“EGYPT AND LEBANON CONNECT”€¦ · 2- Egypt and Lebanon are also both members of the World...

“EGYPT AND LEBANON CONNECT” FEBRUARY 13, 2015 BEIRUT

HEADLINES1. Economic Overview

2. EGYPTIAN-LEBANESE TRADE RELATIONS

3. WHAT ARE THE INVESTMENT OPPORTUNITIES?

4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

LEBANON IN FIGURES

ECONOMIC OVERVIEW

1

GDP: USD 47.5 billion GDP per Capita: USD 10,530.8

Population: 4.5 million Urban Population (% of total): 87%Labor Force (million): 1.48Average Age of Labor Force: 29 years old

Languages: Arabic – French – English

Average Inflation Rate: 3.5%

Unemployment: 13%

Average Age of Labor Force: 29 years oldAverage Age of Labor Force: 29 years old

IDAL | 2015

Despite the current geo-political climate, Lebanon continuesto attract investments into the country…

3.00

3.38

4.33

4.84 4.96

3.503.78

2.83

2006 2007 2008 2009 2010 2011 2012 2013

FDI Inflows to Lebanon(USD billion) (2006-2013)

2

Source: UNCTAD - World Investment Report 2014, IMF

ECONOMIC OVERVIEW

IDAL | 2015

Relatively to GDP, FDI and FDI stocks to Lebanon remainsamong the highest, regionally and globally…

3

FDI as % of GDP (2013)

Iraq

Kuwait

Egypt

Algeria

Oman

KSA

Tunisia

UAE

Bahrain

Morocco

Sudan

Jordan

Lebanon

0.8 %

1.2 %

1.2 %

1.3 %

2.0 %

2.0 %

2.3 %

2.7 %

3.1 %

3.2 %

4.4 %

5.3 %

6.3 %

Source: UNCTAD - World Investment Report 2014, IMF

ECONOMIC OVERVIEW

IDAL | 2015

23%

27%

28%

29%

35%

40%

55%

63%

126%

182%

283%

Germany

USA

UAE

Canada

KSA

France

UK

Bahrain

Lebanon

Belgium

Singapore

FDI Stock as a % of GDP (2013)

ECONOMIC OVERVIEW

4

IDAL | 2015

Banking sector performance has also shown resilience asdemonstrated by the increasing asset base of banks andthe liquidity ratio

82 94115

129141 152

165176

6778

96 107 116 125136 144

2007 2008 2009 2010 2011 2012 2013 2014

Total assets Total Deposits

366.1%

100.5% 109.9%161.2%

Lebanon MENA Emergingmarkets

World Lebanon MENA World

302.6 %

70.3% 74.9% 94.0%

Evolution of Assets and Deposits(USD billion) (2007 - 2014)

Assets to GDP ratio (2013) Deposits to GDP ratio (2013)

Emergingmarkets

Source: Audi Bank

ECONOMIC OVERVIEW

5

IDAL | 2015

Economic activity in Lebanon has gained traction overthe last year as demonstrated by the number of constructionpermits, and passenger arrival

13,06911,727

12,560

11M-2012 11M-13 11M-14

Construction Permits(000s SQM) (2012-2014)

3.34.0

5.05.5

5.6 5.9 6.2

6.6

2007 2008 2009 2010 2011 2012 2013 2014

Number of Passengers at the Airport

(million) (2007-2014)

Source: Audi Bank

Lebanon offers key advantages to investors through a very sound banking system and minimum restrictions oncapital flows

Source: World Competitiveness Report (2012) Source: World Economic Forum

3.8

4.1

Resilient Banking Sector:Soundness of Banks Rankings(2012)

Restriction on Capital Flows(2010)

Egypt

MoroccoCanada 1st

Australia 3nd

Hong Kong 7th

Singapore 8th

Chile 11th

Lebanon 12th

Brazil 14th

KSA 16th

Luxembourg 18th

5

5.1

5.3

5.5

5.7

5.9

5.9

6.1

6.5Honkong

Finland

Singapore

Lebanon

Qatar

UAE

KSA

Jordan

Turkey

6

ECONOMIC OVERVIEW

IDAL | 2015

Lebanon has one of the lowest taxation schemes and fiscalcharges in the world, with only 15% corporate tax rate

Source: Country's Investment Promotion Agencies

Favorable Investment Environment:Corporate Tax Rate (%)

Lebanon is one of the few countries that still enjoy a flat rate, which is more beneficial to investors than the progressive rates currently adobted in most countries.

Cyprus Ireland

Min Jordan Lebanon

SingaporeKSA

Turkey Egypt

Syria Max Jordan

Germany France Japan 41

33 30 30 28 20 20 20 17 15 14 13 10

7

ECONOMIC OVERVIEW

IDAL | 2015

… And pro-business environment

Source: World Bank (2012)

Bahrain

SyriaKuwait

UAE48

5550

49

Jordan

Qatar

Morocco

Egypt

Tunisia

LebanonYemen

38

43

40

42

39

3736

Number of Procedures toEnforce a Contract(2012)

Source: World Bank (2012)

Sudan

Kuwait

Number of Daysto Start a Business(2012)

36

35UAE

SyriaJordan

Qatar

15131313

Tunisia

Morocco

Bahrain

EgyptLebanon

KSA

11

99

75

12 KSA 40

8

ECONOMIC OVERVIEW

IDAL | 2015

One of the best educational systems internationally, resultingin a trilingual, highly qualified labor force

Source: Global Competitiveness Report (2012-2013)

Quality of Math & Science Education Index (2012 - 2013)

Source: Global Competitiveness Report (2012 - 2013)

Overall Quality of Education(2012)

Jordan

USA

Taiwan, China

UAE

Australia

Lebanon

Belgium

Singapore

Finland

Switzerland 1st

2nd

3rd

5th

10th

15th

17th

24th

28th

31thUSA

Jordan

Australia

UAE

Canada

Taiwan

Switzerland

Lebanon

Belgium

Finaland

Singapore 1st

2nd

3rd

4th

5th

6th

14th

17th

24th

28th

47th

ECONOMIC OVERVIEW

IDAL | 2015

9

1. Economic Overview



4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

HEADLINES

Trade Activity between Lebanon and Egypt(USD billion) 2010 - 2014

ImportsExports

Trade activity between the 2 countries is mainly dominated by Egyptian imports...

EGYPT-LEBANON

IDAL | 2015

1

Source: Lebanese Higher Council of Customs

430

942

841

644

529

201

68 88 73 84

2010 2011 2012 2013 2014

...of Articles of Stone, Food and beverages and vegetables. While top Lebanese exports are Machinery products

2

Imports from Egypt (%share)2014

Exports to Egypt (%share)2014

Source: Lebanese Higher Council of Customs

2

Articles of stone, plaster,cement, glass

Prepared foodstuffs;beverages, tobbaco

Vegetable products

Products of the chemicalor allied industries

Base metals and articlesof base metal

Mineral products

22%

%

14.3%

12.6%

12.3%

12.3%11.5%

8.2%

7.5%

7.2%

14.0% 21.4%

14.7%

13.8%11.1%

8.7%

6.7%

6.1%

5.9%

11.7%

Machinery; electricalinstruments

Vegetable products

Prepared foodstuffs;beverages, tobbaco

Plastics and articlesthereof; rubber

Pulp of wood; paper andpaperboard

Products of the chemicalor allied industries

EGYPT-LEBANON

IDAL | 2015

3Bilateral Trade Agreement between Lebanon and Egypt

1- Trade Agreement signed in 1989 and ratified in 1999 to facilitate and encourage trade activity between both countries, and include: • Exemption of all Imports and exports tariffs and procedures• Protectionism of local market

2- Egypt and Lebanon are also both members of the World Bank Group in establishing the Multilateral Investment Guarantee Agency in 1994 and members of the Arab league for a free zone trade.

3- Agreement signed between Lebanon and Egypt in March 2006 for the

avoidance of double taxation.

4- MOU signed between IDAL and GAFI to enhance cooperation between the 2 investment agencies

EGYPT-LEBANON

IDAL | 2015




4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

HEADLINES

INVESTMENT OPPORTUNITIES

EIGHTSECTORS

ARE ELIGIBLEFOR OUR

INCENTIVESIDAL PROVIDES INCENTIVES TO EIGHT SECTORS WITH GROWTH POTENTIAL AND READINESS FOR

DEVELOPMENT

Selected on their readiness & potential for developmentThese sectors were included in Law 360 in 2001

TECHNOLOGY

TELECOM

TOURISM

INFORMATIONTECHNOLOGY

FOOD ANDBEVERAGES

AGRICULTURE

INDUSTRY

MEDIA

IDAL | 2015

1

TOURISMA market with high undersupply

HEALTHCARE TOURISM SECTOR

• One of the fastest growing sector in Lebanon, with an average of 13% annual growth recorded between 2005 and 2009.

• Directly contributes to 10% of the country’s GDP and indirectly to around 35%

• One of the largest employer in the country: generating 125,000 direct jobs in 2011 and 448,500 direct and indirect jobs in total

• Tourists spending in Lebanon hovers at USD 3,000 per visit, one of the highest rates in the world.

WHY IS THERE POTENTIAL? WHERE ARE THE OPPORTUNITIES?

•

•

SPAs and wellness centers: today there are very few destination wellness

resorts in Lebanon and ample opportunities.

Three-stars and four-stars hotels; thereis a high demand for this segment and currently it is under-supplied.

2

MEDIA & DIGITAL MEDIAA New Growing Market.Lebanon home to one of the most significant mediaindustries in the Middle East

MEDIA & DIGITAL MEDIA SECTOR

• The online platform in the Arab World is

expected to be worth nearly 1 billion by 2016

• Digital game sales expected to grow at 29% in the Arab world, while growing at a rate of 17% worldwide

• Lebanese companies have high export orientation and regional integration

• A qualified labor force with outstanding capabilities

• The media industry accounts for around 2.53 % of the Lebanese na-tional output, with a turnover of around USD 1 billion, and a value added of around 55.3 %

• Production and Post-Production facilities: Lebanon has the potential to become the hub in production and post production

• Online Advertising

• Online Gaming: Today there are only few companies involved in gaming and as such there are ripe opportunities

• Specialized 3D Animation

• Development of Arabic content: supported by Lebanon tri-lingual workforce and less than 1% of content in the Arabic Region is actually in Arabic, whereas more than 60% of users in the region tend to prefer Arabic content.

WHERE ARE THE OPPORTUNITIES?WHY IS THERE POTENTIAL?

3

ICT A sector with great potential and unexploited niches

ICT SECTOR

• Lebanon ranked 3rd in the MENAregion in terms of ICT Development skills index which captures ICT capabilities and skills.

• Skilled and creative labor force: due to a world-class educational system:Lebanon 10th globally in the overall quality of education, and 4th globally in the quality of math and science education.

• Most Competitive wages in software development

• The sector currently employs close to 7000 high-skilled individuals,with demand for ICT skills significantly increasing on a year-on-year basis

• Software development and specifically in the development of mobile applications

• Off-shoring for software production:As a sub-contractor production for European software houses

• E-Platforms:– E-commerce with opportunities available in the banking and healthcare sectors– E-marketing centers for the business sector– E-commerce for enhancing exports of Lebanese products– E-music provider in Arabic language

• IT Security: Network security monitoring centers

• Tele-Health services: Various services as tele-diagnostic, distance monitoring, expertise


4

AGRICULTURERipe with opportunities with Arab investorslooking for arable land

AGRICULTURE SECTOR

• Ideal climate and landscape: with agricultural areas covering around 26% of the Lebanese territory.

• Rich soil favor versatile and high quality agricultural production.

• Abundant water resources: Rainfall in the country is significantly higher than the regional average.

• Exposure to a wide market:Lebanon is a point of entry to the Middle Eastern market

• High government support for the sector: Investors obtain soft loans at low interest rates. IDAL has also in place its Agri Plus program that monitors quality control of Lebanese fresh produces to meet international standards

• Fish farms

• Traditional farmsand vegetables and eggs

• Packaging centers





4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

HEADLINES

The Government of Lebanon, Through

IDAL, Offers Investors a Range

of Facilitation Services and Fiscal

Exemptions

About UsThe National Investment Promotion Agency of Lebanon

HistoryEstablished in 1994 with the aim of promoting Lebanon as a key investment destination and attracting, facilitating & retaining investments in the country

GovernanceIDAL reports to the Presidency of the Council of Ministers (who exercises a tutorial authority over it) and has financial and administrative autonomy

LegislationInvestment Law No. 360 was enacted in 2001 to regulate investment activities in Lebanon

ABOUT IDAL

IDAL | 2015

OUR MANDATES INVESTMENT PROMOTION

• Provide economic, commercial and legal information of relevance to investors

• Identifies business opportunities across various economic sectors

• Provide in depth analysis of sectors

• Grant fiscal exemptions and fees reduction to investment pro-jects

• Facilitate issuance of permits and licenses

• Provide on-going support for investment projects

• Actively promotes Lebanon as key investment destination

EXPORT PROMOTION

• Provide data on external markets

• Support companies in selected sectors in accessing external markets

• Provide promotional materials

• Subsidize participation in foreign fairs

• IDAL currently has in place 2 export promotion programs:

1 Agri Plus (2012): Which provides subsidies and support to exporters of agricul-tural products

2 AGRO MAP (2004): Which subsidizes the participa-tion of agro food companies in foreign fairs licenses

ABOUT IDAL

IDAL | 2015

IDAL Offers Investors a Range

of Services Throughout Their

Different Stages of Operation

1 Pre-Investment Stage MARKET INTELLIGENCEInformation on investment opportu-nities. Data on economic sectors with growth potential.Legal, financial, industrial informa-tion. Data on investment climate. Business Matchmaking support

2 Financing Stage

PACKAGE OF INCENTIVESFiscal incentives: Exemptions from corporate income tax generated by the pro-ject which can go up to 100% exemption for 10 years Financial incentives:Fees reductions such as reduc-tion on land registration fees

Non-Financial Incentives: Employees for the project are granted work permits with the support of IDAL

3 Licensing and after-care StageONE STOP SHOPIDAL serves as a One Stop Shop for Investors.We supersede all public administrations, authori-ties and municipalities in issuing administrative permits and licenses except those granted by the Council of Ministers. We follow up with investors after the start of their operations

ABOUT IDAL

IDAL | 2015

OUR INCENTIVES

1- REGION & SECTOR BASED INCENTIVE

• Also called Investment Projects by Zone (IPZ) incentives

• Provided to projects based on: (1) Geographical location across 3 Zones: A, B, C (2) Investment size (3) Sector

Incentives Provided

• Up to 100% tax exemptions for 10 years for projects located in remote areas

(Zone C)• Work Permits granted

ABOUT IDAL

IDAL | 2015

TWO TYPES OF INCENTIVE SCHEMES

• Also called Package Deal Contract (PDC) incentives

• Provided to projects based on: (1) Investment size (2) Number of jobs created (3) Sector

Incentives Provided

• 100% exemption of Income Tax• 100 % exemptions on Taxes on Project Dividends for up to ten years• Up to a 50% reduction on Work and Residence Permit Fees• Up to a 50% reduction on Construction Permit Fees• Full exemption from Land Registration Fees

OUR INCENTIVESTWO TYPES OF INCENTIVE SCHEMES

2- JOB CREATION BASED INCENTIVE

ABOUT IDAL

IDAL | 2015




4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

Going forward

STRATEGIES & POLICIES

IDAL | 2015

Activate MoU with GAFI to foster investment exchange between the 2 countries

Actively work to implement the network of regional IPA to foster cooperation between MENA countries to attract investments to the region as a whole

1 2




4. ABOUT IDAL

5. GOING FORWARD

6- CONTACT US

CONTACT US

IDAL | 2015

CONTACTUS

INVESTMENT DEVELOPMENTAUTHORITY OF LEBANON

Lazarieh Tower, 4th Floor, Emir Bechir Street, Riad El-Solh, Beirut, LebanonP.O.Box: 113-7251www.investinlebanon.gov.lb

T + 961 (1) 983306/7/8 F + 961 (1) 983302/3

[email protected]@idal.com.lb

@Invest_Lebanon

/investmentdevelopmentauthorityoflebanon

/InvestInLebanon

/InvestInLebanon

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“EGYPT AND LEBANON CONNECT”€¦ · 2- Egypt and Lebanon are also both members of the World...

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