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EgyptDoing Business in
RundownRundown
Egypt’s Integration in the World
EconomyEconomic Outlook
Investment IncentivesInvestment OpportunitiesEgypt and Serbia
Why Egypt
Why EgyptWhy Egypt
• Unique geographic location
At crossroads/gateway to Africa, Asia, Europe & Middle East
Why EgyptWhy Egypt
•Political stability & one of most promising emerging markets •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 EgyptWhy 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 EconomyEgypt’s Integration in the World Economy
• Adoption of bilateral, regional & multilateral approach to trade & investment liberalization:
– WTO (member since June 30th 1995)
Egypt’s Integration in the World EconomyEgypt’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 OutlookEconomic 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 OutlookEconomic Outlook
Gross Domestic Product (GDP) at market
prices (current prices) (L.E Billion ) Exchange rate 1USD=5.45 Egyptian Pounds
Economic OutlookEconomic Outlook
Real growth rate of Gross Domestic Product
(GDP) at market prices and constant prices (%)
Economic OutlookEconomic Outlook
GDP – composition by
sector:
agriculture: 13.2%
industry: 38.7%
services: 48.1% (2008 est.)
13.2%
38.7%
48.1%
Agriculture
Industry
Services
Economic OutlookEconomic OutlookPer capita income (current prices)
(Egyptian Pounds) Exchange Rate 1USD=5.45 Egyptian Pounds
Economic Outlook 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 OutlookEconomic 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 IncentivesInvestment 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 IncentivesInvestment 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 IncentivesInvestment 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 IncentivesInvestment 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 OpportunitiesInvestment 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 OpportunitiesInvestment 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 SerbiaEgypt 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 SerbiaEgypt 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 SerbiaEgypt 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 26th 1957 2. Agreement on Establishing the Joint Committee for Economic Cooperation, signed on March 21st 1961 3. Agreement on the reciprocal promotion and protection of investment, signed on May 24th 2005 4. Agreement on the Avoidance of Double Taxation with respect to taxes on income, signed on July 31st 2005
Egypt and SerbiaEgypt and Serbia
Trade Balances between Egypt and Serbia
YearEgyptian Exports from Serbia
millions of USD
Egyptian Imports from Serbia
millions of USD
Trade Balance
millions of USD
1990 41.7 93.3 135
1991 32.4 71 103.4
1996 9.2 20.6 29.8
1997 4.9 36.9 41.8
1998 3.2 25.3 28.5
1999 1.7 13.1 14.8
YearEgyptian Exports from Serbia
millions of USD
Egyptian Imports from Serbia
millions of USD
Trade Balance
millions of USD
2000 2.6 14.6 17.2
2001 3 11.5 14.5
2002 3.4 9.1 12.5
2003 2.7 7.1 9.8
2004 3.6 19.2 22.8
2005 4.9 21.3 26.2
Egypt and SerbiaEgypt and Serbia
YearEgyptian Exports to Serbia
millions of USD
Egyptian Imports from Serbia
millions of USD
Trade Balance
millions of USD
2006 9.1 26 35.1
2007 13.1 20 33.1
14.2 14.2 36.5 50.7
2009
Until June 30th
4.7 13.9 18.6
Egypt and SerbiaEgypt 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.
Egypt