Transcript Eng. Nabil Itani, Chairman and Managing Director, Investment

Economic Performance &
Investment Environment in
Lebanon
Beirut
April 13, 2015
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Outline
 Lebanon: The Gateway to the Middle East
 A Stellar Economic Performance
 Strong Economic and Legal Fundamentals
 Investment Opportunities
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LEBANON: THE GATEWAY TO THE MIDDLE EAST
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LEBANON – CROSS ROAD TO EUROPE, ASIA, AFRICA AND THE
MIDDLE EAST…
Direct Access to
all European
Markets
GCC
access
Direct Air Services
to African Subcontinent home to
…. Facilitated by very liberal trade policies
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LEBANON IN FIGURES
Overall Country Characteristics
Capital
Form of Government
Official Language
Population
Beirut
Parliament Democracy
Arabic – French
4,224,000
Literacy Rate
90%
Lebanon Main Economic Indicators
2009
GDP at current prices (USD billion)
34.5
Real GDP growth (%)
8%
GDP/Capita ( Current USD)
8,175
Average Inflation Rate (%)
1.20%
Exchange rate (LL per USD )
1507.5
Bank Assets to GDP (% of GDP)
334.1%
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SOLID REASONS TO INVEST IN LEBANON:
A STELLAR ECONOMIC PERFORMANCE
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The Lebanese economy has registered a stellar performance over
the last few years…
REAL GDP GROWTH RATES
(2006-2010)
Worldwide
financial crisis
11%
9.30%
8.5%
9%
Lebanon
8.70%
8.20%
7.50%
7.50%
7%
6.50%
5.80%
6%
5%
5%
7.30%
Emerging
Economies
3.80%
3%
3%
2.70%
MENA
Countries
3.00%
2.50%
2%
1%
0.60%
-1%2006
0.20%
2007
2008
2009
Advanced
Economies
2010
-3%
Source: International Monetary Fund, World Economic Outlook Database, April 2010
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… and was one of the best performers
internationally despite the global slowdown
regionally
and
ANNUAL GROWTH RATES
(2009-2010)
9.03%
Qatar
8.00%
Lebanon
5.20%
Morocco
Egypt
4.67%
Sudan
4.52%
3.99%
Syria
3.35%
Oman
Tunisia
2.95%
Bahrain
2.89%
Jordan
2.75%
2.03%
Algeria
0.14%
KSA
-0.67%
UAE
-2.66%
Kuwait
Japan
-6.29%
Ireland -7.58%
-10%
-5%
0%
Source: International Monetary Fund, World Economic Outlook Database, April 2010
5%
10%
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Confidence in the Lebanese economy has sustained with FDI
inflows growing at a steady rate of 15%
FDI INFLOWS TO LEBANON
(2006-2010)
15%
CAG
R
4.84
4.65
4.33
3.38
2.68
2006
Source: UNCTAD: IDAL Estimates and Calculations
2007
2008
2009
2010
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Enabled mainly by strong interests from foreign investors and
Arab expatriates particularly in the Lebanese real estate and
residential sectors
FDI DISTRIBUTION BY SECTOR
(2009)
Agriculture
1.8%
Education
1.3%
Financial
Trade 1.5%
2.3%
Tourism
22.2%
Real Estate
44.4%
Residential
26.3%
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Lebanon is actually one of the largest recipient of FDI in the region,
If we exclude oil rich economies
FDI INFLOWS TO MENA COUNTRIES
(in 2009)
(Bn $)
KSA
35.0
Qatar
8.7
UAE
8.5
Egypt
6.8
Lebanon
4.8
Morocco
2.5
Jordan
2.3
Algeria
2.3
Syria
Kuwait
Source: UNCTAD/World Investment Report (WIR)2010
Oil Rich
Economies
1.5
0.2
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Actually Lebanon has the highest degree of internalization with FDI
stock as large as the economy
FDI STOCK % GDP
(2009)
Canada
35
France
40
UAE
30
Saudi Arabia
40
Lebanon
100
UK
60
Sweden
80
Ireland
85
Switzerland
90
Belgium
175
Singapore
200
Luxembourg
230
Hong Kong
430
0
Source:
100
200
300
400
500
UNCTAD STAT
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SOLID REASONS TO INVEST IN LEBANON:
STRONG FUNDAMENTALS
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FREE
MARKET
ECONOMY
Lebanon is one of the freest economy regionally and
internationally due to the lack of restrictions on capital
flows
RESTRICTIONS ON CAPITAL FLOW
(2010)
Ranking
Tunisia
4.1
Egypt
4.1
117
Kuwait
4.3
Turkey
5.0
Jordan
5.1
Australia
5.1
Saudi Arabia
UAE
Qatar
How restrictive are regulations in
your country related to international
capital flows. 2009-2010 weighted
average
Score over 10
5.3
5.5
5.7
Singapore
5.9
Lebanon
5.9
5
Finland
1
Source:
Hong Kong
6.1
Lowest restrictions
6.5
World Competitiveness Report
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Lebanon boast one of the soundest banking system in
the world, ranking 4th only after some of the largest
economies
SOUND
BANKING
SYSTEM
Soundness
of Banks*
SOUNDNESS
OFWorld
BANKS Rank
2010(2010)
1st
2nd
3rd
4th
Rank
5th
6th
7th
8th
9th
Canada
New
Zealand
Australia
Lebanon
Chile
South
Africa
Panama
Hong Kong Singapore
Source: Global Competitiveness Report, 2010-11
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COMPETITIVE
TAXATION
ENVIRONMENT
Lebanon has one of the most favorable taxation
environment regionally and internationally
CORPORATE TAX RATE (%)
(2009)
Syria High
45%
Japan
40%
France
33%
Germany
33%
Jordan Hig
30%
Tunisia
30%
UK
25%
Greece
24%
Turkey
20%
Egypt
20%
Singapore
Jordan Low
15%
Lebanon
15%
Ireland
Cyprus
Source:
17%
13%
10%
Countries website
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TOP NOTH
HUMAN
CAPITAL
Lebanon has one of the best educated workforce that is
endowed with a top-notch higher education system
Education Capability Index
Selected Regional countries
(2010)
Number of Higher Education Students
per 100,00 Inhabitants
(2010)
USA
5339
Korea
4974
Argentina
3117
Lebanon
2712
Turkey
1960
Egypt
1900
Syria
1559
Qatar
1509
Saudi Arabia
80
Jordan
57
Tunisia
57
Qatar
55
Morocco
52.6
UAE
41.3
Kuwait
40.4
Egypt
39.8
1380
Tunisia
1253
Algeria
1236
UAE
Lebanon
801
Bahrain
35.2
32.7
Saudi Arabia
Algeria
20.6
The Education Capability Index10 represents CEO
satisfaction levels regarding the education system, based on
current quality, the adequate skills acquired by students upon
graduating, and the ability of the education system to meet
future market requirements.
Source: www.pwc.com; ttp://www.educationdev.net
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QUALITY
HEALTH
CARE
The healthcare system is amongst the best performer
internationally as measured by the ratio of physicians to
population and beds to population
Physicians per 10,000 Population –
Selected Regional and OECD countries
(2000-2009)
Cuba
64
37
France
Lebanon
33
Ukraine
31
30
Bahrain
USA
27
Jordan
26
Egypt
24
UAE
139
Japan
87
Ukraine
France
72
60
Cuba
34
Lebanon
31
USA
Bahrain
20
Saudi Arabia
22
Egypt*
21
15
Saudi Arabia
Syria
Beds per 10,000 Population –
Selected Regional and OECD countries
(2000-2009)
UAE
19
Jordan
18
16
5
Syria
15
Source: WHO Report 2010
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The Quality of Life has been an important factor in channeling
investments to Lebanon
LIFESTYLE
Quality of Life Indicators in MENA
(Scale of 100)
(2010)
Saudi Arabia
45
Algeria
The Quality of Life Index is
based on variables relating to the
cost of living, environment,
culture and leisure, political
freedom, health, infrastructure,
safety & risk.
50
UAE
50.45
Egypt
51.5
Qatar
52.4
Syria
53.5
Bahrain
53.5
+
Lebanon
54.3
Morocco
54.45
Kuwait
54.42
Jordan
55.05
30
40
50
60
Source: International Living
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SOLID REASONS TO INVEST IN LEBANON:
VAST INVESTMENT OPPORTUNITIES
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Lebanon boast at least 9 sectors with growth potential and
readiness for development
SECTORS WITH HIGH GROWTH POTENTIAL
INDUSTRY
FOOD & BEVERAGE
FINANCIAL SERVICES
TOURISM
INFORMATION TECHNOLOGY
EDUCATION
TECHNOLOGY
MEDIA
AGRICULTURE
Source: UNDP Report 2003- Investor Perception Survey
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SECTORS WITH PROMISING POTENTIAL – Overview
ICT: Great potential as Lebanon ranks 16th worldwide for the quality of its education and 7th for sciences.
ERICSSON, US INTEL CAPITAL, NOKIA with operations in Lebanon
FOOD AND BEVERAGE: Great export potential for local industry mainly olive oil, wine and processed food–
Made in Lebanon Products very successful internationally
FASHION INDUSTRY: A booming sector with enormous potential: Designers such as Elie Saab, Rabih Keyrouz,
already serving the international market
HEALTH CARE TOURISM: Lebanon already attracts health tourists from GCC countries and boasts one of the top
notch medical centers in the world and highest ratio of physicians to population in the world
PROFESSIONAL SERVICES / CALL CENTERS: Lebanon offers a strategic location for serving the
“Levant”/MENA markets, with an educated, multilingual and commercially minded workforce.
MEDIA: Significant Hub for the media and entertainment industry; Opportunities in High End Publishing,
advertising, TV and audio Production; Promising market due to very young market
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The Investment Development Authority of Lebanon (IDAL) has
played an important role in attracting investments to growth
promising sectors
Main Authority responsible for promoting Lebanon and attracting
investments. Attached to the Presidency of the Council of Ministers
Created in 1994 and Investment Law 360 ratified in 2001
Provides a wide range of services:
– Provide economic, financial and legal information important for investors
– Grants fiscal incentives and other types of fee reduction to investors
– Facilitates the issuance of permits and licenses
– Identifies investment opportunities across various sectors
– Provide Business Matchmaking Services to investors and entrepreneurs
Follow a sector oriented approach with specialists in growth promising
sectors
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INVESTMENT INCENTIVES IN LEBANON offered by INVESTMENT
LAW 360
TWO TYPES OF INCENTIVES SCHEMES
REGION AND SECTOR BASED INCENTIVE
JOB CREATION BASED INCENITVE
• Also called Package Deal Contract
• Also called Investment Projects
incentives
• Provided to projects based on their
geographical location across 3 Zone:
A, B, C and investment size
• Incentives Provided:
 Up to 100% tax exemptions for 10
years for projects located in remote
areas
 Work Permits granted
• Provided to projects based on their
investment size and number of jobs
created
• Incentives Provided:
 100% exemption of Income Tax and
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
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REGION AND SECTOR BASED INCENTIVE
Sectors
Minimum
Inv. Size
US$
Regions with Socio
Economic
Challenges
Sectors
Minimum
Inv. Size
US$
Tourism
1,000,000
Industry
1,000,000
1,000,000
Tourism
10,000,000
Industry
5,000,000
Agro-Industry
2,000,000
Agro-Industry
Agriculture
1,500,000
Agriculture
Technology, ICT & Media
C
Technology,
Media
200,000
Beirut
C
500,000
ICT
&
200,000
B
A
Sectors
Minimum
Inv. Size US$
Tourism
4,000,000
Industry
3,000,000
Agro-Industry
1,500,000
Agriculture
1,000,000
C
Technology, ICT &
Media
100% income tax
exemption for 10
years
50% income tax
exemption for 5
years
200,000
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JOB CREATION BASED INCENTIVE
Sector
Minimum
Inv. Size US$
Minimum
Job Created
Tourism
15,000,000
200
Industry
10,000,000
100
Agro-Industry
3,000,000
60
Agriculture
2,000,000
50
200,000
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Beirut
Technology, ICT
& Media
100% income tax exemption
for up to 10 years
+
100% exemption from taxes
on project dividends for up
to 10 years
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Today a multitude of Foreign Investors are operating in Lebanon
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Thank You for your Attention
For queries and more information please contact IDAL at:
[email protected] or 00961 1 9833 06
Or Visit our Website at www.idal.com
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