Egypt… Open for Business

April 2008

A Regional Hub

Large Poolof Local Talent

Preferential Access to Major Markets

Reforming Economy

Adequate Infrastructure

Diversified Economy

CompetitiveCost of Production

Strong Macro Fundamentals

Large Consumer Market

Reasons to Invest in EGYPT…

Real GDP growth rate in excess of 7% has increased Egyptians’ purchasing power and solidified Egypt’s position as one of the most important consumer markets in the region

As a heavy-weight economy in the region, Egypt has a large and diversified domestic market spanning several sectors

Services Industry Agriculture Construction and real estate Finance Tourism Communication & Info. Tech. Logistics and infrastructure

Diversified Economy & Deep Local Market

Agriculture14%

Construction 7%

Comm & info. Tech

2%

Services35%

Finance7%

Tourism3%

Industry 32%

GDP Sectoral Breakdown

Global Market Access

Preferential access and geographic proximity to global markets

Accessing more than 1.5 billion customers through various multilateral and bilateral trade agreements…

Direct connection through the Suez Canal between the Indian Ocean to the Mediterranean Sea.

EU through the EUTA US through QIZs Middle East through GAFTA Africa through COMESA EGYPT-TURKEY Agreement Egypt –Switzerland EFTA Countries

Agreement

Largest pool of competitive local talent in the region…in excess of 22 million

41% of population between 15 and 39

Multilingual…strong English and French language capabilities

Sound educational systems…16 universities, local and international

Local Talent

3%18.1%

41%

37.5%

Less than 14 15 - 39 40 - 64 65 +

76 Million Consumers

Estimate of Population by Age Group

22 Million labor forceLabor (Cost, Quality, Productivity, Availability & Flexibility of Labor)

100 = Best 0 = Worst

Mckinsey & Co.

Developed Infrastructure

Competitively priced and reliable supplies of power, water, gas

Excellent access through major airports and port facilities

Large investments in CIT networks

Improved and expanding road network

Ongoing infrastructure investment plans and commitments already in place; expanded private sector engagement in infrastructure development

Energy

(Cost, Quality, Access to Electricity & Natural

Gas)

100 = Best 0 = Worst

Mckinsey & Co.

Liberalized legal framework guaranteed by Investment Law… including; 100% foreign ownership of companies…profit and dividend repatriation…dispute resolution and settlement mechanisms

Cost and time of business entry reduced…Incorporation time reduced from several months to 72 hours…min. capital required for LLC reduced to LE 200

Corporate One-Stop Shop introduced at multiple locations throughout the country

Tax Reform: Corporate tax rates cut from 42% to 20% …Personal tax rate cut from 32% to 20%...new administration practices

Customs reform: weighted average tariff rate reduced from 14 to 6.9% …tariff bands streamlined and reduced from 27 to 6…

Banking sector consolidation and further penetration of non-bank financial products: mortgage finance, financial leasing, fixed income products, factoring, insurance

Strengthened Capital Market Authority…maturing stock exchange…introduction of small cap stock exchange

Introduction of comprehensive corporate governance principles, Anti-Trust and Consumer Protection Laws

Business & Fiscal Reform….A Boost for Investment

Ensuring macroeconomic stability as well as achieving and sustaining average annual real GDP growth that exceeds 7%

The average annual growth rate of exports increased from less than one% in 2001/02 to 33.4% during the first 3Q in FY2006/07

The recent increase in FDI has been accompanied by a change in the sectoral distribution towards the non-oil sectors

Strong Macro Fundamentals … Room for Growth

1.9

2.5

5.3

4.1

5.45.9

3.0

4.3

5.1

3.9

4.75.0

3.4

3.2

6.8

7.2

1991/92

1992/93

1993/94

1994/95

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07Q

3

GDP Growth

Rate

%

International Recognition of Egypt

“Egypt is the top reformer for 2006/07…Egypt’s reforms went deep.”Doing Business 2007, World Bank, International Finance Corporation

“Egypt attracted an exceptional level of inflows [of FDI], amounting to 43% of the total to the [North African] subregion…. Egyptian reforms could herald more foreign investment.” UNCTAD World Investment Report, 2007, which ranked Egypt first in Africa and second in the Middle East for attracting investment.

“Cairo deserves kudos for getting one thing right: economic reform.”Wall Street Journal Editorial, September 07

“Egypt has made impressive progress in reforming its investment policies in recent years…” Egypt formally joins the Investment Committee of the Organization for Economic Co-operation and Development (OECD) as a partner member and the first Arab or African country. OECD Investment Policy Review of Egypt 2007

Leaders in a Growing Market

Improved investment environment attracted world multinationals…

A Broadened Private Sector Contribution to Growth

Public Asset Management / Privatization

Private Public Partnership (PPP) Special Economic Zone Privately-developed Investment

Zones

Private Investment as % of Total Investment

48% 48% 51% 47% 48% 47% 51%

61% 62%66%

0%

10%20%

30%

40%

50%60%

70%

Stronger Engagement of the Private Sector

Privatization… an Asset Management Approach

The MOI has adopted an asset management approach to privatization whereby all state-owned assets are treated as one pool that is managed to maximize returns based on whether they are considered to be…

Saleable Assets that are ready for immediate sale at maximum return under current market conditions, or

Assets to be restructured in order to make them ready for sale. The government, in consultation with independent experts, is following strict policies for injecting new capital in these assets based on thorough technical and financial feasibility studies

Various success stories of Bank privatization and consolidations

Investment Zones

Investment Zones regime…introduced in 2007 with the following objectives…

Promote economic clusters; industrial, services, tourism, agribusiness, etc.

Private sector mandated for developing, promoting, managing these zones, as well as economically benefiting from these zones

Provide a Bureaucracy-free environment through a one-window for incorporation, licensing, and support services in the zone

Offer streamlined custom management through localized dry ports within zone

Investment Zone Opportunities are offered throughout various regions within the country are outlined in the Investment Opportunities Kit

Toshki

Investment Opportunities in

Egypt

Public Private Partnership (PPP)

PPPs are key to the Government’s economic reform agenda and strategy to increase private sector involvement in public services through leveraging private spending against public spending

– Provide a new source of investment capital for required infrastructure projects

– Reduce Government sovereign borrowings and associated risks

– Drive the creation of local long term funding market

– Utilize efficiencies of private sector in running public services

– Expand economy and stimulate job creation

Egypt is providing the right environment for implementation

Adoption and localisation of international successful PPP models (UK)

Provision of Supportive Legislative Environment – New Legal Framework for PPP

Projects – (Draft under finalization for

Submission to Cabinet and Parliament)

– Standard PPP Contracts – Standardization of procurement

documentation and procedures– Creation of regulatory bodies for

post contract implementation

PPP Pipeline Projects

Social Infrastructure – Education Sector– Health Sector

• Educational Medical Facilities

• General Medical Facilities Utilities Sector

– Wastewater Treatment Plants

– Potable Water Treatment Plants

Transportation Sector

Approx Value USD in Billion6.125.001.12

0.320.80

2.802.200.60

7.00

15.92

General Authority for Economic Zone-North West Gulf of Suez

SEZone Site: 20.4 Km2 North West Gulf of Suez-Sokhna Industrial Zone Legal Framework: Special Economic Zone Regime Established by Law 83

of 2002 Governance Model: SEZone Authority: Regulator / Main Development

Company: Development arm Development Approach: Attract private sector to lead on-site

development (zone and utilities), management, operation and promotion through internationally recognized PPP arrangements (45 year use-of-right)

Projected Industry Mix: – Medium and light manufacturing – Logistics and general services

…another PPP Modality

…Value Proposition

Single regulator empowered by a robust legal framework

Fiscal Incentives

Superior location (cross road to 10% of world trade)

Modern port facilities – Sokhna Port

Recently upgraded highway network

Access to workforce

Opportunities in infrastructure development

Law-enabledIncentives

Flat 10% Corp. Tax

5% Personal Tax

Zero duties

Unlimited access

to local market

No duties on local

Content

Adjacent to the new Port at Sokhna Privately managed port Ideally located for added value logistics Direct access to Mediterranean & Indian

Ocean Export/import major international markets

120 km south east of Cairo and 45 km south of Suez City

Approximate adjacent population: 20 Million

…a Smart Location

Suez Governorate

Cairo

Port Said

Alexandria

Site

The General Authority for Investment

www.investment.gov.eg

Thank you