Ksa

Lebanon and Saudi Arabia Investment Climate in Light of Current Conditions
Saudi – Lebanese Forum
March 1st and 2nd, 2012
Beirut, Lebanon

Headlines

1. IMPACT OF ARAB SPRING ON LEBANON AND SAUDI ARABIA

2. SAUDI ARABIA: ONE OF THE MAJOR INVESTORS IN LEBANON

3. WHY IS LEBANON INTERESTING TO SAUDI ARABIA

4. ECONOMIC SECTORS OF INTEREST

5. ABOUT IDAL

6. CONTACT US

Real GDP Growth decreased sharply for almost all MENA region
countries. Saudi Arabia was one of the very few countries to
escape that trend…
Real GDP Growth Rates in Selected MENA Countries
(2010-2011)

Source: International Monetary Fund

In relative terms, Lebanon and Saudi Arabia were however one of
the less impacted countries by the turmoil…

Turmoil Economic Impact Indices on Real
Economy (by Country)

Severe Impact
Syria 5

Libya 5

Tunisia 4

Egypt 4

Iraq 3

Bahrain 3

Lebanon 2

Jordan 2

Qatar 0

KSA 0

UAE 0
No Impact

Source: Bank Audi’s Group Research Department

Significant trade activity between Lebanon and Saudi Arabia
(cont’d)

Top 3 Arab Countries of Exports From Lebanon Top 3 Arab Countries of Imports to Lebanon
(2011) (2011)

Total Exports to KSA Total Imports from KSA
US$ 307.9 million US$ 531.6 million

Source: Lebanese Customs

Coupled with significant Investment activity between Lebanon and
Saudi Arabia (cont’d)

Distribution of Saudi Projects in Lebanon by Sector
Major Investments from Saudi Arabia between (2004-2012)
2004-2012
Year of
Company Name Industry/Sector
Establishement
Cheikh Saleh Kamel Trade/Investment 2004
Nesco / Nesco Group for Hotel Investments Tourism 2004
Ste Méditerranéenne Des Grands Hôtels Tourism 2004
Zamil Industry/Sector 2004
Dallah al Baraka / Albaraka banking group Banking 2005
Gulf Finance Investment Company Tourism 2005
Al Tuwairqi Group Industry 2007
Saudi Cables for Marketing Industry 2009
Information Technology
National Technology Group / DirectFN 2010
(IT)
National Technology Group / DirectFN Services/Trade 2010
Frinsinyeh Saudi Arabia Industry 2010
Saudi Globe Med for Medical Forms ICT 2011
Oger Liban SAL Construction -
Saudi National Commercial Bank Banking -
Movenpick Hotel Tourism -
Summerland Kempinski Hotel Tourism -
Rotana Media -
Four Seasons Hotel Tourism -

Source: Ministry of Economy and Trade

Saudi Arabia’s Investments in the region

• KSA is looking into investing in Sudan's agriculture sector with large cereal
Sudan crops to be exported back to the Kingdom.

• KSA has been highly involved in the Turkish market with more than 170
Turkey Saudi companies currently operating in Turkey within the following sectors:
textiles, food, banking trade, real estate, transportation and tourism.

• KSA has built several strong ties with Egypt over the years. It is currently
Egypt investing in their agricultural, industrial, IT, financial and touristic sectors.

• India is a new market that KSA has grown interest in. It has looked for
India business opportunities within the oil & gas, power, construction, fertilizers
and tourism sectors.

• KSA is conducting several projects within the petrochemical sector as well
Jordan as the information technology sector.

Lebanon • Tourism, Real Estate, Healthcare, IT, Banking.

The Lebanese economy encompasses key
business drivers of FDI…
Favorable Investment Environment: Resilient Banking Sector:
Corporate Tax Rate (%) Soundness of Banks Rankings
(2009) (2010)

Source: Countries website Source: World Competitiveness Report

And a highly diversified Economy…

GDP Diversification of Selected Countries

Least Diversified
-

Sources: Source: Saudi Arabia Central Department of Statistics; Statistics Singapore; Ireland CSO; Statistics Norway; Statistics Canada; Taiwan DGBAS; Abu
Dhabi Statistical Yearbook; IMF World Economic Outlook 2006; Booz Allen Analysis

Economic Sectors with Growth Potential

INDUSTRY AGRO INDUSTRY TOURISM

AGRICULTURE IT TECHNOLOGY

TELECOM MEDIA Sectors
included in
Investment
Law No.360 (*)

(*) Sectors selected for their growth potential and their readiness for development

Agriculture: Important Export Potential

 The country is endowed with the highest
proportion of agricultural land in the
Middle East.

 Abundant water resources allow for
intense agricultural activity
 Agricultural areas cover around 26% of the
Lebanese territory (nearly equivalent to
2770 km2)
 Agricultural production contributes to
around 4.8 % of GDP
POTENTIAL INVESTMENTS IN:
 It employs roughly 10% of the Lebanese
labor force, and is the fourth largest Farms: Fisheries &Animal
employer in the country Packaging & Storage Centers
 Key Agricultural products include: Fruits
mainly citrus, apples, bananas and grapes,
but also significantly olives

Sources: Syndicate of Agro Food Sector // Central Administration of Statistics

Agro Industry: Important Export Potential

 A major contributor to the Lebanese
economy

 Generated around 32.5% of the
industrial sector output in 2009

 Has significant employment potential
with 23.3% of the industrial sector
workforce (30,760 workers)

 Accounts for 20% of industrial
establishments in Lebanon
 Exports of agro-food products equal to
10.9% of total industrial exports
Manufacturing plants
Bottling facilities
 Exports growth at 13% annually since
2001 (despite decline in industrial sector
exports)

Sources: Syndicate of Agro Food Sector // Central Administration of Statistics

Tourism: Highest Generator of Revenues

 Directly accounts for 8% of Lebanese
GDP but indirectly to around 34% of the
national GDP (because of the indirect
effect on the economy)

 Capital investments in this sector have
amounted to 1.2 billion USD in 2010
(10.2% of total investments) and are
expected to rise by 6.2% per annum
according to the WTTC (*)
 7 billion USD of revenues generated by
tourism (20% of country’s GDP)
Hotels and Leisure Facilities
Healthcare Tourism
 40% growth in tourists arrival Cultural and Religious Tourism
Business Conferences

(*) WTTC: World Travel & Tourism Council

ICT: Sizeable Potential In Business Applications

 Estimated size: 287 million USD (2010)

 Forecasted to grow by around 11.8%
(based on estimates)

 Employs around 7,000 people

 Over 20% of Lebanese companies are
involved in the IT sector (either in
hardware, software or as internet service
providers)
 Mobile penetration rates are in fact
among the highest in the region and Software
have totaled 68% by end of 2010 Hardware
Internet Software Providers
 Big potential in business-related Telecommunication
applications and web development as
well as software development

Source: Business Monitor International

Media: A New Growing Market

 Home to one of the most significant
media industries in the Middle East

 Advertising expenditure is expected to
record growth rates of 8.4% over the
next 3 years

 Total advertising expenditure
constitutes 2.8% of the national GDP

 New opportunities in digital media
including: POTENTIAL INVESTMENTS IN:
Advertising
• Online Advertising (e.g. Yahoo
buying Maktoob) TV Production
• Online Gaming Digital Media
• Online Advertising Production Houses
• Specialized 3D Animation

Healthcare Tourism: A Niche Market

 Skilled and specialized medical staff
with 130 yrs of top quality medical
experience

 Healthy climate with environmental
diversity

 Sector size estimated by 1.2 billion USD
with a 30% growth

 More than 15,000 doctors and 270
Hospitals POTENTIAL INVESTMENTS IN:
Hotels, Furnished Apartments &
 New opportunities in healthcare tourism
Villas with medical services
including:
• Centers for Alternative Medicine SPAs and Beauty Centers
• SPAs and Beauty Centres Gyms and Medical Sport Centers
• Specialized physical rehabilitation Nutrition Centers
centers Health Care
• Specialized treatment centers Tourism Park

Headlines

1. IMPACT OF ARAB SPRING ON LEBANON AND SAUDI ARABIA

2. SAUDI ARABIA: ONE OF THE MAJOR INVESTORS IN LEBANON

3. WHY IS LEBANON INTERESTING TO SAUDI ARABIA

4. ECONOMICSECTORS OF INTEREST

5. ABOUT IDAL

6. CONTACT US

About IDAL

THE INVESTMENT DEVELOPMENT AUTHORITY OF LEBANON
(IDAL)

• The National Investment Promotion Agency of Lebanon

• History – Established in 1994 with the aim of promoting Lebanon
as a key investment destination and attracting, facilitating &
retaining investments in the country

• Governance – IDAL reports to the Presidency of the Council of
Ministers (who exercises a tutorial authority over it) and has
financial and administrative autonomy

• Legislature – Investment Law No. 360 was enacted in 2001 to
regulate investment activities in Lebanon

IDAL has 3 tools to support investors
Tools Available to IDAL Though Law No.360

MARKET INTELLIGENCE PACKAGE OF INCENTIVES ONE STOP SHOP

 Fiscal incentives:
 Market Intelligence: Exemptions from corporate  IDAL as One Stop Shop for
income tax generated by Investors
 Information on
investment opportunities the investment project  IDAL to supersede all
across economic sectors  Financial incentives: Fees public administrations,
Reductions on Operational authorities and
 Data on economic
cost: municipalities in issuing
sectors with growth
administrative permits
potential  Non-Financial Incentives: and licenses except those
 Data on investment Employees for the project granted by the Council of
climate are granted work permits Ministers
with the support of IDAL

Pre-Investment Financing stage Licensing stage
stage

Contact Us

THE INVESTMENT DEVELOPMENT AUTHORITY OF LEBANON
(IDAL)
Lazarieh Tower // 4th Floor // Emir Bechir Street
Riad El Solh // P.O.Box 113-7251
Beirut // LEBANON

T + 961 (1) 983306/7/8
F + 961 (1) 983302/3
E invest@idal.com.lb
W http://www.idal.com.lb

@Invest_Lebanon

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