Any foreign company awarded business in excess of KD.1 million, whether from a single contract or whether cumulatively during one fiscal year (1 July to 30 June), either as a prime contractor or a sub-contractor, is obliged to participate in the Counter Trade Offset Program. This program entails investing 30% of the contract value (not the profit), in Kuwait. Although this investment should be treated as potentially profitable rather than as a cost, companies should be aware of its implications before bidding large projects. Kuwait's offset program has given the U.S. Raytheon Company approval to participate in a planned 230,000 tons per year aluminum smelter at a cost of $1.2 billion. The participation of Raytheon in the smelter project would be part of its commitments resulting from the Patriot air-defense missiles and launchers sold to Kuwait. Suppliers and large commercial contractors have pledged $1.5 billion for investment projects under the country's offset program.

• To achieve substantial sustainable economic benefits.

• To provide new business opportunities within Kuwait, in collaboration with the local private sector.

• Transfer of technology to the private sector and the development of their expertise.

• To create educational & training opportunities for Kuwaiti nationals at all levels in the field of finance, industry, education, research and development.

• Marketing overseas of locally produced items by the foreign supplier.

• To encourage participation in the State Foreign Aid Program.

Profits generated by the Offset program will be subject to normal taxation. Foreign companies operating in Joint Venture with local companies will not be exempted from the program.

Contractors from foreign countries should contact the Commercial section of their Embassies in Kuwait