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REVIVING INVESTMENT IN THE MENA REGION:POLICY OPTIONS FOR PROTECTION, PROMOTION AND RISK
MITIGATION OECD Headquarters – Paris
Salem Moosa J. Hassan – Chairman of Namma Development – Representative of the Public Authority for Investment Promotion and Export Development in France
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Table of contents
Part 1 – Namma Development - PAIPED
Part 2 – Reigonal Analysis – Focus on GCC
Part 3 – Key Indicators – Sustainable Progress
Part 4 – Doing Business in Oman
Part 5 – Recommendations
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2
3
4
5
December 6th 2011 – OECD Headquarters
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Part 1 – Namma Development
Consulting company in activity since March 2009 Promotes Business Opportunities between France and Oman Works through innovative non-retainer based Consultancy
Agreements
Representatives of the Public Authority for Investment Promotion and Export Development in France (formally known as OCIPED)
Member of the Task Force for Energy and Infrastructure at the MENA-OECD Investment Programme
Works closely with Omani and French governmental institutions
In France: Market Studies, Networking, Stratregy Counsel, Letter Drafting, Account Maintainence
In Oman: Market Studies, Networking, Stratregy Counsel, Letter Drafting, Follow-up on Accounts
General Information
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Part 1 – Namma Development
Viability Study Consultancy Agreement
Mobilization Negotiation Maintainin
g Accounts
Study of the viability of the mission that Namma will undertake – trends/price/market competitors
Process
Commercial Department : Dedicated Commercial Agents for
your products/servicesLegal and Financial Department
Continuous Legal and Price Monitoring to remain competitive
Whether its accounts opened prior or after the signature of a
Consultancy Agreement, Namma upkeeps and
maintains accounts by paying visits, collecting concerns,
general information, etc
No retainers - commission on sales of product/success of a
mission - advance payable upon signature on a one shot basis deductable and reimboursable
A team of experienced *French Native speaking* negotiating team – we insure that you will
maximize sales/acquire the best deal
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Part 1 – Namma Development
Export Development being a priority for the
government, this Privet Public Partnership works
in perfect synergy
Our client database is utilized at the fullest and
regular communication where synergies can be
created is applied wherever possible
Platform for commercial exchange between France and Oman
Having a large database of partners on the French and Omani market, we believe in synergies by enticing dialog between all parties
Synergy and Reciprocity Philosophy
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Part 2 – Regional Analysis – Focus on GCC
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Part 2 – Regional Analysis – Focus on GCC
Forecasts
IMF forecasting economic growth of about 3.9% expected across MENA region
Oil prices outlook remains strong in 2011 -IMF forecasting $107/barrel in 2011, $108 in 2012
Oil exporters growth 4.9% (GCC = 7.8% (oil), 5.3% (non oil)) But, Egypt and Tunisia down 2.5 -4% year-on-year. Libya off the
agenda
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Part 2 – Regional Analysis – Focus on GCC
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Part 2 – Regional Analysis – Focus on GCC
Concerns Rising food and commodity prices = threat to incomes in LEDC’s,
adding to social tensions Growing debt and debt servicing costs Rising inflation may lead to tightening stimulus spending in GCC Public sector salary hike puts pressure on private sector Greater economic divide
MEED
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Part 2 – Regional Analysis – Focus on GCC
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Part 2 – Regional Analysis – Focus on GCC
Bahrain est. $398m benefits package = 1.5% of GDP Provide cash transfers of $2,660 each to families
Oman est. $825m benefits package =1.25% of GDP Employment for 50,000 Omanis Establishment of monthly unemployment benefit of $390 Possible assistance from the GCC
Kuwait est. $4.32bn benefits package = 2.5% of GDP Provide free staple food to citizens for the next 14 months
together with cash transfers
UAE est. $1.82bn benefits package = 0.5% of GDP Infrastructure programme focusing on the northern emirates 70% increase in pensions for military personnel State subsidies for rice and bread
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Part 3 – Key Indicators – Sustainable Progress
Billion US $
Billion US $
Billion US $
2000
2005
2009
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Part 3 – Key Indicators – Sustainable Progress
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Part 3 – Key Indicators – Sustainable Progressan
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Part 3 – Key Indicators – Sustainable Progress
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Part 3 – Key Indicators – Sustainable Progress
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Part 3 – Key Indicators – Sustainable Progress
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Part 2 – Regional Analysis – Focus on GCC
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Part 3 – Key Indicators – Sustainable Progress
No Sectors Amount in RO Million
Amount in US $ Million
1 Road 1,233.3 3,195.1
2 Airport 652.4 1,690.2
3 Sea Ports 502.1 1,300.8
4 Water 451.7 1,170.2
5 Housing 448.0 1,160.6
6 Health 270.7 701.3
7 Education 244.7 633.9
8 Information & Communication Technology 44.4 115.0
9 Marine 43.8 113.5
Major Projects of The 8th five year plan
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Part 3 – Key Indicators – Sustainable Progress
No Sectors Amount in RO Million
Amount in US $ Million
10 Agriculture 16.0 41.5
11 Vocational Training 54.1 140.2
12 Town Planning & Municipalities 172.0 445.6
13 Sanitary Drainage 72.8 188.6
14 Dams 38.4 99.5
15 Information & Culture 52.0 134.7
16 Youth & Sports Sector 24.6 63.7
17 Justice 42.2 109.3
Total 4,363.2 11,303.6
Major Projects of The 8th five year plan
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Part 3 – Key Indicators – Sustainable Progress
Case Study: DUQM CITY 500km south of Muscat, located directly on the Arabian Sea
Major components include 2nd largest dry dock in the Middle East to be operated in JV with Daewoo and Govt of Oman … repair 10 ships … soft opening next month
Airport: annual 500,000 passenger capacity
Strategic, multi-purpose port with a 2,250m quay and depth of 18m to be operated by Antwerp in JV with Govt of Oman
First rate infrastructure with latest technologies
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1. PORT AND DRY DOCK AREA
2. AIRPORT AREA
3. NEW TOWNSHIP
4. LOGISTICS
5. INDUSTRIAL AREAS
6. TOURISM ZONE
7. FISHING HARBOUR & INDUSTRY
8. LOCAL INDUSTRY
9. TRANSPORT SYSTEM
10. POWER & UTILITIES
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Part 3 – Key Indicators – Sustainable Progress
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Duqm Special Economic Zone
Land availability: area is 1,620 km2 – largest in Middle East 25 km2 tourist area on pristine 18km beach shore Cluster fishing complex: harbor, processing, farming, etc. Large residential area - up to 100,000 people Large logistical center Best international business practices Potential oil refinery, petrochemicals & natural gas supplies 150km2 industrial area with full services Renewable energy alternatives A 1000+ gas-fueled power plant under study
Part 3 – Key Indicators – Sustainable Progress
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a. The rail route is part of proposed Inter-GCC railway running from Kuwait to Salalah (and possibly to Yemen)
1st Phase – 900 km long rail network from Al Ain (UAE) to Sohar Industrial Area to Muscat to Duqm
2nd Phase – 500 km long coastal rail network from Duqm to Thumrayt and 130km to Salalah
b. Expected to start operating by 2016-2018
c. The railway line is expected to provide greater capacity for freight and passenger transport to:• reduce cost and road freight
services• create faster transfer of goods
services between countries in GCC YEMEN
R 32R 31
Sur
Ras Musandam
Masirah
Salalah
Nizwa
Duqm
Muscat
IRAN
UAE
KSA
DUBAI
ABU DHABI
Hayma
SoharAl Buraymi
Phase 1Phase 2
Part 3 – Key Indicators – Sustainable Progress
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Access to Market
WTO
AGCC Common Market
Arab Free Trade Zone
FTA with USA
FTA between AGCC and Singapore.
Part 4 – Doing Business in Oman
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Branch office
Only an option if foreign company is performing a contract with the Oman Government or a quasi-Government entity (e.g. PDO)
Branch is a ‘footprint’ of the foreign parent company.
Taxed at 12% on earnings over RO 30,000 (US$ 1 = RO 0. 385)
Part 4 – Doing Business in Oman
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Limited Liabilities Company (LLC)Simplest form of company to set up
Minimum of 2 shareholders required
Constituted by way of a simple ‘constitutive
contract’
Taxed at 12% on earnings over RO 30,000
Part 4 – Doing Business in Oman
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LLC – ownership100% GCC/US owned LLCs are permitted
United States’ nationals benefit
Oman/US Free Trade Agreement
For everyone else, ownership is limited to 70%
Part 4 – Doing Business in Oman
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LLC – Minimum Capital Requirements
RO 150,000 for an LLC with ‘foreign’ ownership.
RO 20,000 for an LLC with 100% GCC and/or US
ownership.
Certain advantages in increased capital of RO
250,000
Part 4 – Doing Business in Oman
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LLC – Key AdvantagesCommon form –flexible and with basic reporting
requirements.Simple LLCs can be set up in 4 to 6 weeks.Most corporate decisions can be reached by written
shareholder resolution without convening a meeting. It is possible to have disproportionate dividend split
between shareholders, which is ideal for a ‘silent’ shareholder arrangement.
Part 4 – Doing Business in Oman
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Tender boardApplies to large (above RO 250,000) Government
tendersTransparency and due processNot all Government bodies –MOD, PDOLocal tenders versus International TendersOnline
Part 4 – Doing Business in Oman
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Strategic locationStable economic frameworkComprehensive legal frameworkExcellent infrastructuresupport investors
local laborFree Trade and open market policy
Advantages in Oman
Part 4 – Doing Business in Oman
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General Regulations & Incentives
Customs Duty & Corporate Tax Exemption for up to ten years
Competitive Utility Rates
No Personal Income Tax
Free Repatriation of Capital & profits
100% Foreign Ownership
Foreign Ownership of Land and Property (Tourist Designated Complexes).
Part 4 – Doing Business in Oman
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Part 5 – Recommendations
Next step?
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Do You Have Any Questions?