to that effect; the date of this receipt shall mark the beginning of the period prescribed for completing the transaction. The Fund shall also have an operations room comprising offices representing each government body concerned with the procedures for establishing the project and licensing labour, so as to complete the transactions in accordance with the project’s economic feasibility study, without being bound by any other restrictions, within a period not exceeding thirty days from the date of approval of the project. The management of the Fund shall establish the system of internal procedures for decision-making and the processing of project transactions. The initiator or project owner may authorise specialised companies or qualified consultancy offices accredited by the Fund to act on his behalf, in accordance with bases and controls set by the Executive Regulations.
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Chapter Five
Incentives and Privileges

Article 30

The Board of Directors shall set the rules necessary to provide incentives, facilities and privileges for projects to commence their activity, in particular the following:
1- Establishing complexes whose units are allocated to projects on easy terms, comprising incubators, commercial markets and industrial plots to be distributed to projects, while providing the space necessary to display their final products within those complexes.
2- Inviting the public and private sectors to establish Project Incubators through which the necessary services are provided to project owners in return for a nominal annual subscription and for a specified period, enabling the project owner to acquire the necessary experience and move outside the incubator.
3- Seeking to allocate a percentage for the products and services of small and medium enterprises, and to allocate any contracts, tenders, negotiated procurements and auctions with a value of less than fifty thousand Kuwaiti Dinars out of the contracts of ministries, government departments and bodies with attached and independent budgets, for contracting with projects to purchase their needs from the projects’ products or to engage them to carry out the construction works those bodies require, while giving the products and services of the projects a price preference when contracting.
4- Granting projects privileges and exemptions in the fields of taxes and customs, and supporting exports and raw materials, as follows:
a- Exemption from taxes for a suitable period, or reducing the tax base by excluding some investment expenses and reserves, or reducing the tax rate.
b- Exempting imported equipment, supplies, raw materials and intermediate goods from customs duties; they may not be disposed of for a purpose other than that for which they were designated, otherwise the customs duties shall become due.
c- Supporting their products when exported.
d- Supporting raw materials.
5- Providing the services necessary to help them commence their activity and address operating and production problems, and working to develop the managerial capabilities of their owners and their skills in marketing and in monitoring, developing and improving production.
6- Licensing the distribution of their products in the places allocated by public bodies for the distribution of goods in return for a nominal fee.
7- Preparing qualification and training programmes for Kuwaitis to engage in the fields of self-employment and in how to manage their own businesses, through cooperation with the Supporting Institutions.
8- Introducing their activities by supporting their publicity and advertising programmes and their participation in conferences related to similar projects.
9- Enabling project owners to obtain locations in cooperative societies at a nominal rent.
The exemption from taxes and customs duties and the support shall be granted by a resolution of the Council of Ministers upon the proposal of the Board of Directors.

Chapter Six
Final Provisions

Article 31

The Board of Directors shall prepare the Executive Regulations of this Law and issue them by a decision within six months from the date of publication of the Law in the Official Gazette (Kuwait Al-Youm).
* Amended by Law No. 14 of 2018 (Kuwait Al-Youm, Issue No. 1389, 22 April 2018).

Article 32

The provisions of this Law shall apply to the small and medium enterprises benefiting from the decision issued by the Kuwait Investment Authority on 4 February 1997, and their status shall be regularised in accordance with its provisions.
The employees subject to the said decision shall be transferred to the Fund retaining, as a minimum, their job grades and financial entitlements.
Law No. 10 of 1998 and the portfolio established and regulated under it shall remain in force.
* Amended by Law No. 2 of 2014 (Kuwait Al-Youm, Issue No. 1169, 2 February 2014), and then replaced by Law No. 2 of 2017 (Kuwait Al-Youm, Issue No. 1336, 16 April 2017).

Article 33

The Prime Minister and the Ministers, each within his competence, shall implement this Law.

Issued on 26 March 2013 and published in the Official Gazette Kuwait Al-Youm on 2 April 2013.