Transcript Slide 1
Doing Business in Egypt
Rundown
Why Egypt
Egypt’s Integration in the World Economy
Economic Outlook
Investment Incentives
Investment Opportunities
Egypt and Serbia
Why Egypt
•
Unique geographic location
At crossroads/gateway to Africa, Asia, Europe & Middle East
Why Egypt
•
Political stability
emerging markets & one of most promising •
Stable friendly business environment
private sector led economy & competitive incentives offering favorable climate for investors & joint venture partners •
Diversified expanding economy, local
market of 80 million & accessibility to vast markets of one billion in different trade blocks (COMESA, EU, Arab region…)
Why Egypt
•
Competitive advantages
Raw materials, land, large pool of competitively priced labor force (skilled & semi-skilled), maritime, airfreight rates, electricity, tele tariffs… •
Advancing infrastructure
Telecommunications, IT, electricity, roads, ports, banking & capital market…
Egypt’s Integration in the World Economy
•
Adoption of bilateral, regional & multilateral approach to trade & investment liberalization:
– WTO (member since June 30 th 1995)
Egypt’s Integration in the World Economy
•
Free-Trade blocks
–
COMESA:
largest economic grouping in Africa with 400 million people –
EU:
Free and Preferential Trade Agreements –
Arab World:
Free Trade Area Agreement –
USA:
Trade & Investment Agreement – Qualified industrial zone – Free Trade Agreement with Turkey – Free Trade Agreement with EFTA countries
Economic Outlook
•
Early nineties, Egypt launched multi-phased
economic reform
program focused on macroeconomic adjustments & stabilization, privatization & trade liberalization, market driven economy •
Successful program
applauded by international institutions: IMF “as an achievement that has few parallels”
Economic Outlook Gross Domestic Product (GDP) at market prices (current prices)
(L.E Billion ) Exchange rate 1USD=5.45 Egyptian Pounds
Economic Outlook Real growth rate of Gross Domestic Product (GDP) at market prices and constant prices
(%)
Economic Outlook GDP – composition by sector:
agriculture: 13.2% industry: 38.7% services: 48.1% (2008 est.)
13.2% 48.1% 38.7%
Agriculture Industry Services
Economic Outlook
Per capita income (current prices)
(Egyptian Pounds) Exchange Rate 1USD=5.45 Egyptian Pounds
Economic Outlook EGYPT IMPORTS FROM THE WORLD from 2005 to Jan. Sep. 2009 Total imports:
2008: 52915.66 million USD Jan-June 2009: 32692.70 million USD
Economic Outlook EGYPT EXPORTS TO THE WORLD from 2005 to Jan. Sep. 2009 Total exports:
2008: 26209.60 million USD Jan-June 2009: 16478.20 million USD
Investment Incentives Types of Investment in Egypt:
1. Free Zones investment system 2. Inland investment system
Types of Free Zones in Egypt:
1. Public 2. Private
Egypt Free Zones:
10 Free Zones
Investment Incentives Investment Incentives
• Enterprises wholly owned by foreigners • Guarantees against nationalization or expropriation • Output not subject to price control • Repatriation of capital and profits
Investment Incentives Tax exemptions as follows:
* 5-year exemption of the projects set up in the Old Valley * 10-year exemption of the projects established in the industrial zones of new communities or remote areas.
* 20-year exemption of the projects set up in the New Valley (hka, East Owainat, Paris, Kharga, East Farafra and Siwa).
* Life exemption of the projects established in free zones.
Investment Incentives Free Zones objectives:
1. Increase Egyptian exports 2. Attract foreign capital, achieve accrued capital 3. Introduce new technology specially in the industrial field 4. Provide employment opportunities, generate a substantial skill surge
Investment Opportunities Investment Opportunities The Projects Tendered for Investment
• Engineering and Electronics Sector • Metal Projects Sector • Spinning & Textile Sector • Food Projects Sector • Chemical & Pharmaceuticals Projects Sector
Investment Opportunities Automobile Assembly
Highly profitable – Passenger cars, buses, mini-buses: GM, Peugeot, Mercedes Benz, BMW, Suzuki, Hyundai…
Construction Materials
Fast growing - steel, reinforced iron, cement, ceramics…
Additional Opportunities
Juices, leather, chemicals, glass, paper, vessel & ship building & maintenance, granite, marble…
Mining
Varied & abundant mineral deposits: iron ore, phosphate rocks, coal…
Agriculture
• Emerging key regional exporter of primary & secondary food produces • Ambitious projects expanding Arable land & creating new communities
Opportunities
• Mega projects: land reclamation in Toshka, Sinai & East Owaynat • Transportation services, advanced screening, wrapping, packing & storage techniques • Fisheries, fish farming in different lakes: Lake Nasser, Karoon, Burolns, etc…
Tourism
Favorable tourist destination for its variety of attractions & wonders, weather, cultural activities & museums, safari, therapeutic, religious, golf, conferences & exhibitions, shopping, etc…
Opportunities
Development of new resorts for beach & leisure tourism: Marinas, Scuba diving centres, golf, etc…
Egypt and Serbia
•Distinguished political relations •Presidential and ministerial visits •Reviving of relations so as to reach Golden age during 50’s and 60’s.
Egypt and Serbia
• Egypt is a favourable tourist destination for Serbian citizens (22.2 thousands tourists in 2009) • Easy access to Egyptian visa • Charter flights • Attempts to start direct flights between two countries
Egypt and Serbia
There are a number of agreements that aim to foster economic and trade relations and attract investments from both sides which are as follows: 1. Agreement for Long-term Commercial and Economic Cooperation, signed on June 26 th 1957 2. Agreement on Establishing the Joint Committee for Economic Cooperation, signed on March 21 st 1961 3. Agreement on the reciprocal promotion and protection of investment, signed on May 24 th 2005 4. Agreement on the Avoidance of Double Taxation with respect to taxes on income, signed on July 31 st 2005
Egypt and Serbia Trade Balances between Egypt and Serbia
Year Egyptian Exports from Serbia millions of USD Egyptian Imports from Serbia millions of USD Trade Balance millions of USD 1990 1991 1996 1997 1998 1999 41.7
32.4
9.2
4.9
3.2
1.7
93.3
71 20.6
36.9
25.3
13.1
135 103.4
29.8
41.8
28.5
14.8
Year Egyptian Exports from Serbia millions of USD Egyptian Imports from Serbia millions of USD Trade Balance millions of USD 2000 2001 2002 2003 2004 2005 2.6
3 3.4
2.7
3.6
4.9
14.6
11.5
9.1
7.1
19.2
21.3
17.2
14.5
12.5
9.8
22.8
26.2
Egypt and Serbia
Year Egyptian Exports to Serbia millions of USD Egyptian Imports from Serbia millions of USD 2006 2007 14.2
2009 Until June 30 th 9.1
13.1
14.2
4.7
26 20 36.5
13.9
Trade Balance millions of USD 35.1
33.1
50.7
18.6
Egypt and Serbia Most important exports to Serbia in 2009
• rice, soap, paper, beans oranges, strawberries, herbs, ceramic tiles, salt, polyethylene, aluminum, dried onion, cotton, granite, mint, iron and steel powder, conserved olives, artificial cement, conserved tomatoes, textiles, etc.
Most important imports from Serbia in 2009
• processed beech woods, tractors, tires, brass plates, copper pipes, motor parts, brass wires, breathing apparatus, protection masks, hydraulic generators, air filters, rubber products, rubber belts and strips for transports, etc.