economic focus 3

ECONOMICFOCUS ISSUE 1 VOL 8 SPRING 2013MAGAZINE OF THE ARAB-BRITISH CHAMBER OF COMMERCE

> REPORTS IN ENGLISH AND ARABIC

> FOCUS INTERVIEW: RAK FREE ZONE

> ASSESSING A COMPANYS FINANCIAL HEALTH

> SETTING UP BUSINESS IN THE UAE

> CYBER SECURITY AWARENESS

> MOROCCOS TOURISM STRATEGY

> FOCUS INTERVIEW: HSBC MIDDLE EAST

> BRITISH ECONOMIC SURVEY

> CHAMBER ACTIVITIES

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RE1402_Arab_ Gulf_British_Chamber Mag_Ad_NOV2012_V6.indd 1 27/11/2012 16:45

ARAB-BRITISH CHAMBER OF COMMERCE 3

Focus Interview: Rak Free Zone 4

How to Judge a Companys Financial Health 8

Doing Business in the UAE 12

Cyber Security Awareness for Business 20

Vision 2020: Moroccos Tourism Strategy 24

Support for Exporters of UK Goods and Services 34

Focus Interview: HSBC Middle East 40

Quarterly UK Economic Survey 64

Chamber News

Chamber Activities 72

Member Profiles 86

New Members 90

Arabic Section 96

CONTENTS

12 24

64 82

Economic Focus is an Arab-British Chamber of Commerce publication.

Editorial TeamAbdeslam El-Idrissi Cliff Lawrence David Morgan Dr Yasmin HuseinArab-British Chamber of Commerce 43 Upper Grosvenor Street London W1K 2NJTel: +44 (0) 20 7235 4363 Fax: +44 (0) 20 7245 [email protected]

Production & DesignDistinctive Publishing 6th Floor, Aidan House, Sunderland Road Gateshead NE8 3HUTel: 0845 884 2385 www.distinctivepublishing.co.ukArabic pages designed by Andrew Smith www.bellow-creative.com

AdvertisingDistinctive PublishingTel: 0845 884 [email protected]

DisclaimerDistinctive Publishing or Arab-British Chamber of Commerce cannot be held responsible for any inaccuracies that may occur, individual products or services advertised or late entries. No part of this publication may be reproduced or scanned without prior written permission of the publishers and Arab-British Chamber of Commerce.

ISSN No: ISSN 1751-4339

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Email: [email protected]: 0207 7301207 www.princevisa.com

Focus Reports

ECONOMIC FOCUS CHAMBER NEWS

Please introduce the free zone to our readers and describe your involvement with it.Ras Al Khaimah Free Trade Zone (RAK FTZ) is one of the fastest-growing and most cost-effective free trade zones in the United Arab Emirates (UAE). With a reputation for affordability, flexibility and broad geographical reach, RAK FTZ is rapidly emerging as the preferred business hub in the region, from which investors can easily access and branch into the emerging markets.

It has established itself across Ras Al Khaimah at various specialised sites the aim being to provide separate environments that suit the needs of different types of investors and industries. Currently, RAK FTZ has four fully operational parks Business Park, Industrial Park, Technology Park and Academy Zone with plans to develop additional industry-specific sites in the future.

2012 marked RAK FTZs 12th year in operation, and in the past decade, it has gone from strength to strength, garnering accolades and awards along the way. Since its establishment in 2000, with only a handful of staff and a few offices, the free zone has grown by leaps and bounds and is now home to some 6,000+ active companies from 106 countries around the globe. It employs more than 350 full-time staff, operates business and promotion centres in

four locations in the UAE and has an expanding international presence, with liaison offices in Germany, Turkey, India and the USA.

My involvement with the RAK FTZ started before the zone became operational. I have been involved from the beginning when it was just a project plan through to inception in terms of research, market analysis, and operational concept to the present day when I am currently the Deputy Director General of RAK FTZ.

What kinds of companies are registered with the free zone in terms of sectors and activities?Since its inception in 2000, more than 6,000 small and medium sized companies have chosen RAK FTZ as the place to start their business in the UAE and the GCC. A vast majority of these companies represent the commercial sector (62%), followed by consulting (28%) and general trading (9%), and manufacturing (1%).

Which services and incentives attract companies to the free zone?The free zone acts as a one-stop-shop. This is particularly helpful to SMEs who are new in the market and do not know their way around yet. RAK FTZ supports

them with every aspect of their new business venture. Starting from the business license, the facility and visa, continuing with recruitment services and support in networking (finding the right contacts) going to personal requirements such as childcare.

Another very appealing aspects to SMEs from the UK are our low cost market entry packages that enable small business or entrepreneurs to enter the UAE market for not only minimal but also calculable/easy to forecast cost.

For a UK company that is seriously considering setting up in RAKFZ, what are the first steps that it needs to take?They should contact our European Office (by telephone: +44 207 256 4075; or email: [email protected]). Our staff will then provide them with all the information and will help them in choosing the right set-up package or will arrange for a sight visit in Ras Al Khaimah. Once the company or the entrepreneur has decided to go ahead, they will support them with filling the paperwork. The actual license application and company set-up procedure is a very simple and straight forward process that usually takes only 1-2 weeks.

WHy COMPANIES ARE OPTING FOR RAK FREE TRADE ZONE

Economic Focus speaks to Ms Maryam Al Murshedi Al Shehhi, Deputy Director General, RAK Free Trade Zone.

Maryam Al Murshedi Al Shehhi

RAK FTZ has been successful in attracting SMEs. But what specific services are available to SMEs in the free zone?Because of our focus on small and medium businesses, RAK FTZ has partnered with several local banks that have programmes to assist SMEs such as HSBC, National Bank of Abu Dhabi, Emirates NBD, and Bank of Baroda. These banks have their own solutions that are geared for small and medium size businesses to help them start their companies faster and with minimal procedures.

Other solutions that we offer SMEs are the following:

l Our Mazeed Service Desk helps our clients with their requirement to start their business operation with less hassle especially for those who are new in the market. From finding out where to get insurance policy for their employees, printing business cards, setting up a website, where to buy furniture, finding a house, to helping them find schools for their children.

l One of the most notable features that make RAK FTZ the hub for SMEs is the ease of registration; additionally, our environment sets us apart as do our value-added services, which are specifically designed to meet the needs of SMEs focused on operating in the emerging markets.

l Our slogan Home of Business says it all. When a client chooses RAK FTZ, we help them every step of the way. We offer them services that make them feel like they are in their own house.

l We offer flexible facilities with low start-up costs geared for SMEs.

l We offer them networking opportunities and B2B meetings with other RAK FTZ clients that can help them with their business or even just to learn from them.

Why should a company choose RAK FTZ rather than some of the more established free zones in the UAE?RAK FTZ has been operating for more than a decade. We are currently on our 13th year of operation so we are now considered as one of the established free zones in the region. Aside from the common free zone advantages, RAK FTZ has the following advantages. In addition, because our focus is directed to SMEs we have the tools and facilities geared specifically to this segment that other free zones do not specialise in such as our Mazeed Service, our customer focus and other advantages as listed below.

More than 6,000 SMEs from 106 CountriesSince its inception in 2000, more than 6,000 small and medium sized companies have chosen RAK FTZ as the place to start their business in the Gulf.

Value-Added ServicesRAK FTZ offers a wide range of extra services that cater to the unique needs of its clients that includes IT, marketing & creative, procurement, human resources services and more, designed to assist clients with the many different steps involved in setting up and running a successful business.

Award-Winning ServicesRAK FTZs accomplishments have been recognised by a number of well-respected international business organisations such as the World Free Zone Convention for Best Website Award; Middle East Logistics Awards for Best Emerging Free Zone in three consecutive years; by Supply Chain and Transport Awards for Industrial Area of the Year, and RAK FTZs PR & Media Department has been awarded Distinguished Honoree Medal in the Communications Department of the Year category at the 2011 International Business Awards (Stevie Awards). In 2012 RAK FTZ was awarded the Top Economic Zone in the World award for Digital Marketing, conferred by fDi Intelligence and Magazine, and Best Corporate in the UAE Award for Social Responsibility given by the Arab Organisation for Social Responsibility in collaboration with Tatweej Academy for Excellence.

International Reach and Multilingual StaffRAK FTZ is the first and only free zone with international promotion centres in India, Germany, Turkey and US that provides marketing and sales, client support and administrative services. Our multilingual staff from 39 countries can assist our international clients.

International RankingsRanked One of the Top Five Middle East Free Zones of the Future 2011-2012

fDi Magazine rated RAK FTZ fourth best Middle East Free Zone of the Future and third for Best Economic Potential in the 2011-2012 ranking out of 115 free zones in the region.

Ranked One of the Top 50 - Global Free Zones of the Future 2012/13


continued page 6


fDi Magazine rated RAK FTZ one of the top 50 Free Zones of the Future in the Global Free Zones of the Future ranking awards.

Are you satisfied with the performance of RAK FTZ in the years since its establishment?We are very satisfied with the performance of RAK FTZ since its establishment. The growth of RAK FTZ has been phenomenal from 15 companies in 2000 to more than 6,000 companies currently registered and active within our different parks is testament to the success of the free zone. Aside from the growth, the accolades that have been accorded to us over the years and the trust of our clients and partners more than affirmed our slogan as the Home of Business in this region.

What in brief are RAK FTZs future plans?Given the current economic scenario, we will focus primarily on maintaining

the current pace and momentum of our growth. Further on, we have plans to diversify our activities to offer new and enhanced service products. We are also working on additional client-support initiatives.

We are also supporting the vision of the Emirate Ras Al Khaimah and focusing in attracting industries to come to the emirate including tourism, health and education.

How would you assess the growth prospects and potential of the free zone into 2013 and thereafter?RAK FTZs growth has been on an upwards trajectory since its inception. We have been averaging a 15% annual growth for the last five years. We see a continuous growth into 2013 and thereafter for the free zone. There are still a lot of potential that we can tap on and other markets that we have not even targeted yet. We have a positive outlook for the years to come and with the support of the Ras Al Khaimah Government, we know it is achievable.

In conclusion, what is your message to British business?As businesses know, many of the future growth markets are located in Asia and some even in Africa. As the European markets are quite saturated, companies from the UK should look for new growth markets that will ensure them business and profits in the medium and long term future. It is not easy to enter new markets and does usually take some time.

Located in the growing and stable GCC region the UAE is the ideal place to start entering new growth markets. RAK FTZ is the ideal home for SMEs and the starting point for market entries into the GCC, MENA and Asia.

For further information about the free zone see: www.rakftz.com

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It is always safest to assume that the information you are presented with on paper may not represent a true picture of a companys financial health.

It is a proven fact that what may seem like gold in the international business arena could quickly turn to rust if the vetting of all the potential partners is not properly conducted. Heres a case in point:

An investor in the US was interested in purchasing a major jewellery operation headquartered in Dubai. The jewellery business had painted a rosy picture of itself on paper as one of the regions most profitable companies, and had attracted the eye of the US investor. But an intensive due diligence investigation conducted by a professional background screening company based in Dubai and retained by the US investor told another story.

The investigating companys examination unearthed numerous red flags that portrayed the business as not only a risky investment, but a potentially liable one at that.

In the course of the investigation, which involved international public records searches and local hands-on interviews to look into the financial liabilities of the jewellery operations directors and primary shareholders, it was discovered that the jewellery company was, in fact, in the midst of liquidation proceedings, a major factor not previously disclosed to the potential buyer in the US. Further

research conducted at a local level revealed that the companys principals were involved in several bankruptcy cases and that the company had been issued warnings by local regulatory agencies concerning a host of collusive business activities.

Because these discoveries would have been nearly impossible to uncover using conventional Internet-based search methods, the potential buyer stood to lose his entire investment had it not been for the business background investigation conducted by the offshore screening firm.

It has become increasingly easy for both small and large organisations to open up international business channels and source business operations worldwide. One area of increasing influence in the global economy is the Middle East, particularly the Gulf region. Emerging countries such as Saudi Arabia, Qatar, Bahrain and the United Arab Emirates have fast become inviting markets, attracting US, UK and European based businesses with their strong currencies, reduced barriers to entry, and lucrative opportunities.

While these opportunities do prove to be beneficial to companies seeking to extend their reach into global markets, they can also open the doors to predatory or other unscrupulous business practices orchestrated by the dishonest few who prey on otherwise legitimate organisations while creating legal

headaches and wreaking havoc for those companies down the road.

With that threat in mind, it is imperative that business organisations involved in global business dealings establish a comprehensive risk management programme that incorporates international background investigations, preferably conducted by a screening company not only experienced in business due diligence, but highly familiar with the specific laws, jurisdictions, business cultures and terrain of the target countries in which the potential business is being conducted.

Doing Business in the Middle EastMost expatriate business professionals in the Middle East advise anyone contemplating expanding their business in this market to remember that it is not what you know that is important, so much as who you know. Therefore, a good investment in time and effort to understand the social and business culture across the Gulf region is essential to long-term business success. Being well-versed in such areas as business etiquette, meeting protocol and negotiation techniques are crucial to properly establishing business partnerships that transcend stereotypes and improve communications.

It is the who you know part of the equation that dictates the need for a thorough risk management programme, which begins with a scrutinised understanding of the individuals and organisations with whom you are about to enter into business. In this environment it is essential that businesses become completely familiar with the operations of potential international clients, business partners, distributors, agents, consultants and individuals before conducting offshore transactions, establishing formal corporate partnerships or committing to international investments.

Part of the risk management arsenal includes a business partner integrity check, to be conducted before dealing with businesses or governmental organisations, and which involves:

l Pre-merger, acquisition or pre-IPO transactions;

DIAGNOSING A COMPANyS FINANCIAl HEAlTH

Zafar I Anjum, CEO, Corporate Research and Investigations LLC, explains why it is important to do an integrity check on any potential partner before conducting business.


l Entering into any newly formed joint venture;

l Engaging in new banking or business relationships;

l Employing, contracting or retaining a foreign business partner; or

l Reviewing regulatory compliance or corporate governance best practices.

While extensive in scope, this due diligence process requires a boots on the ground team to ensure that no stone is left unturned. Unfortunately, many screening and investigations firms lack the wherewithal to properly conduct overseas search. And when it comes to the Middle East - where a vast majority of jurisdictions lack the technology that makes online records searches globally obtainable - proper vetting of individuals, directors, shareholders (especially those connected to ruling families), companies and governing bodies can only be achieved through in-person interviews, access to local records and discussions with sources who are personally knowledgeable with the subject being investigated.

Due to the sheer remoteness of various regions in the Middle East, there are inherent risks of becoming involved with individuals or organisations that have associations with corruption, organised crime, terrorist financing or money laundering. Furthermore, a misunderstanding of local laws can lead to unenforceable contracts that can blindside a foreign-based operation.

levelling the Playing FieldFor such reasons, major US, UK and European corporations rely on offshore screening companies that can provide the localised research required to properly vet foreign business partners in the Middle East. Such companies have access to the hard-copy records that arent available on the Internet, and have the ability to locate local sources that can aid in the investigation. Armed with a familiarity of the terrain, an understanding of the culture, and an ability to acquire information, these homeland-based screening operations can easily uncover hard-to-obtain facts that can play a vital role in the business decision-making process.

And while foreign investigative companies know their terrain, they are

also highly educated in the local laws that govern business transactions (which could jeopardise your operation) as well as the anti-corruption laws that govern US, UK and EU-based businesses. This dual knowledge ensures complete compliance with FCPA regulations, the UK Bribery Act, anti-money laundering laws and other anti-corruption regulations to which companies must adhere.

The true value of retaining a foreign based investigative firm is that they can uncover information that may not necessarily be on the public record. Such information can include potential involvement with:

l Business or government officials who regularly accept or require bribes;

l Third-party sources (suppliers, distributors, etc.) who regularly pay bribes to officials;

l Unscrupulous individuals who may be part owners of the businesses with whom you associate;

l Minority business owners who may also be government officials or have connections with such;

l Questionable individuals who may have recommended a third-party partner;

l Individuals who require payments in cash for services provided;

l Individuals who may not be experienced in providing the products or services you require;

l Individuals who request commissions that exceed normal commission levels; or

l Organisations or third-party sources those are not familiar with FCPA and other anti-corruption laws.

While association with such organisations or individuals may be termed as business as usual to many operations, such associations obviously conflict with FCPA regulations, EU laws and UK Anti-Bribery rules, and erode public confidence in the parties involved.

Used as part of a comprehensive risk management programme, a thorough and professional offshore screening operation that provides due diligence, business integrity checks will provide

the measurable insight to reduce business, legal and reputation risks when seeking partnerships in unfamiliar international markets. With the required capability to properly assess the background, integrity and character of those individuals and organisations with which global companies seek to affiliate, such offshore investigative companies can help organisations remain compliant with domestic and international regulations while maintaining high standards of business ethics and behaviour.

About the AuthorZafar I Anjum, CFE, CIS, Int Dip (Fin Crime) is Chief Executive Officer of Corporate Research and Investigations LLC CRI Group, a global supplier of investigative, forensic accounting, business due diligence and employee background screening services. A Licensed and Incorporated entity of the Dubai International Financial Centre, CRI safeguards businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI Group maintains offices in Dubai, Islamabad, Lahore, Karachi, Singapore, Manila, Riyadh and the UK.

CONTACTSZafar I Anjum

Tel: +971 4 3589884

Fax: +971 4 3589094

Email: [email protected]

www.crigroup.com

MILITARY BUILDINGS

Hareb Thani Hareb Al Dhaheri, Horizon Chief Executive Officer said: We chose Rubb for their reputation in design, development and deployment of temporary hangars. The installation of our hangars was speedy and efficient, the project was completed on time and as promised.

The high flying academy is based at Al Ain International Airport and has been purpose built for flight training. It has set the benchmark for pilot training in the Middle East, offering fixed wing and helicopter pilot courses.

Its fleet includes Cessna 172SP, Diamond DA42, Bell 206 and Bell 407 aircraft and flight simulators. The hangars will be used for the storage and maintenance of the fleet helicopters.

Horizon first viewed Rubbs state-of-the-art hangar system at IDEX 2011 in Abu Dhabi and the relationship grew from there. The Horizon team visited Rubbs

manufacturing plant in Gateshead, UK, and personnel from Rubb travelled to Al Ain to assist with site assessments and oversee the installation of the structures.

The EFASS shelter system, which features hangars, sunshades and warehouses, is uniquely suitable for the storage and maintenance of aviation equipment and operations. The system is designed to be rapidly deployed and quickly erected anywhere in the world.

The main body of each Horizon hangar was constructed using a number of steel fabricated components together with uniquely designed steel roof and leg sections, that bolt together to form the span trusses. When assembled, high strength robust PVC coated polyester fabric sheets were fitted between the aluminium capping sections of adjacent spans to form the shelter.

The gable ends feature the standard aluminium EFASS frame elements

complete with PVC membrane and a 21.5m x 7m Heli-Door at the hangar entrance. Each hangar includes two personnel doors in the closed gable ends and a porch in each sidewall. One of the aviation buildings has been fitted with an overhead roof-mounted 2000kg gantry crane system to assist with internal maintenance procedures.

These shelters are the first Rubb EFAS Systems to feature an internal PVC membrane to provide additional thermal insulation protecting valuable aircraft and personnel from the soaring temperatures outside.

Rubb adapted the EFASS Steel Variant (SV) design to include mostly steel framework instead of aluminium to meet with stringent fire regulation codes in the UAE.

The company worked with Al Futtaim Carillion during the construction of the aviation facilities and the installation was overseen by Rubb Erection Adviser Dave Cromarty.

The buildings were completed in six weeks. Project Manager Andy Knox said: It has been a challenge to launch the EFASS in the UAE because it was a completely new product and technology in that marketplace. But the team at Horizon really wanted this hangar system and have helped us to introduce this product range to the region. We are now looking forward to showcasing this project and our military and aviation buildings further in the area.

Specifications

Building Type EFASSSpan 23.4mLength 36mArea 842.4sq mEaves Height 3.2mOverall Height 8m

NEW HORIZONS FOR RUBB


Rubb Buildings Ltd won an order to provide three 23.4m x 36m steel and aluminium hybrid EFASS structures to Horizon Flight Academy.

ADVERTORIAL


Still reeling from the effects of the worst financial crisis since World War II, British companies are bracing themselves for anaemic growth prospects in the months ahead. With the UK economy set to grow far slower than previously thought and austerity measures to remain in place until 2018, local businesses are increasingly turning their attention towards fast growth international markets as a means of stimulating their home economy.

One of the top business destinations for international expansion is the United Arab Emirates (UAE). Located in the Arabian Peninsula and a member of the Gulf Co-operation Council (GCC), the country has flourished from its oil and credit booms of 2003 to 2008. No longer simply dependent on its oil exports, the UAE has put in place an ambitious economic diversification strategy, which is forecast to deliver strong growth in 2013.

According to a recent report by leading Lebanese bank and research house Banque Audi, the UAEs real GDP growth in 2013 will reach 2.9%, with non-oil

growth reaching 4.5%. Furthermore, the International Monetary Fund (IMF) projects that the UAEs GDP will climb to its highest level of approximately US$385 billion, maintaining its position as the second largest Arab economy after Saudi Arabia. By 2015, the UAEs imports are expected to reach US$253.7bn with onshore businesses accounting for two thirds of total import volume and free zones representing the remaining third.

Fundamental drivers of growth in the UAE include an increase in tourism, the large expatriate population, large-scale infrastructure developments, rising affluence and high disposable incomes of its residents.

As the country seeks to implement its ambitious 2030 Economic Vision, opportunities abound for British companies across a wide range of sectors. These include: construction, energy and environment, transport, infrastructure, education, consultancy, as well as financial and professional services.

Infrastructure Spending to SoarThe UAE has impressive plans for new developments over the next few years. According to Deloitte, the UAE is ranked as the second largest market for construction in the region, with investments worth US$9bn made in the first quarter of 2011.

The Department of Transports master plan alone calls for an investment of more than US$68bn, putting US$10.2bn on roads and US$23bn on ports projects. In Abu Dhabi, plans have been tabled for a US$7bn metro system and US$800 million for a tram network.

The UAE also has great ambitions to expand its airports, with US$13bn worth of developments planned. Dubai International Airport is eyeing to overtake Heathrow as the worlds busiest airport by 2015.

Most recently, Sheikh Mohammed bin Rashid al-Maktoum, Vice President of the UAE and Prime Minister and Ruler of Dubai, announced the construction of a new mega-city within the emirate. The development, expected to receive 80 million visitors a year, will include the largest mall in the world, 100 hotels, a park 30% larger than Londons Hyde Park and an international theme park in collaboration with Universal Studios.

Seize the MomentUK companies, particularly those specialising in infrastructure and construction, should capitalise on international opportunities by expanding into blossoming markets like the UAE, where setting up a business is not as difficult as one might imagine.

SETTING UP BUSINESS IN THE UAEBy John Martin St Valery, Founder and CEO of The links Group

Dubai Metro


In 2012, the UAE ranked second in the ease of doing business in the Middle East, according to the Doing Business survey of the IMF and the World Bank. According to the 2012 Economic Freedom of the Arab World report, published by the Fraser Institute of Canada, the UAE is home to the highest levels of economic freedom among Arab nations.

Clearly, there is no better time to set up a business in the UAE and establishing the right commercial presence in the emirate will be the most important decision to make when embarking on an international expansion plan.

In order to conduct business on a regular basis in the UAE, foreign investors are required to establish a physical commercial presence in the country. Ultimately, having an on-ground presence in the emirates will help companies win more business in the long-term. By demonstrating a commitment to the development of the local economy, foreign companies are viewed as serious and trusted players in the UAE market. It is imperative that British companies looking to expand

in the UAE identify a trusted company formation partner, who can provide expertise on the best license structure to benefit their business.

Weighing the OptionsIn the UAE, companies can set up either in free zones or as onshore entities. Under the Commercial Company Law of 1984, there are 11 types of onshore companies that can be established in the UAE:

1 Limited Liability Company (LLC);2 General partnership company (UAE

nationals only);3 Limited partnership company (UAE

nationals only);4 Joint venture;5 Sole proprietorship;6 Branch of a foreign company;7 Representative office of a foreign

company;8 Public shareholding company;9 Private shareholding company;10 Partnership limited by shares;11 Partnership-en-commandite.

Onshore VehiclesThe most popular and practical structure used by foreign organisations under the Companies Law is a Limited Liability Company (LLC). As of 2009, the UAE government decided to suspend the minimum capital requirement for forming an LLC onshore. While this is a big plus for foreign companies looking to set up a presence in the emirates, it is important to note that the situation could of course revert as the law itself has not been changed. The biggest advantage to setting up an LLC is that the foreign entity has full access to the UAE market, giving them the freedom to work on an unlimited amount of projects.

International companies wishing to set up an LLC are required to have a local partner who owns a 51 per cent stake of the companys capital. Many foreign companies are wary about setting up a presence abroad due to the uncertainties of choosing a local partner and finding the right local partner be it an individual or a company is of course critical to the success of any business.

continued page 16

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Export DocumentationThe Chambers unique Export Documentation service is an important asset to Arab-British trade. With our extensive experience, we are ideally positioned to assist exporters entering the substantial and sophisticated Arab market, encompassing all your certification and legalisation needs.

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ARAB BRITISH CHAMBER OF COMMERCE OUR MAIN SERVICES TO BUSINESS

NEW SERVICESThe Chamber will soon be able to offer the following services:

l Letter of Credit Management Service

l Pre-shipment Inspection Service

l Libya Visa Service

Further details will be released in due course


Under the Companies Law, The Links Group has pioneered a corporate nominee partnership model in the UAE. This structure provides clients with peace of mind by managing all activities between the foreign entity and local partner to ensure that no commercial administrative process impacts the day-to-day running of their business. By reducing the ambiguity of doing business in an emerging market, this structure means that clients retain full operational control of their business from the start, extending the highest degree of stakeholder protection in accordance with the UAE commercial law.

Establishing a foreign branch office is another popular route to incorporating an onshore commercial presence in the UAE. Under the format of a foreign branch, the international party retains 100% ownership of the branch. In this case, companies must appoint a local service agent to liaise with government departments and aid in obtaining licenses, visas, etc.

International companies can also choose to set up a representative office in the UAE. This format, however, significantly limits the companys business activities

as they are only permitted to promote the activities of their parent company in the foreign market; in essence, the representative office acts as an international marketing office for the parent company.

Foreign entities pursuing more engaging business activity in the emirates can consider setting up a joint venture (JV). As a contractual agreement between a foreign party and a local entity to work together on a specific project, a JV structure only allows the foreign participant to operate in the UAE market for the duration of the particular project. Equity contribution by the local partner must be at least 51%, but the distribution of profits and losses can be agreed upon separately between the two parties. Joint ventures are suitable options for those wishing to establish operations in the UAE on a short-term basis. However, a JV is definitely not the best option for foreign companies looking to establish roots in the UAE and ultimately win more business over the long-term.

Alternative structures such as public and private shareholding companies are not as favoured by foreign businesses since the majority of shareholders and the

chairmen must be of UAE citizenship. The minimum capital requirement for both of these structures is US$2.7mn, which is quite a significant sum compared to the zero capital required for setting up an LLC in the UAE. However some companies, such as financial service entities, banks and insurance firms, have no choice but to operate under a public partnership.

Free Zone CompaniesUnlike onshore companies in the UAE, Free Zone Entities (FZEs) business activities are limited. If a company is established in a free zone, it can only license and contract work within that free zone, regionally or internationally, but not onshore. To contract a business onshore, one must have some form of legal presence either through an agent or a branch of their business. For those free zone companies wishing to do business with the local UAE market, The Links Group can help set up a legal presence outside of the free zone and act as the local partner within the UAE.

Start-up capital requirements differ from one free zone to another. For example, setting up a company in Dubai Media City

from page 13

Abu Dhabi Securities Exchange


requires a minimum start-up capital of AED 50,000 (US$13,612). However, if the company includes any activities within broadcasting (TV or radio), the minimum capital requirement is AED 2,500,000 (US$680,650). On the other hand, operating in Dubais Jebel Ali Free Zone -a logistics and manufacturing hub- requires a minimum start-up capital of AED 1 million (US$272,500).

labour law RequirementsThe UAE has a population of 8 million, with expatriates accounting for almost 90% of the total population. Employers must sponsor all foreign employees, and they are responsible for them as long as their contracts are valid. The implementation of the labour law is heavily connected with the immigration law in the UAE. The only employees excluded from acquiring an employment visa in the UAE are GCC nationals.

Registered companies in the UAE, whether they are free zone or onshore entities, must adhere to the countrys Labour Law when recruiting staff. First and foremost, companies must present

their trade license so they can bring in staff from abroad. Then, in order to legally work in the country, expatriate employees must obtain a work permit via employer sponsorship. Companies must apply for employee visas either through the free zone authority with whom they are registered or, in the case of an onshore entity, through the local naturalisation and residency office.

After liaising with the Ministry of Labour for the work permit application, a labour card can then be issued for the employee. Employers must finalise employee paperwork by issuing a residency visa for each expatriate worker, which will allow them to sign a tenancy contract within the UAE.

It is important for medium to large-sized entities to be aware that they must now meet Emiratisation guidelines. An initiative set up by the UAE government to employ local citizens, Emiratisation requires companies with more than 50 employees to ensure that at least four per cent of their workforce is Emirati.

What Next?In a globalised economy, expansion into fast-growth markets such as the UAE presents viable business development prospects for stimulating home economies through reciprocal trade. Establishing a legal structure on the ground in the UAE, as an alternative to working from abroad or in a free zone, creates countless benefits for a foreign business. The time is certainly right for UK companies to widen their horizons and set up shop in the UAE.

www.the-links-group.com


ADVERTORIAL

In this article, we examine the different types of Saudi investment vehicles available. Please note that this describes current processes for doing business in Saudi Arabia. The Kingdom is currently in the midst of revising its corporate and commercial laws, so there may be a number of changes in the future.

I. Investment VehiclesThere are six types of Saudi investment vehicles through which foreign investors may conduct business in Saudi Arabia:

1. BranchA branch can be used to conduct any activity that does not require the participation of a Saudi partner. They are particularly popular vehicles for foreign investors providing services in Saudi Arabia. The foreign investors exclusive control is the main attraction, but the unlimited liability of the foreign investor for the debts and liabilities of its branch is less attractive. Compared to other Saudi investment vehicles, branches can be licensed and established quickly and easily.

2. EstablishmentAn establishment is an unincorporated business in which there is no legal distinction between the owner and the business. However, whereas a branch is established by a foreign business, an establishment can only be owned by a natural single person. As with a branch, the foreign investors exclusive control of an establishment is advantageous, but unlimited liability for the debts and liabilities of the establishment is a major drawback. An establishment can be licensed and established more quickly than any other Saudi investment vehicle, but natural single person ownership means it cannot be utilized by most companies.

3. JSCA JSC is an incorporated business separate

and distinct from its shareholders. The liability of a JSCs shareholders for the debts and liabilities is limited to the value of their shares in the JSC and a JSC can issue bonds and shares to the public. However, a JSC must have at least five shareholders at all times and it is the most demanding, time consuming, and expensive investment vehicle to incorporate. With limited exceptions, banking and insurance activities can only be undertaken in Saudi Arabia by a JSC.

4. llCThe LLC remains the most popular investment vehicle for foreign investors. It is an incorporated business entity that has shareholders, but is also separate and distinct from its shareholders and can be incorporated more quickly and easily than any other investment vehicle except an establishment. Other advantages include: a shareholders liability for the debts and liabilities of the LLC is limited to the extent of the shareholders interest in the LLCs capital; the Companies Law does not set a minimum capital for an LLC (although a minimum capital might be required by other regulations, depending on the LLCs activities) and an LLC may be managed by a single manager or by a board of managers at the shareholders discretion. An LLC, however, must have at least two shareholders and does not issue share certificates, bonds or more than one class of shares.

5. Professional CompanyA professional company is very similar to an LLC. However, it can only be incorporated by at least two licensed professionals for the purpose of practicing the founders profession. For foreign investors, the professional company suffers from a variety of disadvantages: a licensed Saudi professional must at all times hold at least 25% of the capital in the professional company; the foreign investor must have one permanent

representative who resides in Saudi Arabia for at least nine months per year; and the foreign investor must have been in operation for at least 10 consecutive years since its incorporation. For these reasons and because of the limited scope of a professional companys permitted activities, a professional company is not a popular investment vehicle with foreign investors.

6. TSOA TSO is similar to a branch but can only be established by a foreign manufacturer with a registered commercial agent in Saudi Arabia. The purpose of a TSO is to enable the foreign manufacturer to provide technical support to its commercial agent(s) locally.

A TSO enables a foreign manufacturer to retain exclusive control, but is only available to a limited class of foreign investor and can only engage in limited activities. There is unlimited liability for any debts and liabilities and the TSO is not permitted to engage in any profit-generating activity in Saudi Arabia. A TSO can only be established with the consent of the foreign manufacturers registered Saudi commercial agent, and is typically limited to no more than six expatriate employees. A TSO can typically be established as quickly as a branch, provided that the foreign manufacturers registered Saudi commercial agent cooperates fully.

Crowell & Moring has been working in the Middle East, specifically Saudi Arabia, for many years. We have more than a dozen lawyers located in Cairo and Riyadh. In Saudi Arabia, we operate in collaboration with Al-Enizy & Associates, one of the leading local law firms. Through our association with Al-Enizy, we understand both the legal and cultural issues associated with business ventures in Saudi Arabia.

DOING BUSINESS IN SAUDI ARABIABy Morris Defeo, Head Of Crowell & Morings Mena Practice

This is the third in a series of articles looking at the legal and cultural issues associated with operating a commercial venture in Saudi Arabia.


Its a silent but highly efficient way of extracting money and information and of causing destruction through remote access. The perpetrators can be sitting anywhere in the world, but they have the ability to hack into computer systems and cause mayhem.

Cyber criminals can infiltrate computer security systems and, while many are just satisfied with remotely extracting money from bank accounts to fund anything from actual on the ground warfare or drug smuggling, others are more intent on attacking key installations in countries hundreds of miles away.

They infiltrate and attack, using sophisticated methods which go under the radars of most anti-virus programmes to inject malware malicious software which can worm

their way into computer systems to extract vital, sensitive and personal information.

The discovery of a new malware dubbed Gauss, points to a new wave of cybercrime which has been sweeping the Middle East and North Africa region.

The virus has been found in Windows 32bit systems, with many of the cases being discovered in and around the Middle East. It is thought to be linked to the Flame attacks uncovered in June 2012. Some experts believe it may have been live since last autumn but its effect has only begun to surface.

Designed to capture log-in details for internet banking services, Gauss has had a particular focus on certain banks in the region, although PayPal and Citibank have also been targeted. Thought to

emanate from the same sources as the Stuxnet and Flame viruses. Stuxnet is a follow-on from Zeus, which first presented itself in 2007 and spread through 74,000 File Transfer protocol (FTP) accounts on websites of such companies as Bank of America, NASA, Oracle, and Amazon. Both Stuxnet and Flame have already caused mayhem, but this new virus is unusual, inasmuch as it does not display the typical behaviour of a worm but rather spreads through infected USBs, its module capable of infecting both 32bit and 64bit USB drives.

Experts are still analysing the malware and more is expected, with Kaspersky putting out an appeal in mid-August 2012 for cryptography enthusiasts to help crack its make-up. It must be said at this stage however, that, while Gauss and its predecessors have been seen to target specific regions, virus threats are a global concern.

In terms of financial loss alone, a recently published report from a key anti-virus programme manufacturer, calculates that global cybercrime in the past 12 months has cost over $110 billion.

Of even more concern is the fact that, every second, 18 adults become a victim of personal cybercrime, resulting in more than one and a half million cybercrime victims each day on a global level. With losses totalling an average of

WHy BUSINESS NEEDS TO TAKE CyBER THREATS MORE SERIOUSly

The world is in the hands of a new warfare threat and it is not related to sophisticated weaponry or physical attack; this is information warfare fought through the Internet otherwise known as cybercrime, says ABCC member KCS Group, a provider of strategic intelligence and corporate security.


$197 per victim across the world in direct financial costs, cybercrime costs more than a weeks worth of nutritious food necessities for a family of four.

Translate such statistics into the business arena and, throughout the world, companies are seeing their profits being shaved, simply because the cyber criminals have been at work doing what they are trained to do hack and extract (information and moneys). Overall, vital information is being compromised and businesses are left vulnerable, their intellectual property or sensitive documentation being redirected to ruthless third parties, their bank accounts stripped.

Banks themselves are facing horrific losses and yet they, along with responsible governments, appear reluctant to address the situation seriously. In short, it is fast becoming a world-wide crisis at this critical time when everyone is facing austerity measures.

This Gauss (malware) is yet another threat to world security and its repercussions could go deeper, said Massimo Cotrozzi, one of the worlds leading experts on cybercrime and its prevention. Cotrozzi heads up a dedicated cybercrime division within Londons KCS Group, a long established, global security intelligence and risk management consultancy.

It is highly likely that Gauss was written by a nation-state supported group, this belief is backed by the fact that it has targeted specific countries. Generally, traditional cyber criminals aim to infect as many machines as possible, anywhere in the world. The fact that Gauss has been contained within three main countries but leaked into others is significant, Cotrozzi added.

Lets not be complacent safeguarding our computer networks both at home and, more specifically, in the business environment, is the most important thing that we can do. And I say this - never leave your laptop, iPhone, tablet or even normal mobile phone unattended. Always keep an eye out for people overhearing your conversation and never, ever disclose on any internet connection where precisely you are, or what you are specifically doing at that time, he added.

The Stuxnet virus is, unfortunately, in

the hands of criminals: the virus is being traded on the black market and could fall into the hands of terrorists. In essence, Stuxnet is that key moment where cybercrime crosses the threshold from being a form of virtual pick-pocketing to something which can have a major impact on national infrastructure.

As the virus has matured, it no longer only targets a computer being used by an employee instead, it targets computers controlling SCADA (Supervisory Control and Data Acquisition) networks automation in factories and power plants, for example. Its impact ranges from altering cooling systems of industrial plants to modifying the robots of a production line so that factories deliver products with modifications no one knows about. More importantly, an infected PC will neither detect Stuxnet nor the malicious code it injects into the Programmable Logic Controllers (PLC).

Anti-virus specialists around the world share information but unfortunately most of the researchers are working to crack viruses for commercial reasons and they circulate the information amongst specialists but rarely does that information get to the companies which need to protect their systems.

The real problem, however, according to Cotrozzi is that companies fail to invest appropriately in IT security as they dont understand the full extent of a data loss or a security violation. Additionally, company security systems are not considered of national value and individual organisations are left alone to combat the threats while governments at a political level struggle to achieve an understanding of the real threat.

KCS has continually warned against the sophistication of cybercriminal hackers working in concert against banks and industry. It is KCSs estimation that cybercriminal activity is now a greater threat than the illegal narcotics industry ever was and certainly it is generating more money.

In a report addressing cybercrime, issued at the start of 2011, KCS advised that the sheer scale of cyber related crime had turned the phenomenon in to a major international security concern. KCS wrote that businesses would have little choice but to prepare for sophisticated attacks on computerised database systems and internet traffic hijacking.

Looking ahead, the cyber future remains in the balance. Companies will need to take a strategic and yet even more aggressive approach to cyber security in the months ahead. With particular reference to Iran and China, there is little room to be complacent.

KCS intelligence experts close to the action, however, inform us that the events of 2012 so far, suggest that the international cyber security landscape is likely to make public and private organisations throughout the Middle East and North Africa remain on unsteady footing for the foreseeable future.

Governments and corporations need to increase their efforts to remain one step ahead of the very serious threats posed by cybercrime to the integrity of their business operations which could spell global disaster, the likes of which have never been seen before.

www.kcsgroup.com


Omnis FX is a UK based currency exchange specialist. We are a provider of competitive exchange rates for a variety of clients, both private and corporate. The company objective is to offer clients an unprecedented level of service coupled with cost effective, efficient transaction services.

Why Omnis FX?OmnisFX; HELPING CLIENTS ACHIEVE OPTIMUM PRICES ON CURRENCY EXCHANGE TRANSACTIONS.

Omnis FX is a UK based currency exchange specialist.

We are a provider of competitive exchange rates for a variety of clients, both private and corporate. The company objective is to offer clients an unprecedented level of service coupled with cost effective, efficient transaction services.

The service we provide is efficient, fast and consistent which means that our clients receive the same level of care and attention regardless of transaction size!

Achieving the best rate for any currency exchange requirement is pretty high on the agenda for any company which regularly needs to buy or sell currency and therefore OmnisFX endeavours to provide clients with the optimum exchange rate for currency transactions.

level of ServiceEach one of our clients is allocated an account manager. This enables a relationship to be built, and a clients individual needs to be constantly monitored. They can then advise on the best currency product for a particular client based on their specific requirements.

CredibilityOmnis FX is the trading name of Omnis Capital FX Ltd which is registered with HM Revenue and Customs as a Money Transmitter.

HM Revenue and Customs Money Laundering Registration Number: 12293997

Company Registration Number: 6420928

Omnis Capital FX Ltd is an Appointed Representative of Independent Portfolio Managers Limited which is authorised and regulated by the Financial Services Authority.

Omnis Capital FX Limited is registered with the Financial Services Authority under the Payment Services Regulations 2009 under register reference No. 485601 for the provision of payment services.

Risk ManagementManage your foreign exchange exposure with expert advice from our currency exchange specialists.

Omnis FX prides itself on its individually tailored advisory service. Once your designated business consultant has discussed and evaluated your businesss foreign exchange requirements, they can regularly update you with relevant market news and industry forecasts.

For companies that are heavily exposed to currency volatility, pro-active exchange rate risk management can be the difference between a profit and a loss. Unfortunately, many companies do not have the resources to optimise such currency transactions.

Trading StrategiesBy using a combination of contract types and

market orders, Omnis FX can put together a clear trading strategy and help ease the burden of a constantly changing currency market.

Spot ContractsA straight forward exchange of currency delivered immediately.

Spot contracts are used by businesses requiring immediate foreign currency and the most competitive exchange rate. Businesses that only require foreign currency occasional would benefit from this type of trade.

Forward ContractsFix competitive exchange rates to hedge future currency risk.

A forward contract allows an exchange rate to be fixed for delivery up to 24 months. This protects the business from future adverse currency movements. Forward contracts are ideal for companies who agree sales prices in advance and need to buy from suppliers. In this case profit margins can be fixed in advance.

Market OrdersThese are the two common types of market order used in currency risk management:

Stop Loss Order Enables a business to set a minimum rate at which the desired currencies are exchanged. Stop loss orders are used by businesses to lock in a worst case exchange rate, whilst still benefiting from any favourable currency movement. Stop orders can be monitored closely and amended as the market moves.

Limit Order Enables a business to set a target exchange rate at which point, if reached, currency will be purchased. A limit order is used by businesses that regularly transfer funds, and wish to capitalise on currency movements.

Combining OrdersIn order to effectively manage currency exposure, a stop order is often combined with a limit order to produce a range with an upper and lower currency level. This allows a company to make its currency transactions more predictable as the exchange rate is guaranteed to be within these parameters.

Optimisation of this strategy requires flexibility. The order levels are monitored constantly and in conjunction with client input amended when necessary.

Omnisfx have spent a lot of time and effort in setting up and opening local bank accounts in Dubai. These accounts are for USD,GBP,EUR and AED and means that the processing time for sending and receiving funds has been decreased. This enables our clients to get payments in and out much quicker.

GUIDE TO THE FOREIGN EXCHANGE MARKET

ADVERTORIAL

We offer a very fast payments service (instant in some cases) and can also save clients as much as 3% on their currency purchases. Please contact our team for a comparative price on your next transfer; we might just surprise you!


OmnisFX, The Innovation Centre, 128 Trevenson Road ,Pool, Redruth, Cornwall TR15 3Pl

you can also contact our team for any queries related to our services or your personal account at

Telephone: 0203 328 0611Fax: 0203 328 0612Email: [email protected]

CONTACTS


The Minister of Tourism for the Kingdom of Morocco, H E Dr Lahcen Haddad, paid a visit to the Chamber on 17 January to introduce the countrys tourism strategy to an audience of specially invited investors and chief executives from the UK tourism industry.

The first point to stress is that Morocco boasts a stable economy that has demonstrated a strong macroeconomic performance over many years.

Sustainable growth has been achieved because successive Moroccan governments have undertaken to

preserve macroeconomic stability by taking numerous measures and adopting structural reforms that have achieved an average growth of 5.1% over the years 2001 to 2010.

Public investment has almost tripled between 2004 and 2010 to reach $20 billion (MAD167bn).

This has been invested in the development of large-scale projects designed to create world-class infrastructure. The following projects can be highlighted:

l The Tanger-Med Port which entered into service in 2007 with a total capacity of over 3 million containers. When it achieves its full capacity in 2016 the port will operate 8 million containers, 7 million passengers, 700,000 trucks, 2 million vehicles, and 10 million MT of oil products.

l A nationwide highway network which is to be increased from its 1500 km level in 2010 to 1800 km in 2015, when it will connect all cities with more than 400,000 residents.

MOROCCO TOURISM SEEKS INVESTORS

The Ministry of Tourism of Morocco outlines the countrys tourism strategy and explains why investors cannot afford to ignore it.

Quarzazate


l Thanks to the adoption of an Open Sky policy, Moroccos 14 international airports (largest airport hub in the region) are used by increasing numbers of international companies and are connected to major cities and economic platforms in the world.

l A wide network of Economic Activities Zones including Integrated Industrial Platforms, free zones and clusters.

l Telecommunications infrastructure that meets international standards and continues with sustained growth. Morocco boasts three global operators for fixed phone, mobile, Internet and data. Mobile penetration reached 97% and there were 13 million Internet users by September 2010.

l Morocco will have the first high-speed railway in Africa when the Tangier-Casablanca line opens in 2015.

The improved transport system has made Morocco considerably more accessible both internationally and in terms of domestic travel around the country.

In addition to the road network of 32,000 km, travellers in Morocco are able to make use of its highways stretching 1,416 km, while goods can be unloaded at one of its 11 trade ports. There are also seven marinas to accommodate tourists.

Morocco has taken many bold steps to improve the countrys business climate putting in place a set of mechanisms to increase transparency, boost competition and promote investment.

Key measures include:l Simplification of administrative

procedures for businesses;

l Improving regulatory transparency;

l Creation of the Business Environment National Committee;

l Creation of the Moroccan Office for Intellectual and Commercial Property;

l Modernisation of financial markets;

l Promotion of the Charter on Corporate Social Responsibility;

l Strengthening the business law framework (including competition

and free pricing, law on economic interest groups, law on industrial and intellectual property).

Reliable Banking SystemWith local players growing strongly and with their strong footprint in Africa, the Moroccan banking system offers reliable services to investors and supports Moroccan companies abroad. Local banks have strong presence across the continent. Three of the countrys banks rank among the top in Africa, namely Attijariwafa Bank, Groupe Banque Populaire and BMCE Bank.

Tourism a Driving ForceThe tourism sector is today a driving force of the economic, social and cultural development of Morocco. This is because the country is a tourism destination boasting many unique features. The country is attractive to tourists from the European markets in particular because of its accessibility and because of the diverse attractions of interest to tourists.

A multitude of natural assets include its 3,500 km of Mediterranean and Atlantic coastline, its mild-weather, varied landscape. The mild and temperate climate facilitates outdoor activities and tourism throughout the year, while its seas, mountains, valleys and desert make for a rich and diversified tourism offering.

Morocco stands at the crossroads of many different cultures and over the centuries, the Arab, African and European influences have fused together to create a unique national culture that is most clearly reflected in its Medieval medinas and modern cities.

The country can be proud of its distinct cultural heritage and three thousand year history traces of which can be found in the imperial cities, palaces, souks, kasbahs, medieval towns, as well as its renowned culinary art, folklore, traditional arts and crafts.

Morocco is a land that combines tradition and modernity welcoming visitors attracted by its justly deserved reputation for tolerance and hospitality.

During the decade from 2001 to 2011 the sector achieved record growth and Morocco established itself as a

regional leader for tourism. GDP in the tourism sector expanded twice as fast as the countrys GDP as a whole; tourism receipts grew an average of 15% annually; the industry well outpaced the growth in neighbouring countries with accommodation capacity doubling between 2001 and 2010.

Morocco is now implementing a strategic vision for national tourism development which is known as Vision 2020 which aims to position the country as one of the worlds top twenty tourism destinations by the year 2020.

The ambitious objectives of Vision 2020 involve doubling the available bed capacity from 175,000 in 2010 to 375,000 by 2020; doubling tourism revenues from MAD62 billion in 2010 to MAD140bn in 2020.

The implementation of the policy should also see the doubling of jobs in the tourism industry raising the total from 450,000 in 2010 to 920,000 by 2020 to cater for a doubling of tourist arrivals to 20 million.

The innovative approach to the development of the nations tourism sector rests on three aspects:

l Planning for the territorial development of tourism in the regions of the country;

l A new governance structure for the industry;

l An integrated approach to sustainability.

Eight tourist territories in different regions around the country have been identified as offering most promising potential for development of tourism facilities. Each of these eight regions seeks to take advantage of the unique

Ferry Maroc

continued page 28


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features existing in the area that is to be developed.

These eight territories are:

l The Northern Destination which is described as the gateway to Africa;

l Morocco Mediterranean which concerns tourism based on seaside resorts and recreation;

l Morocco Centre focused on the heart of Moroccos history;

l Centre Atlantic which will see business and recreational tourism on the coast;

l Marrakech Atlantic which is seen as the quintessential Morocco;

l Souss-Sahara Atlantic which spearheads the growth of Moroccos seaside resort growth;

l Atlas & Valleys which is the leading destination for ecotourism and sustainable development;

l The Great South Atlantic which is the region ideal for sports and nature.

Morocco has adopted objectives for each of its three main sub-sectors of tourism as follows:

As regards cultural tourism, there are several new prestige construction projects in the pipeline including a Museum of Africa, cultural parks, convention centre, marinas and theme parks.

In this sub-sector, the aim is to increase the number of tourist arrivals from 6.6 million in 2010 to 13.1 million in 2020; increase the available hotel beds from 117,000 to 205,000 during the same period; and increase the number of jobs from 3211,000 to 603,000.

Turning to seaside resorts, some of the projects identified for development include Tagazout, Marchica, Plage Blanch and Cap Juby. The stated objectives in this sub-sector are to increase hotel bed capacity from 44,000 in 2010 to 137,000 in 2020; increase tourist arrivals from 1.6 million to 4.9 million and increase jobs from 85,200 to 225,600.

Projects for development in connection with the countrys nature tourism include desert golf, desert eco-resorts, Dinopark, as well as development of ksours and kasbahs. Hotel bed capacity relating to this sub-sector would

increase from 16,600 in 2010 to 30,400 in 2020; tourist arrivals would increase from one million to two million over the same period and jobs would be increased from 43,200 to 86, 400.

Moroccan officials are convinced that the target of 20 million tourists by 2020 is easily achievable.

Additional hotel capacity will allow Morocco to attract latent demand. By completing the resorts of Plan Azur on schedule, the country will be able to reach 16 million tourist arrivals. Vision 2020s key objectives will be achieved through an additional capacity of only 4 million more arrivals.

Market share gains to reach a target of 20 million arrivals by 2020 are modest, considering the growth rates expected by the WTO.

Eastern Europe and emerging countries such as Poland, Hungary, Russia and China all represent additional opportunities for Morocco to increase its market base.

Morocco should be able to capitalise on

its unexploited touristic assets to cater for city breaks and the cultural markets that have not yet been reached.

The country is increasingly the home to world class brands in the hospitality industry as Morocco seeks to transform itself into a major destination for sophisticated luxury tourism. Top architectural, design and academic institutions are all increasingly present in the country.

The 2020 Vision is building on the successful implementation of previous policy initiatives by putting in place a framework that is conducive to attracting investors. Its key features include:

l Recognition of the property rights of foreign investors;

l Free repatriation of profits;l Right of foreign investors to invest in

Morocco in their own right;l Upgrading of the financial sector;l Improvement of the regulatory

environment for business;l Flexible labour laws.

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The government has granted exceptional incentives to developers relating to land, import duty exemptions on equipment and government contribution to stimulate inward investment in the sector.

Incentives granted by the Moroccan government to hotel promoters include exemption from registration fees of the land; subsidies on land in some resorts; exemption from VAT on the purchase price of capital goods; total exemption from corporation tax for five years; and financial participation from the government in the training of hotel staff.

Some key projects can be highlighted briefly

The Souss-Sahara Atlantic: Spearhead of Moroccos Seaside Resort GrowthThis includes the Agadir area notable for its sun and sand, Tafraoute and Oasis and Guelmin Tan Tan seaside resort. Investment in the area seeks to increase visitors from 1.2 million to 4 million and raise revenues from less than one billion to 3.5 billion.

Taghazout: Ecology and AuthenticityLocated on the Atlantic coast, 20km south of the city centre of Agadir, this area is noted for its unique natural and cultural attributes that are primed for development. Taghazout boasts:

l A magnificent 6km coastline;l Warm weather providing 300 days of

sunshine over the course of a yearl Proximity to major European cities;

l Cultural festivals and international surfing events.

Taghzaout is an eco-tourism resort meant to be environmentally friendly. In this contest, the construction work will be designed in a way that fits the low density approach.

The project entails:

l 7 hotels including a golfing hotel;l 5 Residential tourism components;l Residential, villas and apartments;l Surf village; Argan reserve, Medina;l An 18-hole golf course.

The project is expected to be completed in 2022.

Under the published master plan, plots of land are available for development, such as:

Eco ResortSurface: 88 haFloor Surface: 35 990 m (H), 40 320 m (R)Hotel Capacity: 2,690 beds Residential Capacity: 1,040 beds

Plot 2Surface: 18 haFloor Surface: 17 160 m (H), 20 000 m (R)Hotel Capacity: 264 bedsResidential Capacity: 400 beds

Plot 3Surface: 8 ha per hotelFloor Surface: 16 100 mHotel Capacity: 400 beds per hotel

Marrakech AtlanticPlans to develop this area including the city itself, Marrakech Heights valleys, Essaouira will double the number of visitors to four million by 2020 and increase the income from tourism to $3 billion.

Mogador: A Charming Seaside ResortThe site is located on the southwest coast of Morocco, 5 minutes from the city of Essaouira , and 10 minutes from the airport.

Mogador offers real potential thanks to its magnificent Atlantic coastline; warm climate; and proximity to major European cities.

The area has a diverse culture and rich history: its medina was classified as a UNESCO World Heritage site. It is known for its natural festivals and nautical sports events.

Also, within a few years, Essaouira will become a destination on the international golf circuit.

With a total capacity of more than 10,600 beds, including 6,800 hotel beds, the resort will feature:

11 hotel units and 150 guest houses, residential units in villas with a capacity of 3,800 beds; 2 golf courses each of 18 holes; shopping outlets; and museum.

Northern Destination: Gateway to AfricaThis region includes Tangier, Tetouen Tanuda Bay, Chefchouen, Asilah and Larache, which offer diverse tourism

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products from city Mediterranean breaks to sea and heritage tourism.

An important project in this area is the Museum of Africa, which is a partnership with the Louvre and which is being built on a prime location near the port of Tangier in an iconic architectural style.

The creation of a museum with an international profile will help Tangier to establish its position in the market as a city break destination.

It is expected that the museum will improve the international image of Tangier in a similar way to the impact of the Guggenheim Museum on Bilbao. The construction is expected to be completed in 2015.

Morocco CentreThis region offers rich cultural and historical sites including the city of Fes, described as a living museum, Meknes and Volubilis and Ifrane. Proposals for the sector will aim to see visitors rise from one to three million by 2020.

Galaxy ResortsMorocco is seeking to interest investors in some major themed resorts:

Imperial City ResortAn integrated resort consisting of luxury accommodation and several entertainment facilities within the city of Meknes; the site is the ideal place to relax and disconnect from the

contemporary world and travel into the mythical past time of Moulay Ismail.

History of Morocco ResortThe Concept: A themed resort whose main goal is to enhance knowledge of Moroccan history by tracing the history from the earliest past to modern times by capitalising and concentrating on the historical region of Meknes and the archaeological site of Volubilis.

Architectural features: Composed of villages that represent different periods in Moroccan history, the resort will be a unique location taking advantage of the cultural influence of the axis Fez-Meknes-Volubilis.

Meknes

economic focus 3

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