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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

1

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 StudyViability Study Consultancy Agreement

Consultancy Agreement

Mobilization

Mobilization NegotiationNegotiation Maintainin

g Accounts

Maintaining 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/services

Legal 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 32

R 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 – ownership

100% 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 board

Applies to large (above RO 250,000) Government tenders

Transparency and due process

Not all Government bodies –MOD, PDO

Local tenders versus International Tenders

Online

Part 4 – Doing Business in Oman

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Strategic location

Stable economic framework

Comprehensive legal framework

Excellent infrastructure

support investors

local labor

Free 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?