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THE EURO-GCC

Trade & Investment Guide 2017

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THE EURO-GCC Trade & Investment Guide 2017

Contents

Note from the Editor, Daisy Reece

Welcome to the second edition of the Europe-GCC Trade and Investment Guide.

Introduction 10

Since the last edition was published, the

The Euro-GCC Trade and Investment Guide....................................................... 10

political change. As international politics

Features 15

policies, it is more important than ever

The European Free Trade Association ................................................................16 What effect will Brexit have from a UK trade perspective to the Gulf States? 20 Q&A with Smith & Williamson LLP..................................................................... 22 Non-doms – pitfalls, opportunities, and what you need to do now ������������������� 24 The Current State of Relations Between Europe and the GCC ........................... 28 Vision 2030........................................................................................................ 30 What do we mean by supply chain finance structures? ......................................32 Why should companies do business in the GCC? .............................................. 34 Saudi Arabia adopts GCC Trade Mark Law.......................................................... 38 Medical Tourism In The GCC and The Need For Healthcare Reforms ���������������� 40

benefits of FDI are threefold - it fosters

Europe Country Spotlights 45

gaps for expansion in technical industries -

Cyprus .............................................................................................................. 46 Germany ........................................................................................................... 54 - Interview with Mr. Abdulaziz Al-Mikhlafi, Ghorfa ............................................. 62 Greece .............................................................................................................. 64 Hungary .............................................................................................................72 Luxembourg ...................................................................................................... 80 - Luxembourg: a powerful partnership for Islamic finance in Europe ���������������� 88 Macedonia ......................................................................................................... 90 Malta ................................................................................................................. 98 UK ................................................................................................................... 106

import and export market between Europe

world experienced a tumultuous year of

that investment is outwardly focused. The

info@blsmedia.co.uk www.blsmedia.co.uk

Unit 5 ‘Hiltongrove N1’ 14 Southgate Road London N1 3LY

Editor Daisy Reece

BLS Media are contract publishers of high quality media for prestigious organisations, event organisers, governments and trade associations both in the United Kingdom and internationally. Our experienced publishing team will develop your publication from initial concept through to completion. Our services include: creative design, PR, advertising sales, sales training, editorial and distribution. Whilst every care has been taken in compiling this publication and the statements contained herein are believed to be correct, the publishers and the promoters will not accept responsibility for any inaccuracies. Reproduction of any part of this publication without permission is strictly forbidden. BLS Media make no recommendation in respect of any of the advertisers and no recommendation may be implied by way of the presence of their advertisements.

the diversification of their economies, as a way to bring about necessary fiscal and social changes to their societies. Diversification presents opportunities to European companies as there are many

and the GCC will grow and expand. The Europe-GCC Trade and Investment Guide aims to promote investment between the two trade blocs. As such, editorial was collated with a view to bringing companies from both sides together. This edition features interviews with the GermanArab Chamber of Commerce, the Kuwait

Promotion and Export Development to that end. In this edition of the Europe-GCC Trade and Investment Guide, in house editorial focuses on the benefits of doing business in the GCC, the medical tourism phenomenon, economic advantages of free trade zones and an analysis of current Euro-GCC relations. As an information resource for companies considering expanding into the Middle Eastern market, the publication contains country profiles which outline and detail the key information investors must evaluate when considering the location of new regional hubs. Overall, the Europe-GCC Trade and Investment Guide 2017 has been designed to provide our readers with the latest

For advertising enquiries in future editions of contact Sam Hussain:

Achraf Amiri

The Gulf countries continue to focus on

the Omani Public Authority for Investment

media@blsmedia.co.uk

Graphic Designer

creating employment opportunities.

Chamber of Commerce and Industry and

Bahrain .............................................................................................................116 Kuwait ............................................................................................................. 124 Oman ...............................................................................................................132 - Oman Investment Department ..................................................................... 140 Qatar ............................................................................................................... 142 Saudi Arabia .....................................................................................................150 Sponsored by UAE ..................................................................................................................158

BLS Media Ltd,

global relations and development as well as

in addition, diversification means that the

GCC Country Spotlights 114

Published by

gradually shift toward protectionist

info@blsmedia.co.uk www.blsmedia.co.uk

updates on the trade relationship between Europe and the Gulf. We wish you happy reading.

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THE EURO-GCC Trade & Investment Guide 2017

Foreword: Abdulaziz Al-Mikhlafi Join the vision of prospering business relations Germany and the GCC countries traditionally share excellent ties. For decades, the countries are building strong relations. On one hand, German companies contribute to visions of further development and diversification of the economies. On the other hand, the GCC investments in Germany are trustworthy and fruitful. These far-reaching exchanges are a mutually beneficial: both for German companies as well as their partners in the region. Although we see a lot of challenges ahead, the outlook remains promising. The Arab countries have more than 380 million inhabitants in total. Almost 50 percent of them are below the age of 25. This is a huge market, which is accessible through the Gulf States. Furthermore, the Asian and African markets are easy to reach from GCC countries. And let us not forget that the region offers huge opportunities for manufacturing by means of good investment conditions and the free environment for doing business. ABDULAZIZ AL-MIKHLAFI Secretary General, Arab-German Chamber of Commerce and Industry

Cooperation in all sectors has allowed both sides to prosper in the past and will offer many mutually beneficial business opportunities in the future. The trade volume between Germany and the Arab countries grew quickly, reaching EUR 52 billion in 2015. The GCC’s share in the trade volume accounted to more than 70 percent. In the first half of 2016 the German exports in the region grew again by 4.2 percent. These positive developments clearly demonstrate the enormous potential of Arab-German relations. Business people from both sides are continuously exploring new cooperation possibilities. Given the fact that the GCC countries are striving for a faster industrialisation process, there are even more possibilities of investments ahead. In this regard I strongly encourage German and Arab business people to further invest in future projects and in technologysectors like renewable energy and environment as well as in health, education and research. Not only big companies offer high potential. Rewarding investments can also be found in Small and Medium Sized Enterprises. SMEs are the backbone of every economy. In Germany these companies already have a long history. They are not just exporting high quality goods, they are also providing education and training alongside their exports. As many GCC economies want to diversify and develop knowledge based economies, Germany is a suitable partner for this endeavour since German companies do not only export their goods, but also bring their know how. In order to foster the high-potential EU-Arab ties, the Ghorfa Arab-German Chamber of Commerce and Industry organises many high-level events and platforms to further strengthen business relations, especially with the GCC countries. Events like the Arab-German Business Forum or sector-specific forums on the fields of health, education and energy are some examples of our top notch services. I invite German as well as Arab companies to benefit from the prospering business relations and to join the vision of thriving Arab-German business relations.

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THE EURO-GCC Trade & Investment Guide 2017

Foreword: Silvia Colombo, Ph.D. The Gulf Cooperation Council (GCC) is a regional grouping bringing together Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Security motives were the driving force behind the GCC’s creation in 1981. In the aftermath of the first Gulf War between Iran and Iraq, the countries of the Arabian Peninsula decided to initiate a move towards regional integration with a view to dealing with possible security threats. Countries in the region share many characteristics, but notwithstanding their commonalities, some important differences exist in a number of domains, including the economic and financial ones. The GCC region is well known for its hydrocarbon endowments, but since their discovery and the beginning of oil exploitation in the 1970s, reserves have decreased substantially in most countries. Despite long-standing calls for the diversification of the GCC economies away from oil and gas and the launch of large-scale initiatives to systematically expand alternative economic sectors (e.g., logistics, tourism, knowledge-based economy, renewable energy), the majority of these economies are still heavily reliant on oil and gas export revenues for their incomes, with fossil fuels accounting for at least two-thirds of their export revenues and up to 85 percent of their central government revenues. Only the UAE has managed to somewhat reduce its dependence on oil relative to its neighbours. In this context, the tremendous downward cycle in global oil prices since Summer 2014 has deeply affected them by slashing government revenues. Again, we can spot a number of important differences between those countries within the group that are fasttracking (mainly Saudi Arabia, the UAE and Qatar) and the others that thus far have been more reactive. Overall, the recent trend has opened up a new phase at the level of economic policy-making in the GCC countries, in addition to affecting the regional grouping’s external relations in the economic sphere. After the GCC’s creation, the GCC countries started to reach out to external partners as well. While the GCC has traditionally privileged the United States as an international partner thanks to its engagement in the region as a security provider, the region has also attracted the attention of the European Union (EU) policymakers as a result of a mix of geopolitical and commercial interests. The first initiative structuring relations between the EU and the GCC countries dates back to 1974, prior to the establishmenmt of the GCC Secretariat. However, it was in 1988 that the scope of relations was gradually expanded and institutionalised in a framework agreement aimed at freeing and increasing commercial exchanges between the two regions. The multilateral Cooperation Agreement sought to “promote overall cooperation between equal partners on mutually advantageous terms in all spheres between the two regions and further their economic development, taking into consideration the differences in levels of development of the parties”. At the time of the conclusion of the Cooperation Agreement, the motivations of the EU countries were quite straightforward. The GCC countries were important suppliers of hydrocarbons and no less important as an export market for European economies. Besides its economic dimension, the Agreement also had a minor political dimension in which the EU saw the GCC grouping as an important actor for the promotion of stability in the region. To achieve this aim, cooperation was established in a wide range of fields: economy and trade, agriculture and fisheries, industry, energy, science and technology, investment and the environment. Nowadays, the rationale for having close relations with the GCC countries is different and perhaps stronger, as trade and investment relations have grown due to the region housing the biggest sovereign investment vehicles, which have emerged since 2008 as important purveyors of emergency finance for distressed EU financial institutions. At the same time, a number of significant obstables still hamper the fully-fledged development of this strategic relation.

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THE EURO-GCC Trade & Investment Guide 2017

This is for example testified by the failure to accomplish the Free Trade Area (FTA) despite 20 years of negotiations. At the end of the 1980s, the EU and the GCC initiated negotiations for an FTA that would have been the first region-to-region trade deal ever concluded. The agreement sought to reinforce integration between both regions and went beyond shallow integration and tariff dismantlement to address issues such as trade in services liberalisation, investment regulations and government procurement rules. Despite the wide and promising scope of the agreement, the parties failed to reach a consensus and the GCC withdrew from the negotiations unilaterally in 2008. Since that moment, divergences over the content of the FTA and the global financial crisis have frozen EU-GCC trade talks while, at the same time, GCC-China trade has soared and moved up the value chain. This does not mean that informal contacts at the multilateral level and, above all, important bilateral trade and investment relations have not been ongoing. Nevertheless, there is the need to rethink the overall framework for EU-GCC relations taking into account the new realities produced by the oil price crisis and the vulnerabilities in the GCC economies it has powerfully brought to the surface. Against this backdrop, this edition of the Euro-GCC Trade and Investment Guide represents an important instrument to track the past and current record of multilateral and bilateral relations between the two regions and to contribute to the rethink of the overall strategic cooperation framework.

SILVIA COLOMBO, PH.D. Senior Fellow, Mediterranean & Middle East Programme Istituto Affari Internazionali (Institute of International Affairs) Rome

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THE EURO-GCC Trade & Investment Guide 2017

The Euro-GCC Trade and Investment Guide: An Introduction to the Publication and the Blocs Introduction ! Imran Hussain

The Euro-GCC Trade and Investment Guide came about after we at BLS Media noticed the need for a publication that would bring together two important blocs in the global economic marketplace and help increase bi-lateral trade between them, namely the GCC and Europe. Our second edition will cover the latest developments and trends for trade and investment between the two. As the GCC member states look to diversify their economies from being defined oil and gas into more multifarious beasts, in which dependence on commodities is better shared and new jobs, start-ups and new sectors are stimulated on the shores of the Gulf, Europe can better help - and benefit from - the bloc’s doing so. It is imperative that such a major trading partner for the GCC is on-board with this diversification. Equally, for Europe, the GCC is seriously important. The GCC is becoming a serious player in other industries and forging new ties with new global trading partners, including China, and Europe will need to stay competitive to keep its status as a major trading partner with the GCC.

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It is in the interest of a great number of companies, people and governments that bi-lateral trade is stimulated between Europe and the GCC and, Geo-politically speaking, it makes great sense for trade and investment to continue and grow from Europe to the GCC and vice-versa respectively. The two sides meet once a year to discuss trade from within the EU-GCC Joint Cooperation committee which is often hosted in either Riyadh or Brussels. However, in April 2016, the committee agreed to increase discussions on a more informal basis, which will allow the committee to tackle issues related to trade and investment with increased regularity and cooperation. This publication is packed with editorial features on these issues and more, while also providing you, the reader, with country spotlights giving some in-depth viewpoints and facts about all the GCC countries and some of the major players in Europe that can and will enhance trade and investment with the GCC. For now, here are introductions to the GCC and Europe and some brief information on how the two operate at business level.


THE EURO-GCC Trade & Investment Guide 2017

Ü

The common currency itself has not been realised yet, but if it is it will be the second-highest by GDP in the World.

The GCC

The GCC at a Glance The GCC, or to give it its full title, The Cooperation Council for the Arab States of the Gulf, is a regional intergovernmental economic and political union involving every Arab state of the Persian Gulf, barring Iraq - namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The bloc was formed officially in 1981 with the following conceits in mind: • Formulating similar regulations in various fields such as religion, finance, trade, customs, tourism, legislation, and administration • Fostering scientific and technical progress in industry, mining, agriculture, water and animal resources • Establishing scientific research centres • Setting up joint ventures • Unified military (Peninsula Shield Force) • Encouraging cooperation of the private sector • Strengthening ties between their peoples • Establishing a common currency

The GCC logo comprises two concentric circles. On the upper part of the larger circle, the Bismillah phrase is written in Arabic and, on the lower part, the Council’s full name is written in Arabic. Trade & Investment in the GCC Trade and investment in the GCC is plentiful and evergrowing as the states themselves use sensibly stored cash reserves (attained through rich oil and gas reserves and supply) to build more elaborate and stupefying architecture and develop a wide economic diversification project. Much of the GCC countries’ trade has traditionally been outward with oil and gas supply and, indeed, the capital accrued has led to many of the royal families of the respective countries ranking among the richest families in the World. Their investment power is serious and, as has been the case with several European football clubs as of recent, large enough to dramatically change the purchasing power of the ventures they invest in.

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THE EURO-GCC Trade & Investment Guide 2017

The GCC, then is a cash rich bloc whose economic power and reserves dwarf most globally. It’s a powerhouse in oil and gas looking to fragment and reshape its approach to the way it does business. Cash rich GCC investors, of which there are many, are a wonderful ally for any entrepreneur around the World, should they indeed become allies.

Ü

Europe

Europe at a Glance Europe is a continent that comprises the westernmost section of the Eurasian plate and is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west and the Mediterranean Sea to the south. In its eastern and southeastern areas, Europe is separated from Asia by the water borders of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways of the Turkish Straits, but the borders of Europe are somewhat abstract, as the actual term “continent” also incorporates cultural and political elements. Europe, having been the continent surrounding Greece during its enlightened “ancient” era, is considered the birthplace of Western culture. After the speculative “middle ages” period (in the post-Roman age), Europe underwent a huge transformation as its philosophical enlightenment and industrialisation in the UK combined to bring the continent towards Renaissance art, philosophical thinking and the scientific method converging with early capitalism. From this period onwards, Europe played a predominant role in global affairs and has been a forebear of economic thought. Between the 16th and 20th centuries, European nations controlled at various times the Americas, most of Africa, Oceania, and the majority of Asia, with the UK at one point controlling a third of the World with its British Empire. Trade & Investment in Europe As has been mentioned, Europe has been a predominant player in global affairs since at least the 16th century, and thus since globalism as a concept became a reality. It is therefore no surprise that European trade and investment is equally predominant on the global stage, with four of the seven member states of the G7 being European.

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The GCC is becoming a serious player in other industries and forging new ties with new global trading partners, including China, and Europe will need to stay competitive to keep its status as a major trading partner with the GCC.

London is one of the World’s two financial centres (along with New York City) and the dominant force in driving the European economy along with Paris, Berlin, Moscow, Madrid and Rome. The top five European countries by nominal GDP in the region are Germany, the UK, France, Italy and Russia and indeed are in slightly different order in terms of GDP PPP. A wealth of industries are in operation in Europe including, but certainly not limited to: commerce, finance, media, the arts, science, technology, energy, transport and tourism. Europe is a centre for innovation globally in nearly every field and various large sums of investment are made into and out of the continent and trade is ongoing, ever-changing and pulsating. Brexit has caused a shake up within the European economy and as of this publication, it is still uncertain exactly what effect this will have on trade between Europe and the Gulf. The UK will likely decrease the amount of trade it does with Europe if an attractive trade agreement between the two parties cannot be reached – this will leave the door open for countries from the GCC to step in and replace many of the areas the UK previously imported from Europe, and doing so without being shackled by EU Regulations.


THE EURO-GCC Trade & Investment Guide 2017

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THE EURO-GCC Trade & Investment Guide 2017

Features introduction Welcome to the features section of the Europe-GCC Trade and Investment Guide. Overleaf, you’ll find key information and editorial regarding free zones, medical tourism and profes-sional services. This edition also features editorial detailing Iran’s new approach to trade and the current status of relations between Europe and the GCC. Also included is an interview with the Secretary General of the German Arab Chamber of Com-merce, Mr. Abdulaziz Al-Mikhlafi, and editorial contribution from the Bahrain Chamber of Com-merce and Industry. The Luxembourg Stock Exchange and the Omani Public Authority for Investment Promotion and Export Development have also contributed to the publication. We hope you enjoy the editorial content, and invite you to contact us about upcoming editions or to contribute editorial at media@blsmedia.co.uk

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THE EURO-GCC Trade & Investment Guide 2017

The European Free Trade Association Feature ! Candy Lebby

An Overview Of The EFTA The European Free Trade Association is one of the most important organisations when it comes to free bilateral trade in the EU. Since its inception in 1960, the EFTA has made substantial contributions to global trade liberalisation and was established with a view to abolish quotas, import duties and other trade barriers in Europe. Ultimately, the aim was - and still is - to develop non-discriminatory world practices. The founding members of the EFTA were Denmark, Austria, Norway, Portugal, Switzerland and the United Kingdom. Subsequently Iceland, Finland and Liechtenstein joined in 1986, 1970 and 1991. All the rules and regulations regarding the EFTA were decided at the Stockholm Convention, and as a result of that meeting, a consensus was met and a common goal established. Since the convention, a tradition of friendly cooperation has developed between the EFTA countries and their Western European companions, particularly those in the European Union. The EFTA plays a vital role in international economic life, and pursues goals such as full employment, sustainable economic growth, increased productivity, financial stability and the harmonious development of world trade with the removal of trade obstacles. EFTA States And The EEA Agreement The European Economic Area Agreement entered into force on 1st January 1994 and brought together the members of the three EEA EFTA states and the EU member states into a single market referred to as the internal market. A condition of the EEA

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agreement states that when a country becomes a member of the European Union, it shall also apply to become party to the EEA agreement which would lead to the expansion of the EEA. Four Freedoms Of The EEA Agreement The EEA Agreement is particularly concerned with the four fundamental pillars of the internal market. These “four freedoms” are the freedom of movement of goods, persons, services and capital. Though the EEA does not cover agriculture and fisheries it may cover “flanking policies” such as social policy, consumer protection, and environmental policy. Here we’ll take a look at some of the four freedoms with a short summary explaining what the EEA policy covers. • Goods (customs/trade facilitation) Trade facilitation aims to improve strategies and controls in commodity trade across national borders by reducing correlating cost burdens and supercharging efficiency, while preserving legitimate regulatory objectives. Simpler trade procedures are essential where trade services are concerned, and for many years the EFTA countries have worked on contributing towards this. • Services (financial services) The financial services in the EEA agreement ensures that all the relevant EU legislation surrounding insurance, banking and securities are integrated into the agreement in a timely manner. These services also monitor the preliminary work of the European Commission on new enterprising laws within the sector. A crucial part of the European

commission’s objective is for there to be an increased number of improved job opportunities in a more dynamic and attractive Europe. Completing the single market in financial services - and doing it successfully - is of paramount importance. • Capital (company law) Cooperate governance and company law are imperative for the successful functioning of the internal market. They encourage competitiveness and efficiency in business, as well as promoting cross-border cooperation between companies in different member states. Recent financial events in Europe and the United States have put the modernisation of company law and corporate governance at the top of the priority list for the European Commission. • Persons (social security) The EEA agreement provides rules which protect citizen’s social security rights when moving throughout Europe. However the rules of social security coordination do not replace national systems with a singular European one. This means that all countries are free to decide who is to be protected under their legislation, and the conditions under which benefits are granted. • Horizontal policies and flanking (statistical cooperation) EEA and EFTA states regularly participate in statistical committees which allow them to influence the shaping of rules and statistical programmes at an early stage. This is imperative for the EEA and EFTA states because all legal acts, which support the achievement of a consistent EEA, through the implementing of the four freedoms, are believed to be relevant to the EEA agreement.


THE EURO-GCC Trade & Investment Guide 2017

EFTA Council The highest governing body in the EFTA is the EFTA Council, which meets together eight times a year at ambassadorial level and twice a year at Ministerial level. It can be likened to a decision-making forum, the committal consults, negotiate and decide on policy issues regarding the EFTA. The Council facilitates cooperation whilst fostering the development of new free trade agreements, and managing existing ones. Each European member state is represented at council meetings and has one vote. However any decisions made are usually reached through consensus. Substantial matters are discussed, especially relating to the continuation of the EFTA relations with third countries. Topics under discussion include management of free trade and general reviews of the EU third country policy and administration. EFTA Budget 2016 On December 7th 2015, the EFTA Council approved a budget of CHF 21.7 million for 2016, which is to be shared between the member states of Iceland, Liechtenstein, Norway and Switzerland. The December 2015 meeting was the last meeting under the Norwegian chairmanship. Since 2016, Switzerland has taken over the rotating EFTA chair and counselled the meeting for the first half of the year. The graph below illustrates a breakdown of the EFTA budget, and where the money is dispensed.

EFTA budget 2016

Budget posts (in CHF) Trade relations with countries outside the EU

5 000 000

EEA related activities

7 914 000

EFTA/EU statistical cooperation

744 000

EFTA Council and horizontal activities

2 088 000

EU/EFTA and EFTA cooperation programmes

2 710 000

Administration and management

3 221 000

Total

21 677 000

Contributions to the EFTA budget 2016

Member State

Share %

Contributions (in CHF)

Iceland

2.62

570 267

Liechtenstein

0.96

208 900

Norway

54.68

12 001 787

Switzerland

41.74

8 896 046

100.00

21 677 000

Total

Ultimately, the aim was – and still is – to develop non-discriminatory world practices.

The EFTA is a dynamic vector for free-trade, and an economically coherent group of countries, which uses annual council meetings to discuss positive change in the world of bilateral trade. As well as making changes in the trade world and co-operation declarations, the EFTA has also implemented technical cooperation programmes designed to assist many east and central European countries and to facilitate their integration into the European and world economy. Due to its dynamic nature, the EFTA has close links with various international organisations, an example being the Organisation for Economic Cooperation and Development and the World Trade Organisation.

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THE EURO-GCC Trade & Investment Guide 2017

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TURNING TODAY’S IDEAS INTO TOMORROW’S REALITIES

F

or more than a decade Titanium Capital has stood head and shoulders above the competition in both attitude and expertise in the funding market. With its unique joint venture system there is literally nothing that the company does not have the financial strength or knowledge to successfully undertake. Be it a standard building or a complicated movie all are grist to the mill. Our specialists cover the whole field of human endeavour. Knowledge in depth has been the hallmark of Titanium from day one. The company’s slogan truly is “we don’t have clients just partners”. Unlike banks we don’t smile and shake your hand in the good times and show you the door in the bad. When we talk about partners we really mean it and offer the funding to match. That is up to 80% with no personal guarantees and no contracts of the type which tie you up in knots forever. Our partners success is our success and their triumphs ours. Above all Titanium Capital is a company which displays the best of humanitarian principles and donates the vast majority of its profits to deserving programmes around the world. But that does not mean funding deals which in reality have little chance of success. If a deal does not turn a profit than no donations can be made at its completion. As you might expect Titanium is at the forefront of the green revolution with partners and directors who are leading lights in such fields as bio mass technology, solar energy and crop cultivation.We are also leaders in Aqua technology, an ever decreasing resource in this modern world. Titanium is actively pursuing a future of clean sustainable and reliable power. It is one of our top priorities. Currently we are developing a pipeline of more than 200 gigawatts across a number of third world countries. This will not only generate power but change the quality of lives for millions of people. Our investments in the mining industry have made substantial contributions to local economies, providing jobs and improving living standards, often in the most challenging of conditions and locations.

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Titanium Capital is not simply focused on the world as we would like to see it tomorrow but has its feet firmly planted in the world as it is today. We have strong connections in both the aviation and ship building industries and traditional construction still forms the bedrock of much of our work undertaking projects from 5 million dollars to 500 million and more. We can both finance and build housing estates, ports, harbours and airports to the highest competitive standards and therefore with a strong profit flow. But there is more to life than just mere existence. We need to laugh and enjoy ourselves. Titanium now has a slate of films from the standard romance through to modern animation and cartoons. Some of our specialist technology can be used to promote everything from a product to a country with the latest patented 3D technology. Negotiations are also well advanced which will take us in to the music and television industries.

Titanium derives its strength and specificity from its culture and values. It takes pride in its team, and its partners. If you are looking for an investor with industry expertise and a clear conscience, Titanium Capital may be the perfect fit to breathe extra life into your project, leading to fast expansion and speedy returns which contribute to the progression of humanity. For more details check our website: www.titaniumcapitalpteltd.com


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WE TURN YOUR GREAT IDEAS INTO REALITY WITH UP TO 80% FUNDING Albania | Algeria | Angola | Antigua | Argentina | Armenia | Australia | Austria | Azerbaijan | Bahamas | Bahrain | Bangladesh Barbados | Belarus | Belgium | Benin | Bolivia | Bosnia & Herzegovina | Brazil | Brunei | Bulgaria | Burkina Faso | Cabo Verde Cameroon | Canada | Central African Republic | Chad | Chile | China | Colombia | Comoros | Congo | Costa Rica Cote d'Ivoire | Croatia | Cuba | Cyprus | Czech Republic | Denmark | Djibouti | Dominica | Dominican Republic | Ecuador | Egypt El Salvador | Equatorial Guinea | Estonia | Ethiopia | Fiji | Finland | France | Gabon | Gambia | Georgia | Germany | Ghana Greece | Grenada | Guatemala | Guinea | Guinea-Bissau | Guyana | Haiti | Honduras | Hungary | Iceland | India | Indonesia Iran | Iraq | Ireland | Italy | Jamaic | Jordan | Kazakhstan | Kenya | Kosovo | Kuwait | Kyrgyzstan | Laos | Latvia | Lebanon Liberia | Libya | Liechtenstein | Lithuania | Luxembourg | Macedonia | Madagascar | Malaysia | Maldives | Mali | Malta Marshall Islands | Mauritania | Mauritius | Mexico | Moldova | Monaco | Montenegro | Morocco | Mozambique | Myanmar Namibia | Nepal | Netherlands | Netherland Antilles | New Zealand | Nicaragua | Niger | Nigeria | Norway | Oman | Pakistan Palestine | Panama | Paraguay | Peru | Philippines | Poland | Portugal | Qatar | Romania | Russia | St. Kitts and Nevis | St. Lucia St. Vincent & The Grenadines | Samoa | San Marino | Sao Tome & Principe | Saudi Arabia | Senegal | Serbia | Seychelles Sierra Leone | Singapore | Slovakia | Slovenia | Somalia | South Africa | South Sudan | Spain | Sri Lanka | Sudan | Sweden Switzerland | Syria | Tajikistan | Tanzania | Thailand | Trinidad & Tobago | Tunisia | Turkey | Uganda | Ukraine United Arab Emirates | UK | USA | Uruguay | Uzbekistan | Venezuela | Vietnam | Yemen | Zambia | Zimbabwe

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A sister company of THE SPECIALISTS - HENRY ABDO & CO


THE EURO-GCC Trade & Investment Guide 2017

What effect will Brexit have from a UK trade perspective to the Gulf States? Advertorial Holman Fenwick Willan Anthony Woolich and Jeremy Kelly

The UK’s exit from the European Union presents significant opportunities for enhanced trade and investment between the UK and the Members of the Gulf Cooperation Council. For the UK, the GCC countries are already a vital export market. The value of UK exports of goods to the GCC countries totalled £15.64bn in 2015. In comparison, the total cumulative value of UK exports of goods to Australia, Canada and Japan – other major trading partners with a greater combined population - was lower, at £11.94bn. The UK also holds a rare trade in goods surplus with the GCC, despite having a large overall trade deficit.

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Once the UK formally exits the EU, which is unlikely to happen before March 2019, it will be possible for the UK to enter into comprehensive trade agreements in its own right. Meanwhile, initial discussions may take place. As the UK may trade less with the EU following Brexit, particularly in the vital financial services sector, it is likely that there will be a political imperative for the UK to enter into trade deals with key partners as soon as possible in order to mitigate the impact of any loss of trade between the UK and the EU. Given the high level of bilateral trade that already exists, a trade deal between the UK and the GCC appears to be a priority as the UK develops a new trade policy. Liam Fox, the UK’s Secretary of State for International

Trade has already identified 31 “big-ticket exporting opportunities” for trade in the region, including in the aerospace, life science and infrastructure industries. Such a free trade agreement would likely be significant in the reduction of barriers to trade between the UK and the GCC. In addition to a reduction or elimination of tariff barriers on goods and enhanced mutual recognition of regulatory standards, such an agreement could also cover enhanced access for service providers, which the UK, with its strong services industry, is likely to prioritise in any future trade negotiations. The GCC appears to be supportive of such a trade deal, which will help build on the extensive free trade


THE EURO-GCC Trade & Investment Guide 2017

agreements it has in place with the EFTA countries and Singapore. The GCC economies are already pursuing a diversified export strategy to reduce reliance on oil, and trade deals which lower import tariffs and reduce technical barriers to trade will help support this strategy. In addition, comprehensive trade agreements may also increase the level of inward investment GCC countries receive from the UK. It may also be in the interests of the GCC to support the UK pursuing an open trade policy. Given the high level of investment GCC sovereign wealth funds have made in the UK, particularly in real estate, GCC countries will benefit from a strong post-Brexit UK economy in the form of a return on investment. Pursuing a comprehensive trade deal with the EU before the UK is unlikely to be a priority for the GCC. As things stand, comprehensive free trade agreements negotiated by the EU have to be approved by each of the EU’s 28 Member States, and in some cases, by regional Parliaments within those Member States. This can cause delays, as seen this year when the Belgian region of Wallonia held up the signing of the Comprehensive Economic and Trade Agreement between the EU and Canada. In addition, such agreements are vulnerable to changes in the Governments of EU Member States at a time when protectionist policies are becoming increasingly popular. A previous attempt by the GCC and the EU to negotiate a comprehensive free trade agreement faltered following 18 years of negotiations.

Illustration by Achraf Amiri

Negotiating a free trade agreement between the UK and GCC will not be unproblematic - the negotiation of such agreements never are. Therefore it cannot be expected that a mutually beneficial free trade agreement can be put in place overnight on the day the UK formally exits the European Union. In addition, any sustained economic impact of the Brexit vote could have a negative effect on GCC countries, as a weaker pound makes exports to the UK more expensive, and the value of investments in the UK could fall. Nonetheless, Brexit appears to present a welcome opportunity for the GCC to liberalise trade relations with a key ally with which it has strong economic and historical links.

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THE EURO-GCC Trade & Investment Guide 2017

Q&A with Smith & Williamson LLP Q&A Louise Somerset, Partner, Smith & Williamson

Louise Somerset, a tax partner in the international team at Smith & Williamson LLP, answers questions on the changes to the taxation of non-UK domiciled individuals, which are due to come into operation from 6 April 2017. 1. We understand that there will soon be some significant changes to the way in which non-UK domiciled individuals (non-doms) living in the UK are taxed. Can you explain a bit more about this?

accounts containing capital, gains and income during the 2 tax years starting on 6 April 2017. This may enable them to ensure that, in the future, they only bring into the UK funds from a nontaxable source.

From next April, non-doms will be treated as if they are UK domiciled for all tax purposes as soon as they have been resident in the UK for 15 out of the previous 20 tax years and those who were born in the UK with a UK domicile of origin will be treated as UK domiciled whenever they are resident in the UK.

Presently, non-doms can bring otherwise taxable income and gains into the UK to invest in certain UK trading companies without triggering a tax liability. However, the funds have to be removed from the UK within a short time period after the happening of certain events, and the Government are concerned that these conditions have deterred individuals from taking advantage of the relief. It has therefore relaxed some of the anti-avoidance rules in a bid to make the relief more accessible.

They will need to be non-UK resident for 6 complete tax years to be treated again as non-doms for all taxes. 2. This is going to mean a very different tax position for a lot of people who have been in the UK for many years. Are there any reliefs available? All offshore assets owned personally by those non-doms whose status changes on 6 April 2017, and who have paid the special non-dom tax charge, will be automatically rebased for capital gains tax purposes with an opt out for particular assets. Trust assets will not qualify, nor will non-reporting offshore funds nor any assets which have been held in the UK since 16 March 2016. Non-doms who have previously elected to be taxed only on their UK income and gains and who have left their foreign income and gains offshore will be able to segregate their offshore bank accounts into separate

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3. A lot of wealthy individuals living in the UK have historically set up offshore trusts to hold their overseas assets. How are these going to be affected by the new rules? Unfortunately, we still do not have all the details on how trusts with a UK connection are going to be taxed in the future. However, it is clear that trusts set up by non-doms (before they are treated as UK domiciled) will continue to have favourable UK tax treatment. The trusts will be able to receive foreign income and gains free of UK tax and the settlors will only be liable to income tax and capital gains tax to the extent that benefits are received from an offshore trust by them, their partner or minor children, and other beneficiaries will only be liable as and when they receive a benefit.

Non-doms will be treated as if they are UK domiciled for all tax purposes as soon as they have been resident in the UK for 15 out of the previous 20 tax years.

... the UK still remains a significant tax haven for non-doms who decide to make their home there ...


THE EURO-GCC Trade & Investment Guide 2017

4. Have there been any further changes to the way in which UK residential property owned by nondoms is taxed? Historically, non-UK individuals wanting to buy residential property in the UK have set up an offshore company to buy the property and, within this structure, virtually no UK tax was payable. Over the last 3 years, additional tax has been imposed on these enveloping structures: SDLT, capital gains tax and an annual tax on enveloped dwellings (ATED). From 6 April 2017, the final benefit – exemption from inheritance tax – will also disappear: Shares in non-UK companies and partnership interests will be liable to inheritance tax to the extent that their value derives from UK residential property. What will make things even more complicated is that loans from connected people or entities made to enable residential property to be bought or ‘done up’ may also now also be liable to inheritance tax in the hands of the lender. No relief has been made available to those with existing property holding structures to enable them to unwind them without triggering a tax charge.

5. What about these changes in the light of Brexit? There is no doubt that all these changes will make the UK a less attractive location from a tax perspective in the future, and many have been wondering about their effect at a time when, arguably, non-UK individuals might be thinking about moving out of the UK following the Brexit referendum in June. However, despite all the changes, the UK still remains a significant tax haven for non-doms who decide to make their home there, certainly in the medium term – up to 15 years, and also in the longer term, provided they take good timely advice on how to arrange their affairs. At Smith & Williamson, we have, for many years, been advising our clients in the Middle East on how to do just that, and we will continue to give them sensible, practical, advice over the next 4 months in the lead up to the introduction of the new rules. If you would like to benefit from our expertise, please contact us for an initial meeting.

Louise Somerset Partner, Smith & Williamson Louise specialises in providing practical tax advice to high net worth individuals, their families, companies and trusts, particularly those with an international aspect to their lives. She advises both trustees and beneficiaries of personal and corporate trusts, ‘non-domiciles’ and individuals moving to or leaving the UK. T: 00 +44 (0)1242 506030 E: Louise.somerset@smithandwilliamson.com www.smithandwilliamson.com

Disclaimer By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing. The tax treatment depends on the individual circumstances of each client and may be subject to change in future.

Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International The word partner is used to refer to a member of Smith & Williamson LLP.

A service as individual as you are.

Smith & Williamson has been looking after the tax and accounting affairs of private clients, their families and business interests for over a century.

Louise Somerset +44 (0)1242 50630.

Because everyone’s needs are different, we work closely with our clients to provide a bespoke service — with direct access to a team of professionals from each service area, who can give specialist advice on a wide range of tax and accounting issues.

louise.somerset@smithandwilliamson.com

smithandwilliamson.com

To find out more, please contact:

Smith & Williamson LLP regulated by the Institute of Chartered Accountants In England and Wales for a range of investment business activities. A member of Nexia International.


THE EURO-GCC Trade & Investment Guide 2017

Non-doms – pitfalls, opportunities, and what you need to do now Guest Editorial ! Tim George and Giuseppe Guerreri, Withers LLP

On 19 August 2016 further details and draft legislation was published in relation to the Government’s proposal to change the tax regime for people who have a domicile outside the UK (‘non-doms’) so that individuals resident in the UK for 15 years will have to pay UK income tax and capital gains tax on their worldwide income and gains, as well as UK inheritance tax (‘IHT’) on their worldwide estate, in the same way as individuals who are domiciled in the UK. The rules will take effect from 6 April 2017. Before setting out the details of the new regime, it is worth noting that individuals born in the UK with a UK domicile of origin will no longer be able to claim non-dom status for tax purposes while they are living in the UK, even if they had previously left the UK and acquired a domicile of choice in another country. For those not born in the UK with a UK domicile of origin, the latest announcements significantly restrict the ability of non-doms to benefit from a preferential rate of taxation. However, they also offer opportunities for effective planning. The proposals, as they stand currently, are summarised below: 1. Limit to ability to claim remittance basis of taxation Non-doms will be deemed to be domiciled in the UK for all tax purposes once they have been resident for 15 of the past 20 tax years (the ‘15/20 test’). Once deemed domiciled they will be subject to UK income tax and capital gains tax on their worldwide income and gains as they arise and subject to IHT in relation to their worldwide assets. 2. Rebasing For those individuals who will become deemed domiciled in the UK on 6 April 2017 under the 15/20 test (and not those who become deemed domiciled at a later date), there will be the opportunity to rebase non-UK assets that are directly held to their 5 April 2017 market value provided: A. the assets were held outside the UK on 8 July 2015; and B. the individual paid the remittance basis charge in any tax year before the 2017/18 tax year. This is essentially a tax free uplift for foreign assets owned since 8 July 2015. Where the original funds used to purchase the asset were clean capital, the entire gains can be remitted to the UK tax free.

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3. Mixed fund cleansing During the 2017/18 tax year, there will be a one-time opportunity to separate mixed funds (funds that contain a mix of one or more of capital, gains and income) into their different constituent parts. This allows individuals to move the part of a mixed fund that represents clean capital to a separate account, giving them the opportunity to remit funds from this account to the UK tax free not only in that tax year but in future tax years. This cleansing will only apply to bank deposits and only if the individual can determine the precise component parts of the mixed fund. Where the mixed fund takes the form of an asset (for example a valuable painting), it will not qualify for this special treatment. However, the proceeds of sale of overseas assets sold during the transitional window can be separated. 4. Trusts Trusts established by non-doms before they become deemed domiciled under the 15/20 test will be ‘protected’ and will remain outside the scope of IHT. They will also not be subject to the rules that tax UK domiciled settlors on the income and gains of non-UK resident trusts. Accordingly, a modified form of the remittance basis will continue to apply to non-UK trusts settled prior to the settlor becoming deemed-domiciled. However this ‘protected’ status will only last until an addition is made to such trusts or such trusts are used to benefit the non-dom settlor, his spouse or minor children. 5. IHT on UK residential property UK residential property owned directly by non-UK domicilaries or non-UK residents has always been subject to IHT but shares in a non-UK company which in turn owns UK property have not. In this way, many owners of houses in the UK have fallen outside the scope of IHT. Now, non-doms (and non-residents) owning UK residential property through a non-UK company will be subject to IHT on such property. Non-doms will need to pay IHT on the value of any interest (however held) which consists of a residential property in the UK. However, debts relating exclusively to the property (such as mortgages) will be deductible when calculating the IHT due. All other overseas assets of a non-dom will remain excluded from an IHT charge unless and until they become deemed domiciled under the 15/20 test.


THE EURO-GCC Trade & Investment Guide 2017

Where non-UK company shares are held in trust, trustees will be subject to IHT at the rate of 6% every 10 years. Opportunities While these long-trailed announcements represent a significant tightening of the rules relating to non-doms, there remains significant planning opportunities, particularly in the transition to the new rules. What can be done to make the most of them? Firstly, individuals who will become deemed domiciled in the UK on 6 April 2017 as a result of the new rules should strongly consider rebasing the assets that qualify for the preferential tax treatment. This is a significant concession which should be fully exploited if possible, so an asset-byasset approach should be taken to determine its availability. Secondly, all mixed fund bank accounts should be segregated into their constituent parts insofar as possible to allow the tax-free remittance of clean capital to the UK during all future tax years. Ideally, this should be combined with the rebasing of assets to maximise the tax advantages. Thirdly, one should review any existing asset holding structures in light of these changes and plan accordingly. In particular, one should ensure that the trusts retain their ‘protected’ status and should plan any addition or distribution from the trust accordingly before next April’s deadline. Potentially beneficial transactions could include extracting funds from trusts, importing trusts, creating trusts for family members, making loans to trusts or creating multiple trusts for separate assets.

If becoming deemed domiciled from 6 April 2017 • Create an excluded property trust ready for funding before 6 April 2017 • Consider requesting distributions from existing trusts • Consider splitting existing trusts • Evaluate assets to determine whether they should be retained and rebased or whether they could be added to trust • Retain foreign assets owned on 8 July 2015 until next April when at all possible to benefit from rebasing • Consider selling assets after 6 April 2017, once rebased, to allow proceeds of sale to be cleansed If already deemed domiciled • Consider requesting distributions from existing trusts • Consider making loans to trust or adding Business or Agricultural Property to trust • Consider selling assets after 6 April 2017, once rebased, to allow proceeds of sale to be cleansed If occupying residential property held through a non-UK company • You should almost certainly wind up the holding structure immediately If holding a residential rental portfolio through a non-UK company • Consider transferring shares to other family members, or to a family partnership, to spread the IHT burden

What can you do now? Depending on your individual circumstances, there are a number of actions that you should take immediately. If remaining a non-deemed domiciled person • Identify accounts most appropriate for cleansing • Consider selling assets to benefit from cleansing • Consider re-evaluating earlier years’ residence position such that you may be treated as becoming deemed domiciled from 6 April 2017 and can therefore benefit from rebasing

Contact Tim George Partner, Withers LLP E: Tim.george@withersworldwide.com Giuseppe Guerreri Trainee Solicitor, Wealth Planning & Tax, Withers LLP E: Giuseppe.guerreri@withersworldwide.com

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THE EURO-GCC Trade & Investment Guide 2017

Interview: David Boorman, Specialised Legal Insurance Services Ltd.

David Boorman Chartered Insurer | Specialised Legal Insurance Services (SLIS)

What are the main reasons SLIS offer comprehensive insurance even in high risks countries? The transfer of risk is the basic tenet of insurance. We learned this during our experiences in Iraq, where our services and expertise were called upon to provide insurance cover for the reconstruction of an embassy building in Baghdad. Another example is that SLIS arranged Terrorism cover for personnel (non-combatant) in Kurdistan. Our knowledge of the exposures are carefully measured, and if they fall within the parameters of acceptable risks behaviour, we can offer an insurance policy. Where are clients able to access the services of SLIS? In the usual way – by email, Skype, Facebook or through our offices in the region. How can private aircraft owners benefit from working with AVGEN AVIATION? Our aviation company has great experience with private owners, such as farmers in a number of African countries and business jet owners to regional airlines. These and other uses and types of aircraft are the every day fare of AVGEN AVIATION. We are very pleased with our strategic alliance with Aero Assets.

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Aero Assets is a trusted supplier of aircraft spare parts and components to the global aircraft aftermarket industry. We work with intercontinental and regional airlines, MROs and distributors to provide innovative inventory management support solutions tailored to individual requirements. How do AVGEN AVIATION and SLIS pose an alternative to traditional insurance? Innovation and automation; bringing our clients access to data and other useful information relevant to their particular records. These are two key words that describe our approach to business. What principles do SLIS and AVGEN operate by in order to offer a high quality, efficient service to their clients? OUR CLIENT PLEDGE “As a team of dedicated professionals, our aim is always to treat our clients with the respect that they deserve. We acknowledge that you have chosen to give us your business because you believe in us, a trust we will always honour. We are committed to exceeding our client’s expectations and to delivering the highest quality of work possible. We will grow through referrals from clients who have become firm believers in our commitment to customer service”


SLIS is a leading insurance advisory, consultancy and placement organisation. Be it power plants, oil refineries, pipelines or water treatment plants, SLIS has the knowledge and experience to serve clients, both big and small. SLIS is a renowned company within the insurance sector. It has consolidated its position within the global market, particularly in regions where the insurance risk is high and the territory is in a state of economic development. We design and implement a range of insurance product and services across 15 countries. We can provide coverage for a variety of lines, from energy and marine to construction and travel, among many more. Our trading partners allow us to offer a real alternative to traditional aviation insurance. Our tailor made quotes and policies will provide you with perfect insurance solutions designed by our team of insurance professionals who have years of experience in the sector. We are at hand to guarantee your peace of mind by resolving your insurance worries.

For more information, please contact: info@slisinsure.com


THE EURO-GCC Trade & Investment Guide 2017

The Current State of Relations Between Europe and the GCC Feature ! Daisy Reece

The past several years have seen rapid change in the MENA region. Alliances have been broken and formed, and the evolving political face of the region has begun to turn away from its previous stance. Following a loss of confidence in their closest ally, the US, the GCC have been establishing strategic relations with allies elsewhere. The decline in oil prices has meant that the governments of the GCC are diversifying their economies with a view to achieving sustainable economic growth. Relations between the EU and the Gulf have long been prosperous - it is now the hope of both partners that together, cooperation will help foster the development of dynamic economic growth. With growing regional instability and burgeoning economic concerns, the development of EU-GCC relations has never been as crucial. Yet such undertakings are far from simple, with geopolitical tensions often complicating matters. To understand EU-GCC relations, it is imperative to analyse the current state of play between nations, and to consider factors that may further improve relations in the future. A key factor in the analysis of relations is the flow of FDI between Europe and the Gulf. Analysis of FDI trends reveals

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the importance of close EU-GCC ties and emphasises the room for growth that remains. At the end of 2014, the E.U held investments worth a total â‚Ź52.4 billion in the Gulf countries, a nod to the impact of globalisation and the developing relations between the regions. Conversely, Gulf investment in the EU amounted to â‚Ź63 billion at the end of 2013. 2015 saw the UAE invest 21.8 billion dollars in 163 projects globally, with Saudi a close second, having invested 13.5 billion dollars in 24 projects. It is evident by stark comparison of these figures that the Gulf countries are committed to upholding significant investments in the EU, and also that discrepancies between the amounts the EU and the Gulf choose to invest emerge. Figures also highlight which countries foreign investors find the most attractive; the FDI Intelligence report notes that the UAE tops the rankings; despite only claiming 9% of the market share, 24% of FDI projects in the Middle East and Africa region were based in the UAE. In comparison to the 298 projects in the UAE, 118 projects were based in Saudi. Oman and Bahrain attracted 35 and 34 projects, respectively. If European businesses were to further expand in the Gulf, as well as considering additional investments in Gulf based companies, the discrepancies would

To understand EU-GCC relations, it is imperative to analyse the current state of play between nations, and to consider factors that may further improve relations in the future.


THE EURO-GCC Trade & Investment Guide 2017

not be apparent and relations would be fortified. Foreign direct investment is not the only commitment that has been forged between European countries and the GCC. In 2015, relations between France and the GCC became stronger than ever. France was granted arms contracts valued at $15 billion, whilst Bahrain funded and constructed a naval base for their use. More than 80 French subsidiaries are located in Saudi Arabia, which employ an estimated 30,000 people - 10,000 of whom are Saudis. France is the third biggest investor in the Kingdom, highlighting the strength of the friendship between the two. In order to further develop relations, the visa process for Gulf businessmen should be considered; the current regulations prevent between a quarter / one third of businessmen who wish to attend conferences in France from entering the country. France is not the only European country to enjoy a close relationship with the Gulf. Across the channel, a question that many are asking is whether Brexit signals a new era for UK-GCC relations. The U.K views the Gulf countries as long time allies, and though Westminster’s plan for Brexit remains unclear, it is evident that there is space for free trade agreements that are beneficial to all parties involved. Over 5,000 British companies operate in the UAE alone - yet, despite the high number, the Gulf accounted for just 2.7% of U.K trade last year. Aside from trade, the UK and the GCC are working together on a number of security issues; a strong common interest of the two is counterterrorism. In addition, the British Prime Minister, Theresa May, is currently concluding a visit to Bahrain. May was the first woman leader to attend the annual Gulf Cooperation Council, in which she has announced regional naval base plans and strengthening of the UKGCC airport security cooperation. A British military presence in the region suggests the development of closer ties, as well as underlining the strategic importance of relations between the two regions. Though France and the U.K are regarded as the GCC’s largest allies in the European region, Southern Europe have also been reviewing relations in an effort to maximise benefits of harmonious relations. Not only concerned with the threat of terrorism, countries are seeking

to bolster relations in order to cope with the flood of refugees that have been displaced by war and poverty throughout the MENA region. One such country is Italy. Though arms dealings between the GCC and Italy are not equal to that of the GCC and France, the UAE recently invested in a contract worth $355 million that covered the purchase of eight drones from an Italian country. In the last year, it has also been confirmed that Italy is party to a $4.5 billion deal with Qatar that details the provision of five warships. However, Italy’s close relationship with Iran is at times seen as a hindrance to close relations between Rome and Saudi and Bahrain. Of late, Rome has found an ally in Oman; the deepening of ties between the two countries has been exemplified by the first ever military exercise between the pair. Furthermore, as Oman was a key mediator between Iran and the West, the two countries share a common interest. Greece is another southern European country that stands to gain from improved ties with the GCC. In 2011, the Qatar Holding invested a total of $750 million in the construction of two goldmines in Chalkidiki, northern Greece. More recently, the UAE elected to begin a project that required an investment of $9.75 billion; the money was secured to transform an airport in Athens. When complete, the investment would create thousands of jobs, bolstering the economy in a time of financial need. Though investors were naturally cautious when investing in Greece due to its economic troubles, it holds a strong position when negotiating trade with the Gulf - with the UAE in particular. In 2015, Greece backed the proposal that would ultimately allow Emirati citizens the Schengen visa exemption. An additional consideration is Greece’s current model that allows foreign investors to essentially purchase a permanent residency permit with an investment of €250,000. The programme allows for ease of investment, as well as providing an added incentive to possible GCC candidates, as the Greek passport provides its bearer with considerable freedom of movement. Moreover, Greece has much to offer potential investors, and should perhaps focus on the promotion of its tourism industry. Overall, there is significant untapped potential in the Greek-GCC relationship, with much to offer on both sides.

One European country that consistently demonstrates a steady increase in trade with the GCC is Malta. In 2014, Malta exported 53.8% more goods to the GCC than had been exported in 2010. In the same year, the Malta’s value of imports from GCC countries totalled €106.6 million, reportedly an increase of €90.9 million from 2013. Malta has agreed Double Taxation Treaties with the majority of GCC countries (minus Oman and Yemen), which provides GCC businessmen with a clear framework to work within, and prevents the development of unexpected obstacles to business operations. Malta’s economy is renowned for its strong manufacturing sector, but also for its profits made from its tourism industry. Malta has consistently promoted trade and investment through its organisation, Malta Enterprise, which works with investors to offer information and services that may be required if setting up a company. Malta’s commitment to improving their relations with the Gulf countries is highlighted by the number of visits performed by Maltese and Gulf delegations in the last two years; at least 5 visits have been exchanged, a fact which heralds prosperous growth for both sides. Analysing current relations between the EU and the GCC highlights what has been achieved so far and reveals room for growth and improvement in some areas. As governments and businesses sustain links, naturally ties will deepen for all sides involved. Overall, analysis of the current state of play leads to the conclusion that mutual understanding and dialogue are crucial to the facilitation of better relations between the countries.

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THE EURO-GCC Trade & Investment Guide 2017

VISION 2030 Editorial ! Daisy Reece

The last ten years have ushered in a period of great change to the world economy. The financial crisis and the end of high oil prices were two unanticipated changes to the economy, and the kind of shock that is nearly impossible to predict. Prior to these shocks, the economies of the Gulf countries were heavily oil reliant. In the wake of these developments, the GCC member states have been considering their economic future. In response to the potential crisis, the Gulf countries have been implementing policies designed to diversify their economies. These plans, known as Vision 2020 / Vision 2030, are long term overhauls of both economic, social, humanitarian, military and education fields. It is hoped that diversification will lead to growth and push the economies to new heights - traditionally reliant on oil revenue, the member states intend to diversify their economies in order to protect their economic wellbeing. Diversification presents potential opportunities to European investors. As the Gulf countries grow their presence in previously untouched markets and firmly establish themselves as competitors to other trade hubs in the region, investment opportunities develop concurrently.

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It has been acknowledged by the GCC member states adopting the plans that unemployment will rise and growth will slow in the short term. In order to stimulate private sector growth, governments will have to cut subsidies; in the period that growth has yet to be realised, the countries have acknowledged that unemployment will rise and the rate of expansion of the economy will slow. However, in the long term, the reforms are designed to cut bureaucracy, make government processes more transparent and reform the balance of the private and public sectors.

In the coming years, Saudi Arabia aims to become two of the world’s largest economies. As the future of the oil sector hangs in the balance, the member states of the GCC are under pressure to diversify their economic interests in order to remain powerhouses of the Middle East. Through a combination of harnessing untapped natural resources, streamlining government processes, improving education and investing in different areas of the economy, Saudi Arabia anticipates a period of rapid growth. In doing so, the Kingdom of Saudi Arabia has implemented a plan known as Vision 2030.

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Indeed, Saudi Arabia is arguably a hub of the GCC. It controls around 50% of the GCC’s collective GDP and is home to some of the most sacred holy sites in Islam. Its Vision 2030 goals are representative of that fact; aiming to increase Ummah visitors from 8 million to 30 million each year, rise among the top ten ranking of competitive countries and increase the Public Investment Fund from 700 billion SAR to 4 trillion, the plans are tailored to lift Saudi Arabia to its position as one of the top fifteen large global economies. Successful completion of its targets will ensure the creation of a vibrant, thriving and ambitious nation.

Saudi Arabia

The fall in oil prices means that Saudi Arabia has been forced to dip into reserves that had previously been untouched. Between April 2015 and April 2016, Saudi Arabia had withdrawn $100 billion from its reserves, which totalled around a sixth of its reserve funds. Whilst the reserves demonstrate that the Kingdom of Saudi Arabia will be financially solvent for years to come, despite its tendency to rely on oil funds as an economy driver, it is clear that the government cannot rely on its reserve funds and should consider its options.


THE EURO-GCC Trade & Investment Guide 2017

The oil slump did not just affect Saudi Arabia - the fallout was felt throughout the Gulf, and the likelihood is that prices will continue to slump in the long term. In response to this challenge, economic plans have been unveiled across the Gulf.

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Oman

Oman’s Vision 2020 plans include a series of five year plans that detail goals such as increase growth of GDP to 3%, transforming itself into a shipment centre for the region and increasing tourism. Other diversification efforts will focus on fisheries, manufacturing and mining. The 2016 budget outlined that Oman is projected to become less dependent on oil; GDP contribution is projected to fall from 44% to 25% by 2020.

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Bahrain

Bahrain launched its Vision 2030 programme in 2008. The goal of the project is to shape government, society and the economy through three key areas: sustainability, competitiveness and fairness. Bahrain has recognised that 1,100 jobs are created per year with a monthly wage higher than 500 BHD, whereas 2,700 are created for non-Bahrainis.

Employers tend to favour expatriate workers as the Bahraini educational system does not provide young people the required skills and expertise. This has led to job creation primarily in the public sector, which caused an unsustainable imbalance that can only be rectified by a thriving private sector. Since the 1970’s, Bahrain has been a financial hub in the region. Economic diversification will predominantly focus on finance as well as manufacturing, the third largest contributor to the country’s GDP. As FDI stood at $18.8 billion in 2014, the highest investment has been since the country’s period of unrest in 2011, it is likely that the figure will continue on an upward trend particularly as the whole country offers business regulations that essentially signify a free zone.

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Qatar

Also launched in 2008, Qatar’s National Vision 2030 aims to transform the economy by creating sustainable development by the year 2030. The scheme hinges on 14 key sectors, which includes education, training and employment.

The National Vision hinges on the ‘Qatarization’ of the public sector. The government hopes to increase employment amongst Qatari citizens, decreasing its dependency on nonnationals. As the skill level of the population increases, added opportunities arise for European companies, who can confidently outsource their work to nationals.

CONCLUSION With its business friendly regulations and positive attitude toward economic expansion, the Gulf has always been a popular destination with investors. However, given new diversification efforts, opportunities in sectors that were previously unexplored are being created in the region. Furthermore, the plans have recognised the need for an education system overhaul, which will give employers a bigger pool of skilled employees. As the Gulf countries work to make their visions become the reality, investment in the private sectors of the GCC member states looks to offer a strong return.

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THE EURO-GCC Trade & Investment Guide 2017

What do we mean by supply chain finance structures? Q&A Simon Cook Trade & Export Finance Partner at law firm Sullivan & Worcester (UK LLP) in London

Supply chain finance structures are used in trade finance to minimise financing costs whilst maximising the financing period. They comprise the purchase of receivables by way of assignment without recourse to the seller. Supply chain finance structures are used in trade finance to minimise financing costs whilst maximising the financing period. They comprise the purchase of receivables by way of assignment without recourse to the seller. There are two categories: buyer-led and supplier-led transactions - distinguished by the engagement of the financer or service provider with the debtor of the receivables.

What are the key features of buyer-led structures? These include: • the buyer (the contractual debtor) is the financer’s client. • a contractual link between the financer and the buyer. • the buyer accepts liability to make payment to the financer (mitigating the performance risk on the supplier). • commonly (though not a rerequisite), an electronic platform (a Platform) developed and managed by the financer is used.

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What is the benefit of a buyer-led structure? In a buyer-led structure, the parties’ rationale is: • the supplier obtains earlier payment. • the buyer gets better commercial. terms and maintains a stronger. relationship with its supplier. • the financer makes its margin. • both buyer and supplier have accounting treatment requirements: the buyer wants a trade payable on its books, not a debt and the supplier wants the receivable off its balance sheet.

How does a supplier–led structure differ? They are more varied but generally the supplier is the financer’s main client. There are contractual arrangements between the supplier and the financer but the financer has no contractual relationship with the buyer. The key differences from a buyer-led structure are:

• supplier-led structures can have confirmed or unconfirmed receivables. In the latter case, there is still seller performance risk to consider. • the assignment of the receivable may be disclosed or undisclosed to the buyer. • the supplier commonly acts as collection agent for the receivables. • if an issue arises with the supplier or the buyer or there is a default, then the financer would serve notice at that point on the buyer if the assignment was undisclosed. • the accounting treatment is generally only relevant to the supplier who still requires the receivables to be offbalance sheet.

How does a buyer-led structure work in practice? Commonly, where there is a financer’s Platform, there would be three contracts: • a sales contract (Contract) between the buyer and the supplier. • a payable services agreement (PSA) between the financer and the buyer. • a receivables purchase agreement (RPA) between the supplier and the financer.


Illustration by Achraf Amiri

THE EURO-GCC Trade & Investment Guide 2017

Under the PSA, the financer acts as paying agent. This agreement sets out the terms on which the buyer uses the financer’s Platform. Under the RPA, the receivables are transferred from the supplier to the financer and, in some cases, this agreement includes terms allowing the supplier to access the financer’s Platform (this can be separately documented). A purchase order is submitted under the Contract, so the supplier supplies the goods and services. An invoice is sent out and, if the buyer wants to put the invoice into the structure, it uploads details of the invoice onto the financer’s Platform (including at least the name of the supplier, the amount, the maturity date and a reference linking it to the right transaction) automatically notifying the supplier. The supplier decides either to retain the receivables or to offer them for sale to the financer. If offered, the financer has the choice to either buy the receivable or not. Alternatively, you could use an automatic sell down process, in which case as soon as the buyer uploads the invoice the financer is bound to buy the asset. When the purchase price is paid by the financer, this triggers assignment of the receivable to the financer and notice is issued to the buyer confirming the purchase. From then on, the buyer will only be able to discharge its obligations by payment to the financer in accordance with its instructions. The buyer will put the financer in funds prior to the receivable’s due date and then, on the due date, if the receivable

was purchased by the financer, the financer retains the funds itself. If not purchased, the financer makes payment on behalf of the buyer to the supplier.

What about supplier-led structures? In this case, as with buyer-led structures, there would be a Contract (though there may also be multiple sales contracts/buyers with different protections and different pricing) and a RPA. Generally, these structures are not carried out over a Platform, so there would be no PSA or equivalent. The commercial processes are generally the same as for buyer-led structures. There is the potential for variation following issuance of the invoice depending on whether you have the confirmed or the unconfirmed receivable structure and the receivables purchase process may be automatic or discretionary as with the buyer-led structures.

What are third party structures? These are structures involving a Platform developed and managed by a third party. The key features are: • buyers and suppliers have access to a wider group of financers. • financers can participate in transactions they might not otherwise be able to participate in because it does not have its own Platform or it cannot manage a whole programme for a customer. • they might be disclosed or undisclosed. • the third-party Platform provider

will provide the paying and collection agent’s services. There are commercial arrangements between the supplier, the financer and the third-party Platform provider (either bilaterally or by way of a tripartite agreement) and the financer still has to sign up to the terms of the third party Platform. The way the commercial structure works is very similar to the previous structures and, again, the financer purchase arrangements can be automatic or discretionary. Some of the differences to the previous structures are: • there is no contractual relationship between the financer and the buyer but, if drafted properly, the arrangements to which the buyer has signed up (the equivalent of a PSA) should give third party rights to the financer separate from the financer’s rights under the RPA. • the documents must ensure rights flow through to the financer. • the cash flows should go directly from the buyer to either the supplier or the financer rather than through the third-party Platform and the third-party Platform provider’s accounts to avoid a financer taking insolvency risk on the third party Platform provider as well as the buyer. Buyer funds should be segregated and subject to a trust until payment is made down to the financer. If the systems fail, if the third-party Platform provider pays to the wrong party or it just does not pay at all, a financer’s rights will very much depend on the terms of the documents so it is critical to understand exactly what the buyer’s obligations are and how to enforce against it.

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THE EURO-GCC Trade & Investment Guide 2017

Why should companies do business in the GCC? Feature ! Daisy Reece

Each GCC member state has differences; from geography to regulations, no two are exactly the same. Yet, one commonality is their stellar reputation for business. Companies considering relocating or expanding in the Gulf will be aware that the UAE stands out as an attractive option for export and expansion. In the ‘Doing Business’ rankings, drawn up by the World Bank, the UAE was ranked 26th for overall ease of business. Their ranking was higher than any other Gulf country, and has consistently remained in the top thirty countries in the world throughout recent years. More specifically, the UAE was lauded for both the efficiency of their tax system and the ease of gaining construction permits, registering properties and installing electricity. However, there are many advantages of doing business in both the UAE and the GCC as a whole. Both SMEs and large businesses may be unaware of the distinct benefits of undertaking business operations across the GCC.

Financing options SMEs based in Gulf countries are often able to apply for a wide variety of financing options to improve their short and long term liquidity. One useful finance option for SMEs is invoice financing - also known as invoice discounting - which is designed to improve cash flow by closing the gap between when an invoice is issued and when the business receives payment. Once an invoice is received by the business, the business sends the invoice to its finance company of choice, who pay out the value immediately. Once the business receives payment for the invoice, they repay the sum and any interest that has been accrued. Interest is usually only paid on borrowed funds, and the transaction is confidential; customers will not know that the business is borrowing against invoices. Invoice financing is an effective way to maintain cash flow, and a large benefit is that it can lead to cash in hand almost immediately. The practice is frequent throughout the UAE, and ensures ease and efficiency the day to day operations of the business. Logistics One of the biggest advantages of basing a business in the GCC region is its geographical location. Close to the entire Middle East, with routes to both Africa and East Asia, the markets that companies can reach from a GCC

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location is unparalleled. In addition, there are many large transport hubs across the different GCC countries. Three large commercial airlines are based in the GCC; Etihad Airways, Qatar Airways and Emirates and GulfAir. There are also large commercial ports in Oman, the UAE, Qatar and Bahrain. Promisingly, the UAE was ranked 13th globally in the World Bank’s Logistics Performance Index; in order to consolidate the rankings, the World Bank considered infrastructure, customs, tracking and tracing, international shipments and logistics competence. Qatar, Oman and Bahrain were also ranked among the top fifty countries out of one hundred and sixty in total. Tax The UAE and Saudi Arabia offer a tax free base for companies. It has recently been announced that Saudi is considering taxing the income of expats for the first time, but the UAE has mentioned no plans to follow suite. The UAE is also served by the added benefit of free zones; within these zones, foreign companies can enjoy full ownership of their business and a nil taxation regime. Bahrain also has one of the lowest corporate and personal tax rates in the GCC; personal income is not in effect, and there is no wealth tax on personal gains. Kuwait does not levy a personal income tax, and its corporation tax is a flat rate of 15%. Tax rates in the GCC vary from

member state to member state, with corporation tax rates in Oman also imposed at 15%. High oil revenues allow the GCC countries to maintain low taxes whilst sustaining a healthy economy, which may be an attractive prospect for businesses considering expansion abroad. Another benefit of working throughout the GCC are its business friendly regulations. The 2016 Heritage Economic Freedom rankings rated Bahrain, the UAE and Qatar as the top three most economically open countries in the Middle East / North Africa region; Oman, Kuwait and Saudi Arabia were the sixth, seventh and eighth respectively. Governments are consciously streamlining processes; from reducing the amount of capital needed to open a business to reducing levels of bureaucracy faced by businesses when starting up, the GCC are working toward making their countries some of the easiest countries in the world in which to do business. Infrastructure The GCC countries boast impressive infrastructure. In 2015, Alpen GCC’s Construction Industry report ranked the UAE as third for the most competitive infrastructure (including roads, ports and airports) in the world. Bahrain was ranked 21st globally, whilst Oman, Qatar, Saudi Arabia and Kuwait were ranked 25th, 26th, 29th and 67th


respectively. It has been estimated that the combined spending of the GCC governments will hit $480 billion over the next four years. 60% of that amount is projected to be spent on infrastructure; with the Dubai World Expo of 2020, the Qatar World Cup in 2022 and the growing demands of the Hajj, the region requires investment to combat growing congestion in urban areas. The region continues to seek innovative ways to improve inter-region trade and facilitate transportation. The pan-Gulf state railway, originally planned to be built between 2018 and 2020, is currently in development stages. When completed, the railway will link the six Gulf states and provide easy access across the landscape for both citizens and businesses. The railway will also mean better access to sparsely populated areas of the countries; these links could be used to access mineral mines, as is planned in Oman, or to improve tourist access to undiscovered gems. Diversification It is no secret that the GCC countries have historically relied heavily on revenue generated from the energy sector. However, recent years have seen a collective effort by the member states to diversify their economies. Diversification offers fantastic opportunities to foreign companies

to expand in the region and invest in growing businesses. The GCC countries already boast dynamic financial sectors, with the UAE, Kuwait, Saudi and Bahrain known for being financial hubs in the region. To add to their financial sectors, the GCC countries have been developing their petrochemical, natural gas, construction and telecommunication sectors. As a result, its governments are very open to foreign investment, as diversification would lead to opportunities for future generations, growth that stimulated the creation of jobs and protection against the volatility of oil prices. Moreover, as oil supplies may dwindle, it is important that the GCC economies have self sufficient sectors that do not rely on the funds of oil revenue to be successful. As the GCC countries have young populations, with high numbers of children under fifteen, diversification is particularly important; the energy sector creates fewer jobs than others due to its reliance on capital. In an effort to further FDI, most GCC countries have sought to develop the legal framework for PPP agreements in order to fund public projects. The acronym signifies a Public Private Partnership, and consists of a long term agreement usually 15 or more years - between a private partner and a government partner. The private partner typically provides a service such as the

project’s construction, financing or maintenance. Repayments are based on the standard of service offered by the project during its operating period, or the availability and condition of the asset. Since the fall of oil prices, PPP agreements have become increasingly more popular with the GCC governments over the last two years. Consequently, most - if not all - of the GCC members have been working to streamline the PPP process. Examples of PPP funded projects include the Sultan Qaboos Medical City in Oman, which will offer 1,200 beds across specialty hospitals, as well as commercial developments to provide the hospitals with their own source of independent income. As part of its Vision 2020 program - designed to diversify its economy - Saudi Arabia have set targets for the Civil Service to achieve 5 activated PPP projects by 2020 and for the Ministry of Transport to involve the private sector in the expansion and improvement of roads and transport links, among other Ministry targets. Bahrain is likely to seek funding and sponsors for proposed housing plans, and Qatar has expressed interest in the creation of sporting centres and investment in healthcare through the same model. The increase in popularity of the PPP agreements highlights the amount of business opportunities available in the GCC; for those seeking to invest in government projects, the time has never been better to bid for the chance.

IRANIAN CLASSIFICATION SOCIETY (ICS) We have received the approval of the Iranian flag administration, the Islamic Republic of the Iran Port and Maritime Organization, to offer classification services to the Iranian fleet since 2007. ICS has been promoting safe shipping and clean oceans by continually developing technology and human resources pertaining to shipping, shipbuilding and other industrial services. Today, we strive to be the most efficient provider of marine and offshore classification services. We are achieving that goal through the innovative thinking, enthusiasm and professionalism of our staff. At ICS, setting standards of excellence in marine and offshore classification is more than a motto - it is the way in which we conduct business.

E: info@ics.org.ir | Iranian Classification Society, NO.5, Shabnam. Alley, Qaem Maqam-e-Farahani St., Haftom-e-Tir. Sqr, Tehran, Iran P.Code: 1589675951

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THE EURO-GCC Trade & Investment Guide 2017

Investing in EU-GCC trade through alternative Supply Chain Finance solutions Advertorial Haitham Al Refaie Group Chief Executive Officer Tawreeq Holdings

Global trade is always in the spotlight; in fact debated more following the financial crisis and the rapid changes due to globalization and digitization. Trade and investment are strongly correlated, rather two faces of a coin. Supporting expansion and growth of trade integration, the two tend to progress in tandem; albeit, investing in trade is conversed little when compared to the significance of trade discussions. Despite volatility, global trade volumes are projected to expand moderately in 2016, according to the World Trade Organization (WTO). The value of global trade volumes in merchandise and services combined is roughly about USD 20 trillion in current dollar terms. According to a paper released by the Bank of International Settlement’s Committee on the Global Financial System (CGFS), the estimated amount of bank intermediated trade finance averaged about 1/3 of global trade, with others estimated as little as 20%, leaving the remaining volume as open account transactions financed by other means. Focusing on the ties between the European Union (EU) and the Gulf Cooperation Council (GCC), according to the European Commission data, trade has been steadily expanding between 2008 and 2015 at an average 6.5% per year, where the EU-GCC trade amounted to EUR 155.5 billion in 2016 setting the GCC as the fifth top trading partner for the EU, and the fourth most important export market. Globalization and digitization has influenced Corporates’ cross-border trade patterns; they are more comfortable with their trade partners, focusing less on hedging the risk and more on dealing with competitions. Corporates are quite selective in utilizing trade finance instruments due to their lengthy process and complexity, especially when it comes to Small and Medium Enterprises (SMEs). With the GCC being a net importer for the EU, open account trade is seen in constant growth. Inter-company credit finance transactions have evolved, and the Supply Chain Finance (SCF) market is expanding with the growth of global value chains and intricate trade transactions.

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According to the Global Supply Chain Finance Forum, “Supply Chain Finance is defined as the use of financing and risk mitigation practices and techniques to optimise the management of the working capital and liquidity invested in supply chain processes and transactions.” SCF is seen as a positive support for trade from two angles; first, the ability to hedge risk and finance cross-border trade; second, the emergence of a new investment product, offering an alternative and competitive investment asset class. SCF offers a tangible solution for all stakeholders, promising growth with prospects for EU-GCC trade and investment ties. • The region is rapidly evolving into a global trading hub • The banking sector continues to tighten lending under Basel III • Client margins are improved, enhancing the efficiency of global supply chain • Late payments are managed and structured to suit realistic schedules • Investors are investing in a credit enhanced non-volatile competitive yielding product In developing the world’s first comprehensive shariacompliant technology-enabled Supply Chain Finance (SCF) solutions, Tawreeq Holdings has developed an innovative approach to SCF. Tawreeq delivers tailored working capital solutions and access to finance to SMEs and corporates across the MENA region, and connects investors to alternative investment asset class. SCF offers an alternative asset class to diversify and improve fixed income and treasury portfolios using Sharia-compliant methods. SCF can be the underlying asset for Short-term Notes, Collective Investment Schemes, and for larger-sized Securitisations. Liquidity and capital management are critical problems for traders and investors alike these days, and investing in SCF is a promising avenue for an all-inclusive win.


Connecting you to trade growth Tawreeq, your SCF partner in MENA SUPPLY CHAIN FINANCE THE FUTURE OF TRADE AND INVESTMENT

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TAWREEQ HOLDINGS THROUGH ITS AFFILIATES OFFERS: FACTORING

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REVERSE FACTORING

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SECURITISATION Trade receivables securitisation solutions are structured to provide corporates with financial flexibility by benefiting from reliable and revolving liquidity facility. ALTERNATIVE SHARIA-COMPLIANT INVESTMENTS

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THE EURO-GCC Trade & Investment Guide 2017

Saudi Arabia adopts GCC Trade Mark Law Guest Editorial

! Rob Deans & Saba Al Sultani, Clyde & Co

Rob Deans, Partner, Clyde & Co and Saba Al Sultani, Senior Associate, Clyde & Co look at the legal and practical implications of the Kingdom’s adoption of the new trade mark law on doing business in the country. The Saudi Trade Mark Office has adopted the GCC Trade Mark Law and its implementing Regulations with effect from 29th September 2016. This article considers the current status of the GCC Trade Mark Law and its implementing Regulations in Saudi Arabia. We then take a look at how the main ways in which the new Law and implementing Regulations are likely to have an impact in Saudi Arabia. The status of the GCC Trade Mark Law and its Implementing Regulations The GCC Trade Mark Law has been a long time coming in Saudi Arabia. On 19 May 2014, the Saudi Official Gazette included an announcement that the GCC Trade Mark Law had been approved and that a Royal Decree had been drafted in this regard. This was shortly followed by Royal Decree No. M/51 dated 27 May 2014, which provided that the GCC Trade Mark Law would come into force 90 days after publication. We then heard nothing further until the GCC Trade Mark Law (together with implementing Regulations to the Law) were published in the Official Gazette on 1 July 2016. The usual procedure for enacting legislation in Saudi Arabia is for the relevant Royal Decree to be published in the Saudi Official Gazette. However, Royal Decree No. M/51 was not published in the Official Gazette (a copy of the decree is publicly available through the website of the Saudi Bureau of Experts to the Council of Ministers, but it has not been

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published in the Official Gazette, as would normally be the case). In the circumstances, it was not clear until recently that the Law and Implementing Regulations would be coming into force. However, the position has now been clarified with the Saudi Trade Mark Office taking steps to adopt the GCC Trade Mark Law and its Implementing Regulations with effect from 29 September 2016 (90 days after the publication of the GCC Trade Mark Law on 1 July 2016). Accordingly, it is now confirmed that the GCC Trade Mark Law and its Implementing Regulations have been adopted by the Trade Mark Office in Saudi Arabia and with effect from this date. Impact of the new Law and Implementing Regulations in Saudi Arabia The introduction of the GCC Trade Mark Law and its Implementing Regulations will possibly have more impact in Saudi Arabia than in any other of the GCC states. This is because the new Law and Implementing Regulations contain a number of provisions that were not present in the old Saudi Trade Mark Law (which is repealed by the GCC Trade Mark Law) and it also introduces some important procedural changes. The changes introduced by the GCC Trade Mark Law include: Changes to official fees The official fees being charged by trade mark offices in the GCC states have attracted significant attention. The Regulations (published in the Saudi Official Gazette on 1 July


THE EURO-GCC Trade & Investment Guide 2017 2016) showed some increases and one apparent decrease in official fees. However, the Saudi Trade Mark Office has since confirmed that it has decided to maintain the official fee for publishing a trade mark application at the same amount as applied prior to its adoption of the GCC Trade Mark Law and Implementing Regulations (rather than the reduced amount specified in the Implementing Regulations). As a consequence, the total official fees for registering a trade mark in Saudi Arabia have increased from USD 1,865 to USD 2,400. This is instead of a reduction of USD 130 which would have applied if the Saudi Trade Mark Office had imposed the lower official fees specified in the Implementing Regulations. Although unconfirmed, it appears that this decision may have been made pursuant to Article 40 of the Implementing Regulations which allows each GCC member state to charge official fees in accordance with its own procedures. The introduction of new forms of non-traditional trademarks, such as colour, combinations of colour, sounds and smells The old Saudi Trade Mark Law allowed for three-dimensional marks to be registered, with the definition of ‘a trade mark capable of registration’ including shapes. The GCC Trade Mark Law extends this definition so that it now includes some forms of non-traditional trademarks, such as colour, combinations of colour, sounds and smells. Of course, as practitioners elsewhere in the world have found, the existence of legislation which confirms such that such non-traditional marks may be registered does not necessarily mean that significant obstacles to obtaining registrations will not remain. Opposition period decreased to 60 days The opposition period under the old Saudi Trade Mark Law was 90 days. This decreases to 60 days, with no extensions of time being available. Oppositions to be heard within the Trade Mark Office Under the old Saudi Trade Mark Law, oppositions are filed before the Board of Grievances, which is a form of administrative court, with appeals against the refusal of trade mark applications being heard by the Minister of Commerce and Investment. The GCC Trade Mark Law and Implementing Regulations now requires oppositions to be heard within the Trade Mark Office. The Implementing Regulations to the GCC Trade Mark Law also set out a basic procedure for dealing with oppositions: • Once an opposition has been filed, the Trade Mark Office is to notify the applicant of the opposition within 30 days; • The applicant then has a non-extendable period of 60 days from receipt of the notification to submit a counterstatement; • The Trade Mark Office may fix a hearing to receive the statements and evidence of the parties; • The Trade Mark Office is to issue its decision within 90 days of the date of the hearing. In practice, this means that opposition proceedings in Saudi Arabia should become significantly shorter and less expensive than they have been in the past, where it has been

common for the Board of Grievances to set and adjourn numerous hearings over the course of several months or even years. Changes in examination practice The GCC Trade Mark Law includes an express provision that “goods or services listed in the same class may not necessarily indicate similarity. Likewise, goods or services listed in different classes may not necessarily be dissimilar”. As with other trade mark offices in the GCC region, it has been common practice at the Saudi trade Mark Office not to take into consideration goods / services in the same class as being similar, without consideration of the specific goods or services. The introduction of this concept could lead to a significant change in examination practices in Saudi Arabia, and it will be interesting to see how examiners make use of this provision. The protection afforded to well-known marks is extended The GCC Trade Mark Law prohibits the registration of marks which constitute a “reproduction, an imitation, or a translation of a well-known mark or an essential part thereof” in relation to identical/similar goods and/or services. The Law also prohibits the registration of such marks in relation to dissimilar goods and/or services where the use of the mark would indicate a connection between those goods and/or services and the owner of the well-known mark, and would be likely to damage his interests. The express statement in the GCC Trade Mark Law that an application for a mark which is identical or similar to an ‘essential part’ of a well-known trade mark (and, arguably, not necessarily to the trade mark as a whole) goes further than the Saudi Trade Mark Law which does not refer to parts of marks. The GCC Trade Mark Law also goes further than the Saudi Trade Mark Law (which is silent on this point) by setting out the criteria for determining whether a mark is well-known stating that “the duration and extend of any registrations or use of the mark, the number of countries where it has been registered or recognised as a well-known mark, the value associated with the mark and the extent to which such value helps promote the goods and/or services to which it applies shall also be considered. In addition to the above points, there are further positive provisions in the GCC Trade Mark Law and Implementing Regulations, such as an enhanced ability to cancel wrongfully registered trade marks and improved enforcement provisions. As a result, the introduction of the GCC Trade Mark Law in Saudi Arabia is a positive step and, after a period of adjustment, there should be real benefits for brand owners with an interest in Saudi Arabia.

Contact Rob Deans Partner, Clyde & Co E: Rob.deans@clydeco.com Saba Al Sultani Senior Associate, Clyde & Co E: Saba.alsultani@clydeco.com

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Medical Tourism In The GCC and The Need For Healthcare Reforms Feature ! Candy Lebby

Global Health Reforms The medical tourism industry appeals to many in countries across the globe. In particular, the GCC countries have seen an increase in the amount of people in need of healthcare services - both from within these countries and in citizens from overseas. This has led to considerable strain on the services - as it would with any healthcare system. Thus, a reform of the policies, economics and services is essential to keep up with the growing demand. Healthcare Crisis Factors Many factors are contributing toward the global healthcare crisis: a lack of human resources, an ageing population, a fragmented healthcare system and an increase in healthcare fraud. This means that global health reforms are a top priority for all countries - especially for the GCC member states. The Gulf Cooperation Council countries – Kuwait, Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates – are expected to face an unparalleled increase in demand for healthcare throughout the next two decades. No other region in the world faces such a rapid increase in demand for health services. Non communicable diseases in the region are also very high and factors such as poor diet, high body mass index and high blood pressure are among a few of the preventable illnesses which contribute towards the growing burden on health services. Although GCC healthcare systems have vastly improved over the past 20 years, many residents are still dissatisfied with the quality and availability of care at government run clinics and hospitals. It could be argued that there is a lack of managerial skills needed to run healthcare facilities,

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with cash incentives not enough to attract the right specialists to treat patients with ailments such as cancer and heart disease. Government run hospitals and clinics are not adequately prepared for a rapidly ageing and growing population, nor are they prepared for the rise in chronic diseases such as diabetes, a disease which has pervaded countries as they develop. In order to strengthen services and raise the standard of care, some GCC governments have started encouraging international renowned academic institutions to set up healthcare facilities in their countries. However, this is not enough to meet the demand, and many more private healthcare providers are needed. For the most part, GCC governments will continue to contribute hefty medical benefits, but this will be for their own citizens. Most GCC governments now recognise that they will soon need private sector help to finance their huge costs. Fundamental changes need to be made to government policy, and regulations are needed to ensure that private healthcare providers can attract patients successfully. Improvements Made In The Healthcare Sector In the past 25 years, GCC governments have made substantial investments in the development of health care infrastructures; building clinics and hospitals and incorporating a more modern approach to diseases which were once rampant in the region, such as malaria and measles. Evidence of the improvements made to the healthcare system can be seen in an increased life expectancy, which has risen from 60.5 years in 1978, to 77 years in 2012. Insurance reforms in some GCC countries have enabled

the private sector to make sizeable long-term investments, and there is an expectation that the private sector will play a big role in taking a share of the growing demands for health services. The GCC governments are actively supporting private sector investment in a bid to diversify their economies, especially since the public sector currently covers an estimated 65% to 80% of healthcare expenditure across GCC countries. Although there is no denying that there has been robust growth in the health care system in GCC countries, the quality of service still trails behind international standards. Healthcare in GCC countries is not at its optimum because governments have been ill-equipped to deal with high demands for quality services. Health-care providers are not managed to a high enough standard and governments feel little pressure to set service, quality, or financial performance targets. The GCC faces 3 drivers that will greatly increase the demand for healthcare in the region - unique health-risk factors, population growth, and ageing. Population Growth The last decade has seen the GCC have one of the highest rates of population growth in the world, being around four times faster than the US, seven times faster than China and ten times faster than in the Euro zone. By 2020, the GCC’s population will surge by 30 percent according to estimates made by the Economist Intelligence Unit in 2012. By 2025, the GCC population will be almost twice the size it is today. With the numbers of people in GCC countries increasing and the fact that half of the population is under 25, it is essential that substantial growth-friendly policies in all sectors are pursued by GCC governments.


Illustration by Achraf Amiri

Ageing Population

Facilities and Jobs

Market Growth In The Next Few Years

Older people have more expensive profiles than younger people and generally need to seek more medical care. The improvement of life expectancy in the GCC means that old people signifies that there are an increasing number of elderly people in need of care. This demographic segment will only continue to grow.

Another big healthcare challenge the GCC faces is related to the shortage of hospital beds. Demand for hospital beds has risen from 11,200 in 2013 to an expected 115,500 in 2018. This vast increase has meant that governments have already put plans in place to increase their support to keep up with the rising numbers. The search for new healthcare solutions has led to GCC countries improving their current facilities and systems of care by implementing new technologies, care systems and public/private partnerships. Healthcare is an important engine of overall growth and this is believed by many countries in the GCC, who are working to modernise and transform their respective healthcare systems. Many GCC countries are struggling with huge understaffing in the healthcare industry and there is a lack of home grown medical staff. Relying on expatriate nurses, doctors, pharmacists and lab technicians makes the GCC member states even more of an attractive place for those looking for jobs in the healthcare sector.

The GCC healthcare market is expected to grow at a rate of 12.1 percent a year from approximately $40.3 billion in 2015, to $71.3 billion in 2020. As the market continues to grow and the population increases, there will be a demand for hospital beds. It is estimated that the number of hospital beds in the GCC region will rise from 101,797 to 113,925 in 2020.

Health Risk Factors There are unique health risk factors in the GCC, in particular, the prevalence of Type 2 diabetes and obesity are unusually high. In fact, the obesity rate for GCC nationals averages at a staggering 40% and is one of the highest in the world. Since much of the population are GCC nationals, the high rates of Type 2 diabetes and obesity, and their consequent health complications, mean that healthcare costs are expected to skyrocket significantly in the next decade. This is particularly true for countries such as Bahrain, Kuwait, Oman, and KSA where home nationals account for 35% of the total population. Lifestyle diseases are on the rise which is an unfortunate consequence of modernisation and GCC countries are being plagued with heart disease, hypertension and cancer.

Governments in the GCC region aim to change and improve the healthcare system and boost economic growth in their respective countries. It is this driving force and commitment that will improve medical services for both GCC nationals and those who travel from outside the country for medical tourism.


Why Cuba for Medical Treatment For many patients, Cuba is considered as the best available option for medical treatment. At CubaHeal, we have chosen Cuba as a medical destination for our valued clients for the following fundamental reasons: 1. Most of the medical centers available in Cuba are certified ISO 14001 and ISO 9001: which is an international status given to institutions adhering to British Standard Institution (BSI) when it comes to excellence in medical conduct, hygiene, sanitation, and administration. 2. No wait time: As opposed to treatment in your own country, Cuba prides itself in offering quality medical care without the long wait. The average amount of time it takes for the treatment program to start is between 2 weeks to a month. 3. Cuban doctors are some of the world’s finest: In the last 5 years, over 50 thousand patients from 40 countries have benefited from Cuban Medical expertise. 4. Medical breakthroughs: Cuba is recognized for its medical breakthroughs in treatment, and in some instances, curing diseases that are considered incurable in some of the most advanced medical centers in both North America and Europe. Some of these breakthrough and cures include: ORTHOPEDIC SURGERIES Retinitis Pigmentosa, degenerative disease which leads to blindness Four Cancer patent vaccines which proved effective in the treatment of advanced Lung Cancer. Many people are unaware that Cuba was the country developed Nimotuzumab, an anti cancer drug known to treat advanced tumor in the head, neck and brain 5- Higher Health standards than many other advanced nations: According to the world Health Organization (WHO),Cuba attains higher health indicators than advanced countries such as the United States 6- Cuba is a beautiful island: with breathtaking beaches, a tropical oceanic climate, and natural beauty, many people believe it to be the most gorgeous island on Earth. The magic of Cuba can be seen and heard everywhere; you can feel it in the food and drink, in the architecture, in the smiles of the local people and even in the air.


LIST OF MEDICAL TREATMENTS

• Oncology programs • Diabetes and Diabetic Foot Ulcer Program • Gynaecology and Infertility Treatment Programs • Cuban Medical Program for the Rehabilitation of Addictions • Orthopaedic Programs • Cardiology and Cardiovascular Surgery Programs • Neurological Restoration • Rehab Programs for Disabilities and Chronic Health • Transplant Programs • Maxillofacial Surgery • Cosmetic Surgery Programs • Skin Medical Program • Eye Programs


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THE EURO-GCC Trade & Investment Guide 2017

Europe Country Spotlights ! Imran Hussain

The term “global leader” doesn’t even begin to describe Europe’s trade and investment prowess. Taken as a bloc, the EU has the highest nominal global GDP of any collective of states and its status globally in nearly every sector imaginable is high ranking or top. Europe, and particularly the UK, birthed industrialisation as we know it and the very idea of global trade and investment only exists because of steps taken in Europe in the 1700s and 1800s. In the 1900s through to now, Europe has always looked to harness products imported from global markets and has served those very markets by exporting goods to them too. Its outreach is pretty much unmatched and its innovations and products are in a league of their own.

European standards, then, are the global standards and, as such, business is conducted in a proudly professional manner across the continent. Germany is the continent’s largest economy, followed by the UK and France and, if Russia is included as European, the top 10 countries ranked by nominal GDP includes five European countries. Please do enjoy and dissect the information overleaf about the European countries we’ve selected for this issue.

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THE EURO-GCC Trade & Investment Guide 2017

President of Cyprus Nicos Anastasiades

Nicos Anastasiades was born in Pera Pedi, Limassol, in 1946. Both his parents played an important role in his life, especially his father. He has a twin brother and a sister.

Nicos Anastasiades is a founding member of the Youth of the Democratic Rally (NEDISY), in which he served from the posts of District Secretary, Vice President and President.

In 1971 he married Mrs Antri Moustakoudi and they had two daughters, Elsa and Ino. He has four grandchildren, Andys, Nicholas, Giorgos and Nicos.

After his successful term in NEDISY he takes action next to the historical leader Glafkos Clerides from the positions of First Vice President and later Deputy President until 1997. He is a member of the Cyprus National Council since 1995.

He studied Law at the University of Athens and pursued his postgraduate degree in Maritime Law at the University of London. He practices law since 1972. During his student years he was an active member of the Youth of Georgios Papandreou’s Centre Union in Athens. After his studies he served in the National Guard, first at the Recruits’ Training Centre (KEN) in Larnaca and then at the 4th Higher Military Command.

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Nicos Anastasiades was triumphantly elected as President of the Democratic Rally in 1997, a position that the members and officials of the party firmly trusted him with by being reelected in 1999, 2003, 2007 and 2012.


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Cyprus Country Spotlight

Quick Facts Capital City: Nicosia Population: 1 183 613 GDP: 19.330 billion USD Government: Unitary presidential representative republic President: Nicos Anastasiades Ethnic groups: Greek 60%; Turkish 24%; Other 16%

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Cyprus at a Glance

Cyprus can be found within the boundaries of the Eastern Mediterranean Sea and is an island country located in relation to the following countries: south of Turkey, west of Syria and Lebanon, northwest of Israel, north of Egypt and east of Greece. With a sub-tropical climate, it experiences very mild winters and summers can be extremely warm. With an average temperature along its coast of 24 degrees Celsius, Cyprus boasts one of the warmest climates in the Mediterranean and as a result it is a popular tourist destination famed for its beautiful beaches and archaeological sites relating to the cult of Aphrodite, including ruins of palaces, tombs and mosaic-adorned villas.

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Politics

Cyprus utilises a multi-party system but of course ultimate power is attributed to the President, who is both chief of state and head of government. The current President, Nicos Anastasiades, has been in power since February of 2013 and currently has a council of eleven ministers who operate underneath him, each one presiding over various categories, e.g. education, defence, health, etc.

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The Cypriot constitution, conceived in 1960, codifies the principle of separation of powers and, as such, the executive, legislative and judicial branches are all independent of one another in order to avoid abuse of power. The legislative branch consists of a House of Representatives who are represented by 59 members who get elected for a five year term. The three main parties in Cyprus include that of the current President, DISY, who was elected with 45% of the vote in the first round of the 2013 election and finally 57% of the vote in the second round. The other two prominent parties are the AKEL, who received 27% of the vote in the first round, and EDEK, who received 25% of the vote in the first round.

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Economy

Cyprus has been sought after greatly as a base for several offshore businesses for its low tax rates. Tourism, financial services and shipping are significant parts of the economy and the government’s economic policy has focused on meeting the criteria for admission to the European Union. The Cypriot government adopted EUR as the national currency on 01/01/2008. Cyprus, then, is part of a monetary union - the Eurozone -


THE EURO-GCC Trade & Investment Guide 2017

...Cyprus is a key figure in the European Union and although a great destination for tourists...

and the EU single market. The 2012–2013 Cypriot financial crisis led to an agreement with the Eurogroup in March 2013 to split the country’s second largest bank, the Cyprus Popular Bank (also known as Laiki Bank), into a “bad” bank, which would be wound down over time and a “good” bank which would be absorbed by the Bank of Cyprus. In return for a EUR 10 billion bailout from the European Commission, the European Central Bank and the International Monetary Fund, the Cypriot government was required to impose a substantial trimming of uninsured deposits. A large proportion of these were held by wealthy Russians who had been using Cyprus as a tax haven. Insured deposits of EUR 100,000 or less were not affected. In the early 21st century the Cypriot economy diversified massively and Cyprus became far more prosperous due to this diversification. However, in 2012 it became affected by the Eurozone financial and banking crisis and in June 2012, the Cypriot government announced it would need EUR 1.8 billion in foreign aid to support the Cyprus Popular Bank, and this was followed by Fitch downgrading Cyprus’s credit rating to junk status. Fitch said Cyprus would need an additional EUR 4 billion to support its banks and the downgrade was mainly due to the exposure of Bank of Cyprus, Cyprus

Popular Bank and Hellenic Bank - Cyprus’s three largest banks - to the Greek financial crisis. Because of the heavy influx of tourists and foreign investors, the property rental market in Cyprus has grown massively in recent years. In late 2013, the Cyprus Town Planning Department announced a series of incentives to stimulate the property market and increase the number of property developments in the country’s town centres. This followed earlier measures to give immigration permits to third country nationals investing in Cyprus property quickly and without fuss. Significant quantities of offshore natural gas have been discovered in the area known as Aphrodite in Cyprus’s exclusive economic zone (EEZ), about 109 miles south of Limassol. Turkey’s offshore drilling companies accessed both natural gas and oil resources on the island in 2013 and have continued to since. Cyprus demarcated its maritime border with Egypt in 2003, and with Lebanon in 2007 and Cyprus and Israel demarcated their maritime border in 2010. To boot, in August 2011, the US-based firm Noble Energy entered into a production-sharing agreement with the Cypriot government regarding its commercial development.

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THE EURO-GCC Trade & Investment Guide 2017

Following the financial crisis, Cyprus has exceeded expectations with its economic recovery. It managed to maintain earlier than predicted, with its economy exiting recession in 2015 and continuing to grow into 2016. Progress has been achieved in all of the key objectives Cyprus’s international lenders have targeted, resulting in Eurogroup hailing Cyprus as a success story.

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Education

Cyprus boasts a highly developed educational system and offers exceptional facilities, both public and private. The brilliant standard of Cypriot education can be attributed to its government prioritising it highly, in fact Cyprus is one of the top three spenders for education in the EU, with nearly 7% of its GDP devoted to educating its citizens. Its only rivals in Europe are Sweden and Denmark and the quality of its public schools are comparable with many of other European countries’ private schools. Indicative of its high quality, Cyprus currently has the highest percentage of citizens of working age who have higher-level education in the EU at 30% which is ahead of Finland’s 29.5%. In addition, 47% of its population aged 25–34 have tertiary education, which is the highest in the EU. The two most popular spoken languages in Cyprus are Greek and Turkish, although for those who speak English there is little to fear - English is widely understood and many road signs, public notices, advertisements etc. are also translated into English.

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Religion

According to Eurobarometer 2005, Cyprus is the second most religious state in the European Union, just falling slightly short behind Malta. Approximately 94% of its citizens follow Eastern Orthodox Christianity, while small, but significant, Muslim and Jewish communities also reside on the island. Cyprus is also the home ground of the Hala Sultan Tekke, which can be found close to the Larnaca Salt Lake, and is considered by many to be the third holiest site in Sunni Islam. Both Muslims and Christians have been known to visit the site as part of their pilgrimage.

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Cyprus: the Irrepressible Island

With an advanced, high-income economy and a very high Human Development Index, Cyprus is a key figure in the European Union and although a great destination for tourists, it is also much more than that. Boasting a rich and divisive history which dates back as far as 10 million BC, it generally follows European standards and for English speakers, communication will be easy as English is widely spoken and recognised by its citizens. Cyprus is so much more than just a beach-time resort; the island is multilayered, like its history, with a compelling culture, lifestyle and landscape, overseen by warm, hospitable people who are pleased to accept foreign trade and to do commence business relations with citizens and cultures of all kinds and creeds. Do not miss the opportunity to experience what the country has to offer, both culturally and from a prospective business perspective.

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THE EURO-GCC Trade & Investment Guide 2017

Chancellor of Germany Angela Merkel

Angela Dorothea Kasner, better known as Angela Merkel, was born in Hamburg, West Germany, on July 17, 1954. Trained as a physicist, Merkel entered politics after the 1989 fall of the Berlin Wall. Rising to the position of chairwoman of the Christian Democratic Union party, Merkel became Germany’s first female chancellor, and one of the leading figures of the European Union, following the 2005 national elections. German stateswoman and chancellor Angela Merkel was born Angela Dorothea Kasner on July 17, 1954, in Hamburg, Germany. The daughter of a Lutheran pastor and teacher who moved his family east to pursue his theology studies, Merkel grew up in a rural area north of Berlin in the then German Democratic Republic. She studied physics at the University of Leipzig, earning a doctorate in 1978, and later worked as a chemist at the Central Institute for Physical Chemistry, Academy of Sciences from 1978 to 1990. After the fall of the Berlin Wall in 1989, Merkel joined the Christian Democratic Union (CDU) political party and soon after was appointed to Helmut Kohl’s cabinet as minister for women and youth and later served as minister for the environment and nuclear safety.

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Following Kohl’s defeat in the 1998 general election, she was named secretary-general of the CDU. In 2000, she was chosen party leader, but lost the CDU candidacy for chancellor to Edmund Stoiber in 2002. In the 2005 election, Merkel narrowly defeated Chancellor Gerhard Schröder, winning by just three seats, and after the CDU agreed a coalition deal with the Social Democrats (SPD), she was declared Germany’s first female chancellor. Merkel is also the first former citizen of the German Democratic Republic to lead the reunited Germany and the first woman to lead Germany since it became a modern nation-state in 1871. She was elected to a second term in 2009. Merkel made headlines in October 2013 when she accused the U.S. National Security Agency of tapping her cell phone. At a summit of European leaders she chided the United States for this privacy breech, saying that “Spying among friends is never acceptable.” Later reports revealed that the NSA may have been surveilling Merkel since 2002. Merkel was sworn in for a third term in December 2013.


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Germany Country Spotlight

Quick Facts Capital City: Berlin Population: 80,679,750 GDP: 3494.9 billion USD Government: Federal parliamentary constitutional republic President: Joachim Gauck President of the Bundestag: Norbert Lammert Chancellor: Angela Merkel

Germany is the world’s third largest exporter of goods, and has the largest national economy in Europe which is also the world’s fourth largest by nominal GDP.

President of the Bundesrat: Malu Dreyer President of the Federal Constitutional Court: Andreas Voßkuhle

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Germany at a Glance

Germany is a republic built on a federal parliamentary system in western-central Europe comprising 16 principal states. Its capital and largest city is Berlin. The country has a total land area of 137,847 square miles. Germany has a fundamentally moderate seasonal climate. With 81 million residents, Germany is the most populated member state in the European Union. After the United States, it is the second most popular migration destination in the world. The rise of Pan-Germanism inside the German Confederation resulted in the unification of many of the German states in 1871 into the Prussian-dominated German Empire. After World War I (1914-1918) and the German Revolution of 1918–1919, in which Kaiser Wilhelm was forced to stand down, the Empire was replaced by the parliamentary Weimar Republic. The establishment and eventual prominence of the Third Reich in 1933 led to World War II (1939-1945) and various tragedies in Germany and, indeed, across Europe. After 1945, Germany split into two states: East Germany and West Germany, but at the Cold War’s end in 1990, the country was reunified.

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In the 21st century, Germany is a great global power player, and has the world’s fourth-largest economy by nominal GDP. As a global leader in several industrial and technological sectors, it is both the world’s third-largest exporter and importer of goods. Germany is a highly developed country with a very high standard of living sustained by a skilled and productive society and workforce whose high educational esteem and attitude is focused towards societal responsibility. It upholds a social security and universal health care system, environmental protection and a tuition-free university education. Germany was a founding member of the European Union in 1993. It is part of the Schengen Area, and became a co-founder of the Eurozone in 1999. Germany is a member of the United Nations, NATO, the G8, the G20, and the OECD. The national military expenditure is the 9th highest in the world. Known for its rich cultural history, Germany has continuously been the home of influential artists, philosophers, musicians, sportsmen, entrepreneurs, scientists and inventors.


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Economy

Germany is the world’s third largest exporter of goods, and has the largest national economy in Europe which is also the world’s fourth largest by nominal GDP. Germany has a social market economy with a highly skilled labour force, a large capital stock, a low level of corruption and a high level of industrial innovation. The service industry and IT contribute approximately 71% of the total GDP, with manufacturing and heavy industry contributing roughly 28%, and agriculture putting in around 1%. The country has the lowest unemployment rate – at 4.2%. It is part of the European single market, which comprises more than 508 million consumers and, according to OECD data, Germany boasts one of the highest labour productivity levels in the world. Several domestic economic policies are determined by arrangements among EU members and by EU legislation. Germany introduced the common European currency, the Euro, at its inception in 2002. Its fiscal policy is set by the European Central Bank, which is headquartered in Frankfurt, continental Europe’s financial centre. The automotive industry in Germany is regarded as one of the most competitive and innovative in the world, and is the fourth largest by production output. The top 10 exports out of Germany are motor vehicles, machinery, chemicals, electronics, electrical equipment, pharmaceuticals, transport apparatus, basic metals, food produce and rubber and plastics. Of the world’s 500 biggest stock market-listed organisations calculated by revenue in 2014, the ‘Fortune Global 500’, 28 are headquartered in Germany. 30 German-based firms are included in the DAX, the German stock market index. Well-known international brands based in Germany include Allianz, Adidas, SAP, Volkswagen, Audi, Mercedes-Benz, BMW, Siemens, Porsche, and DHL. Germany is recognised for its large portion of specialised SMEs, known colloquially and, indeed, globally as the ‘Mittelstand model’. Approximately 1,000 of these companies are global market leaders in their respective segments and are labelled hidden champions. Berlin, the capital, has now developed a thriving, cosmopolitan centre for new start-up businesses and has become a top locality for venture capital funded firms in the European Union. It will be interesting to see how Brexit impacts Germany’s economy. Many fear that confidence in the German economy will be negatively impacted as a result. A postBrexit EU trade deal with Britain is being suggested to help minimise any negative impact. Angela Merkel, as of this writing, has raised the possibility of giving Britain access to the single market whilst still allowing them to maintain their own border control.

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(President of the Bundestag) - elected by the Bundestag and responsible for overseeing the daily sessions of the body. The third-highest official and the head of government is the Chancellor, who is appointed by the Bundespräsident after being elected by the Bundestag. Germany’s political structure operates under an agenda laid out in the 1949 constitutional document known as the Grundgesetz (Basic Law). Amendments to the constitution usually involve a two-thirds majority of both chambers of parliament. The central values of the constitution are as expressed in the articles guaranteeing human dignity, the separation of powers, the federal structure, and the rule of law are valid in perpetuity. The chancellor, Angela Merkel, is, as aforementioned, the head of government and exerts executive power, similar to the role of a Prime Minister in other parliamentary democracies such as the UK. Federal jurisdictive power is vested in parliament, which consists of the Bundestag (Federal Diet) and Bundesrat (Federal Council), which together form the country’s legislative body. The Bundestag is elected through direct elections, by proportional representation. The members of the Bundesrat represent the governments of the 16 federated states and are members of the state cabinets. Since 1949, the party system has been dominated by the Christian Democratic Union and the Social Democratic Party of Germany. So far, every German chancellor has been a member of one of these parties. However, the smaller, liberal Free Democratic Party (in parliament from 1949 to 2013) and the Alliance ‘90/The Greens (in parliament since 1983) have also played important roles in running the country. As of this writing, Angela Market has announced her intention to run for a fourth term as Chancellor during the next German federal election in 2017.

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Durable Deutschland

Germany in the post war age and up to present day has proven itself to be a resilient and, indeed, fiercely competitive global player. Its principles of prudence, hard work and productivity, sometimes seen as stereotypes and oft-used as taunts from other European nations, are its complete underpinning and the very reasons it’s not languishing in the economic mire. The country has a solid manufacturing and services-based economy, in which its citizens are invited to participate and grow. The country also has great artistic and bohemian centres, such as Berlin, alongside industrial powerhouses, such as Munich, and financial hubs, such as Frankfurt. Above all this, Germany operates in a democratically political manner, while placing its virtues above its power.

Politics

The German President, Joachim Gauck, is the country’s head of state and is tasked primarily with representative responsibilities and powers. He is elected by the Bundesversammlung (federal convention), a body containing members of the Bundestag and an equivalent number of state delegates. The second-highest official in the German order of precedence is the Bundestagspräsident

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Interview with Mr. Abdulaziz Al-Mikhlafi, Secretary General of Ghorfa

What is the purpose of Ghorfa as an organization? The Ghorfa Arab-German Chamber of Commerce and Industry is the competence centre for business relations between Germany and the Arab world. Our chamber pursues non-profit goals to enhance and strengthen business relations in the fields of trade, industry, finance and investment. German companies have been well known in the Arab world for decades now and the Ghorfa has been an active player in supporting business relations between the two for forty years. During this time, not only did the trade volume between the Arab countries and Germany increase, but also Arab investments in Germany have risen substantially. We are proud to contribute to the already well working cooperation. In general, we see ourselves as the bridge between Germany and the Arab countries. The Ghorfa, therefore, mainly focuses on networking, consulting and on providing information about relevant economic and industrial developments. Our mission is to pave the way for stronger business cooperation between German and Arab business partners.

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Why is it important to increase trade between Germany and the Gulf states? The trade between Germany and the Arab countries, especially with the states of the Gulf Cooperation Council (GCC), is already on a good track, as we can see in the trade statistics. The trade volume between Germany and the Arab countries grew fast and reached EUR 52 billion in 2015. The GCC’s share in the trade volume accounted to more than 70 percent. In the first half of 2016 the German exports in the region grew again by 4.2 percent. On the other side, Arab investments in Germany are estimated at about EUR 100 billion. We have to consider, that the trade volume is in favour of German businesses. With our service, we are working to promote a healthy and balanced exchange of goods and services. This means, that we also try to increase Arab exports to Germany. This would be a winwin situation. First of all, we are a partner for both: German and Arab businesses. We truly believe that only a balanced trade volume can enhance the partnership on a sustainable level.

Why should companies from the Gulf states choose Germany over its other EU counterparts for trade and investment? German products are not only well known because of their quality. German businesses are also known for reliability, efficiency and sustainability. They provide high value services alongside their products. There is not only a warranty you can get from many German companies. They also provide education and trainings with it. Siemens for example, got the biggest contract in its history because it also included education in its offer. Now the company is not only delivering state of the art technology to enhance the Egyptian electricity grid, it will also build an education system to train young people. These skilled Egyptian workers will operate and maintain the turbines, which makes them even more sustainable. While many Arab countries want to develop, knowledge based economies, Germany can be a suitable partner for this endeavour since German companies do not only export their goods, but also bring their know-how.


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What impact will Brexit have, if any, on trade between Germany and the Gulf states?

Our chamber pursues non-profit goals to enhance and strengthen business relations in the fields of trade, industry, finance and investment. German companies have been well known in the Arab world for decades now and the Ghorfa has been an active player in supporting business relations between the two for forty years.

As the Brexit is still at an early stage, it is hard to make a forecast. If it comes to the worst-case scenario and German companies have to find alternative markets and investment opportunities, I truly believe, that the doors to the Arab markets will be wide open. Apart from the possible impacts of the Brexit, Arab countries still offer great options. The GCC-countries have very good relations with both the United Kingdom and Germany. Let us not forget that the Arab countries have more than 380 million inhabitants in total. Almost 50 percent of them are below the age of 25. Whatever happens with Great Britain and the EU, all GCC-states and the corresponding markets offer great opportunities for the German economy. Why should a company consider becoming a member of Ghorfa? The Ghorfa Arab-German Chamber of Commerce and Industry serves as the primary centre of expertise within the Arab-German business community. Our members profit from first-hand information, sophisticated publications, delegation visits and business forums. Our biggest achievement is the broad and trustworthy network consisting of both institutional and entrepreneurial decision makers. This is the basis of our services, that we provide for our members. Currently we are organizing the 10th Arab-German Health Forum, which will take place in Berlin March 22nd - 23rd, 2017. I also want to highlight the 20th Arab-German Business Forum, which will take place May 15th -17th, 2017. More than 600 representatives from politics, businesses and the sciences will attend the forum to further strengthen the ties between Germany and the Arab countries. Thus, I can just encourage German as well as Arab companies to become part of the exclusive, high-level network and to join the vision of prospering Arab-German business relations.

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Prime Minister of Greece Alexis Tsipras

Alexis Tsipras is the 185th and current Prime Minister of Greece, having been sworn in on 21 September 2015. He previously served as the 183rd Prime Minister of Greece from 26 January 2015 to 27 August 2015. Tsipras has been leader of the left-wing Greek political party Syriza since 4 October 2009. Tsipras was born in Athens in 1974. He joined the Communist Youth of Greece in the late 1980s and in the 1990s was politically active in student protests against education reform plans, becoming the movement’s spokesperson. He studied civil engineering at the National Technical University of Athens, graduating in 2000, and later undertook post-graduate studies in urban and regional planning. He worked as a civil engineer in the construction industry, based primarily in Athens. From 1999 to 2003, Tsipras served as the secretary of Synaspismos Youth. He was elected as a member of the Central Committee of Synaspismos in 2004, and later the Political Secretariat. In the 2006 local election, he ran as Syriza’s candidate for Mayor of Athens, winning 10.5%. In 2008, he was elected as leader of Syriza, succeeding Alekos Alavanos.

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He was first elected to the Hellenic Parliament representing Athens A in the 2009 election, and was re-elected in May and June 2012, subsequently becoming Leader of the Opposition and appointing his own shadow cabinet. In January 2015, Tsipras led Syriza to victory in a snap legislative election, winning 149 out of 300 seats in the Hellenic Parliament and forming a coalition with the Independent Greeks. 20 August 2015, seven months into his term as Prime Minister he lost his majority after intraparty defections, Tsipras announced his resignation, and called for a snap election, to take place the following month. In the September 2015 election that followed, Tsipras led Syriza to another victory, winning 145 out of 300 seats and re-forming the coalition with the Independent Greeks. As Prime Minister, he has overseen negotiations regarding the Greek government-debt crisis, initiated the Greek bailout referendum and responded to the European migrant crisis. In 2015 he was voted by TIME magazine as one of the 100 most influential people globally.


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Greece Country Spotlight

Quick Facts Capital City: Athens Population: 11.03 million GDP: 242 billion USD Government: Democratic republic President: Alexis Tsipras Prime Minister: Prokopis Pavlopoulos Ethnic groups: Greek 95.6%, Turkish 2.4%, Aromanian 1.2%

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Greece at a Glance

Greece, a full EU Member State, scores high on all major factors taken into consideration when choosing a new country for relocating, such as quality of life, regulated environment, secure living conditions in urban and rural areas, access to efficient services, residence privileges for family members, freedom to travel, among others. Despite its small size, Greece features a particularly diverse natural environment, providing many recreational opportunities. This, combined with a spirited lifestyle blending both ancient and modern Mediterranean culture, makes Greece a simply extraordinary place to be - and a wonderful place to call home. The birthplace of Western civilization, Greece’s cultural legacy lives on in modern Greek society. While countless archaeological sites and museums offer visitors and residents a chance to experience Greek history in person, the country’s deep heritage is also felt in the spectacular concert halls, the summer open-air theatres, and the bustling neighbourhood art galleries found throughout Athens and other cities. Greece is today, as it has been for thousands of years, an inspiring place to be.

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With 300+ days of sunshine per year, the climate in Greece makes living in this Mediterranean destination a year-round joy. The country’s stunning topography and existing facilities offer countless options for recreation and relaxation, such as swimming, sailing, kite surfing, rafting, biking, rock climbing, skiing, golf, spas - just to name a few. For after hours entertainment, restaurants, bars, clubs and cultural venues all contribute to a vibrant nightlife. A modern tourism infrastructure is at your disposal for weekend getaways to some of the world’s most beautiful locales. Whatever you choose to do, healthy and joyful living is part of the Greek lifestyle. The Mediterranean diet is a global brand that needs no introduction. There is nowhere on earth better suited for healthy, wholesome eating than Greece. With a rich variety of ingredients and traditional products, such as seafood, olive oil, cheeses and other dairy products, tempting pastries and specialty wines that will satisfy every foodie and thrill every cook. Greece offers a wide variety of international educational options for expatriates, from pre-schools to universities especially for students seeking studies in English, French and German. Many high schools offer the International


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Baccalaureate (IB) program and have a agood track record in placing students at prestigious universities, both in Greece and abroad. At the same time, many international universities offer unique educational programs in Greece for undergraduates and graduates alike.

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Politics

The politics of Greece takes place in a parliamentary representative democratic republic. Thus, the Prime Minister of Greece is the head of government, and of system of multi-parties. Passing legislation is done in both the government and the Hellenic Parliament. Since 1974 and Greek government-debt crisis the party system was dominated by the liberal-conservative New Democracy and the social-democratic Panhellenic Socialist Movement. The Judiciary is independent of the executive and the legislature. The Constitution of Greece, which calls Greece a “presidential parliamentary republic�, includes extensive specific guarantees of civil liberties and vests the powers of the head of state in a president elected by parliament.

The Greek governmental structure is similar to that found in many other Western democracies, and has been described as a compromise between the French and German models. Legislative power is exercised by Parliament and the President of the Republic. Executive power is exercised by the President of the Republic and the Government. Judicial power is vested in the courts of law, whose decisions are executed in the name of the people. Although the President of the Republic has limited political power, as most power lies with the government, his duties include formally appointing the Prime Minister, on whose recommendation he also appoints or dismisses other members of government, he represents the State in its relations to other States, proclaims referendums etc. Greek politics is often described as dynastic, with longestablished political families controlling the positions of power. This is certainly true for the Prime Ministers, but there are many Ministers and Members of Parliament with no relation to political families.

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... The Greek economy is beginning to recover. In 2016, the Greek economy grew by 1.5% ...

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Economy

The economy of Greece is the 51st in the world by purchasing power, and is the 45th largest in the world. The Greek debt crisis, which played out after the financial crisis in 2007-8, the Greek economy struggled to meet its repayment schedule. Negotiations between its creditors led to austerity measures; in a popular referendum in 2015, the Greek public rejected the third round of austerity measures. However, the Greek economy is beginning to recover. In 2016, the Greek economy grew by 1.5%, and Alex Tsipras has recently replaced hardline left ministers with newer recruits who are more willing to cooperate with Greece’s creditors. Furthermore, the launch of the Golden Visa program in 2013 underlines its commitment to opening the country to foreign investment. Starting in June 2013, the Greek authorities issues 983 Golden Visas. Despite the economic problems that have affected Greece in recent years, it remains a viable and popular option for people who wish to relocate to Europe.

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Requirements and procedures

Real estate Greece offers the opportunity to invest in a residency permit. To apply for the permit, an applicant must first apply for a national “D” visa in order to gain entry to Greece. The applicant can then buy a property. The property investment can be a single property or multiple properties, as long as the value of the investment is EUR 250,000 plus VAT. A residence permit can be renewed every 5 years, as long as the holder still owns the property in question, or other properties of the same value. Investment in industry Greece also welcomes investment activity involved in the implementation of the operation of an investment project. Up to ten permits may be issued for an investment project (investors and executives) depending on the investment scale. The investment activity may be implemented through the construction of new facilities or business acquisitions, as well as expansion of current activities, provided it has a positive impact on the national economy. In order to qualify for the residency permit, the investment must equal the value of EUR 250,000.

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Prime Minister of Hungary Viktor Orbán

Viktor Orbán, Hungarian form Orbán Viktor (born May 31, 1963, Alcsútdoboz, Hungary) Hungarian politician who served as prime minister of Hungary (1998–2002; 2010– ). He was considered to be the first post-Cold War head of government in eastern and central Europe who had not been a member of a Soviet-era communist regime. Orbán received a law degree from the University of Budapest in 1987. The following year he gained a fellowship appointment at a central and eastern European research group sponsored by the Soros Foundation, a pro-democracy organization created by the financier George Soros. Orbán also became a founding member of the anticommunist Federation of Young Democrats (Fidesz). In 1989 he received a scholarship from the Soros Foundation to study political philosophy at the University of Oxford. That June Orbán gained wide recognition when he gave a speech at the reburial of former premier Imre Nagy, leader of the 1956 Hungarian Revolution, in which he called for free elections and the withdrawal of Soviet troops from Hungary. All Soviet forces did indeed withdraw by mid-1991.

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Following the transition to democracy in 1990, he was elected to the National Assembly and functioned as leader of Fidesz’s parliamentary caucus until 1994. Under his leadership, Orbán shifted Fidesz away from its original classical liberal, integrationist platform toward center-right national conservatism. After Fidesz attained a parliamentary plurality in the 1998 elections, Orbán governed the country for four years at the head of a right-wing coalition government. Fidesz narrowly lost the 2002 and 2006 elections to the Socialist Party, and Orbán spent eight years as the leader of the opposition. The Socialists’ rising unpopularity, exacerbated by PM Ferenc Gyurcsány’s “Őszöd speech”, saw Orbán reelected to the premiership in 2010 in a landslide coalition victory (with the Christian Democrats). At the helm of a parliamentary supermajority, Orbán’s cabinet spearheaded major constitutional and legislative reforms, which drew criticism from opposition parties and foreign observers. Fidesz retained its supermajority in the 2014 elections, though by-elections have reduced this to a simple majority since.


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Hungary Country Spotlight

Quick Facts Capital City: Budapest Population: 9,811,539 GDP: 120.69 billion USD Government: Parliamentary republic President: János Áder Prime Minister: Viktor Orbán Ethnic groups: 92.3% Hungarian, 1.9% Roma, 5.8% Other

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Politics

Hungary is a parliamentary representative democratic republic. The President is the Head of State, but the position is largely a ceremonial one, whereas the head of Government is the Prime Minister who holds executive power. The current party in power is Fidesz who are a conservative party, and their main opposition comes from the Hungarian Socialist Party and the Jobbik party. Their legislative power derives from both the government and their parliament: it is exercised by the unicameral National Assembly that consists of 199 members. Members of the National Assembly are elected for four years. Cabinet ministers are selected by the Prime Minister who also has the right to dismiss them during their term. Ministers of Hungary are appointed to the following areas: home affairs, rural development, defence, national development, human resources, foreign affairs, administration and justice, and national economic affairs. The executive powers are kept in check by Hungary’s judicial branch, a fifteen member constitutional court which has the power to challenge legislation put forward by the National Assembly on grounds of unconstitutionality. Members of the constitutional court are elected for periods of twelve years.

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Using their supermajorities, the Fidesz and KDNP parties passed a media law in 2010 which can impose fines on the media for engaging in what they term “unbalanced coverage”. There was also a new constitution imposed by them in 2012 that modified several aspects of the institutional and legal framework in Hungary – this was widely criticised by the European parliament and other international bodies who have called for stronger checks and balances over the power the executive has legislated for itself. Currently, a hot topic in Hungarian politics concerns refugees via the European Union. The Prime Minister called for the Hungarian people to vote in a referendum rejecting quotas the EU has put into place, and although 98% of voters voted to reject the quota, less than the required amount of voters turned up and so the quotas were enforced.

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Foreign Relations

Ever since the revolution from communism into democracy in 1989, it’s top foreign policy has been to integrate itself into Western economic and security organisations. It has also worked to thaw out cold relationships with many of its neighbouring countries: for example, it has signed treaties


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with Romania, Slovakia, and Ukraine, which renounce all outstanding territorial claims and lay the foundation for constructive relations. Although these attempts are being made, there can still be some tension and disagreements between the countries, particularly in relation to the treatment of Hungarian minority rights in Romania, Slovakia and Serbia, but progress is being made and, as the saying goes, Rome wasn’t built in a day.

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Economy

Hungary has a high income economy of medium-size, and it is part of the European Union’s single market. With the changes taking place in 1989 from communism to democracy, obviously there were very large changes to the country’s financial system as it made the transition from a socialist economy to a market economy. It operates using the currency known as the Forint (HUF), and is one of the few member states of the European Union not to adopt the Euro currency. The private sector amounts to around 80% of Hungary’s gross domestic product (GDP) and foreign ownership and investment in Hungarian firms are plentiful, calculated to equal almost USD 70 billion in direct investment from foreign sources.

Previously, foreign investment was placed into mostly low level industries like textiles and food, however, more recently there have been large investments in industries such as luxury vehicle production, renewable energy systems, high-end tourism, and information technology. Hungary’s main industries are mining, metallurgy, construction materials, processed foods, textiles, chemicals (especially pharmaceuticals), and motor vehicles. Hungary’s main agricultural products are wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, and dairy products. The Hungarian economy, like any economy, has its peaks and valleys, but in the long run it is consistently growing. Moody’s has upgraded Hungary’s rating to Baa3. Hungarians have more money to spend as record-low unemployment, deflation and the exodus of hundreds of thousands in recent years to western Europe has produced a labor shortage, driving up wages across the economy. The average salary grew 6.8 percent in the first five months of 2016 from a year earlier, including a 10.6 percent increase in the public sector, according to statistics office data that excludes wages paid to people employed on public works.

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Hungary has developed throughout its rich history into one of the most fascinating locations in Central Europe.

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Education & Innovation

A quite incredible thirteen Nobel Prize winners have been either Hungarian or Hungarian-born since the award’s inception, and accordingly Hungary has developed a great reputation for theoretical advancement, particularly in the field of mathematics. Hungary’s higher education and training system has been ranked 44 out of 148 countries in the Global competitiveness Report 2013/2014 and clearly it is a culture that places academic achievement highly in its list of desirable attributes for its citizens. Famous Hungarian mathematicians include father Farkas Bolyai and son János Bolyai, who was one of the founders of non-Euclidean geometry; Paul Erdős, famed for publishing in over forty languages and whose Erdős numbers are still tracked; and John von Neumann, a key contributor in the fields of quantum mechanics and game theory, a pioneer of digital computing, and the chief mathematician in the Manhattan Project. Many Hungarian scientists, including Erdős, von Neumann, Leó Szilárd, Eugene Wigner, Rudolf E. Kálmán, and Edward Teller emigrated to the United States. Some of the important inventions derived from Hungarian citizens, many of them mentioned above, include the development of holography, the theory of thermonuclear fusion, the modern cathode ray tube, the ballpoint pen and even the Rubix cube!

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Hospitable Hungary

Hungary has developed throughout its rich history into one of the most fascinating locations in Central Europe. Its high tourist rate can be ascribed to its sprawling landscapes, plentiful rivers and stunning architecture, and that’s before mentioning the wonderful cultures and traditions that its citizens embrace. With a fast growing economy right in the heart of Europe, Hungary is a key figure in the international landscape and should definitely not be ignored. Although it is unique in how different its language is as compared to the other Central European countries that neighbour it, the potential visitor/investor should not feel intimidated to interact with its people. The position of Hungary can be likened to its rivers: calm and steady but consistent in its current toward growth.

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Prime Minister of Luxembourg Xavier Bettel

Following secondary school studies, Xavier Bettel pursued higher education studies at the University of Nancy, where he was awarded a master’s degree in public and European law from the Faculty of Law, followed by a DEA (postgraduate diploma of advanced studies) in political sciences and public law. Following the legislative elections of 20 October 2013, Xavier Bettel was appointed Prime Minister, Minister of State, Minister for Communications and Media, Minister for Religious Affairs on 4 December 2013 in the coalition government formed by the Democratic Party (DP), the Luxembourg Socialist Workers’ Party (LSAP) and the Green Party (“déi gréng”). Following the resignation of Maggy Nagel from the government, Xavier Bettel was appointed Minister of Culture on 18 December 2015. A member of the DP since 1989, Xavier Bettel was elected to Parliament for the first time in 1999 at the age of 26 while standing for the DP in the constituency of the Centre.

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He was re-elected in 2004, 2009 and 2013. In Parliament, he assumed among others the roles of vice-chairman of the Legal Affairs Committee from 2004 to 2013 and vice-chairman of the Committee of Enquiry into the State Intelligence Service from 2012 to 2013. From 2009 to 2011, he assumed the role of chairman of the DP parliamentary group. At local level, Xavier Bettel initially served as a municipal councillor of the City of Luxembourg from 2000 to 2005, then as an alderman from 2005 to 2011. Following the municipal elections of 2011, he assumed the role of mayor, an office he held until his appointment as Prime Minister, Minister of State in December 2013. From January 2013 to November 2015, Xavier Bettel was the chairman of the DP.


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Luxembourg Country Spotlight

Quick Facts Capital City: Luxembourg City Population: 585 568 GDP: 57.79 billion USD Government: Parliamentary representative democratic monarchy Prime Minister: Xavier Bettel Ethnic groups: Luxembourger 63.1%, Portuguese 13.3%, French 4.5%, Italian 4.3%, German 2.3%, other EU 7.3%, other 5.2%

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Luxembourg at a Glance

Luxembourg, officially the Grand Duchy of Luxembourg, is a completely landlocked country in western Europe, bordered by Belgium to the west and north, Germany to the east and France to the south. It comprises two principal regions: the Oesling in the north as part of the Ardennes massif, and the Gutland in the south. With a land area of 998 square miles, it is one of the smallest sovereign states in Europe and has a population of roughly 525,000, making it the eighth leastpopulous country in Europe. Luxembourg is a representative democracy with a constitutional monarch and is headed by a grand duke Henri, Grand Duke of Luxembourg – making it the World’s only remaining grand duchy. Luxembourg is a developed country, with an advanced economy and the world’s highest GDP PPP per capita - according to the United Nations - in 2014. Its central location has historically made it of great strategic importance to numerous powers, dating back to its founding as a Roman fortress, its hosting of a vital Frankish castle during the Early Middle Ages, and its role as a bastion for the Spanish Road between the 16th and 17th centuries. Luxembourg is a founding member of the European Union, OECD, United Nations, NATO, and Benelux, reflecting its political consensus in favour of economic, political, and

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military integration and unions. The city of Luxembourg, which is the country’s capital and largest city, is the seat of several institutions and agencies of the EU. On 18 October 2012, Luxembourg was elected to a temporary seat on the United Nations Security Council for the first time in its history. Luxembourg’s culture can be seen as a fusion of Romanic and Germanic Europe, integrating certain customs and traditions of each. Luxembourg is a trilingual country, with Luxembourgish, French and German as its official languages and the public is well educated and indeed trilingual, being taught in the three languages throughout schooling stages. Although technically secular, Luxembourg’s citizens are mainly Roman Catholic.

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Economy

The economy of Luxembourg is heavily reliant on its various industrial sectors and despite it commonly being referred to as the “Green Heart of Europe”, Luxembourg has a very impressive export-intensive area which is in contrast to its extensive pastoral land; in this way, Luxembourg offers the best of both sides of the spectrum between naturalisation and industrialisation. Its success in industry has actually led to it boasting the second highest GDP per capita, only lagging behind Qatar in this regard. However, where


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Qatar has gained much of its wealth due to its oil boom, Luxembourg is impressive in that its economy is derived mainly from its industrial sectors: a feat which is very rare in the current financial landscape. Luxembourg is particularly well known for its banking sector. As the population of the country itself is relatively small, many of the banks have instead specialised in cross-border fund administration, meaning that the majority of their income is derived from service to businesses who operate outside the country. At the end of March 2009, there were 152 banks in Luxembourg, with over 27,000 employees. There has been an amount of controversy regarding some practises in the banking sector, particularly in regards to secrecy laws and the potential for Luxembourg to become a tax haven. It was actually placed on a “grey list” by the G20 in 2009, but was later removed as it modified its tax legislation to avoid conflict with the tax authorities of European Union Members. As an example, the classic tax exempt 1929 Holding Company was outlawed 31 December 2010, as it was deemed an illegal state aid by the European Commission. Another vitally important sector for Luxembourg is the steel industry, which accounts for nearly 30% of all the country’s exports, 1.8% of GDP, 22% of industrial employment, and 3.9% of the work force. The country calls itself home for

Arcelor-Mittal, the largest steel produced in the world. In regards to tourism, the country still welcomes over 900,000 visitors a year who spend an average of 2.5 nights in hotels, hostels or on camping sites. Interestingly, the number of people visiting the country on business is rising rapidly, representing 44% of overnight stays in the country and 60% in the capital, reflecting the increasing growth and importance of Luxembourg as a centre for industry. Major events worth visiting for include the Buergbrennen: held on the Sunday after Shrove Tuesday, huge bonfires blaze throughout the country celebrating the end of winter, and the Octave, a major religious festival which is held the second half of April for a period of two weeks when pilgrims come to the cathedral and there is a market on the Place Guillaume that offers food, drink and religious artefacts. Luxembourg’s forecasted economic growth is to be supported by a rebound in financial sector activity as well as supportive monetary conditions, it has been predicted. As a result, the number of exports is set to increase. The government of Luxembourg are looking to combine a reduction in corporate and income tax rates against an increase in tax credits for low-income taxpayers and investors. The goal is to make the tax system promote growth and equity, allowing for more spending on research, development and further improving Luxembourg’s already impressive infrastructure.

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Luxembourg is particularly well known for its banking sector. Ü

Infrastructure

Luxembourg is highly regarded for its logistical and communication facilities. In terms of transport, Luxembourg has efficient road, rail and air transport facilities and services. The road network has been considerably modernised in recent years with 147 km (91 mi) of motorways linking the capital to neighbouring countries. The introduction of the high-speed TGV link to Paris has steered to renovation of the city’s railway station and a new passenger terminal at Luxembourg Airport was revealed some years ago. There are plans to introduce trams in the capital and light-rail lines in adjacent areas within the next couple of years. In relation to its communication facilities, Luxembourg prides itself on its advanced technology. It is one of the only countries to have widely installed optical fibre and cable networks throughout, an investment that will continue to bear fruit as ultra-high internet speeds become higher and higher in demand. The country’s position in Central Europe, plus its stable economy and low taxes favour the telecommunication industry hence why the governments have focused on improving it. In fact, in 2010, the Luxembourg Government deployed its national strategy for very high-speed networks with the goal in mind of becoming a global leader in terms of very high-speed broadband by achieving full 1 gigabyte coverage of the country by 2020.

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Landlocked Luxembourg

Luxembourg’s position in the centre of Europe can be used to explain its identity as a collective mixture of other European countries. Its culture can be considered a combination of elements from both Roman and Germanic Europe and its diversity is also reflected by the fact it is a trilingual country: Luxembourgish, French and German are official languages. Despite it being considered the centre for culture in Europe, which earned it the distinction of being the only country to be awarded the distinction of being the European Capital of Culture twice, it is its involvement in industry exporting which helps to support the country financially. With deep ties in cross-border banking and its distinction as the leading player in the global steel industry, Luxembourg supports itself both via modern means as well as through good old fashioned graft. This unique mixture of both the old and the new is trademark for Luxembourg: the lines between modern and archaic become blurred but what can be consistently observed is its determination to grow in whatever industry it is involved in, all the while accepting and adopting the best traits of the cultures that surround it, leading to a unique identity which both charms and imprints upon all those who sample it. For those looking to diversify their business interests, they would do well to open up lines of communication with the pleasant citizens of Luxembourg, who are even still, seeking new cultures to absorb and embrace.

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Luxembourg and its stock exchange, a powerful partnership for Islamic finance in Europe Guest Editorial ! Luxembourg Stock Exchange

Located in the heart of Europe, Luxembourg is a true cross-border and international financial centre. Despite its small size, it is an important listing venue for international issuers, the premier private banking centre in the Eurozone and the second largest fund centre in the world. Due to its stability, a focus on innovation and an international outlook, the Luxembourg financial centre is an ideal hub for companies from the Gulf states. Stability is important in Luxembourg and, as a result of its healthy economy, growth prospects and a strong institutional framework, it continues to benefit from the highest rating of the three major credit agencies: S&P (AAA), Moody’s (Aaa) and Fitch (AAA). The Luxembourg financial centre is based on social and political stability and on a modern legal and regulatory framework. This framework, combined with Luxembourg’s openness to the world and its strategic location, has attracted a vast range of international banks, insurance companies, investment fund promoters and specialist service providers. It hosts important infrastructure institutions including, among others, Clearstream, one of the principal European clearing institutions. Centre for Islamic finance Luxembourg is also a leading centre for Islamic finance in Europe. The country’s financial sector and government are dedicated to creating a first-class environment for Islamic finance and Shariah-compliant products.

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The Central Bank of Luxembourg was the first European member of the Islamic Financial Services Board. It is also the only European shareholder of the International Islamic Liquidity Management Corporation. Human capital is fundamental to Luxembourg’s success: the country has at its disposal a multilingual and multicultural workforce which has extensive experience in the needs of an international clientele. A number of major banks, legal and audit firms, fund administration companies and other service providers have trained and active Islamic finance teams. Luxembourg Stock Exchange for Sukuk As for its stock exchange, the Luxembourg Stock Exchange (LuxSE) was the pioneering European exchange to enter the Sukuk market, listing its first in 2002. LuxSE assists issuers to participate in the globalisation of Islamic finance and its success in western economies. With some 40,000 securities from over 3,000 issuers worldwide and in 55 currencies, LuxSE is the world’s leading listing venue for international securities. “Listed in Luxembourg” is a recognized label of quality in capital markets, offering an integrated listing, trading and reporting service. LuxSE offers straightforward listing procedures and a competitive fee structure. All securities are registered with international clearing and settlement organisations

The country’s financial sector and government are dedicated to creating a first-class environment for Islamic finance and Shariah-compliant products.

and systematically admitted to trading on the Universal Trading Platform. Innovation and a strong first-mover attitude are part of LuxSE’s pioneering role in international capital markets. For more than 50 years, LuxSE has continuously aided issuers to bring new instruments to market. From Eurobonds to RMB-denominated products, from Islamic to green finance, LuxSE embraces the latest market needs, while maintaining high levels of investor protection and a pragmatic approach to issuers’ expectations.


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President of Macedonia Gjorge Ivanov

President Dr. Gjorge Ivanov was born in Valandovo, on May 2, 1960. After completing his primary and secondary education in Valandovo, he started his law studies at Ss. Cyril and Methodius University in Skopje. Ivanov spent seven years as a journalist, and is also one of the founders of the Institute for Democracy, Solidarity and Civil Society, a renowned Macedonian think-tank which has helped shape the political landscape in Macedonia and served as guide to many young talents in the politics. Although never a party member, Professor Gjorge Ivanov was active in designing the reform policy of the political party VMRO-DPMNE, the party that supported his presidential nomination at the 2009 elections.

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Macedonia Country Spotlight

Quick Facts Capital City: Skopje Population: 2.107 million GDP: 10.2 billion USD Government: Parliamentary democratic republic Prime Minister: Emil Dimitriev Ethnic groups: 64.2 Macedonian, 25.2% Albanian, 3.9% Turks, 2.7% Romani, 1.8% Serb

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Macedonia at a Glance

Macedonia is Europe’s part-Balkan, part-Mediterranean gem. Visitors to the country are attracted by its rich Greek, Roman and Ottoman history, as well as its beautiful landscapes. Topped by a balmy mediterranean climate, Macedonia has plenty to offer those who wish to discover new adventures. The languages spoken in Macedonia include Macedonian, Albanian, Turkish, Romani and Serbian. The country is landlocked. To the north lies Serbia, to the northwest lies Kosovo; it is also adjacent to Greece, Bulgaria and Albania, to the east, south and west. The rugged landscape features mountains, valleys and lakes. The mountain ranges, which frame the country’s borders, are known as the Šar Mountains and Osogovo-Belasica chain, which is also known as the Rhodope range. At the southern border, there are three lakes; Lake Ohrid, Lake Prespa and Dojran Lake line the borders shared with Albania and Greece. The total area of the country stretches to 25, 713 km. The climate in Macedonia is both mediterranean and continental. The summers are hot and dry, with the hottest regions being Demir Kapija and Gevgelija.

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The climate varies across the country; the mountainous regions are privy to long, snowy winters and much shorter, moderate summers. Outside of these regions, however, the country enjoys warm and dry summers and cold, wet winters.

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Politics

Following the resignation of Nikola Gruevski on the 18th of January 2016, Emil Dimitriev was appointed as the interim prime minister. It was agreed that elections would be held on the 24 April 2016, however this date was postponed until October and then again until December. When elections were held on the 11 December 2016, the ruling VMRODPMNE maintained a majority of the vote.

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Republic of Macedonia

Macedonia was one of a number of countries carved out of the Old Communist state of Yugoslavia. It has more than adapted to its new way of life and is truly not only a Balkan success story but a shining example to any country looking to march forward into the future whether newly independent or not. What Macedonia has done makes it envied by many but alas still copied only by the few.


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The Economic Chamber of Macedonia is proud to announce that it has signed a Memorandum of Cooperation with the global corporation Titanium Capital Pte Ld. Both parties believe that this will result in a major boost to the country’s economy. In light of the above, Titanium will fund up to 70% of the cost of the projects supported by the Chamber and shall become involved in network infrastructure as well as inward investments which have been distinguished as projects that would boost the economy of Macedonia. Consequently, Titanium shall be funding millions of dollars to offer a better future for those who want to have the opportunity of being part of Macedonia’s future business success.

It is a country that does not deal in dogma and slogans but just facts. It is deeds rather than words which have taken it to number 10 overall in the rankings of the World Bank. What got it there? A 21st century way of registering property, construction permits not held up by endless bureaucracy, cross-border trading and enforcement of contract law are all guaranteed to make international businesses feel content, at home and certain that they are trading in a secure environment. The local currency is also pegged to the Euro so that account crunchers and bankers always know where they are. For a small country of 2 million people, which in terms of world trade only entered the market yesterday, the economy has slowly but surely been moving forward and the budget deficit is now down to 3.7% - a figure the envy of many Western countries. Macedonian industry is wide, varied and probably a reason for its comparable success. It ranges from iron and steel manufacturing to food processing and those all important service industries. Germany and the UK feature prominently in its top tier list of trading partners but also the closer to home Greece, Kosovo, Bulgaria and Turkey are both major importers and exporters to the country.

Macedonia was the first country in South Eastern Europe to sign the Stabilisation and Association agreement with the EU. It is an EU candidate country. It has excellent infrastructure with a one stop shop system for border crossings. There is fast company registration with a regulatory department specifically focused on cutting red tape and making life easy for the businessman. When you combine this with financial and political stability, with governments being changed at the ballot box, the attraction of investing becomes ever more obvious. In fact the World Bank found it the second best place in the world to start a business, 10th in the world for ease of doing business and first in Total Tax Rate in the World(PwC). The country as a whole has a BB+ rating from the ratings agency Fitch.

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Economic Chamber of Macedonia

It is really no surprise that as far as international business is concerned, Macedonia has taken to it like a duck to water. It was as long ago as 1922 that the Economic Chamber of Macedonia first came into being. On 18th February 2017 the Chamber celebrates its 95th anniversary. The Chamber is a referral institution for business in Macedonia and it is no surprise that with 15,000 members it is successful and growing.

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Mr. Branko Azeski, President of the Economic Chamber of Macedonia signing with Dr. Henry Abdo, CEO of Titanium Capital

Macedonia was the first country in South Eastern Europe to sign the Stabilisation and Association agreement with the EU.

As well as its overall leadership the Chamber is split into various sections from a general enterprise club, to a European enterprise club, fully supported by the EEC, and with an eye to the East, a Chinese sector. Not only are there country sections but business related sections for mines and metals; and, with an eye on global warming and its beautiful countryside and lakes, an Environmental Protection Council together with a Health Association. The Economic Chamber has become the national coordinator and partner, with numerous international and regional projects. The aim is to support and guide the business community. This will make the economy ever more competitive with vocational and aligned education. The Chamber has always looked forwards and to this end a Foreign Investors Council was formed in 2006. It provides comprehensive help to the budding business community with training initiatives suited at the same time to protect the environment. The bottom line is to encourage clean investment into Macedonia.

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The objectives

The objective of the council members is ensure that policy makers are on the same page as the business community for the benefit of both sides and thus the country. With its pro-business initiatives, the Council is rapidly becoming the major voice for inward investors. But the Council is looking to go further.

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EJZ Comprehensive Business Services Limited is a multidiscipline organization, comprising accountants, experienced accounts clerks and secretaries. The Company’s competent and friendly staff is conversant in Maltese, English and Italian.

The company offers the following services:

Through our networking with Maltese legal and auditing firms we offer a one stop shop service.

tax authorities, VAT compliance services)

Our satisfied international clients hail from Russia, Sweden, Norway, Cyprus, Italy, France, Greece, United Kingdom, Germany, Hungary, Poland, United States of America, Libya and Austria.

• Company Secretarial i.e. ensuring compliance with the

• Tax Consultancy • Tax Related Services (personal and company tax declarations, claims for tax refunds, representations with • Company formation regulations of the Maltese Companies’ Regulator, MFSA. • Book keeping services • Payroll Bureau

To explore opportunities available at EJZ email: Mr. Edward J. Zammit | info@ejz.com.mt

EJZ Comprehensive Business Services Ltd. 217 Suite 4, 21st September Avenue, Naxxar NXR 1013, Malta T: +356 2149 1127 | F: +356 2540 1093 | www.ejz.com.mt


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EJZ Comprehensive Business Services Ltd .....a multidiscipline organization, comprising qualified accountants, experienced accounts clerks and secretaries.

Mr. Edward Zammit (inset) is the sole and managing partner of EJZ Comprehensive Business Services Ltd. He has qualified as a Certified Public Accountant (CPA) from the University of Malta in 1985 after reading for a BA (Hons) degree in Accountancy. During his early qualification years he

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For the last 18 years, Mr. Zammit has

Being associated with Maltese legal and auditing firms we offer a one stop shop service.

been in public practice, specializing in the field of taxation. He has delivered lectures to accountancy students studying for the ACCA qualification and addressed various conferences abroad. He was a Member on Council and is a Fellow Member of the Malta Institute of Accountants, for which he was representative on the Fêdêration des Experts Comptables Europêêns (FEE) Direct Taxation Working Group during 2004/2005. Fellow of the Malta Institute of Taxation

worked in the industry. Later, he joined

(MIT) and a member of the Institute of

Joseph Tabone & Co (now KPMG) where

Financial Service Practitioners (IFSP)

he was appointed as tax consultant

Assistant to the Magistrate sitting on

managing the firm’s tax department.

the Administrative Review Tribunal


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(Income Tax) between 2011 and 2013

The Company’s competent and friendly staff is conversant in Maltese, English, Italian and Russian.

EJZ Comprehensive Business Services Ltd. is a multidiscipline organization, comprising qualified

Contact Us ... ✆ Tel:

accountants, experienced accounts clerks and secretaries. The Company’s competent and friendly staff is conversant in Maltese, English, Italian and Russian.

+356 21491127 +356 27491127

2 Fax:

+356 21491136

* Email: info@ejz.com.mt

Being associated with Maltese le––gal and auditing firms we offer a one stop shop service. Our satisfied international clients hail from Russia, Latvia, Sweden, Norway, Italy, France, Greece, United Kingdom, Germany, Hungary, Poland, United States of America, Libya and Austria. ¡

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President of Malta Marie-Louise Coleiro Preca

Marie-Louise Coleiro Preca had been active in politics for forty years, starting at the young age of sixteen years. She served in Parliament for sixteen years. Coleiro Preca has been active in politics for the past forty years, Within the Labour Party, she served as a member of the National Executive, Assistant Secretary-General and Secretary General, occupying the latter post between 1982 and 1991. Coleiro Preca is the only woman who ever occupied this important elected position in a Maltese political party. Coleiro Preca was also a member of the National Youth Socialists Bureau, President of the Socialist Women’s Group, member of the National Council of the Malta Labour Party, member of the National Bureau of Socialist Youths (now the Labour Youth Forum), founder member of Ġuze Ellul Mercer Foundation, as well as editor of the newspaper, il-Ħelsien.

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Coleiro Preca served on the board of directors of Maltacom plc (now the GO Company), as well as the Libyan Arab Maltese Holding Company. She was also a member of the National Commission for Fiscal Morality. Marie-Louise Coleiro Preca served as a Member of Parliament in the House of Representatives between 1998 and 2014. In the 2008 and again in 2013 general elections, she was the first candidate to be elected to Parliament. As a Member of Parliament in Opposition, she served as Shadow Minister for Social Policy, Tourism, the national airline, and Health. Marie-Louise Coleiro Preca was a member of the Parliamentary Committee for Social Affairs and the Family. She also served in the Parliamentary delegation to the Council of Europe and on various committees that fall within it.


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Malta Country Spotlight

Quick Facts Capital City: Manama Population: 420,754 GDP: 11.22 billion USD Government: Parliamentary republic President: Marie Louise Coleiro Preca Prime Minister: Joseph Muscat Ethnic groups: 95.17% Maltese, 4.83 % Non-Maltese

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Malta at a Glance

Malta is a southern European island nation comprising an archipelago in the Mediterranean Sea. It lies 50 miles south of Italy, 176 miles east of Tunisia, and 207 miles north of Libya. The country covers just over 122 square miles, with a population of just under 450,000 (despite an extensive emigration program since the Second World War), making it one of the world’s most densely populated countries. The capital of Malta is Valletta, and is the smallest national capital in the European Union. Malta has two official languages: Maltese and English. Malta’s location has historically given it great strategic importance as a naval base and a succession of powers, including the Phoenicians, Romans, Moors, Normans, Sicilians, Spanish, Knights of St. John, French and British, have ruled the island.

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Economy

Until around 1800, Malta was dependant on cotton, tobacco and its shipyards for exports. However, once it came under British control, the UK had a certain dependency on Maltese

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Dockyards for support of the British Royal Navy, especially during the Crimean War of 1854. The military base aided various Maltese and British craftsmen and all those who served in the British military during the 1800s. The 1869 opening of the Suez Canal helped Malta’s economy take a significant upturn, with a massive increase in the freight ships that entered the port. Ships stopping at Malta’s docks for refuelling helped the Entrepôt trade, which brought additional monetary, trading and industrial benefits to the island. Towards the end of the 19th century, however, the Maltese economy entered a serious decline and, by the 1940s, that decline had morphed into a serious crisis. One factor was the longer range of newer merchant ships that required less frequent refuelling stops. Currently, Malta is considered an advanced economy, together with 32 other countries globally, according to the International Monetary Fund (IMF). Malta’s major resources are limestone, a favourable geographic location and a productive labour force. Malta produces only about 20% of its food needs and intake, has limited freshwater supplies because of summer droughts, and has no domestic energy


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sources, aside from the potential for solar energy from its plentiful sunlight. The economy is dependent on lots of foreign trade, with Malta serving as a freight trans-shipment point: manufacturing - largely electronics and textiles - and a thriving tourism sector. In preparation for its inauguration into the European Union, which it officially joined in May 2004, Malta privatised some state-controlled firms and liberalised certain markets. For instance, the government declared in January 2007 that it was to sell its 40% stake in MaltaPost (the state postal service), to complete a privatisation process which has been ongoing. In 2010, Malta had managed to fully privatise its postal services, as well as telecommunications, shipyards and shipbuilding. Film production, strangely, is a growing contributing sector to the Maltese economy. The first film ever to be shot in Malta was in 1925 - H. Bruce Woolfe’s Sons of the Sea. Since then, over 100 feature films have been entirely or partially filmed in the country. Malta has served as a ‘double location’ for a wide variety of locations and historic periods including Ancient Greece, Ancient and Modern Rome, Iraq, the Middle East and many more. The government introduced a number of financial incentives for filmmakers in 2005, in a bid to

attract more of them to use the island as a location. The current financial incentives to foreign productions currently stand at 25% with an additional 2% if Malta stands in as Malta (rather than as a double), meaning a production can get up to 27% back on its eligible spending incurred in Malta from the government. Malta has taken significant and considerable measures to mark itself out as a global player in the cross-border fund administration industry. Competing alongside countries such as Ireland and Luxembourg, it has a unique blend of both a multi-lingual workforce and strong legal system. Malta has a mixed standing for transparency and a DAW Index score of 6, though both are likely to improve as Malta progressively assumes more comprehensive legislative framework for financial services. Malta has a regulator, namely the MFSA, with a strong business development mindset and outlook. The country has been successful in drawing gaming companies, aircraft and ship registration firms, credit-card issuing banking licences and fund administration. Service providers to these industries, including fiduciary and trustee business, are a core part of the growth strategy of the island and its citizenship by investment program is well established also.

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secure

effective

dependable Getting it Right Malta’s financial services centre offers financial institutions a combination of the essential ingredients for success: convenient location, rapid access to market, effective regulation, rocksolid legislation, accessible authorities and a pool of highly competent, experienced professionals. Many internationally recognised financial institutions have already experienced the merits of operating out of Malta and their continued growth and success stands as testament to Malta’s strengths and potential. The jurisdiction already hosts hundreds of international finance companies, credit and financial institutions, insurance companies, fund managers, insurance managers, pensions, trusts and treasury companies, all attracted by Malta’s unique and well-balanced recipe for success. Success depends on getting it right - Malta is getting it right.

more information on:

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FinanceMalta - Garrison Chapel, Castille Place, Valletta VLT1063 - Malta | info@financemalta.org | tel. +356 2122 4525 | fax. +356 2144 9212

FinanceMalta is the public-private initiative set up to promote Malta’s International Financial Centre


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A thriving tourism sector, a widening and strengthening commercial outlook and a key geographic placement have led to increased trade and investment. Strong headway has been made in implementing EU Financial Services Directives in the country. As a base for alternative asset managers, who must comply with new directives, Malta has attracted a number of key players including IDS, Iconic Funds, Apex Fund Services and TMF/ Customs House. Malta and Tunisia are currently discussing the commercial exploitation of the continental shelf between their countries, particularly for petroleum exploration. These discussions are also undergoing between Malta and Libya for similar arrangements. The two largest commercial banks are Bank of Valletta and HSBC Bank Malta, both of whom can trace their origins back to the 19th century. The Central Bank of Malta (Bank Ċentrali ta’ Malta) has two key capacities of responsibility: the construction and implementation of monetary policy country-wide and the advancement of a wide-ranging and effective financial system. The bank itself was established by the Central Bank of Malta Act in April 1968 and the Maltese government entered ERM II on 4 May 2005, and adopted EUR as the country’s currency in January 2008. FinanceMalta is the quasi-governmental organisation tasked with marketing and enlightening business leaders about Malta’s strengths as a business destination. The company runs seminars and events around the world highlighting the emerging strength of Malta as a jurisdiction for banking and finance and insurance. Malta continues to be rely largely on its thriving tourism sector, but is also taking measures to diversify its economy through increased industrial production and retail trade.

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Politics

Malta is a parliamentary republic whose parliamentary system and public administration are closely modelled on the UK’s Westminster system. Malta had the secondhighest voter turnout globally -and ranked highest for nations without a mandatory voting system in place and enforcement - based on electoral turnout in national lower house elections from 1960 to 1995. The unicameral House of Representatives is elected by direct universal suffrage through a single transferable vote every five years, unless the House is dissolved earlier by the President on the advice of the Prime Minister. The Maltese House of Representatives is made up of 69 members of parliament in total. However, if a party is to win an absolute majority of votes, but does not have a majority of seats, that party is handed additional seats to safeguard a parliamentary majority.

The Constitution of Malta provides that the President appoints as Prime Minister the member of the House that is best able to command a governing majority in the House. The President of Malta is appointed for a five-year term by a resolution of the House of Representatives carried by a simple majority. The role of the President as head of state is largely ceremonial and superfluous in some respects. The main political parties are the Nationalist Party - a Christian democratic party - and the Labour Party - a social democratic party. The Labour Party is currently at the helm of the government, with its Prime Minister being Joseph Muscat. The Nationalist Party, with Simon Busuttil as its leader, is thusly in opposition. There are a number of smaller political parties in Malta that presently have little or indeed no parliamentary representation.

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Tourism

Malta is an extremely popular tourist destination, with 1.6 million inbound tourists per year. Three times more tourists visit the country than residents that live there. Tourism infrastructure has increased and improved dramatically over the years and a number of high quality hotels are available on the island, although overdevelopment and the destruction of traditional housing is of a growing concern among natives. An increasing number of Maltese themselves now travel abroad to holiday. In recent years, Malta has promoted itself as a medical tourism destination, and a number of health tourism providers are pushing to develop the industry, however, no Maltese hospital has undergone an independent international healthcare accreditation procedure. Malta is very popular with British medical tourists (and indeed British tourists in general), directing Maltese hospitals towards seeking UK-sourced accreditation, such as the Trent Accreditation Scheme. Dual accreditation with the American-oriented Joint Commission is necessary if hospitals in Malta wish to compete with the Far East and Latin America for the lucrative market of medical tourists from the United States.

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Malta Multiplies

Malta has established itself on the World stage and is as prosperous as it ever has been in its history. A thriving tourism sector, a widening and strengthening commercial outlook and a key geographic placement have led to increased trade and investment. Its place as a thoroughfare country for increasing trade and investment between Europe and the GCC may well be unmatched.

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Prime Minister of the UK Theresa May

Theresa had a varied education spanning both the state and private sectors, and both grammar school and comprehensive school. She read Geography at St Hugh’s College, Oxford University. She started her career at the Bank of England and went on to hold posts at the Association for Payment Clearing Services (APACS) as Head of the European Affairs Unit and Senior Adviser on International Affairs. Theresa has been involved in politics at all levels for many years, starting out stuffing envelopes at her local Conservative Association before going on to be a councillor in the London Borough of Merton from 1986 to 1994. During that time she was Chairman of Education between 1988 and 1990 and Deputy Group Leader and Housing Spokesman between 1992 and 1994. Theresa was elected Member of Parliament for Maidenhead in May 1997. She lives in the constituency and is an active local campaigner.

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Her local activity has included campaigns to improve the local train service, bring a minor injuries unit to St Marks Hospital, and improve Maidenhead town centre. She has held several positions within Parliament since 1997. She was a member of the Shadow Cabinet from 1999 to 2010, and from 2002 to 2003 was the first female Chairman of the Conservative Party. Theresa was appointed Home Secretary in May 2010 and became the longest-serving Conservative Home Secretary for over a century. During this time she oversaw reductions in crime, reform of the police, and the introduction of the landmark Modern Slavery Act. Following her election as Leader of the Conservative Party, Theresa was appointed Prime Minister of the United Kingdom on 13th July 2016.


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UK Country Spotlight

Quick Facts Capital City: London Population: 64,100,000 GDP: 2,848,755 million USD Government: Constitutional Monarchy Monarch: Queen Elizabeth II Prime Minister: Theresa May Ethnic groups: White 87.1%, Asian or Asian British 6.9%, Black or Black British 3%, Mixed or Multiple 2%, Other 0.9%

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UK Economy

The UK is globally famed for its thriving financial sector and holds claim to being the fifth largest GDP in existence worldwide and the second largest GDP in Europe. The financial hubs of Canary Wharf and the City of London show off impressive architecture that can be viewed for miles around and at night time their respective bright lights can be seen reflected in the River Thames. London is, of course, the place in which the vast majority of the large financial players are located and this is reflected by the fact that it is the largest city by GDP in the whole of Europe. During the 19th century the UK was a dominant global economy but it lost some of its power due to events such World War 1 and World War 2. Between 2007 and 2008 the UK suffered a financial crisis, the like of which it had not experienced for nearly two decades. However, since then the economy has started to recover and it was the fastest growing GDP of the G7 members in 2013, 2014 and 2015. The UK uses the currency of pound sterling, represented by the symbol £. The public has been surveyed on numerous occasions regarding whether they think the UK should abandon the Pound and each time the majority vote in the pound’s favour. With Brexit, the threat of the Euro replacing the pound has been quashed; the citizens of the UK had their final say on the matter.

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Citizens of the UK are taxed by both their local and central governments. The local governments are financed by grants from central government funds, business rates, and council tax and increasingly from fees and charges such as those from on-street parking. Central government revenues are mainly income tax, national insurance contributions, value added tax, corporation tax and fuel duty. The UK’s economy is fuelled by a number of industry sectors. One of its major sectors is tourism, as the UK attracts a large number of tourists due to its vast culture and history. The Monarchy is a particular attraction to many tourists and many travel over to visit key landmarks and sites such as the Stonehenge, Buckingham Palace, Big Ben and a number of other attractions. Another huge industry sector which contributes to the UK economy is construction. The largest construction project currently ongoing in the UK is Crossrail. Due to open in 2018, it will be a new railway line running east to west through London and into the surrounding countryside with a branch to Heathrow Airport. The main feature of the project is the construction of 26 miles’ worth of new tunnels connecting stations in central London. It is also Europe’s biggest construction project with a GBP 15 billion projected cost.


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The financial hubs of Canary Wharf and the City of London show off impressive architecture that can be viewed for miles around and at night time their respective bright lights can be seen reflected in the River Thames.

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Although Brexit cast uncertainty on the future of the UK economy with many doomsday predictions, the reality has not been the horror story many feared. Of course, another vital factor to consider when discussing the UKs economy is its import and export activity. UK Trade Office for National Statistics shows import and export activity is a main contributor to the overall economic growth of the UK. The UK’s deficit on trade in goods and services was estimated to have been GBP 3.3 billion in August 2015, a narrowing of GBP 1.2 billion from July 2015. This narrowing of GBP 1.2 billion is attributed to trade in goods, where the deficit has decreased from GBP 12.2 billion in July 2015, to GBP 11.1 billion in August 2015. Exports of goods increased by GBP 0.8 billion to GBP 23.6 billion in August 2015. This is attributed to an increase in cars which increased by £0.6 billion to a record high of GBP 2.4 billion and chemicals which increased by GBP 0.5 billion. Imports of goods decreased by GBP 0.3 billion to GBP 34.7 billion over the same period. The UKs economy, although suffering some dips and turns toward the end of 2010, has seemingly begin the road to recovery and its growth has been both impressive and worthy of its global historical reputation as a dominant global economy. Although Brexit cast uncertainty on the future of the UK economy with many doomsday predictions, the reality has not been the horror story many feared. However, growth has still suffered and is likely to continue to suffer into 2017. While services have continued to expand robustly, construction and manufacturing have struggled. Official data for the first three months since the EU referendum suggest a similar pattern continued, with the service sector driving growth, while industrial production, construction and agriculture all shrank.

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UK Real Estate

The vast majority of the UK’s buildings are private homes. The remainder are made up of commercial real estate and other non-domestic buildings. The PIA Property Data Report 2014 contains many useful figures concerning the UK real estate, for example: • The UK built environment was worth GBP 5,480bn, with commercial real estate representing 12.5% • The private rented sector was worth GBP 839bn (15% of the total) • Commercial real estate contributed a similar amount to the UK economy as the transport and telecommunications sectors combined • Directly-owned commercial property returns were 10.6%

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GCC Country Spotlights ! Imran Hussain

In this section we’ll be focusing on each of the six member states in the GCC. We aim to provide you with the information necessary to understand patterns of trade and investment in the region. The GCC has much to offer beyond its oil and gas reserves and huge steps are being taken in each of its constituent countries to diversify each economy. Investment in education has been huge across the region and wide ranging directives are in place to improve healthcare and social mobility. It is evident that the large oil and gas reserves and, indeed, cash reserves from supplying much of the World with fuel have helped all of this inward investment, but they also serve to allow GCC companies and investors the capital to be key players in foreign direct investment (FDI).

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When it comes to investment, the GCC is undoubtedly a world leader. The GCC is entering a new dawn and its commercial shackles are off. A fervent market culture is starting to appear and new cultural boundaries are emerging. It is our hope that the country spotlights highlight the changing business world of the GCC.


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The GCC has so much to offer beyond its oil and gas reserves and huge steps are being taken in each of its constituent countries to diversify their economies.

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King of Bahrain

H.M King Hamad Bin Isa Al Khalifa

King Hamad bin Isa Al Khalifa is the eldest son of Shaikh Isa bin Salman Al Khalifa and Hessa bint Salman Al Khalifa. H.M. the King was born in Riffa on January 28, 1950, corresponding to Rabe’a Al Awal 7, 1369, on the Hijra calendar. In 1964, following the completion of primary education with honours, H.M. the king was proclaimed Crown Prince on June 27, 1964. He completed his secondary schooling from Leys public school in Cambridge, England, returning to Bahrain in the summer of 1967. He joined the Mons Officer Cadet School at Aldershot in England graduating on September 14, 1968. He also studied at Sandhurst Academy. H.M’s interest in sports and youth was enhanced by his appointment as President of the Supreme Council of Youth

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and Sports in 1975 with Amiri decree No 2. H.M. the King has always shown interest in sports, especially horse riding. His keen interest in Arabian horses caused him to establish the Amiri stables in June 1977 which was registered in the World Arabian Horses Organization in September 1978. H.M. the king has always emphasized the importance of bolstering scientific research and technology, coordinating such activities in the service of Bahrain. These activities were given a boost with the establishment of the Bahrain Centre for Studies and Research in1981 and his heading of the BSCR. Since his teenage years, H.M. the king had shown great interest in aviation and, in October 1977, he began his theoretical and practical training in flying helicopters.


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Bahrain Country Spotlight

Quick Facts Capital City: Manama Population: 1.332 million GDP: 24.689 billion USD Government: Unitary parliamentary constitutional monarchy King: Hamad bin Isa Al Khalifa Crown Prince: Salman bin Hamad bin Isa Al Khalifa Prime Minister: Khalifa bin Salman Al Khalifa Ethnic groups: 45.5% - Bahraini, 46% - other Arab denomination, 4.7% - African, 1.6% - European, 1% - other

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Bahrain at a Glance

The Kingdom of Bahrain is a small island country situated near the western shores of the Persian Gulf. Saudi Arabia lies to its west and is connected to Bahrain by the King Fahd Causeway, while Iran lies 200 km to the north, across the Persian Gulf. Bahrain is the site of the ancient land of the Dilmun civilisation. It was one of the earliest areas to convert to Islam, doing so in 628 AD. Following a period of Arab rule, Bahrain was occupied by the Portuguese in 1521, who in turn were expelled in 1602 by Shah Abbas I of the Safavid dynasty under the Persian Empire. In 1783, the Bani Utbah clan captured Bahrain from Nasr Al-Madhkur and it has since been ruled by the Al Khalifa royal family, with Ahmed al Fateh as Bahrain’s first hakim. In the late 1800s, following successive treaties with the British, Bahrain became a protectorate of the United Kingdom. In 1971, Bahrain declared independence from the UK. Formerly a state, Bahrain was declared a Kingdom in 2002. Bahrain has the first “post-oil” economy in the Persian Gulf. Since the late 20th century, Bahrain has invested heavily in its banking and tourism sectors and the country’s capital, Manama, is home to many large financial structures. Bahrain ranks highly on the Human Development Index (48th in the world) and has been recognised by the World Bank as a high income economy.

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Economy

According to a January 2006 report, Bahrain has the fastest growing economy in the Arab world (Source: United Nations Economic and Social Commission for Western Asia). Bahrain also has the “freest economy in the Middle East” and is twelfth freest overall in the world based on the (Source “2011 Index of Economic Freedom”, Heritage Foundation/Wall Street Journal). In 2008, Bahrain was named the world’s fastest growing financial centre by the City of London’s Global Financial Centres Index. Bahrain’s banking and financial services sector, particularly Islamic banking, has benefited from the regional boom driven by demand for oil. Petroleum production and processing is Bahrain’s most exported product, accounting for 60% of export receipts, 70% of government revenues, and 11% of GDP. Aluminium production is the second most exported product, followed by finance and construction materials. Economic conditions have varied with the changing price of oil since 1985. With its highly developed communication and transport facilities, Bahrain is home to a number of multinational firms and construction is ongoing on several major industrial projects. A large share of exports consist of petroleum products made from imported crude oil, which accounted for 51% of the country’s imports in 2007.


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In 2007, Bahrain became the first Arab country to institute unemployment benefits as part of a series of labour reforms instigated under the Minister of Labour, Dr. Majeed Al Alawi. Recently, the government has faced internal and external challenges to the economy. However, Bahrain has maintained economic resilience and was ranked 1st in the region for Economic Freedom in the Middle East / North Africa in 2016. It remains a centre for dynamic economic activity, with a regulatory environment that boosts competition and bolsters efficiency. Currently, the kingdom is acting to secure the economy through diversification and modernisation. The government encourages investment in non-energy sectors such as construction and the financial sector to avoid heavy reliance on its oil supply. Bahrain does not levy personal income taxes or a corporation tax, but imposes a 46% tax on oil companies.

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Politics

Bahrain under the Al-Khalifa regime promotes itself as a constitutional monarchy headed by the King, Shaikh Hamad bin Isa Al Khalifa. King Hamad enjoys wide executive authorities which include appointing the Prime Minister and his ministers, commanding the army, chairing the Higher

Judicial Council, appointing the parliament’s upper half and dissolving its elected lower half. The head of government is the unelected Prime Minister, Shaikh Khalīfa bin Salman Al Khalifa, the uncle of the current king who has served in this position since 1971, making him the longest serving prime minister in the world. In 2010, about half of the government was composed of Al Khalifa family. Since the Arab Spring in 2011, the government has introduced judicial, law enforcement and intelligence reforms. The tensions between the Shia and Sunni community were resolved through national dialogue led by the ruling family.

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Financial Sector

Bahrain’s financial sector is healthy and relatively diversified, consisting of a wide range of conventional and Islamic financial institutions and markets, including retail and wholesale banks, specialized banks, insurance companies, finance companies, investment advisors, money changers, insurance brokers, securities brokers and mutual funds. There are two licensed exchanges, one licensed clearing settlement and central depository, four stock brokers, one licensed securities dealer, 15 licensed securities broker dealers and six licensed securities clearing members.

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Bahrain’s financial sector is healthy and relatively diversified, consisting of a wide range of conventional and Islamic financial institutions and markets...

Bahrain has the leading financial centre in the Gulf region. The financial sector is the largest single employer in Bahrain, with Bahrainis representing over 80% of the financial workforce in the country. Overall the sector contributes 27% of Bahrain’s GDP, making it one of the key drivers of growth in the country and a major exponent of trade and investment. The sector is regulated and supervised by the Central Bank of Bahrain (CBB) (formerly Bahrain Monetary Agency), which since 2002 has functioned as the single regulator for the entire financial system.

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Bahrain Beyond

Bahrain has one main international airport, the Bahrain International Airport (BIA), located on the island of Muharraq, in the north-east. The airport handled more than 100,000 flights and more than 8 million passengers in 2010. Bahrain’s national carrier, Gulf Air, operates and bases itself in the BIA. Bahrain has a well-developed road network, particularly in Manama. The discovery of oil in the early 1930s accelerated the creation of multiple roads and highways in Bahrain, connecting several isolated villages, such as Budaiya, to Manama. The telecommunications sector in Bahrain officially started in 1981 with the establishment of Bahrain’s first telecommunications company, Batelco, and until 2004, the company monopolised the sector in Bahrain. In 1981, there were more than 45,000 telephones in use in the country. By 1999, Batelco had more than 100,000 mobile contracts. In 2002, under pressure from international bodies, Bahrain implemented its telecommunications law which included the establishment of an independent telecommunications regulatory authority (TRA). In 2004, Zain (a rebranded version of MTC Vodafone) started operations in Bahrain and in 2010 VIVA (owned by STC Group) became the third company to provide mobile telecommunications services. Bahrain is sometimes described as “Middle East-lite”, due to its combination of modern infrastructure with a Persian Gulf identity. While Islam is the main religion, Bahrainis are known for their tolerance towards the practice of other faiths and are generally relaxed and liberal. Bahrain is home to many multinational companies as a result of their open attitudes toward business, cultures and faiths.

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Emir of Kuwait

Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah

Born in 1926, Sheikh Jaber was the third son of the former ruler of Kuwait, Sheikh Ahmad Al-Jaber Al-Sabah. As a young boy Sheikh Jaber received his preliminary education at Al-Mubarakiya School, the first school to open in Kuwait. He was subsequently tutored privately in religion, Arabic literature, English, and the basic sciences. At the age of 23 Sheikh Jaber began his career in public service by holding the post of director of public security for the Ahmadi region, and in 1962 he became the first minister of finance and economy for Kuwait.

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In 1965 he moved closer to the seat of power, being appointed prime minister, and in mid-1966, by Amiri decree, he was named crown prince and heir apparent. Sheikh Jaber became the 13th amir of Kuwait on December 31, 1977. In 1991 Sheikh Jaber also held the position of chairman of the Kuwait Fund for Arab Economic Development and the Kuwait Fund for the Advancement of Science. He chaired the World Islamic Conference, which was held in Kuwait in 1988.


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Kuwait Country Spotlight

Quick Facts Capital City: Kuwait City Population: 3,440,000 3,440,000 GDP: 175.8 billion USD Government: Constitutional emirate Chief of State: Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah (Emir of Kuwait)

Outside of the energy sector, Kuwait is home to a bustling financial sector. Its wealth management industry is one of the largest in the region, save Saudi Arabia

Crown Prince: Sheikh Nawaf Al-Ahmed Al-Jaber Al-Sabah Prime Minister: Jaber Al-Mubarak Al-Hamad Al-Sabah Ethnic groups: 30.9% - Kuwaiti, 19.7% - Indian, 12.4% - Egyptian, 4.4% - Phillipines, 4.3% Bangladesh, 3.3% - Syria, 3.2% - Saudi

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Kuwait at a Glance

The state of Kuwait is located in the Middle East, in the Northern part of the Arab Peninsula (between latitudes 28o.30’ and 30o.06’ North to the equator and between longitudes 46o. 30’ and 48o.30’ East to Greenwich. It is bordered in the East by the Arabian Gulf, in the South and South-West by the Kingdom of Saudi Arabia, and in the North and North-West by Iraq. Kuwait has several islands, the biggest of which is Bobyan, and the smallest is Failaka, which is distinguished with its ancient monuments, and is relatively inhabited. The total area of the State of Kuwait is 17,820 square kilometres, with a population density of about 139 per square kilometre. The weather of the State of Kuwait is tropical due to its location in the desert geographical region. The weather is distinguished with a long dry hot summer with temperatures reaching sometimes up to 50 Degrees Celsius in shaded areas and a short warm winter, which is mostly rainy.

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Economy

The economy of Kuwait is largely petroleum based; the country controls roughly 6% of the world’s oil supply. The World Bank has ranked Kuwait as the second richest GCC country per capita after Qatar, and is the fourth richest country in the world. Outside of the energy sector, Kuwait is home to a bustling financial sector. Its wealth management industry is one of the largest in the region, save Saudi Arabia. The Kuwait Investment Authority is Kuwait’s sovereign wealth fund. Founded in 1953, the fund has invested heavily in the United States, Europe and Asia Pacific.The total of the fund was estimated at $410 billion in 2014. Kuwait does not levy a personal income tax. Corporation tax is imposed at 15%. Public debt is less than 10%; oil revenues allow the Kuwaiti government to impose low taxes whilst maintaining country profit.


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Politics

The National Assembly in Kuwait is democratically elected every four years. The executive branch is the Al Sabah monarchy, which includes the Emir and the Crown Prince. The Emir chooses the members of the cabinet, with at least one member having to be chosen from the National Assembly. Kuwait is an ally of the United States, and its democratic values reflect its commitment to openness and a competitive economy. Kuwait’s media is known to enjoy an openness and freedom that is uncharacteristic of the region as a whole.

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Education

Education represents the main core of integrated development. The government is keen to provide a seat for each individual in different educational phases. It also provides medical clinics for students. The number of students in the school year 2005/2006 was about 336,000, while the number of teachers was about 40,000. Number of students registered in Kuwaiti University and Colleges of Applied Education in the year 2006 was about (4854), while the number of professors was about (2,387).

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Health

The government provides free integrated and advanced health services for nationals and against fair charges for residents. The government constructed several hospitals and health care units furnished with physicians and specialists in different medical fields. The number of hospitals and healthcare units in 2008 was 15 hospitals and units, while the number of physicians was 4,784 and the number of beds 5,000.

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Social Services

The State of Kuwait is keen to render developed social care services in all fields, to provide a better standard of living and deepen the feeling of social solidarity, as well as shielding its citizens against instability, and hindering their positive reaction for serving themselves and their society. In 2009 governmental social aids for beneficiaries outreached KWD 62 million. The government is also keen to provide care for people with special needs and provides them with special schools, rehabilitating hospitals, and even residence for those in need of care round the clock. The government is particularly interested in providing suitable housing for its citizens, where it provides housing units or plots with loans for building to its citizens.

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Sultan of Oman

His Majesty Sultan Qaboos bin Said Al Busaidi

His Majesty Sultan Qaboos was born in Salalah, the most southerly city of the state then known as Muscat and Oman, on 18th November 1940. He was the only son of the late Sultan Said bin Taimur and the eighth direct descendant of the royal Al Busaidi line founded in 1744 by Imam Ahmad bin Said. Sultan Qaboos spent his childhood in Salalah. When he reached the age of 16, his father sent him to a private school in England, and in 1960 he entered The Royal Military Academy SandHurst as an officer cadet. Having finished his military service, His Majesty studied local government in England and then embarked on a tour of the world. When he returned to Oman, he spent six years studying Islam and Omani history in Salalah.

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On the abdication of his father and his subsequent accession on 23rd July 1970, Sultan Qaboos moved to Muscat to implement his vision for the country’s development. His Majesty loves the land and sea trips this hobby practiced within the annual programs which keen to inspect the conditions of his people. During these trips His Majesty, accompanied by certain ministers and advisers, travels round the country - sometimes for several weeks at a time stopping off in various places to meet local citizens, sheikhs and dignitaries. These meetings take place either at Royal Camp sites or on the road in more spontaneous encounters.


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Oman Country Spotlight

Quick Facts Capital City: Muscat Population: 3,632,000 GDP: 79.66 billion USD Government: Absolute monarchy Sultan: Qaboos bin Said al Said Deputy Prime Minister: Fahd bin Mahmoud al Said

Ethnic groups: Omani Arab 73%; Indian 13%; Pakistani (mostly Balochî) 7%; Egyptian 2%; other 5%

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Oman at a Glance

Oman, officially named the Sultanate of Oman, is the oldest independent state in the Arab world. For a long period of its history, the state chose to live in pretty much isolation from the outside world. It is located on the south eastern coast of the Arabian Peninsula. The coast is formed by the Arabian Sea on the southeast and the Gulf of Oman on the northeast and the nation is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest, and shares marine borders with Iran and Pakistan. The vast majority of Oman consists of a desert plain as a base, however various mountain ranges can be located on the outskirts of the country. The climate is mostly dry and the tem-perature can rise to very high numbers, for example between May and September- its hot-test period - temperatures can soar as high as 50 degrees Celsius. However, if you travel to the outskirts then you will find the atmosphere a lot more humid in quality. There is a little rainfall; the rain it does experience is usually limited to January. This causes various environmental issues for the people of Oman, as maintaining an adequate supply

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of water for both domestic and industrial usage can be challenging. The risk of pollution caused by oil tankers across beaches and other coastal areas also does not help the environmental situation. Oman operates under an absolute monarchy and the current Sultan, Qaboos bin Said al Said, has ruled since 1970 and is currently the longest serving ruler in the Middle East. Sul-tan Qaboos has focused on economic reforms during his reign as Sultan and has focused on spending the country’s resources in order to further the development of its health, educa-tion and welfare innovations. During early 2011, protests occured; protestors demanded po-litical reforms and a higher standard of living. The demands also included an increase in the number of jobs available. In October of the same year, the government responded by prom-ising job reforms and an increase in benefits for citizens.

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Politics

As an absolute monarchy, the Sultan is Chief of Staff of the armed forces, Minister of De-fence, Minister of Foreign Affairs and chairman of the Central Bank. The country operates in accordance with Sharia law. The Omani judicial system is completely subordinate to the Sul-tan, who can


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appoint judges of his choosing and also overrule or pardon any sentences that he deems fit. Oman has friendly ties with Iran, which it has maintained to this day, despite pressure from other countries in the Middle East and countries such as the United States of America to adopt a sterner stance towards the state. Oman is developing into a constitutional monarchy. The country has no political parties, but the state bodies provide the Sultan with advice. Administratively, the populated regions are divided into 59 districts. The governors of these districts are responsible for maintaining peace and collecting taxes.

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Economy

The Omani economy has been predominantly driven by oil revenue. However, realising over reliance left the country vulnerable to external shocks, the regime has begun to modernise and diversify the economy. Diversification has been focused upon natural gas and foreign investment in the pharmaceutical, telecommunications and electric power.

Public debt remains under 10% despite Oman’s limited tax regime. Oman does not levy a personal income tax, and corporation tax remains relatively low at 12%. Oman joined the World Trade Organisation in 2000 and signed a Free Trade Agreement with the United States in 2006. Overall, Oman is consciously developing a dynamic private sector that will bolster its GDP and the economy as a whole.

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Education

Only as far back as 1970, there were only three formal schools in existence in the entire Sul-tanate of Oman. However, in modern times, this number has been hugely improved upon due to the government pushing hard to make educational reform a priority. Currently there are approximately 1,000 state schools and about 650,000 students, a vast improvement from only 40 years ago when the number of students was less than 1,000. The current liter-acy rate in Oman has been calculated as high as 87%.

Regulations are becoming increasingly more business friendly. It takes just eight days to open a business in Oman.

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Oman has managed to keep itself surprisingly isolated from outside cultures influences over the years, instead choosing to follow the influence of Islam. Ü

Language

Arabic is considered the official language of Oman and Southern Baluchi is spoken by a large majority of its citizens. However, there are various of languages that are slowly dying out, but can still be found spoken in a few circles, including Kumzari, Bathari, Harsusi, Ho-byot, Jibbali and Mehri. Other than Arabic, other languages spoken include English, Urdu and many other Indian dia-lects. English is widely spoken by the Omani business community and is in fact taught from an early age, so many Western businessmen considering doing business in Oman should be confident in their ability to communicate with each other.

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Health

Oman boasts a very impressive healthcare system, with estimates at just over two physicians and just over two hospital beds per 1,000 people calculated in 2010. Its healthcare system has been responsible for many significant innovations and developments, including advances in preventative and curative medicines and treatments. Many of the highest quality hospitals are located in Muscat, and the citizens of Oman are granted free access to the country’s public health care. Unfortunately, although traditionally common con-tagious diseases such as measles and typhoid have been massively reduced due to these advancements, conversely cases of illnesses inspired by modernity, such as cardiovascular disease and diabetes, are becoming an increasing problem. Life expectancy at birth in Oman was estimated to be 76.1 years in 2010.

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Organic Oman

For a country with such a rich history, Oman has managed to keep itself surprisingly isolated from outside cultures influences over the years, instead choosing to follow the influence of Islam. Although the country has found itself subjected to some political dissidence via pro-tests from its citizens, for a country not governed by democracy, Sultan Qaboos bin Said al Said has a generally high approval from his people in regards to his policies. The general policy of using Oman’s natural oil reserves in order to develop the country’s infrastructure and workforce has proven successful and the country has experienced rapid growth over the years – growth which continues to expand well into the future. Oman has built itself from the ground up and stayed true to its own roots and the result is a fascinating culture which should be experienced and explored by all.

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Oman Investment Department

Editorial ! Oman Investment Department

Oman has an ancient and distinguished history as a trading and seafaring nation and today is one of the most economically vibrant countries in the Gulf region. Its strategic location, highly desirable quality of life, young, multilingual workforce and diversified economy have made it an industrial and enterprise powerhouse and a magnet for attracting companies looking to penetrate the fast-growing markets of the Middle East, Asia and Africa. Oman is strategically placed and has the business base, track record, infrastructure, experience, talent, leadership and global connectivity to help any business take its export activities forward. International Trade On 9 November 2000, Oman joined the World Trade Organization (WTO) and since then, WTO- consistent protection of intellectual property, market access and customs valuation have made Oman a dependable trading partner. Among several key bilateral achievements, Oman’s Free Trade Agreement (FTA) with the United States took effect on 1 January 2009, marking a major new phase in their longstanding ties. On the multilateral front, Oman is also an active member of the Greater Arab Free Trade Zone, the GCC Customs Union and the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC).

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Chemicals, Plastics, Steel & Packaging Oman has been exporting goods for centuries. Our non-oil products range from steel and cement to confectionary and perfume; from automotive spare parts and polyethylene pipes to ceramic tiles and PVC; from fibre-optic and electrical cables to pharmaceuticals and petrochemicals; and from food and beverage and marble to fertilizer. Today, the Sultanate is building a strong industrial base in a concerted effort to diversify the economy away from hydrocarbons and is enjoying significant success in attracting and winning investment that is taking Oman’s exports to new heights.

The global aluminium market continues to be dynamic despite recent economic uncertainties, and countries like Oman are in a good position to increase output to meet this growing demand. The predicted growth in demand for aluminium worldwide stands in the region of 5% that is 4 million tons of aluminium per year at present and that is expected to increase to close to 10 million tons by 2020. Food Agriculture, livestock, fisheries and food production are a major source of employment in Oman. Downstream, they help supply large and mediumsized food-processing units, including flour mills, poultry farms, producers of


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to be major markets for Oman’s nonoil exports.

Oman has been exporting goods for centuries... ...from automotive spare parts and polyethylene pipes to ceramic tiles and PVC; from fibre-optic and electrical cables to pharmaceuticals and petrochemicals; and from food and beverage and marble to fertilizer. milk powder, seafood, juice, ketchup, chocolates and sweets, canned tuna, mineral water, bakery products and snack foods. Exports in this area totaled US$961mn in 2012. Fishing With 3,165 kilometres of coastline and 150 species of fish and crustaceans, Oman’s fish reserves are among the largest in the world. Our annual catch is the biggest in the Arabian Gulf. This sector is being strengthened with improved harbours and storage facilities, marine workshops and aquaculture projects. Oman’s marine exports include sardines, tuna, grouper, kingfish, sea bream, shrimp, lobsters and abalone.

Supporting Exporters The Public Establishment for Industrial Estates Our industries are resolutely turned outward to global markets, and our world-class transshipment ports ideally positioned on global shipping lanes. Oman is strategically poised at the entrance to the Arabian Gulf, in the middle of the East-West trade routes, and has been an important trading hub between Europe and Asia for many centuries. The Port of Sohar The Port of Sohar is located just outside the Strait of Hormuz. This US$14bn development boasts three clusters: logistics, petrochemicals and metals. Freezone Sohar Freezone Sohar is an ideally located trans-shipment hub between east and west which provides businesses with an opportunity to distribute products to a customer base of nearly 2 billion consumers – all on Oman’s doorstep. Freezone Sohar is home to companies operating in: steel manufacturing and processing; trade and logistics; oil and gas; petrochemicals; minerals and aggregates industry; ceramics; and food processing. The Duqm Special Economic Zone Authority (www.duqm.gov.om) With a land area of 1,777km2 and 80 kilometres of coastline along the Arabian Sea, The Duqm Special Economic Zone Authority (SEZAD) is the largest in the Middle East and North Africa region and ranks among the largest in the world. A variety of targeted sectors have ben identified for SEZAD - including petrochemical; oil refining; chemicals; plastics; paints and mineral oils.

Major Markets

Port of Salalah

Omani non-oil exports have faired extremely well despite the global recession. In 2012, the UAE and Saudi Arabia accounted for 31.5% of Oman’s non-oil exports and the GCC region as a whole represented 40.6% of our non-oil exports. Indeed, the GCC, India and the Middle East and North Africa have been less affected by the global economic downturn and will continue

The Port of Salalah, approximately 1,000 kilometers southwest of Muscat in southern Oman, has established itself as one of the largest transshipment ports in the world.

Asian trade routes. Given substantial import momentum in India and China, and positive trade sentiment across the region, Asia will continue to drive growth in the global economy and Salalah Free Zone is ideally located for businesses looking to penetrate these important markets. Muscat International Airport The new terminal at Muscat International Airport will have the capacity to handle 12 million passengers annually. Further expansions planned in three subsequent phases will ultimately boost the airport’s capacity to 24, 36 and 48 million passengers when the demand is required. Here to Help Ithraa’s Export Development Team can provide you with information, research, market studies, B-2-B meetings, participation at international trade shows and contact with our representatives in markets across the globe. In brief, we want to: • Help increase the number of Omani non-oil business exporters. • Help increase the value and volume of Omani non-oil exports. • Help raise international awareness of Oman’s non-oil products and services. o Help increase Oman’s competitiveness in the global marketplace. • Help Omani businesses compete in the international marketplace. • Help generate increased sales as well as retain and create jobs. • Help strengthen Oman’s economy. Choose Oman Most small companies think exporting is purely for large and established firms. However, research suggests it is as beneficial for small businesses to engage in international trade as it is for large companies. More and more people are choosing Oman to export from – it is a country that will open your eyes to new experiences and exciting possibilities. With opportunities across a number of sectors it could be the ideal opportunity for your business to grow and develop.

Salalah Free Zone Salalah Free Zone (SFZ) is located at the heart of East African, GCC and

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Emir of Qatar

His Highness Sheikh Tamim bin Hamad Al Thani

Born on 3 June 1980, HH Sheikh Tamim bin Hamad Al Thani is the Emir of Qatar and the fourth son of HH The Father Emir, Sheikh Hamad bin Khalifa Al Thani and second son of Sheikha Mozah bint Nasser Al Missned. He was appointed as Qatar’s Heir Apparent on 5th August 2003. He became Emir of Qatar on 25th June 2013. HH The Emir received his education at Great Britain’s Sherborne School (International College) in 1997. He then attended the Royal Military Academy Sandhurst, graduating in 1998. In 2005, Sheikh Tamim founded Qatar Sport Investments, which owns Paris Saint-Germain FC. among other investments. In 2006, he chaired the organising committee of the 15th Asian Games in Doha.

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Under his leadership, Qatar won the rights to host the 2014 FINA Swimming World Championships. Sheikh Tamim is a member of the International Olympic Committee and the National Olympic Committee chairman. He headed Doha’s bid for the 2020 Olympics. Sheikh Tamim heads the Qatar Investment Authority board of directors. Under his leadership, the fund has invested billions in British businesses. It owns large stakes in Barclays Bank, Sainsbury’s, and Harrods. The fund also owns a share of Europe’s tallest building, The Shard.


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Qatar Country Spotlight

Quick Facts Capital City: Doha Population: 2,169 million GDP: 203.2 billion USD Government: Unitary parliamentary absolute monarchy Emir: Tamim bin Hamad Al Thani Deputy Emir: Abdullah bin Hamad Al Thani Prime Minister: Abdullah bin Nasser bin Khalifa Al Thani Ethnic groups: 46% - Bahraini, 45.5% - Asian, 4.7% - other Arab denomination, 1.6% - African, 1% - European, 1.2% - other

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Qatar at a Glance

Following Ottoman rule, Qatar became a British province in the early 20th century until gaining independence from the UK in 1971. Qatar has been ruled by the Al Thani family since the mid-19th century and is accordingly a hereditary constitutional monarchy. Its head of state is Emir Sheikh Tamim bin Hamad Al Thani. The constitution was overwhelmingly approved in a constitutional referendum, with almost 98% in favour. Qatar is a conservative society and most Qataris adhere strictly to the Wahhabi interpretation of Islam. Sharia law is the main source of Qatari legislation according to Qatar’s Constitution. In 2014, Qatar’s total estimated population was around 2.15 million - 278,000 Qatari citizens and 1.5 million expatriates, showing its diversity in populace. Qatar is a sovereign nation state located in Southwest Asia, occupying the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula. It borders with Saudi Arabia to the south, with the rest of its land surrounded by the Persian Gulf. A strait in the Persian Gulf separates Qatar from the nearby island kingdom, Bahrain. Qatar is a high income economy backed by the world’s third largest natural gas and oil reserves.

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The country has the highest per capita income in the world, and has the second highest standard of living in the Middle East and the seventh highest in Asia. Qatar is a hugely influential state in the Arab world, both financially and through its globally expanding media group, Al Jazeera Media Network. Qatar will host the 2022 FIFA World Cup, becoming the first Arab country to do so. For its size, Qatar wields disparate influence in the world and has been identified as a middle power.

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Economy

As of 2014, Qatar had the highest GDP per capita in the world with approximately 14% of households being USD millionaires. The country relies heavily on foreign labour to push its economy, to the extent that migrant workers make up 86% of the population and 94% of the workforce. The economic growth of Qatar has been almost exclusively based on its petroleum and natural gas industries, whose inception in the country in 1940 led to a boom of production and inbound capital. Qatar is the World’s leading exporter of liquefied natural gas and, in 2012, it was estimated that Qatar would invest over USD 120 billion in the energy sector over the following 10 years. The country is a member of the Organization of Petroleum Exporting Countries (OPEC), having joined in 1961.


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Prior to the discovery of oil, the Qatari economy focused mainly on fishing and pearl hunting. After the introduction of the Japanese cultured pearl onto the World market during the 1920s and 1930s, Qatar’s pearling industry crashed. The country has an extremely high standard of living for its legal citizens and with no income tax, Qatar has one of the lowest tax rates in the World. Its unemployment rate, as of June 2013, was 0.1%.

Formed in 2005, Qatar Investment Authority (QIA) is the country’s sovereign wealth fund, specialising in foreign investment. Owing to billions of dollars in surplus from the oil and gas industry, the Qatari government has directed investments into United States, Europe and Asia Pacific. As of 2013, the holdings were valued at USD 100 billion in assets. Qatar Holding is the international investment arm of QIA.

Qatar held onto its title of “richest country in the world according to per capita income” for the third time in a row, having overtaken Luxembourg in 2010 and retaining it in 2011. According to a study, published by the US-based Institute of International Finance, Qatar’s per capita GDP at purchasing power parity (PPP) was USD 106,000 (QAR 387,000) in 2012. Luxembourg came a distant second with almost USD 80,000 and Singapore in third with per capita income of about USD 61,000. The research put Qatar’s GDP at USD 182 billion in 2012 and said it had climbed to an all-time high due to soaring gas exports and high oil prices. Its population stood at 1.8 million in 2012. The same study published that Qatar Investment Authority (QIA), with assets of USD 115bn, was ranked 12th among the richest sovereign wealth funds in the world.

Qatar’s economic outlook for 2016-17 shows stability in economic growth; despite lower oil prices, the nonhydrocarbon sector will bolster growth rates. The services and construction sectors will continue to contribute to growth.

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Politics

The eighth Emir of Qatar is Tamim bin Hamad Al Thani, whose father Hamad bin Khalifa Al Thani passed power to him on 25 June 2013. The Supreme Chancellor holds the sole power to assign and remove the Prime Minister and cabinet ministers, whom together constitute the Council of Ministers, which is the supreme executive authority in the country. Qatar’s royal family is the Al Thani family, who

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Qatar held onto its title of “richest country in the world according to per capita income” for the third time in a row, having overtaken Luxembourg in 2010 and retaining it in 2011. have been ruling the country since the family house was established in 1825. There is no independent legislature and political parties are forbidden, however, in 2003, Qatar approved a constitution that provided for the direct election of 30 of the 45 members of the Legislative Council. The Parliamentary elections are expected to be held in 2016.

The illiteracy rate in Qatar in 2012 was the lowest in the Arabic-speaking world - 3.1% for males and 4.2% for females. Citizens are required to attend governmentprovided education from kindergarten through high school. Qatar University, founded in 1973, is the country’s oldest and largest higher education institution.

The Council of Ministers also initiates legislative procedures. Laws and decrees proposed by the Council of Ministers are referred to the Advisory Council (Majilis Al Shura) for discussion, after which they are sent to the Emir for authorisation. A Consultative Assembly has limited legislative authority to draft and approve laws, but the Emir has final say on all matters. The Council is composed entirely of members selected by the Emir and no legislative elections have been held since 1970 when such elections were partial.

In November 2002, Emir Hamad bin Khalifa Al Thani created The Supreme Education Council. The Council directs and controls education for all ages - from pre-school level through higher education - including the “Education for a New Era” initiative, which was founded to try and place Qatar as a leader in education reform. According to the Webometrics Ranking of World Universities, the top-ranking universities in the country are Qatar University (1,881st worldwide), Texas A&M University at Qatar (3,905th) and Weill Cornell Medical College in Qatar (6,855th).

The estimated national budget is never published in full and the current Advisory Council only has the right to examine estimated capital expenditure. The Qatari government does not publish statistics about the number of citizens. Public policies and life-changing decisions enacted by the government are a private affair that regular citizens do not know.

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Education

In 2002 Qatar hired the RAND Corporation to reform its K–12 education system. Through Qatar Foundation, the country has built Education City - a campus which hosts local branches of the Weill Cornell Medical College, Georgetown University School of Foreign Service, Northwestern’s Medill School of Journalism, Texas A&M’s School of Engineering and other Western institutions.

In 2008, Qatar formed the Qatar Science & Technology Park in Education City to link those universities with commerce and industry. Education City is also home to a fully accredited international Baccalaureate school in the Qatar Academy.

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Qatari Confidence

With a World Cup looming in 2022 and a burgeoning youth educated to high standards, along with the tag of “richest country in the World per capita”, it’s clear that Qatar is in a position of improvement. As these financially prosperous outcomes take hold, one can foresee, and indeed hopes to foresee, a stronger middle class and wealth distribution that will pull Qatar alongside some of its Western compatriots.

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King of Saudi Arabia

His Royal Highness King Salman Bin Abdulaziz Al Saud

Salman bin Abdulaziz bin Abdul Rahman bin Faisal bin Turki bin Abdullah bin Mohammed bin Saud was born on December 31, 1935. son of King Abdulaziz (b. 1876-1953) and Hessa bint Ahmed Al Sudairi (b. 1900-1969). Salman and his six brothers make up what is referred to as the Sudairi Seven. He was raised in Murabba Palace. The Crown Prince received his early education in the Prince’s School in Riyadh, which was founded by his father, King Abdulaziz, to provide education to his children. Crown Prince Salman bin Abdulaziz Al Saud studied religion and modern science. At the age of nineteen Crown Prince Salman bin Abdulaziz Al Saud started his governmental work, when his father

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appointed him as Emir and Mayor of Riyadh on March 17th, 1954. On April 19th, 1955, he was appointed by his halfbrother, King Saud (b. 1902-1969) as mayor of Riyadh at the rank of minister. He remained in this office on December 25ft, 1960. On February 4th, 1963, Crown Prince Salman bin Abdulaziz was appointed governor of the Riyadh Province. He stayed in this office until 2011. During his time in office he contributed in the transformation of Riyadh from a mid-sized town into a major urban metropolis, while he also attracted tourism, capital projects, and foreign investment inside his country.


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Saudi Arabia Country Spotlight

Quick Facts Capital City: Riyadh Population: 28,830,000 GDP: 748.4 billion USD Government: Absolute monarchy King: Salman Crown Prince: Muhammad bin Nayef Ethnic groups: 82% - Saudi, 10% - Yemeni, 3% - other Arab denomination, 5% - other

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Saudi Arabia at a Glance

Saudi Arabia is a desert country surrounding most of the Arabian Peninsula, with Red Sea and Persian Gulf coastlines. Known as the origin state of Islam, it is home to the religion’s two most sacred mosques: Masjid al-Haram, in Mecca, destination of the yearly Hajj pilgrimage, and Medina’s Masjid an-Nabawi, burial place of the prophet Muhammad. Riyadh, the capital, is a skyscraper-filled conurbation. The region of modern-day Saudi Arabia formerly consisted of four distinct areas: Hejaz, Najd, and parts of Eastern Arabia (Al-Ahsa) and Southern Arabia (‘Asir). The Kingdom of Saudi Arabia was formed in 1932 by Ibn Saud. He unified the four regions into a lone state through a series of takeovers beginning in 1902 with the capture of Riyadh, the ancestral home of his family, the House of Saud. The new kingdom was one of the humblest nations in the world, dependent on inadequate agriculture and pilgrimage revenues. However, in 1938, massive reserves of oil were revealed in the Al-Ahsa area along the shore of the Persian Gulf, and full-blown expansion of the oil fields commenced in 1941 under the US-controlled Aramco (Arabian American Oil Company). Oil delivered Saudi Arabia with economic

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affluence and considerable political leverage globally. Cultural life quickly developed, chiefly in the Hejaz, which was the centre for newspapers and other media. Simultaneously, the government turned out to be progressively wasteful and excessive. By the 1950s, this had resulted in large executive deficits and excessive foreign borrowing. The kingdom has since been an absolute monarchy, in effect an inherited dictatorship ruled along Islamic lines. The Wahhabism religious effort within Sunni Islam has been named “the predominant feature of Saudi culture”. Saudi Arabia is from time to time called “the Land of the Two Holy Mosques” in reference to Al-Masjid al-Haram (in Mecca), and Al-Masjid an-Nabawi (in Medina), the two holiest dwellings in Islam.

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Economy

Saudi Arabia’s command economy is petroleum-based and approximately 75% of budget proceeds and 90% of export income arrive from the oil and gas sector. It is heavily reliant on imported manual workers, with about 80% of those working in the private sector being non-Saudi. Among the tribulations of the Saudi economy are the halting or prevention of decline in per capita income, cultivating


THE EURO-GCC Trade & Investment Guide 2017

Saudi Arabia formally has about 260 billion barrels of oil reserves, encompassing one-fifth of global proven total petroleum reserves.

schooling to prepare adolescents for the workforce and employment, expanding the economy, stimulating the private sector and housing construction and lessening corruption and inequality. The oil sector includes about 45% of Saudi Arabia’s nominal GDP, in contrast with 40% from the private sector. Saudi Arabia formally has about 260 billion barrels of oil reserves, encompassing about one-fifth of global proven total petroleum reserves. In the 1990s, Saudi Arabia went through a substantial contraction of oil revenues pooled with a high increase in the rate of population growth. Per capita income dropped from a high of USD 11,700 at the height of the oil industrial boom in 1981 to USD 6,300 in 1998. Factoring in the impact of the real oil price fluctuations on the Kingdom’s real gross domestic income, the real command-basis GDP was calculated to be USD 330.381 billion in 2010. Increases in oil prices helped increase per capita GDP to USD 17,000 in 2007 dollars (about USD 7,400 adjusted for inflation), but they have weakened since oil price drop around the middle of 2014. During recent years, Saudi Arabia has begun to focus upon diversification of its economy. To this end, it has established

petrochemical companies as well as beginning construction on ‘economic cities’. These new additions to the economy are projected to add billions to the GDP.

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Politics

By custom in Saudi Arabia, all males of full age have the right to appeal to the king via the traditional tribal assembly, which is called the majlis. The attitude towards government differs little from the traditional organisation of tribal rule. Tribal identity is still solid and, apart from the royal family, political influence is often frequently decided by tribal affiliations, with tribal sheikhs upholding a substantial amount of sway over local and national events. In recent years there have been restricted steps to broaden political contribution, for example the formation of the Consultative Council in the early 1990s and the National Dialogue Forum in 2003. Saudi Arabia is an absolute monarchy. However, according to the Basic Law of Saudi Arabia assumed by royal decree in 1992, the king must obey with Sharia (Islamic law) and the Quran, while the Quran and the Sunnah (the traditions of Muhammad) are acknowledged to be the country’s constitution. No political parties or national elections are allowed.

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Education

The school system consists of elementary, intermediate, and secondary schools. Much of the curriculum across all years and levels is devoted to Islam, and much of the educational curriculum includes learning by rote large sections of the Qu’ran. At the secondary level students are allowed to decide whether to continue religious education or whether to pursue a more technical field of education as well. All schooling and educational establishments are free of charge for citizens of Saudi Arabia. The late 2000s in particular saw a large boost in the numbers of universities and education has been a particular priority for the Saudi government. The country has a literacy rate of 90.4% for males and 81.3% for females and men and women are segregated throughout the country’s educational establishments.

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Legal System

Saudi Arabia uses Sharia law as its legal system and has no codified constitution. It is quite unique in that judges are not forced to consider precedent cases - meaning judgements that were given by other judges in prior cases - when coming to a decision. Instead, judges have full discretion and can apply their own interpretation of Sharia law when determining a judgement in their own case. This can lead to legal uncertainty as in what seem to be identical cases, different judges may rule different verdicts depending on their own interpretations of the law. The Sharia court system constitutes the basic judiciary of Saudi Arabia and its judges (qadi) and lawyers form part of the ulema, the country’s Islamic scholars.

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Foreign Relations

Saudi Arabia joined the UN in 1945 and is a founding member of the Arab League, Gulf Cooperation Council, Muslim World League, and the Organization of the Islamic Conference (now the Organisation of Islamic Cooperation). It plays a role in the International Monetary Fund and the World Bank, and in 2005 joined the World Trade Organization. Saudi Arabia supports the intended formation of the Arab Customs Union in 2015 and an Arab common market by 2020, as announced at the 2009 Arab League summit.

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The Kingdom of Saudi Arabia

There is a very compelling contrast between the hightech fast paced cities such as Riyadh and Jeddah and then the more traditional residential areas in which citizens live humble and devotional lifestyles which many find attractive. Saudi Arabia boasts many business opportunities but also many opportunities to expand one’s horizons and embrace different cultural and religious perspectives which may be different from your own. It is recommended that rather than place too much stock in the western media’s portrayal of Saudi Arabia, one should conduct their own dealings with its institutions and citizens and then draw their own conclusions as to the tolerance and hospitality of its people.

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President of the UAE

His Highness Sheikh Khalifa bin Zayed Al Nahyan

His Highness Sheikh Khalifa bin Zayed Al Nahyan is the second President of the United Arab Emirates (UAE) and the 16th Ruler of the Emirate of Abu Dhabi, the largest of the seven Emirates which comprise the UAE. Born in 1948, in the Eastern Region of Abu Dhabi, Sheikh Khalifa is the eldest son of Sheikh Zayed. His mother is Her Highness Sheikha Hessa bint Mohammed bin Khalifa bin Zayed Al Nahyan and his full name is Khalifa bin Zayed bin Sultan bin Zayed bin Khalifa bin Shakhbout bin Theyab bin Issa bin Nahyan bin Falah bin Yas. Sheikh Khalifa is married to Her Highness Sheikha Shamsa bint Suhail Al Mazrouei, and together they have eight children: two sons and six daughters. His Highness is also a grandfather to several grandchildren.

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After his father’s passing and his accession to the role of the President of the UAE, Sheikh Khalifa launched an initiative to evolve the nomination system for members of the Federal National Council, which was seen as a first step towards the establishment of direct elections in the UAE. Sheikh Khalifa is renowned as being a good listener, modest, affable and interested in his people, frequently conducting direct outreach through official missions and other occasions. As a result he is much loved and revered. His Highness has many hobbies, including fishing and falconry, both pastimes he developed a love for from his father, the late Sheikh Zayed.


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United Arab Emirates (UAE) Country Spotlight

Quick Facts Capital City: Abu Dhabi Population: 5,779,760 GDP: 339,085 billion USD Government: Federation of 7 hereditary monarchies President: Khalifa bin Zayed Al Nahyan Prime Minister: Mohammed bin Rashid Al Maktoum Ethnic groups: 16.6% - Emirati, 23% - other Arab denominations, 42.3% - South Asian, 12.1% - other Asian, 6% - other expatriates.

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UAE at a Glance

Formed in December 1971, the UAE is a federation of seven emirates. The fundamental emirates are Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. Each emirate is ruled by an absolute monarch and together they jointly form the Federal Supreme Council. One monarch is selected as the President of the United Arab Emirates. Islam is the official religion of the UAE, and Arabic is the official language, although English is widely spoken across the emirates. The UAE is located in the southeast end of the Arabian Peninsula on the Persian Gulf, adjoining Oman to the east and Saudi Arabia to the south, as well as sharing sea borders with Qatar and Iran. In 2013, the UAE’s total population was 9.2 million, of which only 1.4 million are genuine Emirati citizens, while 7.8 million are expatriates. The UAE’s economy is the most diversified in the GCC, with its most populous city, Dubai, having developed into a global city and international aviation hub. Nonetheless, the country remains tremendously reliant on its export of petroleum and natural gas.

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The UAE’s oil reserves are the world’s seventh-largest, while its natural gas reserves are the world’s seventeenthlargest. The late Sheikh Zayed, ruler of Abu Dhabi and the first President of the UAE, managed the development of the Emirates and drove oil revenues into healthcare, education and infrastructure.

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Economy

In 2011, oil exports accounted for 77% of the UAE’s state budget. Successful exertions at economic diversification have condensed the portion of GDP based on oil and gas output to 25%. With the exception of Dubai, most of the UAE is still reliant on oil revenues though. Petroleum and natural gas remain in a central role in the country’s economy, especially in Abu Dhabi. Over 85% of the UAE’s economy was based on oil exports in 2009. While Abu Dhabi and other emirates have remained comparatively unadventurous in their tactics for diversification, Dubai, which has far smaller oil reserves, was much more daring in its diversification policy. The UAE has the second biggest economy in the GCC after Saudi Arabia, with GDP of USD 402.3 billion in 2013. Since gaining its independence in 1971, the UAE’s economy has grown by nearly 231 times to AED 1.45 trillion in 2013.


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Non-oil-based trade has grown to AED 1.2 trillion, a growth of around 28 times from 1981 to 2012. UAE is ranked as the 31st best nation in the world for doing business based on its economy and regulatory environment, ranked by the Doing Business 2016 Report published by the World Bank Group. Dubai, being diversified, suffered heavily from the major economic crisis of 2007–2010 and was bailed out by Abu Dhabi’s oil capital. Dubai is now running a balanced budget, targeting economic growth rather than a full-scale spendthrift approach. Tourism acts as a growth sector for the entire UAE economy and Dubai itself is the number one tourism destination in the Middle East. According to the annual MasterCard Global Destination Cities Index, Dubai is the fifth most popular tourism destination in the world. It holds up to 66% of the share of the UAE’s tourism economy, with Abu Dhabi having 16% and Sharjah 10%. It welcomed 10 million tourists in 2013 alone. The UAE has the most progressive and settled infrastructure in the GCC region. Since the 1980s, the UAE has spent billions of dollars on infrastructure - these developments are particularly evident in the larger emirates like Abu Dhabi and Dubai. The northern emirates are now starting to follow suit, providing huge incentives for residential and commercial property developers.

All that said, according to a recent survey conducted by Bayt.com, 56% of professionals working within the UAE expect the economy to improve year-on-year. Overall, the United Arab Emirates is competitive in many areas of the economy. Trade barriers are minimal and open market policies foster growth. With its combination of a competitive business climate and political stability, the UAE has created a dynamic entrepreneurial environment for international investors.

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Politics

The UAE is a federation of hereditary absolute monarchies. It is administered by a Federal Supreme Council made up of the seven emirs of Abu Dhabi, Ajman, Fujairah, Sharjah, Dubai, Ras al-Khaimah and Umm al-Qaiwain. All accountabilities not granted to the national government are reserved to the individual emirates. A percentage of revenues from each emirate is allocated to the UAE’s central budget. Although elected by the Supreme Council, the presidency and prime ministership are essentially hereditary: The emir of Abu Dhabi holds the presidency, and the emir of Dubai is prime minister. All prime ministers in the UAE bar one have served concurrently as vice president.

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The UAE has the most progressive and settled infrastructure in the GCC region. Sheikh Zayed bin Sultan Al Nahyan was the UAE’s founding president until his death on 2nd November 2004. On the following day, the Federal Supreme Council elected his son, Sheikh Khalifa bin Zayed Al Nahyan, to the post. Abu Dhabi’s crown prince, Mohammed bin Zayed Al Nahyan, is the heir apparent now. The UAE assembled a half-elected Federal National Council (FNC) in 2006. The FNC consists of 40 members drawn from all the country’s emirates. Half are appointed by the rulers of the constituent emirates, and the other half are indirectly elected to serve two-year terms. However, the FNC is given a largely consultative role.

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Tourism

The United Arab Emirates is one of the World’s fastestgrowing destinations for visitors, be they for business or leisure purposes. This is hardly unexpected given that geographically, economically and culturally, it is in a unique strategic position between the East and the West. With constant sunshine, endless white sandy beaches and clear turquoise seas, many tourists are flocking to the UAE, but also the wealth of shopping districts, luxury resorts, high class restaurants and modern architectural feats are attracting thousands in their droves. The UAE is now a key global travel hub. Today, the UAE’s rapidly expanding national airlines transport millions of people through its world-class airports, and visas are available upon arrival for over 30 nationalities globally. Huge investment has taken place in tourism infrastructure and all of the world’s top hotel brands are represented in the UAE. Luxury resorts have multiplied and premium tourist and entertainment facilities are widespread. Dubai, the emirate that receives the most visitors, has established itself as a top destination globally, ranking at number five globally and number one in the Middle East region.

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Expanding Emirates

The UAE has made massive steps to diversify its economy and its trade and investment influence. Money from oil and gas has been widely, and indeed, wisely reinvested in infrastructure and architecture, creating genuine centres of global wealth attraction in Dubai and Abu Dhabi. The country’s airlines are thriving and its health is improving; with life expectancies from birth at 78.5 years. Its culture has diversified tremendously also – keeping a traditional Arabic backbone, but with a more globally-conscious outlook.

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Thank you for reading! As the edition draws to a close, we would like to say thank you to all of our editorial contributors. It was a pleasure to work with them to highlight the importance of Euro-GCC relations, and to further future dialogue surrounding issues that stem from bilateral trade and investment. The next edition of the Euro-GCC Trade and Investment Guide will continue to focus on promoting prosperous, strong relations between the trade blocs. To stay up to date on the latest happenings with the Europe-GCC Guide, please subscribe to up-dates by emailing our team on media@blsmedia.co.uk

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