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 inYOUR
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Table of contents
December 6th 2011 – OECD Headquarters
1
Part 1 – Namma Development - PAIPED
2
Part 2 – Reigonal Analysis – Focus on GCC
3
Part 3 – Key Indicators – Sustainable Progress
4
Part 4 – Doing Business in Oman
5
Part 5 – Recommendations
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Part 1 – Namma Development
General Information
 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
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Part 1 – Namma Development
Process
Study of the viability of the
mission that Namma will
undertake – trends/price/market
competitors
Viability Study
Commercial Department :
Dedicated Commercial Agents
for your products/services
Legal and Financial Department
Continuous Legal and Price
Monitoring to remain competitive
Consultancy
Agreement
No retainers - commission on
sales of product/success of a
mission - advance payable upon
signature on a one shot basis
deductable and reimboursable
Mobilization
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
Maintaining
Accounts
Negotiation
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
Synergy and Reciprocity Philosophy
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
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
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Part 2 – Regional Analysis – Focus on GCC
Page  6
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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
Page  8
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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
Page  10
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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
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
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
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
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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
Page  18
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Part 3 – Key Indicators – Sustainable Progress
Major Projects of The 8th five year plan
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
No
Sectors
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Part 3 – Key Indicators – Sustainable Progress
Major Projects of The 8th five year plan
No
Sectors
Amount in Amount in
RO Million 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
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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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Part 3 – Key Indicators – Sustainable Progress
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
22
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Part 3 – Key Indicators – Sustainable Progress
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
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Part 3 – Key Indicators – Sustainable Progress
IRAN
Ras Musandam
a. The rail route is part of proposed InterGCC railway running from Kuwait to
Salalah (and possibly to Yemen)
DUBAI
ABU DHABI
1st
UAE
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
Al Buraymi
Sohar
Muscat
Nizwa
Sur
KSA
b. Expected to start operating by 20162018
c.
R 31
R 32
Masirah
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
Hayma
Duqm
Phase 1
Phase
2
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YEMEN
Salalah
Part 4 – Doing Business in Oman
WTO
AGCC
Common
Market
FTA
between
AGCC and
Singapore.
Access
to
Market
Arab Free
Trade Zone
FTA with
USA
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Part 4 – Doing Business in Oman
Branch office
 Only an option if foreign company is performing a
contract with the Oman Government or a quasiGovernment 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)
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Part 4 – Doing Business in Oman
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
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Part 4 – Doing Business in Oman
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%
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Part 4 – Doing Business in Oman
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
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Part 4 – Doing Business in Oman
LLC – Key Advantages
 Common 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.
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Part 4 – Doing Business in Oman
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
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Part 4 – Doing Business in Oman
Advantages in Oman
Strategic location
Stable economic framework
Comprehensive legal framework
Excellent infrastructure
support investors
local labor
Free Trade and open market policy
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Part 4 – Doing Business in Oman
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).
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Part 5 – Recommendations
Next step?
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Do You Have
Any Questions?
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