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Overview
Kuwait earns some 95% of export revenue from oil, with the country owning about a fifth of the world’s oil reserves. The economy been hit by the decline in crude oil prices and stresses in the banking sector. Provisional National Bank estimates put the decline in GDP for 2008 at 4% and the annual rate of inflation at 8%. The Kuwait Investment Authority, the sovereign fund which manages the state’s oil-funded assets has taken a substantial shareholding in Gulf Bank following derivatives losses. In February 2009 the government announced a stimulus package expected to include support for banks and investment companies.
Despite the national economic problems, there is considerable accumulated wealth held in private hands, through investment companies, and in the Kuwaiti sovereign fund. Law firms note a decline in cross border lending but continuing M&A activity, driven to some extent by consolidation in the oil and petrol service sector, and restructuring.
The number of firms competent in international work is fairly small and although foreign law firms are only allowed to practice in partnership with Kuwaiti firms, there are signs that global firms are becoming more interested in the state. During 2008, Denton Wilde Sapte LLP recruited the entire Bryan Cave office which now operates as Dr Ahmad Al-Samdan, Law Office of in association with Denton Wilde Sapte. The latest international firm to arrive is DLA Piper which announced a joint venture with Al-Wagayan & Al-Awadhi & Al-Saif at the end of January 2009.
Several international firms with a presence in the Middle East handle work which has a Kuwaiti element. These include Ashurst LLP, Norton Rose (Middle East) LLP, Baker & McKenzie LLP, Clifford Chance and Pinsent Masons LLP.