9th Egyptian Side Meeting
Egypt- Korea Business Council
Sunday, 1st of November 2015
The 9th Egyptian side meeting of Egypt – Korea business council was held
on the 1st of November 2015, the meeting was headed by Dr. Sherif El
Gabaly, Chairman of the Egyptian Side of Egypt –Korea Business council,
Mr. Kim Eung Joong Economic Counselor, Embassy of the Republic of
Korea in Egypt, Mr. Rho Jungmin Deputy Director KOTRA, as well as
Ambassador Amin Meleika Deputy Assistant Minister for Foreign
Affairs for East Asian Affairs , Dr. Noha Ahmed Salah, first secretary ,
Egyptian commercial service and Mr. Mohamed Mohy Eldine , and
Marwa Hussein from the General Authority for investment and free
zones.
Dr. Sherif El Gabaly, Chairman of the Egyptian Side of Egypt –Korea
Business council, started by mentioning that the last joint business council
meeting was held in Cairo in august 2014 and since things are improving
now in Egypt as we are now in the process of electing a new parliament
which is considered the last step in forming our political institutions after
the 30th of June Revolution. He aslo added that during the Sharm El
Sheikh Economic Conference a lot of major mega projects were announced
through the PPP and that he believes that for sure Korean investors can
play an important role in these projects.
He added that we are planning to visit Seoul in order to hold the “9 th Joint
Egypt-Korea Business Council Meeting” and consultations are ongoing to
decide on the date of the visit.
Dr. Gabaly also said that there are a lot of room for mutual cooperation
especially in the new and renewable energy, the Suez Canal development
project and the PPP projects recently announced by the ministry of
Finance.
Dr. Gabaly also added that in order to rebuild the investors’ confidence and
to support the government efforts towards a roadmap for investment and
business climate reforms, Egypt Korea Business Council has extended an
invitation for the Korean companies in Egypt to attend this meeting where
we were supposed to discuss the challenges that face the Korean Investors
in doing business in Egypt in order to open up channels of dialogue with
governmental officials, and serve as a mediator between the Egyptian
authorities and foreign companies. Unfortunately, they were not present,
but we still offer our services as a catalyst to facilitate their business
experience in Egypt.
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Mr. Kim Eung Joong the Economic Counselor, Embassy of the Republic
of Korea in Egypt, started by thanking EBA and the council for the
invitation and said that the Egypt Korea relations are long term ones, and
that since President Sisi started his presidency, the Egyptian society is
moving forward on the political social and economic fronts even though
mounting challenges are being faced. He also added that Korea has passed
through a similar experience where the main problems were national
security, economic development as demand for democracy.
Ambassador Amin Meleika Deputy Assistant Minister for Foreign
Affairs for East Asian Affairs, highlighted on the exceptional relations
between Egypt and Korea based on excellent ties of mutual understanding
and cooperation. He also mentioned that the diplomatic relations has this
year reached 20 years.
Ambassador Meleika, added that a lot of important visits were done
during the past period namely:
1. Prime Minister of Korea (November 2014)
2. Vice Minister of Trade attended the Sharm El Sheikh Economic
Conference
3. Minister of Oceans and fisheries was also here during the
inauguration of the new Suez Canal in August 2015
4. President Sisi was expected to visit Korea, but it was postponed due
to parliamentary elections.
5. The presidential expected visit will be preceded by a visit from the
Egyptian Minister of Foreign Affairs.
Ambassador Meleika , also mentioned that there are now important
projects under discussion between the two side:1. Nuclear Power Plant in Daba’a (the Korean side has prepared a
valuable feasibility study for this project ,knowing that they have
background experience as they have built a similar project in UAE
in 2009)
2. Egyptian – Korean University for Science & Technology (the
project was supposed to be in Damietta, but now there are
discussions to move it to Beni Sueif where Samsung Plant already
exists. The project is supposed to start in 2016 and be ready in 2022)
3. Development of Alexandria Port (there is a MOU between the two
ministries of transportation in this regard)
4. Development of Traffic Lights between Nagaa Hamady and
Luxor (118 KM)
5. Establish a power station to Produce Photovoltaic energy with
the capacity of 20 megawatt in Hurghada.
6. Establish a power station to produce new and renewable energy
(biomass) using waste to energy recycling techniques.
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7. Start the second phase of enlarging the automatic control over
the distribution network in Cairo
Ambassador Meleika , also added that there is an expected visit from the
Korean Vice Minister of Finance from the 16 th to the 18th of November
2015 to discuss the financing possibilities in some projects.
He added that EBA and the Egypt – Korea business council can act as a
catalyst between the business communities in both countries to take active
roles in these projects.
Dr Gabaly added that we have received a proposal from the New and
Renewable Energy Authority (NREA) on the importance of activating the
local manufacturing and technology transfer from the Korean side in the
renewable energy machines.
Mr. Mohamed Mohy Eldine , the General Authority for investment and
free zones said that we have a long investment experience with Korea with
a lot of success stories such as Samsung, LG , Hyundai ,and we are
targeting now to attract more investment from SK group , Kia and in
sectors such as petrochemicals and electronic
He added that, a large economic conference for Investment opportunities in
Upper Egypt will be held in December 2015.
Mr. M. Mohy Eldine also added that the master plan for the projects in the
Suez Canal development will be ready by January 2016.
He added that joining efforts to receive delegation will add more value to
the outputs of the events. And confirmed that GAFI will participate in the
upcoming business trip to Korea when the date is finally decided.
Dr. Noha Ahmed Salah, First Secretary, Egyptian Commercial Service
said that there is a proposed MOU that is expected to be signed between
the ministries of trade during the upcoming presidential visit.
She added that the main cooperation sectors are: education and vocational
training, technology transfer, shipbuilding, automotive industry
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Eng. Mohanad Taha Khaled , Partner BDO Khaled & Co gave a small
overview on the latest developments on taxation :
 Egypt has 52 tax treaties with different countries in the world, one of
which is with Korea .
 After the revolution, there was an increase in the corporate tax rate
to be 25% instead of 20% to cover the budget deficit.
 A new tax was introduced which is the Dividend taxes were also
introduced on the dividends distributed from companies to their
shareholders.
 The government after several lobbying voices and meetings
announced a reduction in corporate tax rates to become 22.5%
fixed for 10 years which is considered as a major change in the
mindsets and would lead to more stability.
 The government has postponed the customs duties on imported
capital goods for companies established under the law number 8.
 Sales tax on capital goods was reduced to 5% instead of 10%. That
will be recoverable with the first tax return.
 An attractive point for investors aiming at exporting, is that the
exports are at 0% tax rate.
 In the current tax law, you are allowed to have an accelerated
depreciation for assets by 50% in the first year especially in
manufacturing facilities. (Draw back) therefore, the government
decided that it will be a non- compulsory depreciation.
 The introduction of (Value Added Tax) VAT, major step ahead, the
draft law in under discussion with business organizations and
chartered accounts.
 Regarding the monetary exchange rate, aggressive decisions are
being taken in the Central Bank of Egypt by changing the
government, one point that need to be mentioned that Egypt has
passed through the same situation in 2004 where the difference
between the official exchange rate and the black market was around
1.5 LE , whereas , now the difference is only 50 PT, therefore, it will
be resolved by taking some measures in the near future.
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During the discussion the following points were raised:
1. A new feed in tariff will be announced in February 2017 for energy
produced from waste, therefore the using the Korean know how in
this area would be required.
2. Requesting a list of the top Ten Korean Companies working in the
field on energy.
3. The cooperation in renewable energy should focus on rural areas to
be linked to the national grid
4. Cooperation in the education sector is crucial for the development of
Egypt, and that both governments should support dispatching
Egyptian engineers to be trained in Korea especially in the field of
new and renewable energy.
5. Regarding education , not only university exchanges are required but
also the cooperation in vocational training and e learning
6. The trade balance is in Korea’s favor, as we export represent less
than 20% of what we import , non-oil exports are only 57 million
US$.
7. Desalination of water using the Korean experience using less costly
methods.
8. Encourage more investments from the Korean side especially in the
mega projects.
9. Other areas of cooperation were suggested as the telecommunication
sector, shipping and logistics as well.
10.Activating the recommendation our the 8 th round of the joint council
to allocate a special industrial zone for the Mega Korean companies
to pump long term, ongoing investments to Egypt.
11.Recycling of paper, plastic and fibers was also discussed using the
Korean know how.
12.Encouraging incoming Tourism from Korea to compensate for the
imbalance in trade.
13.Applying the (ABC) of value chain approach in exporting value
added products not raw materials.
14.The PPP upcoming projects should be downloaded from the finance
ministry web site and sent to the Korean side.
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