“egypt and lebanon connect”€¦ · 2- egypt and lebanon are also both members of the world...
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“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
2. EGYPTIAN-LEBANESE TRADE RELATIONS
3. WHAT ARE THE INVESTMENT OPPORTUNITIES?
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
1. Economic Overview
2. EGYPTIAN-LEBANESE TRADE RELATIONS
3. WHAT ARE THE INVESTMENT OPPORTUNITIES?
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
WHERE ARE THE OPPORTUNITIES?WHY IS THERE POTENTIAL?
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
WHERE ARE THE OPPORTUNITIES?WHY IS THERE POTENTIAL?
1. Economic Overview
2. EGYPTIAN-LEBANESE TRADE RELATIONS
3. WHAT ARE THE INVESTMENT OPPORTUNITIES?
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
HEADLINES1. Economic Overview
2. EGYPTIAN-LEBANESE TRADE RELATIONS
3. WHAT ARE THE INVESTMENT OPPORTUNITIES?
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
HEADLINES1. Economic Overview
2. EGYPTIAN-LEBANESE TRADE RELATIONS
3. WHAT ARE THE INVESTMENT OPPORTUNITIES?
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
in