1. Egypt Improving Investment Climate Twenty Fourth Session of the COMCEC Istanbul, Turkey October 23 rd, 2008 Neveen EL Shafei Vice Chairman General Authority For Investment and Free Zones

2. Government Economic Reforms Legislative Reform, Monetary and Banking Reform Tax Reform Trade Policy Reform Investment Policy Reform Expanding Role of Private Sector Enhanced Investment Climate

3. Major changes to enhance the investment climate FDI Entry 49% ceiling on foreign ownership in commercial banking and insurance has been abolished. Fewer activities are restricted to foreigners (e.g. Tourist guide activities, Legal Services and Fishing). Adopting the “The Procedure Simplification” program through GAFI “One Stop Shop” (OSS) Reduction of incorporation time for 3 days maximum. Reduction of Minimum paid in capital for LLC (EGP200). Reduction of incorporation and publication fees. Tax card issuance in 48 hours. Unification of bank certificate form to be issued in 1 day. Checking Name Uniqueness within hours. Opening social insurance files within 48 hours. Sales Tax registration within 2 hours. Replicating the OSS approach in GAFI offices outside Cairo in Alexandria, Assiut and Ismailia. Establishment and Operation

4. Enhanced Investment Climate Privatization Adopting a rigorous Asset Management Program in 2004. Sale of assets and shareholdings in public enterprises. Pubic sector companies have undergone a series of reforms, e.g. activating the role of general assemblies of holding companies and other public sector companies. Protection & Treatment of FDI Greater emphasis on implementation of rules protecting Investors. Expansion of BIT networks. Growing role of arbitration (local and international) and role of Cairo Centre for International Commercial Arbitration based on UNCITRAL rules. Law for Special Economic Courts. Adoption of the Competition Law and establishment of the Egyptian Competition Authority (ECA). Expanding role for Ministerial committee for Investment Disputes (GAFI). Corporate Governance Code and establishment of the Institute of Directors Growing emphasis on transparency of rules.

5. General Measures Issuance of New Income Tax Law reducing income tax rates for businesses from 40 to 20 per cent. New customs structure reducing the weighted average tariff rate from 14 to 9 per cent, as well as reduction in tariff bands from 27 to 6. Banking Sector Consolidation and Financial Reform coupled with strengthening the Central Bank of Egypt. Launching Mortgage, Securitization and Factoring while strengthening the Financial Leasing sector. A new vision for Private Sector Participation leading to new Public Private Partnership schemes (PPP). A draft PPP law will be discussed in the next Parliamentary session. Expanding the Egyptian market through various trade agreements with: Europe, GAFTA, COMESA, QIZ and Aghadir Enhanced Investment Climate

6. Investment Policy Framework Investment policy has been encouraged by Non- discriminatory investment policies Pro-active strategy of investment promotion stressing the role of government as a service provider rather than as a regulator Sharp reduction of trade impediments to capital imports and streamlining of cumbersome and costly customs procedures Adoption of the competition law and establishment of the Egyptian Competition Authority (ECA) Towards a fully unified investment company regime Improving investment statistics in Egypt Transition from current transaction-based approach to a survey approach based on the standards of the IMF BOP5 and the OECD Benchmark Definition of FDI Advisory committee, headed by MOI, has been established and a business register has been developed to include all FDI enterprises, coded according to ISIC Active engagement in international investment negotiation being party to 67 ratified BITs Usage of several diagnostic and benchmark tools to assess investment climate obstacles (ICAs, OECD PFI)

7. Investment Policy Framework Free Zones Low Infrastructure cost Income Tax exemption 1% annual duty on the value added No sales tax No custom duties (Except for sales into Egypt) Special Economic Zone Upper Egypt Incentives Investment Zones 10% income taxation 5% tax on wages One administrative authority Private Sector can establish, manage and promote investment zones which will follow the same licensing procedures as free zones; however, will not be exempted from taxes Industrial land for free Rebate for job creation

8. Liberalized legal framework guaranteed by Investment Law… 100% foreign ownership of companies 100% foreign representation of Board of Directors Protection against expropriation Protection against compulsory pricing Full right of profit and dividend repatriation Implementation of dispute resolution and settlement mechanisms Robust Investment Regimes

9. Banking & Financial Reform  Strengthened supervisory role of Central  Banking sector consolidation and privatization  Anti-money laundering regulations in line with international standards  Further penetration of non- bank financial products: mortgage finance, financial leasing, fixed income products, factoring  Streamlined insurance activities Source: the Central Bank of Egypt. 20 Oct: W.Ave. Interbank Rates 5.5861 US$ ’Market Rate: 5.5643 US $

10.  Strengthened Capital Market Authority  Introduction of small cap stock exchange “Nilex” Vibrant Capital Market Source: Cairo & Alexandria Stock exchanges

11. Results of Reform & Incentives

12.  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 1 % in 2001/02 to 20% in FY2006/07 and increased by 33% in 2007/08 Results of reform & incentives Exports Proceeds GDP Growth Rate % US$ Million 20% 34% 33% * * Expected

13. Results of reform & incentives Net International Reserves Inflation Current Account as a percent of GDP

14. Public and Private investment % of GDP

15. FDI Performance Net FDI flows  FDI has Reached $13.2 bn as of FY2007/08 and represented 8.5% as a percentage of GDP.  The recent increase in FDI has been accompanied by a change in the sectoral distribution towards the non-oil sectors. 54% 56% 80% US$ bn 19%

16. International Ranking / Perception

17. Doing Business Report 2009 Egypt Among the Top 10 Best reformers over the last two years D.B. 2009 Rank 114 out of 181 Source: D.B report 08.

18. FDI Performance Top Reformers in 2007/2008 For the second consecutive year, Egypt is among the top 10 reformers in the Doing Business Report, issued by the World Bank. Source: DB 2009, World Bank

19. World Investment Report 2008 Egypt ranks The First among North African countries and the Second among Africa and in terms of FDI Inflows

20. FDI Performance Improved Ranking in OECD FDI Regulatory Restrictiveness Index (2000 and 2006) 41st 33rd * In July 2007, Egypt became the first Arab and African country to adhere to the OECD Investment Declaration, on International Investment and Multinational Enterprises. * Over the period 2000-2006, Egypt’s rank in FDI Regulatory Restrictiveness Index has improved by 43%, Preceding that of many countries such as Canada, South Africa, & India. Source: IPR 2007, OECD