Bahrain (top)
A Free Trade Agreement exists between Bahrain and the United States. 100%
of bilateral trade in consumer and industrial products became duty free.
Bahrain will phase out tariffs on the remaining handful of agricultural
product lines by 2015. Textiles and apparel trade is duty free, promoting
new opportunities for U.S. and Bahraini fiber, yarn, fabric and apparel
manufacturing.
As a member of the Gulf Cooperation Council (GCC), which is political and
economic union, Bahrain applies the GCC common external tariff of 5 percent
for most non-U.S. products, with a limited number of GCC-approved
country-specific exceptions. Bahrain's exceptions include alcohol and
tobacco. Some 432 food and medical items are exempted from customs duties
entirely.
In 2005, the U.S. government approved a free-trade agreement with Bahrain.
Bahrain is one of six Gulf countries planning for monetary union as early as
2010 .
With its tradition of shipping and commerce, the government has been more
successful than other Gulf States in developing manufacturing and commercial
services. The country has adopted a policy of openness and diversification.
Therefore it has become one of the most advanced economies in the region
with liberal exchange rates, trade, and investment regimes.
The country has recently completed a US$900 million modernization program,
which will increase overall capacity. The government's long-term plan
includes the target of doubling household income by 2030.
The government welcomes foreign investment, except in cases involving
competition with established local enterprises or existing government-owned
companies. Even better, foreign-owned companies may operate in some cases
without a Bahraini partner.
Bahrain has more than 400 financial institutions, which account for
approximately a quarter of the GDP. It is generally seen as the region's
best financial regulatory environment. The country has been successful in
attracting international banks with tax-haven facilities. The offshore
banking sector presently has assets in excess of US$90 billion .
Comoros (top)
Foreign exchange earnings stem from exports of cloves, vanilla, perfume
essence and remittances from the Comoran diaspora. Fishing and tourism are
operating well below potential. The islands have inadequate transportation
links, a young and rapidly increasing population and few natural resources.
This opens up opportunity for foreign investment.
Comoros has a large natural forest that offers substantial scope for timber
exporting but is not developed. This offers opportunity for development in
infrastructure in areas such as tourism when foreign investment is received.
Israel (top)
A Free Trade Agreement exists between Israel and the United States. Each
country has agreed to implement phased tariff reductions culminating in the
complete elimination of duties on all products.
Agreement on Trade in Agricultural Products (ATAP) with Israel and the
United States provides U.S. food and agricultural products access to the
Israeli market under one of three different categories: unlimited duty free
access, duty free tariff-rate quotas (TRQs), or preferential tariffs, which
are set at least 10% below Israel's Most Favored Nation (MFN) rates. The
agreement also provided for annual increases in the in-quota quantity under
the TRQs.
Israel has made some progress towards privatizing government-owned
companies, including banks, the state telecommunications company, the
national airline and others. The government plans to privatize ports,
utilities, and oil refineries. The VAT rate was temporarily raised in 2009.
Also to stimulate credit, public-private funds are being used to purchase
corporate bonds.
Macroeconomic policies and structural reforms have opened up the economy,
improved the degree of competitiveness, and attracted foreign investment.
Other drivers of the economy include improving internal security and
productivity. The field of life sciences is especially strong, attracting
considerable foreign investment.
Jordan (top)
Jordan has free-trade agreements with the U.S. and most of its Arab
neighbors, a peace treaty with Israel, a partnership agreement with the EU
and membership in the WTO.
With the idea of improving their economy, the government has managed to
attract more than US$6 billion around the port of Aqaba. Authorities offer a
flat 5% tax rate, no duties, 100% foreign ownership and the right of
companies to employ up to 70% foreign labor .
The manufacturing sector is diversified with production of cement, steel,
glass, paints, plastics, fertilizers, food products and pharmaceuticals
being prominent. Officials hope that the creation of several new industrial
parks will provide a new growth impetus for manufacturers.
Kuwait (top)
It is a member of the Gulf Cooperation Council monetary union, which is
political and economic union.
Kuwait is a member of the Organization of Petroleum Exporting Countries
(OPEC), which secures an efficient, economic and regular supply of petroleum
to consumers, a steady income to producers and a fair return on capital to
those investing in the petroleum industry.
The government relies on its Trade and Investment Agreement with the USA as
a means of encouraging foreign investment in its industries and pushing
diversification. Implementation of the Foreign Investment law still requires
clarification of areas open to foreign investment including 100% foreign
ownership .
Kuwait is open to some types of foreign investment, but there are
restrictions in others. Foreign investors may own 100% of investments in
areas such as water, energy, transport, tourism and urban development but
foreign investment in the upstream petroleum and downstream gas and
petroleum sectors remain restricted. Kuwait has no income tax but corporate
tax rates on foreign businesses are high.
Almost 40% of Kuwaiti nationals are under the age of 25, and around 90% of
employees in the private sector are currently non-Kuwaitis. Authorities have
formally implemented a Kuwaitization policy to generate employment
opportunities for Kuwaiti workers in the private sector. The policy imposes
quotas for percentages of Kuwaiti workers to be employed by individual
non-government entities but the policy is being employed in a flexible
manner .
Despite its strong macroeconomic position, including sizable fiscal and
trade surpluses, Kuwait would like to diversify its economy away from its
near-complete dependence on oil revenues and state subsidies. Currently, the
country relies on oil revenues for around 90-95% of total export earnings
and about two-fifths of GDP .
Lebanon (top)
Lebanon's banking sector contributes almost 10% to GDP and most of the
sector is profitable despite considerable fragmentation. The banking sector
remains well capitalized and liquid making the country attractive to foreign
investment .
Manufacturing makes up more than two-fifths of GDP and is concentrated
around the coastal urban areas . The more important industries include
textiles, cement, chemicals, refining and light industries making goods for
the domestic consumer market. The construction industry has continued to
expand.
Tariff duties on food items were cut during 2008 and the minimum wage was
raised. Both measures were aimed at boosting domestic demand and attracting
more foreign investment.
Oman (top)
It is a member of the Gulf Cooperation Council monetary union, which is
political and economic union. In 2005, Oman and the US reached agreement on
a new free-trade pact. Movement continues towards an eventual customs union
amongst the Gulf Cooperation Council states.
Oman has no income tax on individuals and the corporate rate is just 12%.
The process of privatizing selected state-owned industries continues.
Foreign investment incentives include a five-year tax holiday for companies
in certain industries, an income tax reduction for publicly held companies
with at least 51% Omani ownership, and soft loans to finance new and
existing projects .
Oman became a member of the World Trade Organization in 2000. The reforms
associated with membership have helped to further reduce the barriers to
entry faced by foreign firms.
Government reforms are focused on broadening the privatization program,
encouraging foreign direct investment, and accelerating the Omanization of
the labor force by modernizing the educational and training system.
Oman has large mineral and metal deposits, including silica, dolomite,
copper and gold. In 2008, the government completed a new aluminum smelter
which will be able to produce 350,000 tonnes of aluminum annually. Other
projects being implemented are several natural gas investments, a
petrochemicals plant and a urea fertilizer plant .
Qatar (top)
Qatar now rivals Luxembourg as the world’s richest economy in per capita
terms and is expected to claim that title for its own in the next few years.
The country is a member of the Organization of Petroleum Exporting Countries
(OPEC), which secures an efficient, economic and regular supply of petroleum
to consumers, a steady income to producers and a fair return on capital to
those investing in the petroleum industry.
The government hopes to join the Gulf Cooperation Council monetary union,
which is political and economic union, by 2010.
The government's desire to develop an up-market tourist sector appears to be
making progress. In addition to luxury hotels, Qatar is spending freely to
create attractions that will appeal to rich tourists. The government plans
to build a new waterfront city for 200,000, known as Lusail, and to develop
a reclaimed island for luxury living. An international airport will be
opened in 2011 at a cost of US$14 billion. New port and roads are being
built along with a rail system linking Doha to Lusaid .
The government is pushing legislation to encourage foreign businesses. It
has opened up three areas: consultancies, information and technology
distribution for 100% foreign ownership. The foreign portion of these
businesses have faced a tax of 35% in previous years but the government
plans to cut that to 10% in 2010 .
Qatar has twice the natural gas reserves of either Saudi Arabia or Abu
Dhabi, unlike these countries, its gas is clean and easy to exploit. Qatar
aims to become the world’s leading producer of LNG by 2010 .
Qatar's policy of economic diversification has led to a surge in investment
in projects for the export of liquefied natural gas (LNG) and
petrochemicals.
Saudi Arabia (top)
Saudi Arabia is a member of the Organization of Petroleum Exporting
Countries (OPEC), which secures an efficient, economic and regular supply of
petroleum to consumers, a steady income to producers and a fair return on
capital to those investing in the petroleum industry.
It is a member of the Gulf Cooperation Council monetary union, which is
political and economic union. In general, Saudis and citizens of the Gulf
Cooperation Council pay no income tax. For foreigners, there is a flat 20$
income tax .
Economic reforms began in earnest when Saudi Arabia joined the WTO at the
end of 2005. In 2008, foreigners were allowed to trade in domestic stocks on
the Saudi stock exchange through intermediaries.
It is one of the world's fastest population growth rates, and the need for
increased government spending. The country’s policy of "Saudiization" is
intended to increase employment of its own citizens by replacing 60% of the
estimated 5-6 million foreign workers working in Saudi Arabia .
Planners intend to buy large amounts of fertile land overseas and then
develop it for the home market as an investment. The first of these projects
will be in the country of Sudan.
Saudi Arabia's financial sector is highly profitable and virtually oblivious
to the international financial crisis. Oil is a major reason but the banks
are also benefiting from a boom in consumer banking. In addition, banks pay
no taxes at all in Saudi Arabia. Saudi Arabia's banking industry continues
to be profitable, in part because banks pay no taxes at all. The kingdom's
strong regulatory environment means that Saudi banks have fared reasonably
well.
Syria (top)
Private investors, with financial backing from the Gulf States, have been
expanding into various sectors, such as textiles, pharmaceuticals,
food-processing and other light industries. Policy makers have introduced a
number of modest reforms to encourage private entrepreneurship, promote
market mechanisms and open the economy. The government hopes that its
structural reforms will accelerate growth to 7% by 2010, lower unemployment
to 8% by 2010, and reduce poverty .
Farming, which is the main activity, is concentrated mainly on the
Mediterranean coastline. Cotton and tobacco are cash crops, while wheat,
barley and fruits are grown for the domestic market.
United Arab Emirates (top)
It is a member of the Gulf Cooperation Council monetary union, which is
political and economic union.
It is a member of the Organization of Petroleum Exporting Countries (OPEC),
which secures an efficient, economic and regular supply of petroleum to
consumers, a steady income to producers and a fair return on capital to
those investing in the petroleum industry. The overall performance of the
UAE's economy is heavily dependent on oil exports, which account for 30% of
GDP .
By 2010, almost one-third of the population will be between 15 and 29 years
offering opportunities to foreign companies with this demographic as their
target market .
The UAE has no income tax and no corporate tax at the federal level. There
are different corporate taxes in various emirates however. The richer
emirates have taken steps to encourage more private sector participation.
Dubai's property law allows 100% foreign ownership of properties in specific
fields. Sharjah has established a number of industrial free zones and has
attracted numerous new small and medium-sized enterprises that are now
expanding.
The standard of living in the United Arab Emirates is one of the highest in
the world. The country also has one of the more diversified economies among
the major oil-producing Persian Gulf states. Nevertheless, revenues from oil
and gas account for about a third of GDP . The pursuit of a highly liberal,
business friendly and market-oriented growth strategy continues to guide the
evolution of economic development.
Abu Dhabi and Dubai together contribute about 80% of the UAE's income. Abu
Dhabi accounts for more than half the country's GDP and plans to spend more
than US$300 billion on infrastructure, tourist projects and energy-intensive
industry hubs. Abu Dhabi's own GDP could still rise in 2009. Construction is
the most dynamic industry in this part of the economy. The industry employs
up to 700,000 foreign workers .
Key government entities, such as the Abu Dhabi National Oil Company, Dubai
Ports Authority, and Dubai Aluminum Company, have massive investment plans
to further increase the capacity of upstream activities in the
petrochemicals sector, infrastructure in airports and ports, and new
manufacturing plants in the metals sector.
Dubai aims to establish itself as the leading capital market for its region.
Like other Gulf States, the UAE is trying to restrict the employment of
foreign workers. As the number of foreigners grows, fears that they may
demand more rights increases proportionally.
Categorized as a Tax Haven, the UAE offers tax incentives for individuals,
along with the Jebel Ali Free Zone which offers business and tax incentives
for corporations.
As part of its strategy to further expand its tourism industry, the UAE is
building new hotels, restaurants and shopping centers, and expanding
airports and duty-free zones. Dubai has probably been the most successful
emirate in diversifying its economy; oil accounts for just 7% of GDP . Abu
Dhabi has developed an offshore financial and commodity trade centre on
Saadiyat Island, which includes storage facilities, a port, a freight centre
and a financial and insurance centre to facilitate trading.
Yemen (top)
Yemen sits on the entrance to the Bab el-Mandeb strait, which links the
Red Sea to the Indian Ocean. The strait is one of the busiest and most
strategic shipping lanes in the world. Yemen has asserted traditional
fishing rights to islands ceded to Eritrea.
A general sales tax has been implemented but applies to only a limited
number of taxpayers. Tax exemptions are slowly being eliminated in
preparation of a move to reduce the income tax rate.
Agriculture accounts for about 20% of GDP and employs a majority of the work
force. The main agricultural products are fruits, vegetables, pulses, qat (a
mildly narcotic shrub), coffee, cotton and livestock .
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