A GUIDE TOassilconsulting.free.fr/Data/AGuidetoIndustrial... · - 7 - of the Labour Legislation in...

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A GUIDE TO INDUSTRIAL INVESTMENT

IN THE GCC STATES2004

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Published By: Gulf Organization for Industrial Consulting

P.O. Box 5114DOHA - QATARTel: 0974-4858888Fax: 0974-4831465E-mail: [email protected] Site: http://www.goic.org.qa

May 2004

AcknowledgmentThe Gulf Organization for Industrial Consulting is indepted

to the Kuwait Fund for Arab Economic Development (KFAED)for its support in making this “Guide” a reality.

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CONTENTS

FORWARD

Chapter One. Basic Data

1: Area and Population2: Resources and Utilization 3: Currency Prices4: GDP5: Average GDP per Capita6: Imports Value7: Exports Value8. Relative contribution of oil and non-oil exports9. Major Trade partners

Chapter Two. Objectives and Policies of the Industrial Development in the GCC

1: Objectives and Policies of the Industrialization inthe GCC States:

First: Basic Objectives of the Unified StrategySecond: Priorities of the Unified StrategyThird: Implementation Policies of the unified

strategyFourth: Requirements of the unified strategy

Chapter Three. The Infrastructures and the BasicServices in the GCC

1: Roads and Transport2: Electricity3: Water4. Communication5. Education6: Ports7: Airports

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Contents page

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Chapter Four. The Available Incentives for theIndustrial Sector in the GCC

1: Direct Incentives1.1 Soft Loans1.2 Industrial Lands (Reduced Rents)1.3 Encouraging Prices for the Services:

A. WaterB. Electricity

1.4 Exemptions from Customs and Taxes1.5 Preferential for the national products in the

Government Procurements2: Indirect Incentives

2.1 Providing Information, Data and Pre-feasibility Studies.

2.2 Establishment of Industrial Areas 2.3 Training and Qualifying of the National Man-

power

Chapter Five. Rules and Legalisations of the foreigninvestment in the GCC states -The ModelGuide Law for FDI in the GCC

* Reference Model Regulation 1: United Arab Emirates2: Kingdom of Bahrain3: Kingdom of Saudi Arabia4: Sultanate of Oman5: State of Qatar6: State of Kuwait

Chapter Six. Licensing Procedures of an IndustrialProject in the GCC

1: United Arab Emirates2: Kingdom of Bahrain3: Kingdom of Saudi Arabia

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CONTENTS

Contents page

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4: Sultanate of Oman5: State of Qatar6: State of Kuwait

Chapter Seven. Labour Laws Profile in the GCC

1: United Arab Emirates2: Kingdom of Bahrain3: Kingdom of Saudi Arabia4: Sultanate of Oman5: State of Qatar6: State of Kuwait

Chapter Eight. Standards, Specifications, and TradeMarks

Chapter Nine. National Institutions and Corpora-tions involved in the Industrial Develop-ment in the GCC

1: Banks and Funds for the Industrial Development2: Other Relevant Institutions and Bodies

Appendices

1: Addresses of the Ministries of Industry and rele-vant bodies in the GCC

2: Addresses of the Chambers of Commerce and In-dustry in the GCC

3: Addresses of Banks and Funds for Industrial De-velopment in the GCC

4: List of Investment Profiles prepared by GOIC.

List of References(See the Arabic Version)

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CONTENTS

Contents pag

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FOREWARD

The Gulf Organization for Industrial Consulting (GOIC) is allthrough attentive to the investment issues, how to attract it, andincrease its contribution in the industrial development in the GCCstates. In that context, GOIC is delighted to introduce this updatedissue of “A Guide to Investment in the GCC States”, aiming atproviding businessmen and investors with necessary up to date dataand information, to assist in decision-making, and as a currentawareness and identification of the investment climate in the GCCregion.

The issuance of this updated “GUIDE” falls within the effortsexerted by GOIC, and its tendency aiming at enhancing anddeveloping the industrial development process in the GCC region,through dissemination of useful update data and information, thatleads to attract investors, as well as providing them with an up to datemap progress in the region.

The “Guide” comprises in Chapter One basic data of the GulfStates, as Chapter Two highlights the objectives and policies of theindustrial development,, and the unified and amended strategy for theindustrial development, in order to acquaint the investors with theinvestment climate, and the tendencies of the industrial developmentin the region. Chapter Three tackles the existing infrastructures, i.e.roads, electricity, communication, education, health, and publicutilities, e.g., ports and airports. Chapter Four reviews the incentivespackage rendered by the GCC governments, which include directincentives, e.g. soft loans, industrial lands, water, electricity and fuelwith encouraging prices, in addition to customs and taxes exemptions.Indirect incentives, e.g., provision of information and data,establishing of industrial areas, and participating in training andqualifying nationals.

Chapter Five, sheds light on the Gulf laws for the foreigninvestment as an important factor in supporting and increasing theproductivity and exports, localization and as well as the issue of theendogenization of technology. As Chapter Six looks into thelicensing procedures of the industrial project, and Chapter Sevenexamines the standards and specifications and trade marks in the GCCstates, which is vital for improving the Gulf industry and enable it tocompete in the international markets. Chapter Eight gives a glimpse

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of the Labour Legislation in the GCC, with reference to the mostimportant Articles of organizing and employing the manpower. Thefinal Chapter Nine, reviews the major bodies and institutions involvedin the industrial development issues, particularly the banks anddevelopment funds.

We hope that the “Guide” will be useful for those interested inindustrial development, and be of great help for investors, and inidentifying the investment climate in the GCC region, and help intaking the sound decision.

We pray that God help us for the benefit and prosperity of our Gulfregion.

Mohammed Ali Al Musallam

Secretary General

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CHAPTER ONE

BASIC DATAGCC STATES

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Population('000) State DensityArea

('000) Km2

UAE

Bahrain

Saudi Arabia

Oman

Qatar

Kuwait

44.4

944

9.8

8.2

53.7

132.8

3,754.0

672.0

22,160.0

2,538.0

618.0

2,363.0

84.6

0.712

2,250,000

309.5

11.5

17.8

TABLE 1Area, Population

GCC 2002

Source: Industrial Market Intelligence Department, GOIC

First:: Resources:

1. GDP (at current prices)

2. Goods & Services Imports

Total Resource

Second: Utilization:

3. Government Expenditure

4. Private Expenditure

5. Total Expenditure

6. Investments

7. Goods & Services Exports

Main Chapters

TABLE 2Resources and Utilization

(Million Dollars)

1995 1996 1997 1998 1999 2000 2001

224,958

90,203

315,161

56,212

95,620

151,832

49,187

114,142

266,816

98,034

264,850

62,528

118,698

181,226

52,968

130,656

279,708

107,687

387,395

67,844

121,301

189,145

56,667

141,583

250,315

102,594

352,909

66,625

120,798

187,423

59,660

105,826

280,728

98,841

379,569

67,486

123,651

191,137

60,081

128,351

341,938

113,045

454,983

77,123

129,248

206,371

62,445

186,167

332,550

115,629

448,179

80,200

133,940

214,140

56,243

177,796


32,105.0 TOTAL 12.02,674.1

Total Utilization 5 + 6 + 7 315,161 364,850 448,179454,983379,569387,395 352,909

2002

337,267

120,578

457,845

83,010

139,248

222,258

55,973

179,614

457,845

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1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Years

TABLE 3GCC Currencies against US Dollar

1992 - 2002

UAE

3.6710

3.6710

3.6710

3.6710

3.6710

3.6710

3.6725

3.6725

3.6725

3.6725

3.6725

Bahrain

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

0.3760

Kuwait

0.2933

0.3013

0.2976

0.2985

0.2994

0.3034

0.3048

0.3042

0.3057

0.3070

0.3070

Oman

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

0.3845

SaudiArabia

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

3.7450

Qatar

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400

3.6400


Years

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

TABLE 4GDP in GCC States

Current Prices (Million US Dollar)

UAE

35,413

35,519

38,268

42,807

47,566

51,209

48,500

55,194

70,522

69,546

67,054

Bahrain

4,751

5,201

5,567

5,850

6,100

6,349

6,184

6,620

7,971

7,929

8,417

Kuwait

19,866

23,998

24,797

26,550

31,071

30,021

25,323

29,833

37,152

34,335

35,126

Oman

12,452

12,493

24,919

13,803

15,277

15,837

14,086

15,710

19,868

19,949

20,310

SaudiArabia

123,204

118,516

120,167

127,811

157,743

164,994

145,967

161,173

188,693

183,257

188,479

Qatar

7,646

7,157

7,374

8,138

9,059

11,298

10,255

12,197

17,732

17,534

17,881


Total

203,332

202,883

209,093

224,958

266,816

279,708

250,316

280,726

341,938

332,550

337,267

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TABLE 5Average GDP per capita, GCCAt Current Prices (US Dollars)


TABLE 6Imports Value, GCC (Million US Dollars)

Years

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

UAE

17,740.0

16,559.1

17,160.6

17,754.8

18,653.1

19,515.8

17,471.5

18,121.2

20,362.5

19,939.0

17,862.0

Bahrain

9,147.1

9,664.9

9,986.0

10,126.0

10,189.8

10,234.4

9,617.9

9,934.0

11,537.7

12,179.0

12,525.0

Kuwait

13,968.8

16,427.2

15,306.2

14,735.3

16,402.1

15,164.7

12,492.1

14,157.7

17,316.1

15,092.0

14,865,0

Oman

6,616.7

6,247.0

6,301.9

6,477.2

6,900.6

7,023.1

6,159.2

6,757.0

8,271.4

8,048.4

8,002.0

SaudiArabia

7,269.5

6,815.2

6,734.2

6,980.0

8,394.7

8,556.1

7,375.6

7,935.1

9,051.0

8,526.0

8,505.0

Qatar

17,147.2

15,551.4

15,527.6

16,603.5

17,910.0

21,642.3

18,862.9

21,638.2

28,408.0

29,370.0

28,933.0

Total

8,734.5

8,455.6

8,439.0

8,745.5

10,048.2

10,251.4

8,918.4

9,670.9

11,249.2

10,734.0

10,505.0


Years

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

UAE

17,532

19,745

21,316

21,375

23,163

23,512

25,381

27,037

35,008

36,243

41,468

Bahrain

4,263

3,858

3,763

3,716

4,273

4,026

3,566

3,698

4,634

4,240

4,985

Kuwait

7,260

7,049

6,680

7,784

8,373

8,246

8,616

7,621

7,182

7,894

8,950

Oman

3,902

4,296

4,014

4,379

4,728

5,191

5,826

4,801

5,131

5,933

6,296

SaudiArabia

33,273

28,202

23,351

28,087

27,765

28,743

29,981

28,033

30,238

31,223

32,309

Qatar

2,015

1,891

1,927

3,398

2,868

3,322

3,409

2,500

3,252

3,758

4,052

Total

68,245

65,041

61,050

68,739

71,170

73,040

76,779

73,689

85,445

89,291

98,060

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TABLE 7Exports Value, GCC (Million US Dollars)

Note: Exports value for 2000 - 2002 include free zones and re-exportSource: Industrial Market Intelligence Department, GOIC

Years

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

UAE

14,628

14,665

13,892

15,184

16,478

16,971

13,801

18,010

49,835

46,638

48,409

Bahrain

3,397

3,650

3,532

4,003

4,611

3,446

2,546

3,159

4,189

5,545

5,786

Kuwait

6,584

10,259

11,230

12,782

15,614

14,124

9,464

12,149

19,471

16,219

15,308

Oman

5,553

5,370

5,565

6,010

7,373

7,656

5,520

7,239

11,318

12,576

13,062

SaudiArabia

50,287

42,395

42,614

50,041

60,728

60,732

38,822

50,757

77,584

68,206

73,025

Qatar

3,736

3,181

3,146

3,481

3,752

3,794

4,880

7,061

11,425

10,706

10,771

Total

84,185

79,520

79,980

91,501

108,602

106,723

75,033

98,375

173,822

159,889

166,361

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CHAPTER TWO

OBJECTIVES AND POLICIES OF THE

INDUSTRIAL DEVELOPMENT

IN THE GCC STATES

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1. Objectives and Policies of Industrialization in the GCC

Industrialization process in the Gulf region aims basically at thediversification of the economic base, and secure stable rate ofeconomic growth, and avoid depending on fluctuating oil revenues.

To achieve that objective, it is natural that the industry sector is thecore of interest in the GCC region. The industry sector is differentfrom other sectors in the sense that it utilizes the locally availableproduction inputs, e.g. energy, capital, and national manpower. Alsoit utilizes the oil revenues in profitable investments, and secure jobopportunities, moreover, industry is enhancing the productioncommunity instead of the consumption community and last but notleast it assists in the domiciliation of technology and knowledge.

The GCC states had exerted strenious efforts during the past twodecades in enhancing the industrial base, of which is the establishmentof sophisticated infrastructure e.g. industrial cities and areas. As wellas developing of vital utilities, e.g. ports, airports, roads,communication, and specialized financial institutions to render softloans, plus incentives packages to support the private sector, alsocenters and institutions for training and vocational qualification wereestablished, adding to the availability of education at all levels.

Those efforts in fact led to creating modern economic sector, inwhich non-oil sectors realized up-scaling growth, which in turn assistin creating balanced economy in the medium and long run. It is worthmentioning that the public sector in the GCC region played aneffective role in establishing the large scale industries, which is ahighly capital-intensive, aiming at the utilization of availableadvantageous resources, e.g. oil and gas, in establishing basicindustries, e.g. petrochemicals, chemical fertilizers, aluminium, ironand steel and cement. As for the private sector, it participated inestablishing substitution light industries, which constitute 80% of theindustrial sectors.

Due to the limited local markets, export-oriented industry hasbecome the only way out, particularly after the increase of productionand the completion of large factories during end of the eighties, andnon-oil industrial exports increased from 5.4% in 1985 to 10% in2002.

Table 10 shows the number of the factories in 2002 as 8448, theinvested capital amounted to more than $ 95 billion (Table 11), where

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the number of workers reached to 670,000 (Table 12). Thepetrochemicals industry constitutes about 61% of the total investmentin the manufacturing industries in 2002. The nineties also witnessedthe establishment of many new projects, and large expansions, whichincluded cement, primary aluminium and iron and steel industries.The manufacturing industries generate around 35 billion dollars,which represent 10.4% of the GDP, Table (13).

As for the oil and gas industry, distinct development prevailed,including the execavation and extracting processes, and gasliquefaction. Table (14) and (16) shows the oil reservations in GCC in2002, it amounts to more than 478 billion barrels, which constitutes45% of the world reserves, as for the gas 40.4 trillion cubic meters,which constitutes 23.4% of the world reserves. Table (15) shows theoil production about 4.9 billion barrels in 1995 and 4.7 billion barrelsin 2002, also the marketed natural gas increases from 114.5 billioncubic meters to around 157.5 billion cubic meters during the sameperiod Table (17).

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2. The Unified Industrial Development Strategy for the GCC

I. Main objectives of the unified strategy:

* To speed up an integrated industrial development process in the

GCC states, that is compatible with the potential andcircumstances of each country.

* To increase the manufacturing sector growth rates in theindustrial GCC states, subject to the conditions and constraintsprevailing in each country, with the aim of doubling the totalvalue added of the manufacturing sector every ten years.

* To raise the share of nationals in the manufacturing sectorlabour force to a minimum of 75% in 2020, assigning a priorityto the technical and professional occupations.

* To work toward increasing the share of national components inall industrial products..

* To set up a base for industry-related research and appliedsciences.

* To promote the integration of the industrial sector with thepetroleum and gas sectors as well as with other sectors of theeconomy.

* To develop the exploitation of the region’s natural resourcesand to increase the efficiency of their utilization in industry..

* To promote the establishment of industries in the lessdeveloped areas.

II. Priorities of the unified strategy:

According to the environmental protection requirements throughthe adoption of a clean production policy and of water resourcesconservation measures, insures the success of and provides incentivesto those industries that, meet the following criteria:

1. Industries that exploit and develop GCC states’ naturalresources.

2. Industries in the GCC states with high productivity and valueadded levels and with the strength to compete and grow in thenational (local) and international markets.

3. Industries which promote integration, inter-link with the existingproduction chains and increase the chances of success of theGulf industries.

4. Small and medium size industries that are affiliated to larger sizeindustries and which are paving the way for the transformation

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of the GCC community into an industrialized society bothtechnically and phychologically.

5. Industries which contribute to the Gulf industrial integrationthrough joint investments in industrial projects that conformwith the above criteria.

III. Policies for implementing the unified strategy:

The implementation of this strategy depends on a basic principle,namely:

The governments of the Gulf states will encourage and promote theprivate sector initiatives to establish viable industrial projects,particularly in the chemical, hydrocarbon, basic mineral and relatedengineering branches. In this connection, the GCC states need to:

* Provide appropriate incentives to the industrial projects that arecommensurate with the strategy priorities, including theprojects with foreign investment.

* Re-structure or develop the production system so as to increasethe competitive strength of the industrial projects and enablethem to integrate into the international trade process.

* Promote the establishment of more industrial investmentcompanies and have their ownership increasingly in the hands ofGCC nationals.

* Promote the establishment of industrial projects that are jointlyowned by companies and nationals of the GCC states, as andimportant means of contributing to the economic unity of thesestates.

* Encourage the private sector to participate in providing theinfrastructure called for by the industrial projects that meet therequirements of the strategy priorities.

* Identify the various means through which industria technology.can be transferred to the GCC states, including the transfer forutilization by the GCC industry of the latest research-basedtechnology about to be marketed.

The policies for the implementation of the unified strategy include,in particular, the provision of incentives and basic requirements,together with a climate that is favourable to industry, as noted below:

a) Incentives:

The incentives that the GCC state governments or their public

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agencies can provide to the GCC industrial projects include thefollowing:

1. Provide the industrial investor with technical advice andassistance in preparing technical feasibility, economic, andmarketing studies, and provide technical information on thesuppliers of machinery, equipment and raw materials.

2. Exempt the equipment and raw materials required by the plantsfrom import customs duties.

3. For specific periods of time, exempt from taxes the profits andearnings of industrial projects.

4. Provide soft loans to he small and medium size projects.

5. Provide grants, aids and technical assistance to encourage theestablishment of research and development centres in Gulfindustrial projects.

6. Promote industrial exports through various means, including thecreation of independent specialized agencies that provide exportfinancing and guarantees and assist in establishment ofspecialized centres which promote exports to foreign markets atthe national and Gulf regional levels.

7. Provide technical and financial assistance for training andskill-development of the national workers employed in theindustrial enterprises.

8. Sponsor and honour creative talents and industrial pioneers whoplay an essential role in guiding the industrial developmentprocess in the GCC states.

(b) Basic Facilities

The facilities that the GCC states governments seek to expand forthe benefit of the industrial projects include:

1. Construction of specialized industrial towns and zones and thedevelopment of an appropriate infrastructure in less-developedareas, to attract more industrial projects.

2. Encouragement of the private sector to participate in theconstruction and expansion of industrial towns.

3. Continue improvement and development of supporting sectorsservices, e.g. highway, communication and seaports networks;and banking, insurance and trade services.

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(c) An environment favourable for industry

Accelerating the implementation of the `unified EconomicAgreement and giving priority to the unification of customs tariffs, asan important step towards the formation of a common market, wouldprovide an environment favourable to industrial growth, and wouldalso lead the GCC governments to focus attention on the following:

1. Adopt, on a gradual and selective basis, a new protection system,that is more efficient and meets the time-limits provided for inthe World Trade `organization Agreement.

2. Enact an anti-dumping and countervailing tariff legislation thatconforms to the WTO agreement, and provide, for a subsequentdevelopment of an administrative structure to monitor theapplication of this legislation.

3. Give due importance to the principle of privatizing the publicsector basic industries and formulate specific rules for theselection and privatization of industries.

4. Insure a high performance level on the part of the governmentagencies that interact with the industrial sector, and increasetheir effectiveness and ability to meet the requirements ofindustrial development.

5. Conduct and publish studies on industrial investmentopportunities and promote the industrial projects that are likelyto be successful.

6. Promote industrial awareness in GCC countries, and inducequalified nationals to work in industrial enterprises, particularlyin leading technical and administrative positions.

7. Establish and adopt appropriate fiscal and monetary policieswhich insure an adequate and sustained demand for nationalindustrial products.

8. Develop Foreign Capital Investment Regulations (Laws) whichcreate an investment climate that attracts and encourages foreigninvestors to participate in joint industrial ventures that entail thetransfer of modern technology and joint marketing efforts at theinternational level.

IV. Requirements of the unified strategy

For strategy implementation purposes, the GCC states are in the

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process of establishing a clear and codified mechanism whichprovides for programs of action and multilateral or unilateralprocedures for attaining the strategy objectives and its underlyingcomponents. These include details of the industrial developmentplans scheduled within a specified timetable, and identification ofpriorities for the basic projects that are capable of motivatingindustrial development, a determination of the institutions that are tobe in charge of the implementation of these procedures and provisionsof the required fiscal resources, taking into account the followingmain aspects:

1. Government participation in setting-up industrial projects:

The furtherance of efforts by the private sector in the industrialdevelopment process, the GCC countries are to establish - collectivelyor individually - industrial projects, particularly as joint ventures withthe private sector, in the follwing areas:

* Basic or heavy industrial projects that are capital-intensive orentail high-risks.

* Industrial projects which are important for the security of theGCC countries.

* Advanced-technology projects, such as communications andinformatics.

* Industrial projects that are important in fostering andstrengthening integration among the GCC countries.

* Selection of industrial projects to be established inless-developed areas.

In all cases, the GCC countries should encourage the private sectorto participate in these projects. As a general rule, the governments ofthe GCC countries endeavour to relinquish the ownership of theseprojects to the private sector, when their success is proved. Thegovernments also attach a great importance to the participation offoreign investors in projects that entail advanced technologies orexclusive ownership.

2. Administrative and organizational measures

These measures relate to the efforts exerted by the governments ofthe GCC countries to organize industrial activity in general, as well asto the efforts intended to guide the educational, training and technicalpolicies toward achieving the industrial development objectives andaccelerating and fostering industrial activity in the GCC countries.The measures cover the following major areas:

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(a) General Organizational efforts:

* Unification of the time schedules of the economic developmentplants and formulation of the phased plans for theimplementation of the strategy in the GCC countries, on acontinuous basis.

* Unification and development of industrial licensing procedures inthe GCC countries and instructing the licensing authorities todirect industrial activity in conformity with adopted plans.

* Accelerating the unification approved specifications andstandards for the GCC industrial products, and insuring theapplication of the unified specifications and standards to theimported industrial products.

* Encouragement of industrial establishments to adopt total qualitymanagement system (TQM) that raises their competitivestrength to international levels.

* Increasing the coordination among the GCC countries so as toachieve a common negotiating position with regard to marketingthe Gulf industrial products in international markets andpurchasing the needed inputs from these markets.

* Endeavour to unify, coordinate and direct the industrialdevelopment financing policies to insure efficient use ofresources.

* Coordination between the specialized financing institutions infinancing industrial projects in the GCC countries.

* Equal treatment of GCC nationals with regard to securingfinancial resources provided for the industrial projects in any ofthe GCC countries.

* Encouragement of the establishment of joint- stock andinvestment companies in industrial branches and expansion ofthe ownership base of these companies.

* Enhancement and expansion of the role that Gulf organizationsand institutions play with regard to data provision, identificationof industrial investment opportunities, promotion of industrialprojects in the GCC countries, and assisting Gulf plants inovercoming the difficulties that they encounter.

* Inclusion of clauses aimed at promoting GCC industrial exportsin foreign aid contracts and agreements, and in trade agreementswith industrial and developing countries.

* Coordination between the GCC countries with regard tomanagement and marketing contracts with foreign companies,loan agreements with foreign and international financialinstitutions and suppliers’ facilities agreements.

* Adoption of the principle of “offset” in concluding contracts for

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major industrial projects with foreign companies andcontractors.

* Coordination between the joint industrial projects in the GCC andtheir counterparts to be concluded between the other Arabcountries, in order to avoid harmful competition in the markets,and to benefit from common efforts in management andtechnology field.

* Direction of GCC foreign investments to Arab, Islamic andfriendly countries to invest in promising areas that are conduciveto the success of industries in the GCC whether by insuringmarkets for their industrial products, purchasing important rawmaterials or securing appropriate technology.

(b) Education, training, technology and labour policies:

The governments of the GCC states seek to link the education andtraining system to the needs of the national economy focussing ongraduating qualified technical and professional manpower andattaching special importance to the following main aspects:

* Harmonization of the educational and training plans and policieswith the requirements of the industrial plans of the GCCcountries and establishment of research and development centresin the GCC countries with linkages among themselves, with theuniversities and the industrial projects in the GCC countries anddirecting them towards applied research in industry.

* Increasing the allocations for research and development in thegeneral budgets and encouraging industrial companies to dolikewise in their budgets.

* Coordination of the research and development activities of theGCC countries and identification of the research priorities thatbest promote industrial development.

* Encouraging the establishment of national bureaus forengineering consultancy and studies, in order to benefit fromtheir services in industry.

- 37 -

CHAPTER THREE

THE INFRASTRUCTURE AND

THE BASIC SERVICES

IN THE GCC STATES

- 39 -

The GCC governments paid special care to establish and developthe basic infrastructures, as a mainstay of the economicaldevelopment. The infrastructures include roads, electricity and waterfacilities, ports and airports, industrial cities and telecommunications.

The salient features of the infrastructures in the GCC:

* Roads and Transportation

The previous two decades witnessed the construction of a large netof roads in the GCC, particularly the high ways which facilitate themovement of people and commodities between the GCC states. Thelength of the roads in the GCC is estimated at 70 thousands Km. in2002, against 54.4 thousand Km. in 1995. Also the number ofvehicles increased to 10.6 million in 2002, against 8.1 million in 1995(Table 18).

* ELECTRICITY

Establishing of electricity grids, developing the distribution systemsare the main concern in the GCC. Electricity consumption in the GCCin 1995 was 147 billion Kw/year, increased to 214 billion Kw/year in2002 (Table 19), average consumption of 7 thousand Kwh perindividual.

* WATER

Many desalination plants are established in the GCC states, theconsumption of water increased to 738 billion gallons in 2002, against511.2 billion gallons in 1995 (Table 20), consumption per individualreached 23 thousand gallons in annual average.

* COMMUNICATION

Modern communication net is developed in the GCC to meet theneeds of the citizens and businesses. The telephone lines increasedfrom 3.3 million lines in 1995 to 5.7 million lines in 2002 (Table 18).Postal services is cared for and post offices reached 700 offices in2002, while public post boxes reached 650 thousand in 2001.

* EDUCAION

GCC states provide free education at all level for the citizens, thenumber of students at the government and private schools estimated at6.7 million, and in the Universities half million students in 2001.

- 40 -

* SEA PORTS

All GCC states have modern, well equipped ports, able to receivethe biggest tonnage vessels and to handle all kinds of activities. Someof the ports are especially equipped for the export of crude oil, naturalgas, some repair docs are constructed, the following is a profile of theGCC seaports:

1. UAE

* Mina Zayed

Contains 21 berths, container terminal and various storage areas forall kind of products totalling one million sq. m.

* Mina Jazirat Das:

Specialized in the export of liquified gas and sulphur, crude oil andcondensates, and can receive vessels of tonnage up to 410 thousandtons.

* Mina Abu An Nujoosh:

Specialized in crude oil exports, and can receive tankers of tonnageupto 280 thousand tons.

* Mina Jabal Dhanna:

Specialized in crude oil exports, and can receive tankers of tonnage360 thousand tons.

* Mina Rashed

Contains 35 berths, various large storage areas about 1.4 millioncubic meters, 4 dock yards, container terminals.

* Mina Jabel Ali:

Contains 66 different berths, cold stores of 100,000 cubic meter,other stores of 1.2 million meter area, of which 18% for containers,there are grain silos, deck yard, giant tankers (crude oil and Liquidgas) are received.

* Mina Al Fath

Receives oil tankers of tonnage 300,000 tons, specialized in oilexporting.

- 41 -

* Mina Al Ruwais

Receives tankers of tonnage 240,000 tons, comprises berths of 3KM in length, specialized in serving and transporting Ruwais Refineryproducts, chemical fertilizers (ammonia, urea, natural gas, and areasfor storage of oil derivatives.

* Mina Khor - Fakkan

Consists of terminal for containers, used for re-exports, stores forterminals with area amounted to 200,000 m2, also comprises 3 berths.

* Mina Mubarak

Receives tankers with tonnages upto 275,000 tons.

* Mina Khali

Consists of 12 berths, many stores with area 63,600 m2, two coldstores, open stores with area amounted to 220,000 m2.

* Mina Al Hamriyah

Receives tankers with 150,000 tons.

* Mina Ajman

Receives vessels of tonnage amounted to 8553 tons of differentcommodities.

* Mina Um Al Quwain

Comprises 4 berths, pavements 500 m in length, receives vessels oftonnage not more than 15,000 ton, and equipped to deal with containervessels.

* Mina Saqr

Receives vessels with tonnage not more than 50,000 ton, comprises8 berths, stores area amounted to 29,000 m2, also can receivecontainer vessels.

* Mina Al Fujairah

Receives vessels with tonnage 40,000, there are a free trade area180,000 m2. It is strategic port serving the Gulf and Africa and India.Comprises sheltered stores 2,500 m2, and unsheltered area 54,000m2.

- 42 -

REGISTERED VEHICLES ('000)

TABLE 18Transportation, Communication and Telephone Lines

In the GCC States (1995 - 2002)


Years

1995

1996

1997

1998

1999

2000

2001

2002

UAEBahrain

167.5

173.1

182.4

191.0

212.0

230.0

227.7

239.0

Kuwait Oman SaudiArabiaQatar Total

ASPHALTED ROADS (KM)

TELEPHONE LINES (000)

1816.5

861.2

914.3

970.0

755.0

815.0

825.3

860.0

299.7

316.8

356.6

404.0

447.0

495.9

521.0

545.0

222.3

234.0

253.0

273.0

288.0

303.0

323.0

330.0

6,111.1

6,334.0

6,565.0

6,805.0

7,200.0

7,370.0

7,591.0

7,819.0

438.0

522.0

530.0

550.0

600.0

675.0

745.0

790.0

8,055.2

8,441.1

8,801.3

9,193.0

9,502.0

9,888.9

10,233.0

10,583.0

1995

1996

1997

1998

1999

2000

2001

2002

2,200.0

2,284.0

2,372.0

2,463.0

2,498.0

2,540.0

2,853.0

2,910.0

4,941.0

4,953.0

4.965.0

4,977.0

5,000.0

5,030.0

5,500.0

5,665.0

6,257.0

6,591.0

7,407.0

7,771.0

8,138.0

8,477.0

9,673.0

10,156.0

587.0

587.0

587.0

587.0

587.0

587.0

587.0

650.0

37,085.0

39,058.0

42,360.0

43,360.0

43,783.0

44,589.0

45,179.4

46,100.0

3,312.0

3,326.0

3,597.0

3,611.0

3,790.0

3,810.0

3,924.0

4,042.0

54,382.0

56,799.0

61,288.0

62,769.0

63,797.0

65,033.0

67,716.4

69,523.0

1995

1996

1997

1998

1999

2000

2001

2002

142.0

145.0

153.0

161.0

162.0

169.0

176.0

177.0

383.3

391.8

411.6

427.0

449.0

475.0

503.0

520.0

177.6

211.7

212.8

214.0

220.0

225.0

235.0

245.0

122.7

133.5

142.0

151.0

155.0

160.0

167.0

176.5

1,651.2

1,997.7

2,280.7

2,167.0

2,706.0

2,965.0

3,232.9

3,500.0

801.0

932.0

950.0

968.0

1,000.0

1,035.0

1,080.0

1,082.0

3,276.8

3,811.7

4,150.1

4,088.0

4,693.0

5,029.0

5,393.9

5,700.5

- 45 -

2. KINGDOM OF BAHRAIN

* Mina Salman

Comprises 17 piersides of different length and depth to meetvarious purposes:

- 10 piersides with 9 meters in depth, and 800 meters length forgeneral merchandise vessels.

- 3 piersides with 11 meters in depth, and 200 meters length forvarious purpose.

- 2 piersides with 11 meters in depth, and 300 meters length forcontainer equipped with 4 x 35 ton capacity top spreadercontainer handling fork lift truck.

- 1 pierside for small rolling ships, with anchor not more than 5.5meters

- 1 pierside with 285 meters length to serve small vessels, withanchor not exceeding 7 meters.

The port authority is keen to equip these piersides with mostsophisticate equipment to meet all requirements.

Equipment container and cargo operations:

Major tems

- 2 x 40 ton capacity and 2 x 50 ton post panamax gantry cranes.- 9 straddle carriers.- 4 x 35 ton capacity top spread contrainer handling fork lift

truck.- 6 x 12 ton capacity tgeneral duty fork lift trucks.- 60 x 2 1/2 ton capacity low profile contrainers specification fork

lift trucks.- 10 x 60 ton capacity tugmaster units.- 20 x 60 ton capacity low bed trailers.- 2 x 30 ton capacity mobile cranes.- 120 reefer container plug-in points.

- A computerized container and cargo tracking system.

Marine Equipment Major tems

- 2 x 42 ton bollard pull harb our tugfs.- 2 pilot cutter.3. Computerized vessel traffic management system (VTMS)

The containers terminal was inagurated in April 1979, comprising12 heavy container trucks, each of 42 ton capacity. The station can

- 46 -

handle two container vessels at the same time, also can receive vesselsof 300 meters, with 10.5 meter anchor, and 65000 tonnage. The totalstoring area is 30000 m2, and can accommodate 90000 containers,plus 75 electric points, for 150 refrigerated container.

* Mina Khalifa Bin Salman

This new port, which is supposed to be southeast Al-Had, is viewedas the substitute for `mina Salman. The area of the new port will be130 hectors, it is designed to accommodate the needs for the coming25 years.

3. KINGDOM OF SAUDI ARABIA

* Mina King Abdul Aziz

Main Saudi port and one of the important in the Gulf, comprises 4pavements, 39 berths, the port is well equipped to deal with differentproducts. Storage areas amounted to 3.4 million m2.

* Mina Al Jubail

Comprises of two ports, commercial port with 16 berths, andindustrial port with 12 berths to serve the Jubail industrial area. Thestorage area in the first is 380,000 m2, and 600,000 m2 in the second.

* Mina Al `khobar

20 KM south of Dammam, used for general cargo and passengers.

* Mina Ras Al-Khafji

Used for oil exports, receives tanker with 323 thousand tons.

* Mina Ras Tonnoora

Specialized in exporting crude oil, oil derivatives, and liquified gas.

* Mina Ras Al-Mishaab

Comprises 8 berths, one allocated for bulk cement, comprises manystores.

* Mina Al Jieema

32 KM west-north Ras Tannoora, comprises many berths, two ofwhich for propane and butane.

- 47 -

* Mina Ras Al- Ghar

150 KM to the north of Dammam, mainly used for the import ofconstruction materials.

* Mina Jeddah Al Islami

The biggest port in the kingdom, situated on the red sea coast, totalarea 625 hectares, comprises 58 berths, deals with variouscommodities, also comprise huge passengers terminal receivingMuslim pilgrims.

* Mina Yanbu

Second largest port in the kingdom 265 km from Jeddah, and 150Km from Al Madina, comprises many berths, also used for pilgrims.

* Mina King Fahd

Comparatively new port, comprises many berths dealing withdifferent commodities.

* Mina Jizan

560 KM south of Jeddah, comprises 13 berths, of which two forcontainers, one for exporting bulk cement, facilities for handling

10,000 tons of kliner, storage area 148,000 m2, of which 11%sheltered stores.

* Mina Rabegh

155 km from King Abdul Aziz airport, receives tanker with 320,000ton, and specialized in exporting crude oil, liquified gas, oilderivatives.

* Mina Dabaa

New port, near Tabouk, used in transporting of comodities andpassengers.

4. SULTANATE OF OMAN.

* Mina Al Fahl

Used only for oil exports, receives tankers with tonnage of 600,000ton.

- 48 -

* Mina Qaboos

Main port of the Sultanate, comprises 13 berths, one of which isequipped to handle bulk cement, creals, stores and cold store capacity3,000 tons, and terminal station of 600 m in length.

* Mina Reysut

Comprises of an oil tanker terminal, receives vessels of differenttonnage, different berths for various activities including fishing.

5. STATE OF QATAR

* Mina Al Doha

Comprises 9 berths, sheltered stores more than 80,000 m2, andunsheltered stores 600,000 m2 and cold stores with capacity 500 ton.

* Mina Misaed

Situated on the East coast of Qatar peninsula, linked by 170 kmpipeline to the Dukhan oilfield, used for export of crude oil, liquefiedgas, and import of various products such as iron ore (QASCO exportits steel products through the same port), there are special berths forbulk cement, petrochemicals, urea, and ammonia, creals.

* Mina Jazirat Halool

Owned by the Qatar Petroleum (QP), and used for crude oil export.

* Mina Ras Lafan

More recent, largest ever port for export of natural liquefied gas(LNG), occupies 8.5 Km2 area, and total export capacity 30 millionmetric tons annually.

6. STATE OF KUWAIT

* Mina Al Shuwaikh

3.2 Km2 area, various sheltered and unsheltered stores, comprises21 berths, a dry dock, ship yards, many support services are availableof which ship repair and maintenance.

* Mina Abdulla

Used for export of oil and oil products, linked to the refinery

- 49 -

situated inside the port, there are two berths.

* Mina Al Ahmadi

Situated 32 Km to the south of Kuwait city, used for export of crudeoil, refined products and LPG.

* Mina Saud

Located in the neutral zone, comprises two berths for oil export.

* Mina Shuaiba

Situated 56 Km south of Kuwait City, used for the export of crudeoil, refined products, urea and sulphur.

* AIRPORTS

Airports are considered as a vital outlet for the GCC states, for thatreason a special attention was directed towards establishing largenumber of airports in the region on the best known international level.There are 6 international airports in the UAE, namely: Abu Dhabi,Dubai, Sharjah, Al Ain, Ras Al Khaima and Fujairah airports. Oneinternational airport in Bahrain, in Saudi Arabia 3 internationalairports (Jeddah, Riyadh and Dammam), in addition to 20 regional andlocal airports. In Oman there are 2 international airports (Seib andSalalah), and in Qatar one international airport (Doha International),and in Kuwait one international airport..

- 51 -

CHAPTER FOUR

THE AVAILABLE INCENTIVES FOR

THE INDUSTRIAL SECTOR

IN THE GCC STATES

- 53 -

Since the early days of the industrial development programmes, theGCC states choosed to offer a package of incentives to encourage theindustrial development. The package of the Gulf incentive is notdirected toward specific industry, so in most cases it is contradictedwith the WTO rules. Also it is noticed the variation of the incentivesin the GCC states, there is no unification in the incentives given to theindustrial sector.

The industrial incentives in the GCC could be divided intocategories, that is direct and indirect incentives (table 21),

TABLE 21Types of Incentives in the GCC

1. Direct IncentivesA package of policies aiming at increasing the added-value, and to

positively foster the industrial activities.

1.1 Soft loans for the industrial projects.The GCC states used to render soft loans in order to encourage and

attract industrial investment, and usually this is carried through thebanks and financial institutions fully or partially owned by thegovernment. and to give examples: Kuwait Industrial Bankestablished in 1978, Saudi Industrial Development Fund established in1974, Oman Development Bank in 1976, UAE Industrial Bank in1982, Bahrain Bank for Development in 1992, and Qatar IndustrialBank in 1997.

* Rates of Interest

The rates of interest varied in the GCC states as shown in table 22,for instance in Saudi Arabia, the Industrial Development Fund

Provision of information and data,prefeasibility studies

Establishment of industrial areas

Participation in the training of national workers

Direct Indirect

Soft Loans for industrial projects

Industrial lands (reduced rents)

Water, electricity, fuel, gas (preferential prices)

Customs & tax exemptions

Preference of local productsin the government procurements

- 54 -

charged an administrative fees and implementation-follow-up fees onthe total amount of the loans, while Qatar Industrial Bank charged 5%,in Kuwait the interest rates ranged between 5% to 7.5%, and in Oman2 - 3% and in UAE 4%, and Bahrain 6%.

TABLE 22Industrial Loans

* Repayment and the period of grace

The industrial loans usually are long-term loans, it ranged between2 years in Oman to 10 years in Saudi Arabia and Bahrain, also theperiod of grace ranged between one year in Kuwait to 10 years inSaudi Arabia.

Table (23) shows the value of loans presented by banks andindustrial development funds in the GCC during 1995-2002, and table(24) shows the distribution of loans according to the industrialactivities.

StatePeriod ofGrace RepaymentInterest (%)

UAE

Bahrain

Saudi Arabia

Oman * Ministry of Trade & Industry (> 250,000)

* Oman Development Bank (< 250,000)

Qatar

Kuwait * New project * Expansion

* Industrial Service/ Restructuring

1 - 3

1 - 3

5 - 10

3

1- 2

2

1 - 21 - 21 - 2

3 - 8

7 - 10

5 - 10

7

2-7

8

Depend onnature of the

project

4%

6%

2.5% Administrative fees+ Follow-up fees

(Total 5%)

3%

2% (< OR 5,000)3% (> OR 5,000)

5%

5%6%6


- 55 -

TABLE 23Loans presented by Industrial Banks & Funds in the GCC -

According to countries - 1995 - 2002(Million dollars )

U.A.E. SaudiArabia QatarOman Kuwait Bahrain

1995

1996

1997

1998

1999

2000

2001

2002

TABLE 24Loans presented by the Industrial Banks & Funds

2002 (Million US Dollars)

Food, Beverages & Tobaco

Textiles, wearing app. & cloth

Wood, W. products, Furniture

Paper & P. products

Chem. & Pet. Chem

Non-metal

Basic metal

Metal Fab.

Other Manuf.

Total Loans

Industrial Activities

Years Total

8.0

3.1

9.3

11.7

19.9

19.7

30.5

9.2

791.6

870.6

753.9

727.5

515.0

390.2

576.2

640.4

29.7

51.2

69.4

86.9

91.7

21.9

66.5

98.0

51.9

81.1

82.6

31.1

43.3

48.6

56.5

62.2

643.5

648.3

582.9

588.5

352.5

289.2

419.0

460.9

-

-

8.2

5.3

2.6

4.0

2.4

8.9

58.5

86.9

1.5

4.0

7.0

6.8

1.5

1.15

U.A.E. SaudiArab ia

QatarOman Kuwait Bahrain Total

0.3

2.9

-

0.1

1.5

1.5

2.5

0.4

-

9.2

63.4

25.7

13.4

26.2

342.2

38.0

2.5

109.9

19.15

640.4

3.8

2.9

-

10.5

20.5

10.8

-

47.3

2.3

98.0

12.7

2.3

3.4

-

20.9

8.4

-

-

14.5

62.2

45.8

17.6

10.0

15.6

292.3

17.3

-

61.1

1.2

460.9

0.8

-

-

-

7.0

-

-

1.1

-

8.9

-

-

-

-

-

-

-

-

1.15

1.15



- 56 -

C. Qualifying for Soft Loans:* Qualifying for Soft Loans

The conditions for benefiting from the soft loans varied, for instancein Kuwait, the Industrial Bank, finance the industrial projects,provided that the national participation is not less than 25%, in theUAE, the industrial bank stipulated that nationals should participatefor not less than 51% of the paid capital. In Bahrain the conditions forsoft loans is to employ not less than 20% of the nationals in first year,to be increased to 60% after five years. As for Oman, theDevelopment Bank render soft loans for joint projects with foreignersregistered in Oman, regardless of the percentage of the nationalparticipation.

1.2 Industrial LandsAll the GCC states provide the investors with well equipped

industrial areas, and rendering all necessary services in order to attractthe investors. That has led to the development of the industrial sector,and at the same time increased the demand for industrial lands, whichled Saudi Arabia to review the policy of the industrial lands, andinitiated the Saudi Corporate for the industrial cities and technologyareas on 27/8/1422 H, of which responsibility is to plan and developthe industrial cities. Following is a brief of its functions:

* To implement the strategy for developing the industrial cities.* To set up rules and procedures of establishing the industrial

cities.* To suggest and prepare locations for new industrial cities.* To coordinate with other relevant organs responsible for

extending services and utilities to the industrial cities.* To encourage the private sector to establish industrial cities.* To encourage the establishment of parks for modern

technologies.

Table 25 indicates some descripancies in the land rents in the GCCstates ranging between 2 cents (8 halala per square meter) in SaudiArabia to $ 4.086 at Hamriya in UAE.

The industrial land rents differ from one place to another, that wasclear in the UAE, e.g. Abu Dhabi industrial area 3 cents per sq. meter,which in Hammriyah free zone is more than 4 dollars per squaremeter. In Qatar it ranges between 14 cents to 1.37 dollars per sq.meter.

- 57 -

TABLE 25Rents for Industrial Lands

1. UAE

Abdu Dhabi Industrial Area (First Year)“ “ (2nd & 3rd year)“ “ (beyond 3rd yea)

Al Ain Industrial AreaAl GozeIndustrial Area

Lowest rentHighest rent

Al Gaseis Industrial AreaLowest rentHighest rent

Hamriya Industrial Area Lowest rent

Highest rent

2. BAHRAIN

- Coastal Area:- Industrial- Services- Non-coastal Area:- Industrial- Services

3. SAUDI ARABIA

All Industrial citiesMaintenance & Operation Fees

4. OMAN

First 5 yearsAfter 5 years - Rusaiyl

5. QATAR

- All Industrial Cities- Mesaid Industrial Area

Lowest Heighest

- Industrial Area, Doha

6. KUWAIT

- All Industrial Areas- Lands for Services & Storing- Private sector lands

State $ per meter Local currencyper meter

0.0270.0540.1880.293

0.1090.817

0.1090.191

2.1794.086

1.8623.191

1.3202.660

0.0210.134

0.6501.300

0.137

0.5491.3740.55

0.653.9-7.8

9.8

0.100 Dirham0.200 Dirham0.500 Dirham1.076 Dirham

0.400 Dirham3.000 Dirham



0.700 Dinar1.200 Dinar

0.500 Dinar 1.000 Dinar

0.080 Riyal0.50 Riyal


0.500 Riyal

2.000 Riyal5.000 Riyal2.000 Riyal

0.200 Dinar1.2-2.4 Dinar3.000 Dinar

- 58 -

1.3. Encouraging Prices for the Services

All GCC states used to provide the industrial cities with thedifferent services: water, electricity, petroleum derivatives and gas atspecial preferential prices to assist in reducing the production costs:

A. Water Prices

Table 26 shows the water prices in the GCC states, Qatar and Omanare almost similar, 1.21 and 1.71 cent per cubic meter consecutively,where as it is different in Saudi Arabia and Bahrain according tocomsumption: 3 cents for consumption less than 51 m3, and 160 centsif more than 300 m3 in Saudi Arabia, and 80 cents if consumption isless than 450 mm3, and 1.1 dollars if it is more in Bahrain. In Kuwaitit is fixed prices according to industrial area.

TABLE 26Water Prices in the Industrial Areas

2.20 Dirham

0.300 Dinar0.400 Dinar

0.100 Riyal0.150 Riyal2.00 Riyal4.00 Riyal6.00 Riyal

0.660 Riyal

4.400 Riyal

0.250 Dinar0.250 Dinar0.800 Dinar0.300 Dinar

1. UAE

2. BAHRAIN

Less than 450 M3

More than 450 M3

3. SAUDI ARABIA

From 1 - 50 M3

From 51 - 100From 101 - 200From 201 - 300Above 300

4. OMAN

5. QATAR

6. KUWAITShuaibaMina AbdullaOther Industrial AreaWater per tanker

StatePrice/M3

(Dollar)Price/M3

(Local currency)

0.599

0.7981.064

0.0270.0400.5841.0681.602

1.717

1.209

0.8150.8152.6090.978

- 59 -

B. Electricity Prices

The prices of electricity in the industrial areas in the GCC isrelatively low, it ranges between one cent/Kw/hr in Shuiba Industrialarea to 6 cents/Kw/hr in Oman during summer, the other GCC statesare as shown in table 27.

TABLE 27Electricity Prices in the Industrial Areas

1. UAE

2. BAHRAIN

3. SAUDI ARABIA

4. OMAN- Winter (8 months)- Summer (4 months)

5. QATAR

6. KUWAIT- Shuaiba- Mina Abdulla- Other Industrial Areas

State Kw/hr(Dollar)

Kw/hr(Local currency)

0.041

0.032

0.032

0.0310.062

0.016

0.0030.0030.007

0.150 Dirham

0.012 Dinar

0.120 Riyal


0.060 Riyal

0.001 Dinar0.001 Dinar0.002 Dinar

- 60 -

1. UAE- Benzene Super- Ordinary- Diesel

2. BAHRAIN- Super- Ordinary- Diesel- Kerosene

3. SAUDI ARABIA- Super- Ordinary- Diesel (fuel)- Diesel (production input)- Kerosene

4. OMAN- Super- Ordinary- Diesel- Kerosene

5. QATAR- Super- Ordinary- Diesel- Kerosene

6. KUWAIT- Super- Ordinary- Diesel- Kerosene

StateDollar/Liter

Local currency/Liter

0.2750.2750.253

0.2660.2130.1860.066

0.2400.2400.0960.0320.116

0.3120.2970.2650.312

0.1920.1790.1650.110

0.2120.2280.1790.179

1.010 Dirham1.010 Dirham0.930 Dirham


0.900 Riyal0.900 Riyal0.360 Riyal0.120 Riyal0.435 Riyal

0.120 Riyal0.114 Riyal0.102 Riyal0.120 Riyal

0.700 Riyal0.650 Riyal0.600 Riyal0.400 Riyal



TABLE 28Petroleum Derivatives Prices

C. Fuels and Oil Derivatives Prices

- 61 -

1. UAE

2. BAHRAIN

3. SAUDI ARABIA

4. OMAN- Fuel intensive industry- Other industries

5. QATAR

6. KUWAIT

State $/Million Btu(Local currency/

Million Btu

1.09

0.753

0.750

0.800.80 - 1.50

0.501

-

4.00 Dirham

0.283 Dinar

2.81 Riyal

0.308 Riyal0.308-0.578 Riyal

1.825 Riyal

-

TABLE 29Natural Gas Prices

1.4. Customs and taxes exemptionsThe customs exemption is an exception or amendment in the

general system of the duties on the imports, so the exemption on theindustrial inputs, e.g. machinery, raw materials, lead to reducing thecosts of production, consequently makes the products morecompetitive in the local and international markets. Table 30 showsthat all the GCC states are giving full exemptions on machinery andequipments, raw materials and semi fabricated products. Qatar, UAEand Bahrain stated no limits or conditions for the exemption, whileKuwait, Saudi Arabia and Oman put some conditions, for instance theexemption period is ten years in Kuwait for the raw materials.

As for the taxes exemptions, the GCC states give exemption forperiods of five years, and renewable for similar periods as in Qatarand Oman, (Table 30). As from Jan. 2003, after the establishment ofthe unified customs union, the GCC customs will be 5% towards theoutside world. As for the profit taxes of the industrial establishmentsit fall into two categories:

- Countries imposing no profit taxes; Bahrain, UAE.

- Countries imposing profit taxes: Saudi Arabia, Kuwait, Oman andQatar.

According to the Kuwaiti Law, an income tax is imposed on foreigncompanies working in Kuwait. As for Kuwaiti joint-ventures, no

- 62 -

taxes are imposed on them, only 5% of its annual income is deductedas a contribution to support the Kuwaiti Institution for ScientificAdvancement.

In Qatar no income taxes are imposed on industrial companiesowned by citizens, according to Article 49, Law No. 11 for 1993. Forforeign companies and foreign partners, an income tax rangingbetween 10 - 35% are imposed.

In Oman, according to the new amendments for 2000, allcompanies owned fully or partially by Omani subject to 30% taxesafter exempting 30 thousand riyals of the net profit. As forpartnerships where Omani’s ownership is less than 30%, and thebranches of foreign companies are subject to taxes ranging 5 - 30%.For partnership companies enlisted at the Security markets, are subjectto unified 12% taxes, after exemption of 30 thousand riyals of the netincome.

According to the Ministerial resolution No. 3 for 1-5-1421 H inSaudi Arabia, the state will bear 15% of the taxes imposed oncompanies with profit more than 100 thousand riyal, the tax will be30% instead of 45%.

StateExemption for

MachineryEquipment

UAE

Bahrain

Saudi Arabia

Oman

Qatar

Kuwait

NA

NIL

2.5% Zakat30% Foreigners*

5 years

5 years

10 years

Full Exemption

“

“

Full Exemption for 5 years

Full Exemption

“

Full Exemption

“

“

“

“

“

* Profit taxSource: Industrial Market Intelligence Department, GOIC

Exemption forRaw `materials Tax Incentives

TABLE 30Customs and Taxes Exemptions

- 63 -

1.5. Preferential Treatment for national products in the govern-ment procurements.All GCC governments support local industries by giving priority to

their products in governmental procurements, provided that theirprices do not exceed the prices of foreign imported items by more than10%, and not more than 5% for products of Gulf origin, and beconform to the standards of high quality and/or time delivery.

State

UAE

Bahrain

Saudi Arabia

Oman

Qatar

Kuwait

4%

5 - 20%

5 - 20%

5%

4%

4%

TABLE 31Customs duties before the establishment of

the GCC Customs Union

Source: Market Intelligence Department, GOIC

Imposed dutiesbefore 1/1/2003

%

5%

5%

5%

5%

5%

5%

2003

* All the GCC states policies are unified as follows:

1. A range of 5% increase more than similar GCC products.

2. Increase of 10% range more than foreign products.

TABLE 32Preferential Treatment for National Products

in the Government Procurements

- 64 -

2. Indirect IncentivesIt is a package of incentives that indirectly assist the industrial

establishments to increase its revenues and reduce the productioncosts, e.g. provision of data and information, establishing centers fortraining and industrial consulting.

2.1 Provision of information data and prefeasibility studiesAll GCC states are aware of the importance of information in

decision making, particularly for the investors. The accurateinformation, on the right time, are important requirements needed byforeign investors.

2.2 The Industrial AreasThe GCC states established many well equipped and sophisticate

industrial areas to absorb the increasing number of investors. Also theGulf states encouraged the private sector to establish private industrialareas to meet the increasing demand for industrial lands. The totalnumber of the industrial areas in the Gulf region amounted to 41 in2000, incubating 6707 factories, with land area 5965.32 thousand sq.meters. Those industrial areas are equipped with the most advanceelements of services, facilities and public utilities. In Qatar there are 3industrial areas, in Oman 6, Kuwait 6, UAE 8, Bahrain 8, and in SaudiArabia 10. Also free trade zones are established in the GCC region,e.g.: Jebel Ali, Sadiyat in UAE, and Mina Salman free zone, and theindustrial area north of Sitra in Bahrain. Furthermore, there are manyplanned for free zones, 7 in UAE, 2 in Bahrain,12 in Saudi Arabia, 6in Oman, one in Qatar and 4 in Kuwait.

The Jubail industrial city is the largest in the region, with area of130 million sq. meter, followed by Yanbu industrial city 114 millionsq. meter, followed by Ras Lafan industrial city in Qatar 106 millionsq. meter. It is worth mentioning that there is 3 specialized industrialareas established recently in Rusail for IT, and one in Suhar for theheavy industries, and the third in Kuwait for the food industries (Table33 - 38) show the major existing industrial areas in the GCC in 2001.

- 65 -

51870

4790

5040

585

132906

329175

79800

8512

-

612678

Industrial AreaEsta-

blished Date

Al Ain

Sharjah

Al Gouz, Dubai

Al-Gasees, Abu Dhabi

Musafah, Abu Dabi

Jebel Ali Free Zone

Al Fujairah

Jebel Ali Induistrial Area, Dubai

Total

2000

36300

7438

2206

6793

23270

520

5463

83990

1970

1970

1973

1970

1977

1985

1994

1995

* Includes Al Ain & MasafahSource: Industrial Market Intelligence Department, GOIC

Area

('000 M2)

No. of Establish-

ments

No. or Workers

113

977

150

1340

451

605

27

240

3903

32764*

50437

167634

N.A.

-

34000

1085

95960

-

8422

1242000

N.A.

N.A.

-

N.A.

52440

N.A.

-

Invest-ment

('000 $)


blished Date

Mina Salman Ind. Area

Maameer

N. Refinery Ind. Area

Dawar Sitra Ind. Area

ALBA Ind. Area

N. Sitra Ind. Area

Al Had Ind. Area

Araad Ind. Area

Al Had New Ind. Area Total

1960

1975

1976

1976

1978

1978

1978

1981

TABLE 34Industrial Areas in Bahrain

* Includes Al Ain & MasafahSource: Industrial Market Intelligence Department, GOIC

Area

('000 M2)

No. of Establish-

ments

No. of Workers

12

5

4

2

29

31

9

6

-

98

3509

1380

607

100

1958

5175

600

159

-

13488

Invest-ment

('000 $)

655

679

299

98

1044

1400

1665

63

6500

12403

TABLE 33Industrial Areas in UAE

- 66 -

TABLE 35Industrial Areas in Saudi Arabia


blished Date

Jeddah Ind. City

First Ind. City, Riyadh

First Ind. City, Dammam

Jubail Ind. City

Yanbu Ind. City

2nd Ind. City, Dammam

2nd Ind. City, Riyadh

Al Ahsa Ind. City

Al Qasim Ind. City

Mecca Ind. City

Total

12000

451

2704

130000

114470

24000

18786

1500

1500

758

306179

1969

1969

1969

1975

1975

1977

1977

1980

1981

1986

* Note: There are other industrial cities partially developed, or under developing, e.g. Madina, Najran, Hail,Tabouk, Al-Jouf.


Area

('000 M2)

No. of Establish-

ments

No. oF Workers

393

51

121

176

54

176

569

25

36

26

1627

46300

3200

1600

25115

10836

10500

50000

1615

2128

1725

153019

4744

258

1041

22000

12239

1886

4536

194

154

89

47141

Invest-ment

(Million $)


blished Date

Russail Ind. Area

Sohar Ind. Area

Riysout Ind. Area

Nazwa Ind. Area

Boraimi Ind. Area

Sor Ind. Area

Total

3400

1300

1527

263

263

40000

46753

1983

1991

1991

1994

1997

1998

TABLE 36Industrial Areas in Oman


Area

('000 M2)

No. of Establish-

ments

No. or Workers

130

52

17

7

13

2

221

8000

1945

321

200

83

450

10999

500000

250000

53000

39532

9750

2000000

2852282

Invest-ment

('000 $)

- 67 -

TABLE 37Industrial Areas in Qatar


blished Date

Meiseed Ind. Area

Salwa Ind. Area

Ras Lafan Ind. Area

New Industrial Area

Total

44467

15276

106000

11000

176743

1970

1972

1991

2000


Area ('000 M2)

No. of Establish-

ments

No. of Workers

12

73

2

-

87

11700

21000

2000

-

34700

N.A.

87483

N.A.

137.4

-

Invest-ment

('000 $)


blished Date

Doha Ind. Area

Eastern Shuaiba

Western Shuaiba

Sabhan

Sllaibiyah

Amghara

Total

48

10380

12605

1313

2081

1546

27973

1961

1964

1977

1981

1996

1992

TABLE 38Industrial Areas in Kuwait


Area ('000 M2)

No. of Establish-

ments

No. or Workers

45

17

24

224

41

248

599

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

2937

2215808

-0

554989

282251

69384

3125369

Invest-ment

('000 $)

- 68 -

2.3 Training and Qualifying of the National WorkforceVirtually all the GCC states are very particular about the training

and qualifying of the nationals, whereof the trained manpower are themainspring of the industrial development. The developing of theskills of the manpower has a direct impact on the efficiency andproductivity. The GCC states established educational institutions, andspecialized training institutes.

In Bahrain, a vocational training center was established in 1975.The Ministerial Resolution No. 31 of 1979 regulated the conditions oftraining Bahraini workers in the private sector. In 1992 BahrainTraining Institute was established, that beside establishing trainingcenters in the major industrial establishments, e.g. ALBA, ASRY,GIPIC. In 2000 the foundation was laid for establishing a projectcenter for developing new industries (industrial incubators).

In Saudi Arabia, the Royal decree No. 30/M for 1400 H, establishedthe General Directorate for Technical Education and VocationalTraining, under their supervision there are 411 institutes and centers.Jubail industrial college is offering training programmes linking andenhancing the relations between training and basic and secondaryindustries in Jubail city. Also major companies like SABIC, areoffering training programmes to qualify the nationals, and attract themto the private sector. In 2001, the private sector established theHuman Resources Fund, in order to provide the financial support forthe programme of employing in the private sector units, where theFund bears 50% of training costs and salaries for the first two years.The Fund is considered as one of most effective solutions to enlargeand expand the employment in the private sector. More than 60establishments and companies benefited from support of the fund inits first year, and the fund succeded in employing around 7000 (maleand female) in its first year

In Oman, the Public Administration Institute started in 1977 aimingat improving the performance of the Oman employees. In 1984 theVocational Training Center was established in Al-Zahira in order tofeed the Omani market with qualified cadres. The TechnologicalCollege was established in 1993, at Salalah, and a similar college inIbra. In general, the Ministry of Manpower is supervising 4vocational training centers, located in Seeb, Saham, Sur and Abri. In1994 these centers adopted new training system of 2 years, besideother short programmes. Furthermore, the ministry is supervising 5technological colleges in Muscat, Nazwa, Masana, Ibra and Salalah,awarding Diploma degree in engineering fields. The total number ofvocational training centers supervised by the ministry amounted to

- 69 -

167 till 2002. Also there exists a number of sectoral specializedtraining centers, e.g. Oman Telecommunication, Oman OilDevelopment Co., Cement Co. etc. The government has adopted anew policy in employing the Omani, based on the partnership betweenthe government and the private sector.

In Qatar, a number of technical and professional schools wereestablished, which includes industry and commerce schools, andadministration institute. In 1973 the vocational training anddevelopment was established, to qualify and train skill workforces.Also the technological college was established to provide highlyqualified cadres. To mention the efforts of major companies e.g. (QP).

As for Kuwait, more efforts were exerted since the fifties. In 1982,the General Directorate for Applied Education and Training wasestablished. The Law No. 19, for 2000, encourages the nationals towork in non-governmental jobs, and the government shall contributein the costs of training nationals at non-government institutes, andArticle 8 specified the stipulations to benefit from the governmentfinancial support.

- 71 -

CHAPTER FIVE

RULES AND LEGISLATIONS OF

THE FOREIGN

INVESTMENT IN THE GCC STATES

- 73 -

Reference Model Regulation (Law) for the Promotion of

Foreign Investment in the GCC States

Introduction

The GCC states exerted all efforts to attract the foreign investmentas an additional source of income, and to obtain the edge technologiesin order to realize economic development, increase the exports anddiversify the income resources. To that effect, the GCC states issued alot of rules and laws, and the General Secretariat of the GCC issuedthe following Reference Model Law:

Article (1)

The following terms shall have the meanings hereby assigned tothem, unless the context otherwise requires:

the “Council” means the Cooperation Council for the Arab Statesof the Gulf. the “State” means the Member State in the CooperationCouncil for the Arab States of the Gulf.

the”Competent Authority” means the Official entity in charge ofthe application of this regulation according to its organizational rules.

the “Foreign capital” means any asset that can be valuated in thelocal currency or any exchangeable currency at the prevailing marketrates by the competent entity as follows:

A. The cash remitted by the foreign investor to the country forinvestment therein.

B. The machinery, equipment, installations, transportation modesand materials brought from abroad for the purposes ofinvestment.

C. The intangible rights such as licenses, patents, trademarks andnames owned by the foreign investor and registered under thelaws of the country subject of investment.

D. Profits and proceeds of the foreign investment if they haveincreased the foreign capital or are used for the establishmen ofnew investment projects.

the “Foreign investment” means investment of the foreign capitalin an activity licensed under this regulation (law).

- 74 -

the “Rules of implementation” means the rules issued by the competent authority of the country for implementation of the provisionsherein.

Article (2)

The present regulation aims at:

1. Achieving economic integration.2. Laying down plans for the attraction and settlement of state of

the art technologies that meet the requirements of the region andthe market peculiarities thereof, and preserve the environmentand its resources.

3. Giving priority of investment to the projects that help minimizedependence of the Council States on foreign sources for thesupply of their essential and strategic requirements, those whichdiversify production and broaden is baswe, and also th thosewhich diversify production and broaden is base, and also tothose which are export oriented, competitive in the foreignmarkets, capital and technology intensive and have a highvalue-added, and focusing attention on training the nationalmanpower and projects that best exploit the resources where theCouncil States have a competitive advantage.

4. Creating job opportunities for the GCC nationals.5. Promoting GCC exports.

Article (3)The present regulation (law) applies to all foreign investments,

those excluded under a special agreement, by a decree, or relating tothe extraction or exploitation of the natural resources under aconcession or a special agreement.

Article (4)An investment committee shall be formed in each State. The

functions of this committee shall be as follows:

1. (a). to facilitate project licensing and registering procedures,and to overcome tne impediments that may encounter the settingup of the project.

1. (b). to identify and promote the investment fields andopportunities available in the State.

2. to propose the necessary incentives that are likely to encouragethe foreign companies to invest in the State.

3. to develop a mechanism for monitoring the performance of the

- 75 -

foreign investments in the State for identification of theimpediments that may be encountered and overcoming them.

4. to congtentrate effoerts on selecting qualified internationalinvestors to be attracting and brought in to the State forinvestments herein.

5. to coordinate with the foreign investment committees in theGCC states to achieve the objectives envisaged in this law.

6. t o handle the complaints and disputes arising among investors.7. to implement any other duties designated by the competent

authority.

Article (5)The Rules of implementation shall specify the foreign investment

licensing requirements and procedures.

Article (6)When necessary, the competent authority may except the foreign

investment from the national ownerwhip percentage stipulated in theregulations and laws in force in each State.

Article (7)The competent authority shall keep a register for entering the

foreign investments licensed under this regulation (law). Theimplementing rules shall outline the relevant details, conditions andprocedures.

Article (8)Foreign investment, licensed under the provisions of this regulation

(law), may not be confiscated or expropriated unless it is proved bythe laws and regulations in force in the country that it is in an overtcontradiction with a public interest, in which case, the foreign investorshall be entitled to a fair compensation at the exchange ratesprevailing in the markets of the time of confiscation.

Article (9)1. The foreign investor may transfer his investment to another

foreign investor, approved by the Foreign InvestmentCommittee (FIC), or to a national partner, or, in the case ofpartnership, to cede it to his national partner, sub ject to theregulations and laws applicable in the country of investment.

2. In the event the ownership of a foreign investment is transferred

- 76 -

to another foreign investor, the invesment shall continue to betreated according to the provisions herein.

Article (10)Any amendment of this regulation (law) shall not apply to the

foreign investor, hereby licensed, if it proves to prejudice him.However, expansions to any investment, existing at the time ofamendment, shall be excluded.

Article (11)The foreign investor has the right to remit the capital and all kinds

of the profits as well as the compensations provided for in Article (8)herein outside the GCC states, or dispose of them in any other legalway, accordinfg to this regulation (law).

Article (12)The foreign investor’s intellectual and industrial property rights and

his trademarks are protected under the regulations and laws in force inthe country.

Article (13)Foreign investments may be granted all or some of the following

privileges, at the discretion of the competent authority in each case:

1. Exemption from the income tax or any other taxes for five years.The competent authority may extend this period at its discretion,according to the area of investment and the developmentpriorities.

2. Benefiting from the privileges derived from the agreements forthe avoidance of double taxation and investment security.

3. Partial or whole relief from the customs duties imposed on thefollowing imports:a. Machinery, equipment and parts required for construction,

expansion and upgrading.b. Raw materials, sem i-finished goods and the packaging

materials required for production purposes, provided thatsimilar goods (in respect to quality and price) are notavailable in any of the GCC states.

4. Allocating the property and real estatges required for theirpurposwes according to the law applicable in the State.

5. Recruiting the foreign manpower required for their purposesaccording to the regulations and laws applicable in the State,provided that national manpower is not available.

- 77 -

6. Provide protection for the national industries (having a foreigncapital) when such industries encounter an unfair competitionfrom foreign manufacturers.

Article (14)The foreign investor shall:1. Give priority to the national manpower (i.e. national work men

and technicians), if any, and provide them with the training andskills required for the progress of work.

2. Protect the environment against pollution, comply withregulations, laws and instructions relating to the public securityand health, and shall not expose the others to dangers.

3. Retain from committing any act that may contravene thegeneral system and ethics of the State.

Article (15)Should the foreign investor violate the conditions whereby the

license is granted to him under this regulation (law), the competentauthority shall take the followng steps, on a case-by-case basis:

1. Notice,2. Warning.3. Partial or whole deprivation of the granted privileges. However,

the foreign investor may request that the deprivation decision bereconsidered, if he corrects his violation (offense).

4. Administrative suspension of the project.5. Withdrawal of the license and liquidation of the investment.

Article (16)It may be agreed that any dispute airsing between the foreign

investment ventures and other parties be referred to a local orinternational aritration body, including the Commercial ArbitrationCenter of the GCC states based in Bahrain.

Article (17)The competent authority in each State shall issue the rules for

implementation of this regulation (law).

1. UAE

There is no unified law (system) for the foreign investment inUAE, instead there is provisions in the federal and local laws thattackle organizing the investment climate, based on how to attract the

- 78 -

The Council :

Board of Directors :

The Chairman of Board ofDirectors:

The Governor :

The Authority :

Foreign Investor :

Foreign Investment :

Foreign Capital:

The Supreme Economic Council.

The Board of Directors of the SaudiArabian General Investment Authority.

The Chairman of Board of Directors ofthe Saudi Arabian General InvestmentAuthority

The Governor of the Saudi ArabianGeneral Investment Authority. The General Investment Authority.

A natural person who does not carrySaudi nationality or a corporate body, ifall of the partners thereof are not Saudinationals.

Investment of Foreign Capital in anactivity licensed under this Act and theseexecutive rules.

For purposes of this Act and rules,Foreign Capital shall mean, but is notlimited to, the following assets and rightsso long as they are held by a Foreign`investor.1. Cash, securities and commercialpapers.2. Foreign Investment profits ifreinvested to increase capital, expandexisting investment entities or establishnew ones.

foreign investments.

2. BAHRAIN

The investment policy in Bahrain is based on different methods,come first is the joint-ventures with foreign partner, and also allowsfull ownership of project for the foreigners, and also allow themultinational corporations to open branches in Bahrain. Generally theInvestment Policy in Bahrain is encouraging the FDI, and to that end itallow 100% ownership for non-Bahraini.

3. SAUDI ARABIA

The Executive Rules of the Foreign Investment Act

- 79 -

The Act :

Products Facilities :

Service Facilities :

The Rules :

The Center :

3. Machinery, equipment, fixtures,spare-parts, means of transport and pro-duction requirements related to the in-vestment.4. Intangible rights such as licenses, in-tellectual property rights, technicalknow-how, administrative skills and pro-duction techniques.

The Foreign Investment Act.

Projects for the production of industrialand agricultural products (crops and live-stock).

Service and contracting projects.

The executive rules of Foreign Invest-ment Act.

Investors Service Center Stipulated inArticle No. (9) of the Authority Act.

First: Definitions

Article 1:For the purpose of implementing these Executive Rules the

following terms and expressions shall have the meanings indicatedopposite thereto, unless the context requires otherwise:Second: The Fields of Investment

Article 2:The authority is authorized to issue a license for foreign capial

investment in the Kingdom for any investment activity whetherpermanent or temporary with the exception of the activities excludedunder the third article of the Act.

Article 3:The board of Director shall periodically review the list of activities

excluded from foreign investment in order to decrease them andsubmit them to the Council to consider approving them.

- 80 -

Article 4:Foreign Investments licensed under the provisions of this Act and

these executive rules may be in either of the following forms:

1. Entities jointly owned by a national and a foreigner investor.2. Entities wholly owned by a foreign investor.

Third: Benefits, incentives and guarantees

Article 5:Foreign Investment projects shall enjoy all the benefits, incentives

and guarantees extended to national projects, which are for example:

1. The incentives stipulated in the protection and promotion ofnational industries Act issued by the Royal decree No. 50 dated23.12.1381 H.

2. To own properties required to carry out the licensed activity orfor his residence and his staff housing according to theprovisions of the `non-Saudis Real Estate Acquisition andInvestment Act issued by the Royal decree No. M/15 dated17.04.1421 H.

3. The benefits ensuing from agreements of avoiding doubletaxation and agreements of promotion and protection ofInvestment which are signed by the Kingdom.

4. Probation of any confiscation of investment wholly or partiallywithout a court order or subjectin them to expropriation whollyor partially except for the public interest and against fair compensation.

5. The foreign investment is entitled to repatriate his share that isderived from the sale of his equity, from suplus of liquidation orthe profits generated by the entity and to dispose of it by anylegal obligations. He is also entitled to transfer requiredamounts to fulfill any contractual obligations in respect of theproject.

6. The shares may freely move among ;partners and others.7. The licensed entity is entitled to sponsor the foreign investor

and his non-Saudi staff.8. The licensed entiry is entitled to obtain industrial loans in

accordance with the provisions of Industrial Development Fund.9. The losses incurred by the entity may be carried forward to the

following years and will not be calculated at tax settlement ofthe years during which the entity reaps profits.

Fourth: Licensing Conditions and Criteria

- 81 -

Article 6:The conditions for granting a Foreign Investment license by the

Authority shall include the following:

1. The investment activity to be licensed should not be in the listof excluded activirties, and the activity has to be within theAuthority’s power to license.

2. Product standards and production processes shall be approvedunder laws prevailing in the `kingdom, or in the absence of suchlaws, the laws of the European Union or the laws of the UnitedStates of America.

3. a) The amount of capital invested shall not be less than twentyfive million Saudi Riyals for agricultural entities.b) The amount of capital invested shall not be less than fivemillion Saudi riyals for industrial entities.c) The amount of capital invested shall not be less than twomillion Saudi riyals for other entities according to detailedcriteria and rules laid down b y Board of Directors. The Board of Directors may reduce the minimum investedcapital in projects established in areas specified by it or inprojects which require high technical experiences or preparedfor export.

4. The foreign investment must not have been convicted finallyfor substantial violations of the provisions of this Act.

5. The foreign investor must not have been previously convictedof financial or commercial violations whether in the Kingdom orin other countries.

6. The grant of a license shall not result in the breach of anyinternational or regional agreements to which the Kingdom or inother countries.

Article 7:The foreign investor may obtain more than one license to practice

the same activity or different activities according to the followingmeasures:

1. The conditions set forth under Article (6) of these Rules mustbe satisfied.

2. Licensing applications to practice the same activity submittedby natural or moral persons shall be dealt as expansion of theirestablished projects.

3. The Board of Directors will reconsider these measuresperiodically or when necessary.

- 82 -

Article 8:The foreign investor may purchase local or foreign investment

entities or shares thereof provided the foreign investor satisifes theconditions set forth in article (5) and article (6) of these rules.

Fifth: Licensing Procedufres

Article 9:The authority shall prepare an investment guide containing a

description of how to obtain permanent and temporary licenses, theiramendments, the forms and the documents to vbe fulfilled beforeobtaining the licenses and the information required by the investor.The guide shall further contain the offered incentives, benefits andguarantees to be enjoyed by the foreign investor and the guide alsocontains substantial information about the following:

1. Foreign Investment Act, its rules and supplementary decisions.2. The statute for the General Investment Authority and its

executive rules.3. The Non-Saudis Real Estate Acquisition and Investment Act.4. National Industries Protection and Promotion Act.5. Labour and Workmen Act and Social Insurance Act.6. Zakat, Tax and Customs Acts.7. Legal Sharia Procedures Act.8. Penal procedures Act.9. Legal Profession Act.10. Companies Acts (commercial register, trade fraud, banks

monitoring).11. Intellectual Property Protection Acts (Trade Marks Act,

Copyrights Protection Act, Patents Act).12. Residence Act.

The guide shall also contain special sections on the customs andtraditions observed in the Kingdom and shall be updated regularly.

Article 10:The foreign Capital Investment application shall be submitted to the

Applications Reception Unit of the Center, using the designated form.The application must contain all the necessary information; satisfy alldocumentation requirements cited therein and be signed by theapplicant or his duly authorized representative. The Center shallnotify the license applicant by a written or electronic receipt note

- 83 -

including the number of application record and its date.

Article 11:The Authority may accept licensing applications and documents

which reach in complete forms through mail or E-mail or fax andissue the licensing decision provided that it will not be delivered to theapplicant only after getting the original documents when necessary.

Article 12:Decisions on submitted applications shall be made in accordance

with the provisions indicated in these rules and resolutions issued bythe Board of Directors. The Governor, or his assigned delegate, shallsign the licensing decisions within thirty days. National holidays shallbe excluded from the mentioned period.

Article 13:The Center shall notify the investor, either by hand delivery or by

registered mail or by E-mail or any other means, of the final decisionissued with respect to his application.

Article 14:If the Authority rejected the license application or its amendment,

its rejection shall be justified and the foreign investor may object therejection decision before the Board of Directors within thirty dayseffective from the date on which he is notified of the rejectiondecision.

Article 15:The Board of Directors shall consider the objection and make a

decision on it within thirty days from the date of its submittal and if itsdecision was to reject, the license applicant shall have the right tochallenge the rejection decision before the Board of Grievances.

Sixth: Obligations of the Foreign `Investor

Article 16:The licensed investor shall commence the process and undertake

the steps required for setting up the entity in accordance with the timeschedule the investor submits to the Authority. The Authority shall, ifthe investor shows adequate reasons for delays in the implementationprocedures for the entity according to schedule, extend the period

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specified in the schedule, but such extensions shall not exceed oneyear in total. The said extension shall not exceed one year unless adecision to that effect is made by the Board of Directors.

Article 17:In cases, that the Authority not approves the extension requests

specified by the time table and if the investor is found not to bediligent after the extension, the Board of Directors may then revokethe license finally. An investor whose license is revoked under thisArticle shall bear the consequence of revocation.

Article 18:Licensed entities might abide by the conditions and primary

objectives upon which the licenses are issued. No modifications shallbe made to the entities unless approved by the Authority.

Article 19:Owners of licensed entities shall adopt an approved system of

accounting and an approved budget for their entities by one of theauthorized accounting offices and upon request shall provide theAuthority with statistics or information in respect of their entities.

Seventh: Violations

Article 20:Authority officials, empowered by a written mandate by the

governor or his representative, shall have the right to monitor theimplementation of the provisions of the Act and these Rules. For thispurpose, they have the right to examine records and all documentsrelating to the investment activity and shall pin point violations andsubmit necessary reports to the governor. The assigned officials shallmaintain the confidentiality of the information and documents theyexamine.

Article 21:The Board of Director shall issue a list of violations and penalities

pertaining to the violations of provisions of the Act, this list, thelicensing conditions, rules of their implementation and implementingthe penalities therein.

Article 22:

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The authority shall notify the Foreign Investor in writing regardingany violation of the provisions of this Act and its rules or of licensingconditions and shall allow a suitable period of time specified in the listof violations and penalities to correct the violation. If the ForeignInvestor fails to correct the violation he shall be subject to any of thepenalities provided for in the list of violations and penalities.

Article 23:The Board of Directors shall form a committee consisting of at least

three members, one of whom shall be a legal counselor and shalldevelop rules and procedures for the functioning of the committee.The responsibilities of the committee shall be to review violations ofthe Act provisions and its executive rules and the licensing conditions.The committee shall hear the parties accused thereof, to consider theirdefenses and to suggest what it sees according to what specified by theAct and the list of violations and penalities. The board of Directorsshall render the penalty decision.

Article 24:The investor with whose regard the penalty decision is issued

according to Article 23 may object the rejection decision before theBoard of Directors within thirty days effective from the date on whichhe is notified of the rejection decision.

Article 25:The Board of Directors shall consider the objection and make a

decision on it within thirty days from the date of its submittal and if itis decided to confirm the penalty the license applicant shall have theright to challenge the rejection decison before the Board of Grievanceswithin 60 days effective from the date on which he was notified of thedecision.

Eighth: Dispute Settlement Committee

Article 26:The Board of Directors shall form, under Article 13, paragraph 2 of

the Act, a committee composed of at least a chairman and twomembers called (Investment Disputes Settlement Committee) toconsider the disputes arising between the Foreign Investor and his

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Saudi partners in respect of a licensed investment under this Act. Thecommittee shall work to settle the dispute amicably. In case anamnicable settlement could not be reached, the dispute shall be settledfinally through arbitration according to the Arbitration Act issued bythe Royal decree No. (46) dated 12.7.1403 H. and its execujtive rules.This committee is considered the competent body to consider thedispute as stipulated in the Arbitration Act.

4. Oman’s Foreign Capital Investment Law.

Article 1:Without prejudice to the provisions of the Royal Decree No. 57193,

non-Omanis - whether natural or juridical persons - shall not conductany commercial, industrial or tourism business or otherwiseparticipate in an Omani company except with a license from theMinistry of Commerce & Industry to be issued in accordance with theProvision of the Law.

Article 2:The license referred to in the preceding Article shall be granted

after the following conditions have been met:

1. The business shall be conducted by an Omani company with acapital of not less than RO 150,000 and the foreign share thereinshall not exceed 49 percent of the total capital.

However, the above percentage may be increased up to 65 percentof the company’s capital by a decision from the Ministry ofCommerce & Industry following a recommendation from theForeign Capital Investment Committee.

The percentage referred to in the above paragraph may be furtherincreased up to 100 percent of the company’s capital for theprojects which contributre to the development of the nationaleconomy upon the approval of the Council of Ministers following arecommendation from the Minister of Commerce & Industry,provided that the project’s capital shall not be less than RO500,000.

When an existing joint company participates in a new joint venturecompany, the foreign share shall be considered as the total share ineach company provided that the Omani percentage shall not be lessthan the percentage to be owned by Omanis as set out in the

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foregoing paragraph.

Article 3:Exemptions from the conditions specified in the above Article for

obtaining the license shall be granted to the following:

1. Companies which conduct business in the Sultanate of Oman byvirtue of special contracts or agreements by virtue of a RoyalDecree.

2 Parties conducting a business which is declared by the Cabinetas necessary for the country.

Article 4:The application for foreign investment license shall be referred to a

committee to be formed at the Ministry and called the Foreign CapitalInvestment Committee. Such Committee shall be set up by virtue of adecision from the Minister of Commerce & Industry.

Article 5:The said committee shall be responsible for giving opinions on the

investment applications with a foreign share of more than 49 percentand shall make recommendations in respect of the following:

1. The identification of the investment fields.2. The extent to which the project can be considered as one of the

economic development projects.3. To prioritize the project submitted for licensing so that

preference shall be given to the project using local products andraw materials that help maximize the value added thereof, to theexport-oriented industries, and to the industries introducing newproducts or using modern technology. Preference shall also begiven to the projects that attract and localizeinternationally-reputed industries. In the field of tourism,preference shall be given to projects involving the constructionof integrated tourist villages and zones.

4. To look into the complaints and conflicts arising from theapplication of this Law.

5. Other matters related to investment referred to it by the Ministerof Commerce & Industry.

The Committee shall issue is recommendations therfeof by absolutemajority of members and submit them to the Minister for decision.The applicant shall be notified of the decision within a period notexceeding two weeks.

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Article 6:Any applicant whose application has been rejected shall have right

to appeal to the Minister within 30 days from the date of hisnotification of the rejection. The decision of the Minister in thisrespect shall be final.

Article 7:Licensing shall be granted to the projects subject to this Law

without the need for obtaining prior approvals from any authoritiesoutside the Ministry. However, due regard shall be given to thenegative lists issued by such authorities before granting license to anycompany. The concerned ministry may review the environment,health safety and other standartds during the construction andoperation stages.

Article 8:The foreign investment projects referred to in this Law may be

exempted from the income tax for a period of five years effecive fromthe date of establishment. Such exemption may be renewed for onemore period. The said projects may also be exempted from customsduties on their imports of the machinery and equipment required forthe establishment thereof, and may be exempted from customs dutieson the raw materials required for production which are not available inthe local market for a period of no more than five years commencingfrom the production date. This exemption may be renewed once.

In all cases, the exemption shall be issued and renewed by adecision from the Deputy Prime Minister for Financial & EconomicAffairs upon a request from the Minister of Commerce & Industry.

Article 9:The exemption mentioned in the preceding Article shall also be

applicable to the new extensions in the projects as of the first date ofthe fiscal year following the commencement of production orfollowing the operation of the extension as the case may be.

The extention means the increase in capital which is utilized foradding new fixed capital assetsw which achieve increasing theproduction capacirty of the project which is aimed at producing orproviding new activities or services.

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The land needed for investment project may be allocated byusufruct or through rent for a long period.

The investors in the investment projects shall to conduct thelicensed economic activity transfer abroad the imported capital alongprofits accrued from the project.

Article 10:The land needed for investment project may be allocated by

usufruct or through rent for a long period.

Article 11:The investors in the investment projects shall be free to conduct the

licensed economic activity and to transfer abroad the imported capitalalong with the profits accrued from the project.

Article 12:The said projects may not be confiscated or expropriated unless for

the public interest and against equitable compensation.

Article 13:The said project shall, by themselves or through a third part, import

their requirements of whatsoever production materials, machinery,spare parts and transportation means relevant to the nature of activitiesas may be needed for the establishment, extension or operation thereofwithout being required to be registered in the importers register. TheDirectorate General of Industry shall identify the projectsrequirements of the materials mentioned upon request from suchprojects.

Article 14:It may be agreed to refer any dispute between the foreign

investment projects and third parties to a local or internationalarbitration tribunal.

Article 15:The provisions of the Commercial Companies Law shall be

applicable to the above said joint-companies unless otherwisespecifically stated in this Law.

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Article 16:The company violating any provision of this Law shall be notified

to rectify such violation within a period not exceeding one monthfrom the notification date. The Minister may thereafter, upon arecommendation from the Foreign Capital Investment Committeewithdraw the license of the violating company.

Article 17:Without prejudice to any penalty stated in other laws, any foreigner

conducting any business referred to in this Law without license shallbe fined no less than RO 5,000 and no more than RO 10,000.Likewise, any Omani participating with a foreigner in such businesswithout obtaining the required license shall be fined no less than RO1,000 and no more than RO 5,000.

5. QATAR

Law No. (13) of the Year 2000 for Organizing ForeignCapital Investment in Economic Activity

Chapter I.

During the process of executing this law, the following words andphrases shall have the meaning as stated against each, unless the textrequires otherwise;

The Ministry: shall mean the Ministry of Finance, Economy &Commerce.

The Minister : shall mean the Minister of Finance, Economy &Commerce.

Foreign Investors: Non-Qatari natural persons or those concernedwith investing their capital in one of the projects on which directinvestment is permitted by the government in accordance with theprovisions of this law.

Foreign Capital Invest: What foreign investors offer to invest asof liquid money, or money in kind or property with cash value inQatar including:

1. Cash transferred to Qatar through the banking system or thelicensed financing companies.

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2. Tangible imported assets for purposes of investment inaccordance with the provisions of this law.

3. Profits, returns and the reserves accruing from foreign capitalinvestment in a project in case they were added to the capitalinvested in the project, or if invested in one of the l.icenseprojects, in accordance with the provisions of the law.

4. Intangible entitlements such as licenses, patent rights and thetrade marks registered in Qatar.

Foreign Investment: Foreign capital invested in one of the licensedactivities according to the provisions of the law.

ChapterIIForeign Capital Investment

Article (2)1. Taking into consideration the rules of item (2) of this article,

foreign investors are entitled to invest in all the economic sectorsprovided that they have a Qatari partner or partners whosecontribution is no less than 51% of the capital, established onproper basis in accordance with the provisions of the law.

2. Nevertheless, foreign investors are, through a decision by theMinister, entitled to exceed their limit of contribution by raising itfrom 49% up to 100% of project capital in the fields of agriculture,industry, health, education, tourism, development and mobilizationof natural resources or energy and mining, provided that suchcontribution is consistent with the states development plan, and theprojects which attain the optimum utilization of domestic rawmaterials, or those in support of export oriented industries or thoseindustries which produce new commodities or adopt moderntechnology, as well as projects which help support worldwideindustries besides projects which cater for domestic humanresources and their development, should be given due priority.

3. Foreign Investors: Referred to in the above two paragraphs, areprohibited from investing in the field of banking and insurance orpurchase of real estate.

Article (3)The Minister is entitled, after consultations with the authorities

concerned, to licence foreign companies which have businesscontracts with the government to execute their contracts, if this

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facilities provision of public services or benefits.

Article (4)Foreign investors who may be licenced to undertake any of the

activities in which they are entitled to invest in whatever is notprovided for in this law, shall be governed by the currently valid lawsfor the same activities.

Chapter III

Investment Incentives

Article (5)Plots of land shall be allocated for foreign investors to implement

their projects on the basis of long-term lease which shall not exceed50 years liable for renewal.

Article (6)Foreign investors are entitled to import their requirements for

implementing, operating or expanding their projects, in accordancewith the valid laws and regulations.

Article (7)The Ministry is entitled to:

Exempt foreign invested capital, in the fields specified in article (20of this law, from income tax for a period not exceeding ten years fromthe date of operating the project.

Article (8)1. Foreign investments, whether directly or indirectly, are not

liable to exappropriation or to any measures of similar effectunless it is necessitated by the ;public interest, a suitableindemnity according to the law and the general principles asstated in item (2) of this article.

2. The value of indemnity shall be equivalent to the realeconomic value of the exappropriated invested properly at thetime of exappropriation, and shall be estimated under a normaleconomic situation and preceding any threats concerningexappropriation. The indemnity due, should be promptly paidwithout delay, while owners shall enjoy the right to transfer the

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sum received. Interest value, calculated on the basis of thecurrent interest rate, shall result from the value of the indemnitydue.

Article (9)1. Foreign investors are free to undertake all money transfers

resulting from their investment to and from abroad withoutdelay. Such transfer involves:a) Investment returns.b) Proceeds from the sale or liquidation of all or part of the

investments.c) Proceeds resulting from the settlement of investment disputes.d) The value of indemnity stated in article (8) of this law.

2. Transfers can undertaken in any negotiable currency based onthe current exchange rate on the date of the transfer.

Article (10)Foreign investors are entitled to transfer ownership of their

investments to other foreign investors or to Qatari nationals orrelinguish ownership to their Qatari partners. According to the rulesand regulations.

In such cases, investments shall be governed by the provisions ofthis law, provided that the new investors shall continue to operate theinvestments, and replace the former investors in assuming their dutiesand enjoying their rights.

Article (11)Agreement may be reached as regards the settlement of any

disputes that may arise between foreign investors and others under adomestic or international arbitration panel.

ChapterIV

General Rules

Article (12)The provisions of this law shall not be effective towards:

1. Companies and individuals who are assigned by thegovernment to explore, exploit or administer natural resources in

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accordance with a concession or a special agreement, only to thelimits which shall not contradict with the terms of theconcession contract or the special agreement.

2. Companies established by or shared by the government orother public authorities or corporations in partnership withforeign investors, in accordance with article (90) of the companylaw referred to above.

Article (13)Foreign investors shall observe the need for protecting the

environment from contamination and shall comply with the laws,regulations and orders pertaining to security and public health andabstain from violatin public order and discipline.

Article (14)The provisions of this law shall not undermine the privileges and

tax exemptions and other guarantees and incentives granted tocompanies and on-going projects, at the time of its execution. Thesecompanies and enterprises shall keep enjoying these privileges,exemptions guarantee and incentives according to the legislation,agreements and contracts granting these privileges.

Chapter V

Penal Ties and Concluding Rules

Article (15)The Ministry shall notify foreign investors, when they violate any

of the provisions of this law, to ease the violation in a period notexceeding three months of the date of notificaion.

Article (16)Without prejudice to any other tougher penalty, provided by other

laws, any foreigner who operates an economic undertaking inviolation of the provisions of this law, shall be fined for no less thanfifty Qatari riyals and no more than one hundred thousand Qatririyals. Any Qatri national who collaborates with a foreigner inoperating such activity shall be liable to the same penalty.

Article (17)The Ministry technical staff who are delegated by the Minister,

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shall have the power of judicial control officers in controlling andpresenting evidence of crimes committed in violation of the provisionsof this law and the decisions for its execution. To attain this goal, theyare entitled to enter premises and installations governed by this law.Search and inspect the documents and the records.

Article (18)The decree based on Law No. (25) of 1990 shall be abrogated. Any

rules which contradict the provisions of this law, shall also beabrogated.

Article (19)The Minister shall issue the rules, regulations and decisions

necessary for implementing this law including fixing of the charges.

Article (20)All parties concerned, each within their jurisdiction, shall execute

the provisions of this law which shall be valid on the date of itspublication in the official gazette.

Jassim Bin Hamad Al ThaniDeputy Emir of Qatar State19.7.1421 (Hijri)16.10.200 (A.D.)

6. KUWAITArticles 23 and 24 of the Kuwait Commercial Code stated the basic

premise for doing business in Kuwait. Article 23 provides thatnon-Kuwaitis cannot engage in commerce in Kuwait without having aKuwaiti partner whose equity is at least 51 percent. Article 24provides that a foreign company cannot establish a branch in Kuwaitand it may not engage in commercial activities in Kuwait exceptthrough Kuwaiti agent.

In an effort to attract foreign investment, Kuwait’s Parliamentrecently passed Law No. 8 Regulating Foreign Capital DirectInvestment (April 22, 2001). This law creates an exception to thegeneral rules under which foreign investors conduct business inKuwait by permitting up to 100% foreign ownership of businessentities in certain approved sectors. Implementing regulations, whichestablish the guidelines for investment under the law, will beforthcoming.

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A foreign person or entity may enter the Kuwaiti market andconduct business in the following ways:

* Establishment of a company;* Entering into a joint venture agreement;* Appointment of a local commercial agent; or* Appointment of a commercial representative.

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CHAPTER SIX

LICENSING PROCEDURES OF

AN INDUSTRIAL PROJECT

IN THE GCC STATES

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IntroductionThe industrial laws in the GCC states are similar in requiring

to obtain an industrial license prior to any other procedures.Also the procedures for obtaining the industrial license aresimilar with slight differences. The following is a brief profileof industrial licensing procedures:

1. U.A.E.:

Federal Law No. 1 of 1979 Organizing Industrial Affairs

We, Zayed Bin Sultan Al-Nahyan, President of UAE, inconsistance with the provisional constitution, and Act No. 1 of1972 Re. Capacities and powers of Ministers and the amendingActs thereto, and according to the proposal of the Minister ofFinance and Industry and approval of the Council of Ministersand the National Federal Council, and sanction of SupremeFederal Council, promulgate the following Law:

Chapter One

Definitions

Article (15)The following expressions and phrases shall carry the meanings

opposites each, unless otherwise the context requires:

Minister : The Minister of Finance and Industry.

Ministry : The Ministry of Finance and Industry.

Department: The Department of Industry at the Ministry of Financeand Industry.

Director : The General Director of the Department of Industry and itsExecutive Administrative Chairman.

Committee: The Advisory Industrial Committee formed under thislaw.

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Industrial : Any operation whose main purpose.

Project: Is to convert raw materials from their actual essence,composition, forms, shapes or appearance into final or intermediateproducts; or to convert intermediate products into final ones, includingmixing assembling, de-assembling or wrapping products, as well asexpansion and addition of new productive assets to replace consumedor depreciated ones, in accordance with the terms defined when theconcerned project was adopted.

Proprietor of Industrial Project : Persons, establishments and theindustrial bodies owning an Industrial project in the country, whethermanaged by themselves or by others.

Managers of Industrial Project: The person in-charge for themanagement of The Industrial Project.

Project: the proprietor himself or anyone else authorised by him tomanage the project, in implementation of this Law.

Industrial Production : The value of industrial commoditiesproduced by a given unit.

Local Industrial Production : The total production of an industrialproject, where the manufacturing local production cost is not less than25% of the total.

Chapter Two

General Rules

Article (2)The rules of Law shall apply to all industrial projects in the country

except the following:

1. Industrial projects dealing with the extraction or refining ofpetroleum, extraction, refining or liquefaction of naturalpetro-gases or extraction or refining of mineral raw materialsand their preparation for manufacturing, or any other appropriateprocess they may require.

2 Industrial project whose fixed capital does not exceed twohundred and fifty thousand Dirhams (250,000) or those whosenumbers of employees does not exceed ten persons or thosewhich use a motive power not exceeding five horse p;owers.

3. Privelege project governed by special laws or these

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implemented under a pact or agreement in which thegovernment is involved.

4. Projects included in the governmental general plan andexecuted by the Federal Government.

Chapter Three

The Industrial Advisory Committee and the Sub-Committee

Article (3)An Industrial Advisory Committee shall be established within the

Ministry of Commerce and Industry and shall be formed as follows:

1. The Minister of Commerce and Industry.2. Chairman.3. The Under Secretaries of the following Ministries:

- Ministry of Commerce and Industry - Deputy Chairman- Ministry of Economy and Commerce - Member- Ministry of Planning - Member- Ministry of Petroleum and Mineral Resources - Member- Ministry of Electricity and Water.

* A citizen of each Emirate to be selected by the Rulerthereof.

* Members:* Two private industrialists to be proposed by the

Federation of the UAE Chambers of Commerce andIndustry, and appointed officially by ministerial decree,for a renewable period of two years.

* The Director of his Deputy Secretary - The Committeemay seek assistance from government functionaries andexperts whenever needed. It also may decide to form asub-committee in ordeer to study any specific issue andsubmit a report relevant to it.

Article (4)The Committee shall be competent to deal with the following

matters within the framework of the general government plan.

1. Study applications for the establishment of industrial projectsaccording to the rules of this Law, and take appropriatedecisions.

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2. Study the applications submitted by any person requiringprivileges and exemptions for industrial projects, and take theappropriate decisions in accordance with the rules of the presentLaw.

3. Study any issues submitted by the Ministry of Finance andIndustry concerning:

* The state industrialisation policy;* Prompting industrial investment, and determining

prospective concerned sectors; * Fixing the privileges and exemptions to be granted to

industrial projects according to the importance of each;* Defining a suitable frame and rate of participation of

Arab and foreign capital in industrial projects.

- Any other matters within its scope of activities as defined in thisLaw, or those for which the Minister may require consultation.Besides, the Committee shall submit reports disclosing theresults of each study undertaken about any of theabove-mentioned issues.

Article (5)The Committee shall meet periodically at least once a month at the

Chairman’s behest. It may, however, be summoned exceptionally,whenever necessary, upon request of the Chairman or one third of themembers. Any meeting of the Committee shall be deemed valid onlyif any absolute majority of the members of the Chairman or - shouldbe absent - his proxy - be present.

Article (6)The Committee shall make decisions on the matters within its

competence, according to related economics and technical studies,within the framework of the prevailing industrial policy and generalgovernment plan. Such decisions shall be made upon the majority ofvotes of attending members. In case of equal sides, the Chairmanshall be the casting votes. To be final and executable, the decisions ofthe Committee shall have to be previously authorized by theMinisters.

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Article (7)The Committee shall have a Secretariat to be formed by employees

of the Department appointed by ministerial decree. The Secretariat ofthe Committee shall, in particular, prepare the agenda, minutes ofmeetings, registration of decisions and recommendations of theCommittee and communicate them to all concerned authorities.

Chapter Four

Establishment of Industrial Projects

Article (8)With effect from the date of enforcement of this Law, licenses for

the establishment of industrial projects may be granted only to UAEcitizens, or to companies established according to the Law enforce,where local capital shares amount to 51% minimum, and provided themanager in charge thereof is a local, or the board of directors isconstituted in its majority by local citizens. Foreigners owningindustrial establishments existing at the time of enforcement of thisLaw, and not having local partners owning 51% minimum of suchestablishments shall liquidate their works completely within two yearsfrom the date of enforcement of this Law, unless they fulfill theprovisions of the present article within six months from its date ofenforcement.

Article (9)No industrial project may be erected in the country, or transformed

in any way unless its proprietor obtains due approval according to therules of this Law and the regulations in force. A relevant applicationfor each industrial project shall be submitted to the Department on aspecial form, according to the executive regulation.

Article (10)Any application for industrial project shall be backed up by report

including the relevant studies, the purpose of its erection, its economicand technical feasibility, resources, annual cost of production, therequired capital to meet its purpose, financing sources, labourrequired, possibility of marketing its products and any other matterclosely related to the project. The executive regulation of this Lawshall specify the kind of data to be included in the application.

Article (11)The Department shall study the applications for industrial projects

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from the economic and technical points of view, in the light of thegovernment general plan and policy and according to the laws andregulations enforce. Attaching its recommendations, and the results ofthe related study it will have undertaken then Department shall submitthe application to the Committee, within the period of two monthsafter it has been submitted by the applicant - The Committee shall - inits turn - submit its recommendations about the application to theMinister within fifteen days after it has received it.

Article (12)The Minister shall make the appropriate decisions within a period

of thirty days after the application has been submitted to him. If theMinister decides to approve the application, the related decision shallexpress the specific condition for the establishment of the concernedindustrial project. The Department shall notify applicant about theMinister’s decision within fifteen days after it has been issued.

Article (13)Applications for industrial projects shall be considered in the light

of the following:

1. Requirements of the economic and social plan, and theindustrial development programs in the country;

2. Agreements made with the Arab countries;

3. Local consumption requirements and import-substitution;

4. Extent of availability of local raw materials to be used in themanufacturing processes;

5. Possibility of carrying out the project in one of the areaschosen by the Government.

Article (14)If the proprietor of the industrial projects does not start construction

work within a period of six months after he has been notified theMinister’s decision approving the projects, the Minister may cancelthe approval, unless the proprietor applies to extend the period beforeit lapses, and clarifies in his application the reasons for the delay. TheMinister in such a case, may grant an appropriate period of grace, athis discretion and according to the specific condition relating to eachcase.

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Article (15)The Department is empowered to monitor all the phases of

execution of the industrial projects, and make sure the conditionsprovided for in the decision approving its erection are fulfilled. Theproject proprietor shall provide the Department with the data itrequires in this respect, according to the rules and proceduresdetermined in the executive regulation.

Article (16)If the approval for a project is cancelled according to Article (14),

the concerned applicant may not renew his application before a periodof three months after cancellation.

Chapter Five

The Industrial Register

Article (17)An industrial register shall be initiated and maintained in the

Department, wherein all industrial projects shall be registered. Theexecutive regulation related to this Law shall determine thespecification of the register and the entry procedures therein.

Article (18)Subject to the rules of Article (8) of the present Law, the proprietors

of on-going industrial projects, or of those under establishment at thetime of enforcement of this Law, shall apply for registration in theindustrial register within a period of three months after enforcement ofthis Law. The aforementioned application shall be submitted on thespecial form designed and executed in accordance with executiveregulation.

Article (19)After registering the project in the industrial register, the

Department shall license it for production and issue the license thereofin the name of the project proprietor, who - in his turn - shall notifythe Department about any transformation or adjustment of the dateincluded in the said register, in accordance with the provisions and atthe dates determined by the executive regulations.

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Chapter Six

Incentives

Article (20)The Council of Ministers and the competent authorities in the

member Emirates of the Federations, each in his capacity, andaccording to the recommendations of the Committee, may grant theprojects which meet the conditions stipulated in this Law, thefollowing privileges and exemptions:

1. Assignment of a building site for the project, either free or at areduced price or a symbolic rent with optimal condigtions.

2. Renting the necessary industrial buildings for the project to theproprietpr at optimal condition, in the industrial areasestablished by the Government.

3. Supply the project with electricity and water at incentive rates.

4. Custom-free import of the following commodities:* Machinery, equipment,. spare parts and building materials

required for the industrial project.

* Raw and intermediate materials, semi-products, packingand wrapping materials used at production level by theconcerned industrial projects.

- Tax exemption of the profits made by the project, as well as thereserved amount deducted from these profits to be re-invested inthe project for a renewable period of five years stated from thedate when production became effective.

- Exemption of locally made products - when exported - fromduties and taxes..

- Granting subsidies for the exports mentioned in paragraph 6.

- Protective measures for local products, taking into considerationtheir kind quality and quantity.

Article (21)The following industrial project shall be given priority in getting the

privileges and exemptions mentioned in Article (20):

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1. Competitive, export-oriented or export-substitution projects. 2. Project using raw materials; 3. Projects established in the areas determined by the

Government;4. Any other projects that may be of specific economic

importance, and included, for this reason, in the governmentdevelopment plan.

Article (22)The proprietor of an industrial project may obtain from the

Department any available information, statistical data maps, studiesand researches related to his field of interest.

Article (23)Upon decision of the Minister, and according to a recommendation

of the Committee, the Ministry may contribute to the expensesnecessitated by studies and researches carried out by the projectproprietor, if such a project proves to be of special importance for thenational economy.

Article (24)Proprietors of industrial projects, when establishing new industries

shall be given priority to obtain loans from banks and financialinstitutions totally or partially owned by the government, afterapproval of the Minister of Finance and Industry and according to therecommendations of Committee: the bank or financial institution shalldetermine the terms and amount of the loans to be granted.

Article (25)Priority shall be given in government purchases to local industrial

products if they are comparable to foreign products in their qualityand prices.

Chapter Seven

Duties and Responsibilities of Project Owners

Article (26)When the preliminary construction works have been completed and

the project is ready for operation, the owner shall inform theDepartment thereof; the later shall, within a period not exceeding ten

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days, inspect the project and, making sure the construction works haveeffective been completely or partially realised, grant a certificate tothe owner, to that effect. The date mentioned in the certificate shall beconsidered as the effective initial date of production.

Article (27)Imported materials exempted from custom duties according to the

rules of this Law shall not be used for purposes other than those forwhich they are imported. Any disposal of such materials inconstruction with the aforementioned paragraph shall be notified tothe Department and the custom duties they were exempted from shallhave, consequently, to be paid. The owner of the industrial projectshall keep a record of the concerned materials, using the Department.

Article (28)The proprietor of the project shall not be permitted to sublet the site

or buildings assigned to the project according to this Law. He maynot dispose them in any way unless he obtains approval to the effectof the competent authorities.

Article (29)If the industrial project is sold, assigned or rented partially or

totally, or if it ceases work totally or partially, the owner shall make acircumstantial notification of the fact to the Department. The newtenant, buyer or assignee of the project shall, within two mon ths aftertransfer of property or rentel contract, apply for registration in theindustrial register so as to transfer the licenses in their names and thenecessary changes in the registry data; otherwise, the privileges andexemptions granted to the project under this Law may be withdrawn.

Article (30)The owner of the industrial project shall provide the Department

with periodic reports and data showing to which extent the project ismaking advantage out of the exemptions it was granted and the degreeof development the concerned industrial activity has attained as wellas about cost and production features, using the form designed to thateffect by the Department. He shall also submit to the Department areport on the financial situation in the light of the general balancesheet attested by a charted accountant and the final accounts of eachfinancial year.

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Article (31)The owner of the industrial project shall keep a record of employees

therein, according to the entries specified by the executive regulationof this Law.

Article (32)The owner of the industrial project shall comply with all the laws

and regulations in force and carry out properly the rules they stipulateas concern industrial security, public health and environmentprotection. He shall, in case a manager is appointed for the project,notify the fact to the Department by registered mail. The managershall, along with the owner, be responsible for the implementation ofthis Law.

Article (33)The proportion of local employees to the total, in any project, shall

not be less than 25%. Nevertheless, the Minister, uponrecommendation from the Committee, may decide to exempt theproject from fulfilling its condition or reduce the above-mentionedpercentage, in case a sufficient number of locals is not available.

Chapter Eight

Penalties

Article (34)Without prejudice to any more severe penalties, whoever violates

the rules of this Law or its executive regulation shall be fined anamount not exceeding fifty thousand dirhams. The competentauthority may, in addition, forfeit the project from uponrecommendation from the Committee.

Article (35)If the project produces commodities which do not conform to

prescribed Standards and Specifications, or if fraudulent quality, theproprietor or manager in charge shall be imprisoned for a period notexceeding two years and fined an amount equal to that obtained fromthe fraud, in addition to an amount not exceeding one hundredthousand dirhams, or either penalty; moreover, materials and productsubject of violation shall be confiscated. In case of recurrence, the

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penalty shall be doubled, and the contravening establishment closedfor a period not exceeding three months. Withdrawal of the Licensemay also be contemplated.

Article (36)Whoever establishes and manages an industrial project without

obtaining license according to this Law, shall be fined an amountbetween ten thousand dirhams minimum, and one hundred thousandmaximum; moreover the project shall be closed.

Article (37)Any employee who - vested, pursuant to this Law, to implement the

rules thereof - would disclose a secret related to planned industrialshall be fined a sum not exceeding fifty thousand dirhams, withoutprejudice to other legal disciplinary penalties.

Chapter Nine

Conclusive Rules

Article (38)Participation of foreign capital in industrial projects shall be

determined in accordance with the laws and regulations in force.

Article (39)The Department employees authorised by the Minister to supervise

implementation of this Law shall have the quality of judicial officersand identify any violation of this `law. To perform their duties, theymay inspect the stores annexed to any industrial project, verify recordsand examine products. The owner and personnel shall enable theofficers to perform duties, and provide them the data and clarificationsthey may request according to this Law.

Article (40)The Ministers and competent authorities in the Emirates, each in his

capacity, shall carry out the implementation of this Law. The Ministerof Finance and Industry shall issue the appropriate decisions andregulations necessary to implement its articles.

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Article (41)This Law shall be published in the Official Gazette and enforced

from its date of publication.

ZAYED BIN SULTAN AL-NAHYAN

PRESIDENT OF THE UAE

Corresponding 19.3.1979.

2. KINGDOM OF BAHRAINThe licensing application issued by the industrial project

department shows the licensing procedures which runs as follows:

First:

Conditions of obtaining an industrial license:1. To submit an application of industrial license to the Industrial

Project Department (Industrial Licenses Division), and to attacha photocopy of the passport or the ID.

2. The Application includes the following data:* Name and address of applicant* Types of products* Total investment* Manpower* Date of commencement of production* Industrial land required* Electricity* Gas* Water* Industrial wastes* Sewerage wastes

3. The concerned division will study the application, prepares areport for approval.

4. After approval a preliminary license valid for 3 months(renewable) will be granted.

5. The location of the industrial project should be specified, sothat the Industrial Project Department will address the followingfor the approval:* Municipalities* Ministry of Health (Public Health Department)* Environment Affairs* Any other entities if needs be.

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6. After approval, the applicant will be given a final industriallicense for a duration of one year.

7. Following the mentioned procedures, the investor has toconsult the Commercial Register Department at the Ministry ofCommerce in order to obtain a C.R. for the industrialestablishment, to enable to implement the project.

Second:

Conditions to follow after approval of the industrial license:

1. The license is valid for one year from the approval date, andautomatically cancelled afterward, unless the concerneddepartment receives a justifiable reasons for the delay.

2. Must abide by the provisions of the decree Law No. 6 for1984, relating to origanizing of the industry.

3. This department should be provided with a copy of the C.R. ofthe concerned activity.

4. Must adhere to not transporting any industrial wastes outsidethe factory, and that must be done through the coordination withthe Environment Affairs, according to the Law No. 16 for 1989,which amend the Law No. 3 for 1975, relating to the publichealth..

Third: The Industrial Registration

Two months after commence of production, the licensed factoriesmust submit an application for the industrial registeration, and thatthrough filling the related format (Registration and IndustrialInformation Section) at the Industrial Projects Department. Thatpractice should be repeated annually, so that the Department will beable to collect information on the existing factories, and issue anindustrial directory.


INDUSTRIAL LICENSING

Industrial Licensing ProceduresLicenses for establishing an industrial unit are granted according to

one of the two following regulations:

* The National Industries Encouragement Act, which applies toindustrial projects to be established by Saudi citizens with full

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Saudi capital.

* The Foreign Capital Investment Act, which applies to industrialprojects fully owned by foreign capital or joint ventures withforeign capital.

All industrial projects owned by foreign or national or by jointventures whose fixed capital exceeds SR 1 million (excluding thevalue of land and holdings) must be licensed by the Ministry ofCommerce and Industry. Investors planning to start an industrialproject should submit an application to the Evaluation and Licensingof Industrial Projects Department stating the product and theproduction capacity, approximate capital, and proposed location. Ifthe Department considers the project suitable, it will provide theapplicant with a license application form. The investor must fill in thelicense application form with details of the economic feasibility of theproject and return the form and the feasibility study to the Department,with copies of the identity cards of the project owners. For projectswith foreign capital, a copy of the initial partnership contract shouldbe attached with the documents.

Special units in both the Evaluation and Licensing of IndustrialProjects Department and the Foreign Capital Investment Committeeare responsible for evaluating applications. They submit theirrecommendations to the Minister of Commerce and Industry, whogives the final approval.

Projects with a fixed capital of less than SR1 million are not subjectto the industrial license system but should be recorded in theCommercial Register. For these projects investors should obtain aregistration form from the Ministry’s Evaluation and Licensing ofIndustrial Projects Department. The investor must submit the form,along with equipment invoices, to the Department. If the Departmentapproves the registration, it will contact the commercial registrationoffice where the project is located and notify the investor to contactthe Registration Department to complete the registration procedure.Bakeries, cold stores, ice factories, and cement-mixing projects can beregistered commercially, without an industrial license from theMinistry.

NATIONAL INDUSTRIES ENCOURAGEMENT ACT

The National Industries Encouragement Act was sanctioned byRoyal Decree No. M/50 dated 23/12/1381 AH. Its articles apply toexisting and new industries and include the following concessions:

1. Customs duty exemption on all imports for industrial

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establishments, including equipment, machinery, tools, spareparts, raw materials (primary or semi-manufactured), andpackaging materials, including tins, bags and cylinders.

2. Provision of plots of land for the construction of factories andresidences for laborers and personnel, at a nominal rent.

3. Support for local production by limiting imports to theKingdom of commodities similar to those produced locally.

4. Extending financial aid to the industrial establishments.5. Exempting local products from export duties and all other

taxes.

Concessions 1 and 2 are awarded by the Minister of Industry andElectricity on the recommendation of the Technical Industrial Bureauin the Ministry. Concessions 3 and 4 are granted by the Council ofMinisters on the recommendation of the Minister of Industry andElectricity. Concession 5 is govberned by a Royal Decree based onthe decree of the Council of Ministers. To receive these concessions,industrial establishments should meet the following conditions:

* Provide all the information about the industrial project anddetails required by the Ministry, and allow the Ministry’srepresentatives to inspect the project according to the articles ofthe Act.,

* Use equipment, machinery, spare parts and raw materialsexempted from custom duties only in licensed factories and forthe purposes for which exemptions were granted.

* Employ Saudi laborers and technicians, unless otherwiseapproved by the Ministry of Labor and Socil Affairs.

FOREIGN CAPITAL INVESTMENT ACT

The Foreign Capital Investment Act covers currencies, financialand commercial papers, equipment, machinery, spare parts, rawmaterials, products, transportation means, patent rights, and trademarks, provided that they are officially registered and officiallyrecognized. Foreign investments in the oil and mineral sectors aresubject to a special act applied by the Ministry of Petroleum andMineral Resources.

To enjoy the concessions allowed in the Foreign Capital InvestmentAct, foreign capital should meet three conditions:

* The planned investment should be in projects within theframework of the development plan or projects of the samenature in existence in the Kingfdom;

* It should involve foreign technical expertise; and

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* It should have an industrial license from the Ministry ofIndustry and Electricity, upon recommendation of the ForeignCapital Investment Committee.

The license, with all information and documents, and signed by theauthorized official or his authorized representative, should besubmitted to the office of the Foreign Capital Investment Committee,where it is registered and evaluated and referred to the committeealong with any relevant evaluation.

The application should include information on the legal status of theapplicant, the company and the products it plans to produce in theKingdom, with information on the local competiton, a description ofthe manufacturing process, and details of the equipment, machineryand raw materials, manpower requirements and plans for the trainingof Saudi labor and personnel, the value of the project, the economicfeasibility study, the project cost and marketing plans.

The Foreign Capital Investment Committee is comprised of theUndersecretary for Industrial Affairs of the Ministry of Industry andElectricity, as Chairman, together with representatives of theMinistries of Planning, Finance and National Economy, Petroleumand Mineral Resources, Agriculture and Water, and Commerce.Among the committee’s functions are suggesting developmentprojects, assessing investment applications, investigating complaintsor disputes, recommending penalties for violators, and establishingrules for the implementation of the Act.

The Foreign Capital Investment Act grants foreign capital the sameconcessions as national capital under the national IndustriesEncouragement Act. It exempts industrial or agricultural projectsfrom these taxes for five years from the start of production, providedthat the project has local equity participation of not less than 25percent during the period of exemption. If the project was inexistence before the issue of the Act, the exemptions will be applied.

The Commerce and Industry Minister can draw the attention of anyof the licensed industrial establishments to violations of the provisionsof the Act and require them to remedy the violation within a specifiedtime. In case of non-compliance, the Minister may, on therecommendation of the Foreign Capital Investment Committee,withdraw the license or liquidate the establishment.

The owners of the establishment may appeal to the Board ofGrievances against the penalty within 30 days from the date ofnotification, through the official channels.

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DEVELOPMENT PROJECTS QUALIFYING FOR FOREIGNINVESTMENT

The Ministry of Industry and Electricity designates five categoriesof development projects as qualifying for foreign investment, asdescribed below. However, other development projects may beaccepted on the recommendation of the Foreign Capital InvestmentCommitte.

Industrial Development:* Converting raw material into manufactured or semi-manufactured

materials, transferring semi-manufactured materials into fullymanufactured materials or preparing, packaging and filling fullymanufactured materials.

Agricultural Development:* Agricultural resources, for example the production of fruit,

vegetables, grains (except wheat and barley), nurseries,greenhouses, crop seeds, or green fodder.

* Animal resources, such as cattle fattening and breeding, beehives,dairy products.

* Fish recources, such as fishing and the establishment of artificialponds for fish breeding.

Health Development:* Building, maintenance, operation and management of hospitals,

clinics or health centers.

Services:* Banks, hotels, and tourism services

* Training, maintenance and operation services that requiretechnology

* Environmental protection services

* Shopping

* Computers

* Technical workshops

* Refrigerated stores

* Restaurants

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Contracting:* Civil construction, such as notable buildings, medical

installations, airport buildings, terminals, subways, tarmac roads,water and sewerage, civil works and railway lines.

* Electricity works, such as power generating plants, power relayand distribution networks and communications networks, andelectronic fittings.

* Mechanical works, such as cooling and dry air-conditioningworks, and pumping and purification plants.

Industrial Works:* Construction of factories, refineries and petrochemical works,

such as construction of tanks and petrochemical installations,laying of oil and gas pipes, construction of desalination plants, andrelated mechanical installations.

LICENSE APPLICATIONS FOR ESTABLISHING FOREIGNCAPITAL INVESTMENT PROJECTS.

1. Submission of License Applications

A. Industrial Projects:Investors who want to establish an investment project should briefly

describe the nature of the proposed project, in terms of products,production capacity and investments, etc., to the Evaluation andLicensing of Industrial Projects Department of the Ministry ofIndustry and Electricirty and enquire about the possibility of licensingthe project.

If there is a possibility of issuing a license on the basis of theproduction capacity of existing factories and of market conditions, thepotential investor will receive license application forms from theEvaluation and Licensing of Industrial Department at the Ministry.

If a license is to be granted to a joint venture, the Saudi or theforeign partner, or his authorized representative should submit thelicense application form to the Secretariat of the Foreign CapitalInvestment Committee along with the following documents:

If the foreign partner is a company:1. The partnership agreement, signed by all partners.

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2. The license application form for the establishment of anindustrial project, in Arabic, with another form in English if oneof the partners is non-Arab. The form should be signed by theauthorized applicant.

3. The resolution of the Board of Directors of the foreigncompany to invest or participate in the establishment of theproject in the Kingdom to be attested by the concernedauthorities. The resolution should mention the name and thenationality of the company’s representative as well as the nameof the Saudi partner.

4. The project economic feasibility study and catalogues ofproduction, machinery and equipment.

5. For special trademarks or patent rights, an attested certificateapproving the use of industrial patent rights, as well as copies ofthe technical agreement if any.

6. An attested letter of a valid authorization to the applicantstating the aurhority of the applicant.

7. An attested registration certificate of the foreign company inthe country of origin, issued by the authority that approved thecompany. The certificate should state the date of registration,with an Arabic translation of the certificate.

8. Attested documents stating the experience of the foreigncompany participating in the proposed project in manufacturingsimilar products and stating the date on which the companyassumed its industrial activity.

9. If the foreign company participating in the project has noindustrial experience and is affiliated with another companywhich does have experience, the following should be presented:

a) An attested certificate stating the relationship between theforeign company and the parent company.b) An attested registration certificate of the parent companyin its country of origin, issued by the authority which gave itthe right to carry out its work, and bearing the registrationdate. c) An attested certificate of the experience of the parentcompany in the manufacture of products similar to those ofthe proposed project.d) An undertaking attested by the competent authority,including an undertaking by the parent company to extendtechnical assistance to the proposed project. e) Budgets of the parent company for the last three years.

10. The final accounts and the general budgets of the foreignpartner for the last three years.

11. The permanent addresses, phone, and fax numbers of the

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Saudi and foreign partners.12. A copy of the Commercial Registration of the Saudi partner

for the establishment, and copies of the identify cards of theindividual Saudi partners.

13. An undertaking by the foreign partner confirming that it is nota partner in other companies in the Kingdom that have similaractivities.

14. An undertaking by the principals to furnish the Ministry withthe address of the project after its completion.

15. The initial consent of the Ministry of Information for printingand advertisement projects.

16. For lubrication oil blending projects, the initial consent of theMinistry of Petroleum.

If the foreign investor is an individual:

He shall present the documents listed in 1, 2, 4, 5, 6, 11, 13, 14, 15and 16 above in addition to the following: certified copies of theindividual’s curriculum vitae and diplomas translated in Arabic; acopy of the individual’s passport, residence permit if he is resident inthe Kingdom, and a letter from his sponsor approving the transfer ofsponsorship if the project is endorsed.

B. Transportation Projects:Shipping projects mentioned in Article 5 of the ministerial

resolution on development projects are available to foreign investors.Transportation projects require a license in accordance with theForeign Capital Investment Act before the registration and formationof the company according to the Companies Act.

The foreign investor, in the case of a joint venture, or the Saudipartner or a duly authorized representative is to present the followingdocuments:

1. The partnership agreement, signed b y all partners. 2. A copy of the license application in Arabic (with a copy in

English in the case of a foreign partner) along with a statementspecifying the activity, the capital, each partner’s share and theirn ationalities.

3. An attested certificate with the authorization of the person whorepresented the application.

4. An attested certificate from the official authorities (annualreports can also be accepted) showing the activities of theforeign partner inside and outside the Kingdom, with a statementon the means of transport he owns and their value.

5. The resolution of the Board of Directors of the foreign partner to

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invest in the Kingdom and the appointment of an agent of thecompany in the Kingdom. The resolution should be approvedby the concerned authorities.

6. An attested registration certificate of the foreign companyparticipating in the project, in its country of origin.

7. The annual reports and general budgets of the foreign partnerfor rthe last three years.

8. A document stating the assistance and facilities to be extendedby the parent company for the joint venture project.

9. The address of the foreign partner in his country of origin, theaddress of the Saudi partner in the Kingdom and the address ofthe proposed project.

10. Copies of the Commercial Registrartions of the Saudipartners, in the case of companies and establishments, andidentity cards in the case of individuals.

11. An attested certificate stating the date and place ofmanufactrure of the project’s vessels, loads and any otherstatements (for shipping projects).

12. The economic feasibility study of the project in Arabic.13. The consent of the Ministry of Communications (The Deputy

Minister for Transportation Affairs) for the establishment of theproject in the Kingdom.

14. An undertaking by the foreign partner company that neither itnor its branches or associate companies is participating in anyproject of similar activity in the Kingdom.

C. Services and Contracting Projects:The Ministerial Resolution related to development projects, under theForeign Capital Investment Act, states the types of projects related tothe provision of services contracting works that have foreign capitaland can be licensed. All these projects require licenses according tothe Foreign Capital Investment Act before formation and registrationof the company according to the Companies Act. Companies licensedaccording to the Foreign Capital Investment Act that have beenfounded and registered for carrying out certain services or contractingworks should obtain an amendment of the previous license given tothem.

Foreign companies that do not hold licenses but have temporaryregistration from the Ministry of Commerce for carrying out a contractneed a license under the Foreign Capital Investment Act to continuetheir work in the Kingdom on projects for the public or private sector.

In all cases above, the foreign investor, or the Saudi partner or theirduly authorized representative, is to present the following documents.

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If the foreign partner is a Company:

1. The partnership agreement signed by all partners.2. The license application for the establishment of a contracting

and services project in Arabic and another form of English ifone of the partners is non-Arab. The forms should be signed bythe authorized representative, and a preliminary feasibility andmarketing study should be included.

3. The resolution of the Board of Directors of the foreigncompany to invest or participate in the establishment of theproject in the Kingdom, including the name of the Saudi partner,and the name and nationality of the foreign company’srepresentative in a joint venture. The resolution should beapproved by the competent authorities.

4. An attested letter of authorization supporting the applicant’svalidity and stating the applicant’s authorities.

5. An attested statement mentioning projects carried out by theforeign partner inside and outside the Kingdom, their values, thedates of their execution, the name of clients, and a detaileddescription of the executed works.

6. An attested registration certificate of the foreign company inthe country of origin issued by the authority that granted it theright to carry out its works. The certificate shall give the date ofregistration, with a translation in Arabi.c.

7. If the foreign company participating in the project is owned b yanother company, an attested certificate should be presentedstating the relationship between the foreign partner and theparent company, with an undertaking by the parent company toextend technical assistance and facilities to the joint Saudicompany. The parent company shall also present its budgets forthe last three years.

8. The final accounts and the general budgets of the foreignpartner for the last three years.

9. If the project is for maintenance, contracting or laboratories orany similar activity, a statement of the equipment for theestablishment and its value should be presented.

10. The addresses of the foreign and Saudi partners and theaddress of the foreign partner in the Kingdom if any. If there isno permanent address, the applicant shall undertake to providethe Ministry with the permanent address upon its registrationtogether with his signature on the prescribed form.

11. A copy of the Commercial Registration of the Saudi partner ifit is an establishment or a company, and copies of identify cardsif the Saudi partners are individuals.

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12. An understanding by the foreign partner that he is not apartner in any other company in the Kingdom that has similaractivity.

13. The initial consent of the Ministry of Agriculture and Waterfor companies engaged in the drilling of water wells.

14. The consent of the Ministry of Petroleum and MineralResources for companies engaged in exavatioon, drilling of oilwells and mining.

15. The consent of the Ministry of Health for hospitals andclinics.

16. The consent of the Saudi Arabian Monetary Agencian(SAMA) for banks.

17. On application for license by the fully owned branch of aforeign company in the Kindgon, the parent company shallundertake to be responsible for financial and non-financialobligations resulting from the activities of its branch in theKingdom. The undertaking shall be duly approved by theofficial authorities.

If the foreign investor is an individual:

He shall present the documents mentioned in 1, 2, 4, 9, 10, 11, 12,14, 15 and 16 in addition to the following:

1. A copy of diplomas and other educational certificates attestedand translated in Arabic.

2. A copy of his passport and residence permit, if he is residing inthe Kingdom, together with a letter of approval for the transferof sponsorship if the project is endorsed.

II. Evaluation of Investment Projects and Issuing of LicensesIndustrial projects are evaluated by the Evaluation and Licensing of

Industrial Projects Department in association with the Secretariat ofthe Foreign Capital Investment Committee. Other projects areevaluated by the Secretariat of the Foreign Capital InvestmentCommittee after consulting other government organizations ifnecessary. The Secretariat of the Foreign Capital InvestmentCommittee presents to the Committee the project application of theevaluation report for decision. The decision of the Committee is to besubmitted to the Industry and Electricity Minister for approval.

The evaluation of the project and the issuing of the license takesbetween four and six weeks, provided all documentation is completeand depending on the nature of the project and schedules of sessionsto be held by the Foreign Capital Investment Committee. The

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Secretariat of the Foreign Capial Investment Committee sends thelicense to the applicant with copies to:

* The Ministry of Planning* Zakat and Income Tax Department* The Ministry of Commerce, Companies Department* The Saudi Arabian Industrial Development Fund (SIDF), in case

of industrial projects* Other departments of the Ministry of Industry and Electricity, as

appropriate.

If an application is rejected, the applicant may submit a petition tothe Minister of Industry and Electricity. If the investor is requestingthe amendment of a project license, he should submit an application tothe Secretariat of the Foreign Capital Investment Committee withinthree months from the date of rejection or receipt of the license.

III. Project Procedeure and RegistrationThe application for the foundation and registration of a company,

under the Companies Act, or for the amendment of articles ofassociation, if the company is in existence, should be submitted to theMinistry of Commerce with a copy of the license within a month fromthe date of the issue of the license.

Investors should also obtain a registration amendment certificateunder the Commercial Registration and the Companies Act from theAdministration of Companies or the Commercial Registration officesof the Ministry of Commerce in the Kingdom’s main cities.

Investors should take all necessary steps for the establishment of theproject within six months from the date of issuance of the license asstated therein. Delay in taking these steps without acceptable reasonscould cause the license to be canceled.

Applications for an extension of the period for the establishment ofthe project should be submitted to the office of the Secretariat of theForeign Capital Investment Committee with supporting reasons. Inaddition, the following should be taken into consideration forindustrial projects:

* In applying for the lease of a plot of land at the nominal rent, theappropriate form shoud be submitted, along with a copy of thelicense and a sketch map of the required plot, to the IndustrialParks Department at the Ministry of Industry and Electricity.

* The Ministry’s land distribution committee determines the area ofland to be allocated to the project according to the land availableand the proposed products.

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* Should a plot of land be allocated to the project, the investorshould visit the industrial park within ten days of being informed ofthe allocation of the land and make an application to the Director ofthe Industrial Park within six weeks of the date of the layout’sapproval.

* The factory shall be constructed according to the approved layout.Any changes required during the factory construction should besubmitted for the approval of the engineering body affiliated withthe Director of the Industrial Park, Engieering and ProjectsDepartment.

* All investors should submit regular progress reports on theestablishment of the project: industrial projects to the follow-upDivision of the Evaulation and Licensing of Industrial ProjectsDepartment of the Ministry of Industry and Electricity; otherprojects to the Foreign Capital Investment Office. Failure to do socould result in the cancellation of the license.

IV. Procedures for Obtaining Exemptions and IncentivesAll owners of projects that apply for entry visas and resident

permits for foreign laborers and personnel from the Ministry ofInterior should seek the advice of the Foreign Capital InvestmentCommittee on its resident permit (Iqama) and its renewal beforeapplying to the Passports Department, and the advice of the IndustrialEncouragement Department on the manpower needed by the industrialproject before applying to the recruitment office at the Ministry ofInterior.

Industrial projects requiring loans at concessionary terms from theSaudi Industrial Development Fund (SIDF), should submitapplications, with the required details in the prescribed form and acopy of the license, to theSIDF. Industrial projects that requireexemption from customs duties for the importation of machinery andequipment, and raw materials under the National IndustriesEncouragement Act should submit a request for each exemption to theEncouragement Department of the Ministry of Industry andElectricity. The owner of the industrial project should apply to thedepartment before the arrival of the goods that the plans to import,giving a detailed description of imported items, names and addressesof sources, country of origin and the Saudi port through which theywill arrive, number and dates of invoices showing the amounts ofgoods and their prices in foreign currency.

The applicant should attach ten copies (eight in Arabic) of thepreliminary invoices for the imported oods stating specifications,quality and value. The applicnt should also fill in a form undertakingto use the imports for industrial projects only.

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AMENDMENTS TO INDUSTRIAL AND NON-INDUSTRIAL

LICENSES

* Documents to be submitted along with applications foramendment of ownership or shares, increase or decrease of capital;the opening of follow-up offices or marketing centers; and theexpansion of facilities or modification of a project site are asfollows:

Principal Documents* Partner’s resolution on the required amendment.* Company’s balance sheet and report for the last finished year.* Certificate of payment of Zakat and taxes (from the Ministry of

Finance and National Economy).* A copy of the company’s commercial registration certificate (to be

submitted only with the first application of an amendment).* Copies of the original license and any subsequent modifications to

it.

Amendments Requiring Additional DocumentsOwnership amendment (industrial and non-industrial):

* Amended articles of association,* In the case of the admission of a new Saudi partner, copies of the

identify cards of individuals, and the Board of Directors’ resolutionapproving his participation in the joint venture company,accompanied by a copy of the commercial registration certificate inthe case of companies.

* In the case of the admission of new foreign partners (individualsor companies), the documents related to the foreign partner that arementioned in the list of required documents for licensing a newproject that has a foreign partner.

* Approval from the Saudi Industrial Development Fund (SIDF) forthe requested modification or a letter from SIDF stating that it hasno dealings with the company.

* In the case of the withdrawal of a partner, a certified statementregarding his withdrawal signed by the partner withdrawing fromthe company. For the joint venture company to retain the name ofthe withdrawing foreign partner, the certificed document ofwithdrawal should state that his share and the use of his name havebeen sold.

* The Principal Documents listed above.

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Modification of Joint Venture Company’s Name and/or StatutoryStatus (industrial and non-industrial):

* Amended articles of association containing the modificationrequired (signed and dated).

* Approval from the SIDF for the requested modification (industrialprojects only).


Opening Branches (non-industrial projects):* Details of total cost to set up the branch.* For bank branches, an approval from the Saudi Arabian

Monetary Agency (SAMA).* For branches of a transportation company, an approval from

the Ministry of Transportation (Deputy Minister forTransportation Affairs).

* For drilling water wells, an approval from the Ministry ofAgriculture and Water.

* For oil exploration, drilling and mining, an approval fromthe Ministry of Petrleum and Mineral Resources.

* For hospitals and clinics, an approval from the Ministry ofHealth.


Opening Follow-up Offices (non-industrial):* A copy of contracts to carry out works in the districts where the

company wants to open offices.* Names of cities in which the required offices will be operated.* The Principal Documents listed above.

Increasing/decreasing Capial (non-industrial):* A detailed memo on the amendment method.* Amended articles of association including the modified capital and

any modification in partners’ shares.* An undertaking from the partners that they will meet dues or

obligations to the company’s creditors before decreasing thecapital.

* A certificate from a chartered accountant, licensed to work inSaudi Arabia, stating that the capital of the company afterdecreasing will still cover all the debts due from the company.


Adding or Deleting an Activity (non-industrial):

* Amended articles of association* In the case of the addition of an activity, a certified document

including the experience of the foreign partner in the activity.

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Dissolving and Liquidating a Company (industrial andnon-indistrial):

* A copy of the cancellation certificate of commercial registration ofthe company from the Ministry of Commerce.

Extending a Company (industrial):

Increasing production capacity, adding new products, opening anew branch

* A copy of the preliminary approval letter concerning the requiredextension issued by the Evaluation and Licensing of IndustrialProjects Department to the company.

* Completed license application form for the requested extension.* A feasibility study (when required).* The Principal Documents listed above.

Opening Marketing Centers or Showrooms (industrial):

* Names of cities in which the required centers will be opened.* The Principal Documents listed above.

4. OMAN INVESTOR’S GUIDEThis guide is being published as part of the efforts of Oman

Chamber of Commerce and Industry aimed at boosting the privatesector’s activities and providing the investors, both local and foreign,with the laws pertaining to carrying out business in the Sultanate.

The purpose of this guide, in the first place, is to inform the investorabout the procedures and conditions required for obtaining variouscommercial registrations from the competent authorities in Oman.

Firstly: Legal Definition of a Commercial Company*

1. General Partnership

The General Partnership is a Commercial Company formed by twoor more natural juristic persons and which aims at practicing businessunder a certain trade name. The partners of a general partnership shallbbe jointly and severally liable for the general partnership’s debts tothe full extent of their property.

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2. Limited PartnershipThe limited partnership is a Commercial Company, which

comprises two categories of partners:

One) One or more general partners who shall be jointly andseverally liable for the limited partnership’s debts to the full extentof their property.

Two) One or more limited partners whose liability for thepartnership’s debts shall be limited to the amount of theircontribution to the partnership capital, provided that such amounthas been stated in the limited partnership’s memorandum ofassociation.

(*) The commercial Companies Law No. 4/1974 and its amendments.

3. Joint-Stock CompanyThe joint-stock Company is a Commercial Company whose capital

is divided into equal negotiable shares pursuant to the CommercialCompanies Law of Oman. The liability of the shareholder shall beconfined to the payment of the value of the shares he subscribes andhe shall not be responsible for the debts of the company except withinthe limits of the nominal value of he shares the subscribes.

The company shall have an issued capital and the company’sarticles of association may, however, specify an authorized capitalexceeding the issued capital.

The Joint-stock Company shall consist of, at least, three natural orjuristic persons. Companies established by the government solely orjointly wih others shall be exempt from this provision.

4. Holding CompanyThe Holding Company is a Joint-stock Company or a Limited

Liability Company which financially and administratively controlsone or more other Companies which become subsidiary to suchCompany by means of its holding at least 51% of such Company orCompanies whether they are Joint-stock or Limited LiabilityCompanies. The term “holding” shall be added to the title of suchCompany in all its papers, advertisements and other documents issuedthereby. These Companies shall submit an initial assessment of theshares in kind of the partners at the time of forming the Company or atthe time of increasing its Capital, pursuant to the Ministerial DecisionNo. 255/94 issued by the Minister of Commerce and Industry (MOCI)regarding the provisions organizing the Holding Companies and their

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subsidiaries, and the Ministerial decision No. 198/94 issued by MOCIregarding the procedures of evaluating the shares in kind andappointing experts for that.

The capital of a Holding Company shall not be less than 2 MillionOmani Riyals and a Holding Company shall neither hold shares ofgeneral or limited partnership Companies nor shall it hold any sharesin other Holding Companies.

5. Limited Liability CompanyThe Limited Liability Company is Commercial Company with a

fixed capital divided into equal shares. It consists of two or morenatural or juristic persons whose liability is limited to the nominalvalue of their shares in the Capital of the Company. The number ofpartners of the Limited Liability Company shall not exceed 40 (forty)partners.

6. Joint VentureThe joint

venture is a Commercial Company formed by two or more juristic ornatural persons and establishing legal relationship between itsmembers without affecting third parties. The joint ventures shall nothave a name of its own and its existence shall not be raised as adefence against claims made by third parties.Secondly: General Procedures and Conditions for EstablishingCommercial Companies

1. Commercial Registration* Commercial registration is issued by the Ministry of Commerce and

Industry;* Fill-up the application form for registering in the Commercial

Registry;* Fill-up the Specimen Signature form (in duplicate);* Obtain the approval of the Committee which decides the trade

names of the Companies, on the name of the establishment in orderto avoid duplication of the name;

* Attach a copy of the personal identity card;* Pay registration fee.

2. Industrial Registration*One) Procedures for obtaining an Industrial Registration:

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MOCI has identified two types of investments for the industrialinvestor, viz. The Form (a) & Form (b). Form (a) containsindustrial projects while Form (b) includes other projects.

(*) MOCI - Secretariat of Industrial Affairs

Form (a)

Contains 24 industrial projects that can be directly licensed by theIndustrial Registry or the regional offices. The project owner shallcomplete the following formalities:* Fill the relevant form.* Attach a copy of the Commercial Registration (CR), if any, or a

copy of the Passport or ID card.* Produce the initial approval on the Industrial Licence valid for

three months amendable.* Produce the approval of the Ministry of Regional Municipalities

and Environment (MRME) for project on which environmentalconditions shll apply.

* Produce Licence Certificate.* Fill environmental evaluation application for projects on which

environmental conditions apply.* Obtain Industrial Licence Certificate and then the applications

shall be referred to the MRME, for necessary action.

Form (b)

* Fill the form - Attach a copy of CR (if any) or Passport/ID Card

and catalogues of the plant and machinery to be used in the project.* Obtain necessary recommendation.* Produce initial approval on the licensing for a 3 month period

extendable.* Produce MRME approval.* Produce Industrial Licence Certificate for 6 months extendable.

Two) Procedures for obtaining the Industrial Registration:

* Fill-in the relevant Forms (a) and (b).* Attach a copy of valid CR.* Payment of Registration Fee.

Three) Procedures for changing location

* Letter in this regard stating the new location.* Produce approval from MRME.

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Four) Procedures for requesting factory expansion:

* Produce industrial expansion licence application of Form (a) or(b).

* Attach a letter explaining the expanded production capacity.

Five) Procedures for changing the name:

* Submit a letter in this regard;* Produce approval of the Commercial Registry on the new name.

Six) Procedures for updating data [new partner(s), exit of partner(s),sale of Factory]::

* Submit a letter requesting updating of data.* Fill-in the relevant forms, based on which an internal memo will

be forwarded to the Documentation and Attestation Departmentto complete the formalities.

* Inform the Industrial Registry after documentation.

Seven) Procedures for renewing the Industrial Registration:

* Fill-in the Renewal Form.* Produce a copy of the valid CR.* Payment of renewal fee.

Eight) Procedures for extending the Industrial Licence:

* Submit extension application stating the reasons for the delay inproject execution.

3. Procedures for setting up Joint-stock Companies:

One) General Legal Requirements:

* The capital of the public `joint-stock Company should not be lessthan RO 500/- (Riyals Omani Five Hundred only) and the capital inthe case of Limited Joint-stock Company, whose shares will not befloated for public subscription, should not be less than RO 150,000/(Riyals Omani One Hundred and Fifty Thousand only).

* The number of partners should not be less than 3 persons and therate of their shares in the capital of the Public Joint-stock Companyshould not be less than 30% and not more than 60%, and onefounder should not own more than 20% of the capital.

* The shares offered for public subscription should not be less than40% of the capital.

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Two) Documents to be submitted:

* A letter to the Directorate General of Commerce for permitting toset up a Joint-stock Company. This letter should include briefdetails of the type of the Company, its equity capital, activities andnames of the founders and signed by three founders.

* Original and two copies of the Memorandum of Incorporation andthe Articles of Association of the Company signed by all founders.

* A form showing non-presence of same name and the approval ofthe Committee on it.

* Photocopies of the passports of the natural founders.* Resolution of the Partners’ Assembly in case of general

partnership and limited partnership Companies and the BoardResolution in case of Joint-stock Companies, while mentioning thenumnber of shares subscribed, the name of the authorized signatoryon the Memorandum and Articles of Association if one of thefounders ws a juristic person. Also copies of the computer printout and valid CR certificate of these Companies.

* Copies of the approvals of other Ministries, if the nature of theCompany’s activity necessitated that, such as Ministries ofInformation, Education, Health, Board of Muscat Securities`market, etc.

* Memorandum of Incorporation of Articles of Association, copy ofthe CR, signing authorization attested by Oman Chamber ofCommerce and Industry, Oman’s Embassy or Embassy of any Arabcountry which is an Arab League member, situated in the countryof the foreign founder’s Head Office, if he was a juristic person.

* Bank certificate stating deposit of the value of their shares by hefounders.

4. Licence for Practicing Management Business*:The applicant shall do the following:

One) Fill-in the relevant form in Arabic.

Two) Attach the following documents:* A copy of the Registration Certificate of the Office or Company’s

Head Office duly attested by competent authorities.* A copy of the management contract between the applicant and the

Omani firm, duly attested, if it was signed outside Oman.* A copy of the authorization issued to the representative of the

firms in Oman who will implement the Contract in Oman, attestedby competent authorities.

* A copy of the passport of the firm’s representative in Oman.

(*) MOCI - Company Affairs Department

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5. Licensing of Joint Professional Companies Pursuantto Royal Decree No. 120/94:

Applicants should fulfill the following:

* Fill-in the relevant applciation form;* Submit memorandumn of ìncorporation of a Commercial

Company pursuant to the Commercial Companies Law `no. 4/74.

The Omani Partner should submit the following:

* University qualification, not less than a Bachelor’s Degree in oneof the Engineering subjects or equivalent duly recognised plus a listof curriculum.

* Experience of not less than 5 years in his specialization aftergraduation, in the case of post-graduates or a Doctorate in hisspecialization, in the case of post-graduates or a Doctorate in hisspecializaion.

* Photocopy of Passport/Identity Care.* A declaration stating that he was not convicted for any

misdemeanour or breach of trust.* The Omani participation in the Company should not be less than

35%.

For Foreign Partner

* An official certificate from the Commercial Registry or any othercompetent authority in the country of his heal office, stating thatthe Company is still registered and it has an experience of not lessthan 10 years in the same field, duly attested.

* An undertaking from the head office for its responsibility on theshare of the foreign partner duly attested.

* Signing authorisation duly approved with attested copies ofeducational qualifications in the concerned field and experience ofnot less than 10 years.

* The memorandum of ìncorporation of the head office dulyattested.

* The latest balance sheet of the head office duly attested.* The businesses carried out by the Company during the period in

the same specialization.

General Requirements for Joint ~Professional Companies:

* The foreign professinal should have at least 5 years experience inthe field after graduating in Engineering. òmanis with Universityqualification can be appointed without requiring any previous

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experience. However, their works should be approved by theofficials of the office.

* The Omani partner should be involved in the Companies on fulltime basis.

6. Branches of Foreign Professional Companies:The applicant for setting up this type of office should fulfill thefollowing:

One) Fill-in the relevant Applicaion Form, in Arabic.

Two) Attach the following documents:

* A copy of the Registration Certificate of the head office stating theexistence of the Company/Office at the time of application and acopy of the Certificate of Incorporation or any other Certificate toprove the Company’s experience of 10 years.

* An understanding from the head office bearing full responsibilityof the branch in Oman duly attested.

* Authorisation for the Resident Manager or representative in Omanfor signing on behalf of the Head Office, duly attestede. Attachoriginal or copy of attested qualification certificates, provided theexperience is not less than 10 years and a copy of passport.

* Details of experience and previous projects carried out by the headoffice.

* A copy of the Memorandum of `incorporation or Articles ofAssociation of the head office.

* The last annual balance sheet of the head office.

Three) These certificates should be attested by the competentauthorities in the country of the head office and `oman’s Embassy(if any) or the Embassy of any Arab country which is a member ofthe Arab League.

7. Procedures for the Transformation and Merger ofCompanies, pursuant to the CommercialCompanies Law No. 4/74:

One) Transformation of Companies:

Article 13(1)

Without prejudice to the provisions regulating Gulf Investment inOman promulgated by the Royal Decree No. 57/93 and subject to theprovisions of Articles (5), (58), (61) and 124) of the law, a Companymay be transformed from one form into another provided that it hasissued three audited annual balance sheets. The transformation shall

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take place in accordance with a resulution made pursuant to theconditions set out for amending the existing Company’s Memorandumof Association or Articles of Association, and the completion ofincorporation proceedings and the conditions specified for the newform.

The transformation of the Company shall be noted in theCommercial Register provided that is shall not take effect until afterthe expiration of he periods specified in the following Article.

Article 13(2);

The transformation of the Company shall not result in the creationof a new juristic person. The Company, after transformation, shallmaintain its rights and liabilities that preceded such transformationwhich shall not release the jointly laible members from the liabilitiesof the Company preceding the transformation unless the creditorsagree. However, such agreement shall be assumed valid if one of thecreditors object in writing within two months from the date of beingofficially notified of the transformation resolution pursuant to theprocedures decided by the Ministry of Commerce and Industry.

If any of the creditors object to the Ministry of Commerce andIndustry against such transformation, the procedures thereof shall notbe completed until after the payment of the debt or after the Companyhas sued out a decision of the Authority for the Settlement ofCommercial Disputes rejecting such objection.

Article (13)

In the event of transformation, each partner shall have a number ofshares or proportions in the new Company equivalent to the value ofshares or proportions he had prior to transformation.

If the transformation is to a Liability Company, and the value of apartner’s share is less than the minimum nominal value of a share inthe Company, then such member shall have to pay the balance of suchvalue in cash within one month of the date of his notification of thesame; otherwise, he will be deemed withdrawn from the Companyand the value of his share shall be paid according to its market valueon the date of transformation.

Two) Merger of Companies:

Article 13(4):

A company may, although under liquidation, merge with anotherCompany of the same or different legal form. Merger shall take placein accordance with either of the two following ways:

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1. Incorporation - that is, the dissolution of one or more Companiesand the transfer of its or their liabilities to an existing Company.

2. Consolidation - that is, the dissolution of two or more Companiesand the establishment of a new Company to which the liabilities ofthe amalgmated Companies shall be transferred.

A merger resolution shall be made by agreement of the Companieswishing to merge pursuant to the manners specified for theamendment of the Company’s Memorandum of Association orArticles of Association without following liquidation proceedings.The merger resolution shall not take effect without the consent of thecompetent authority specified by this Law according to legal form towhich the Company has been transformed.

In the case of Banks and Investment Companies, the approval of theCentral Bank of Oman of the merger resolution is a must prior to theimplementation of such merger.

A decision shall be made by the Minister of Commerce andIndustry regarding the way of evaluating the assets of the Companieswishing to merge, and the procedures and conditions of mergersubject to the provisions provided in the following articles.

Article 13(5)

Merger through incorporation shall take place as follows:1. A resolution shall be made by the incorporated Company as to its

dissolution and incorporation into the incorporating Company.2. The net assets of the incorporated Company shall be evaluated in

accordance with the last audited balance sheet; otherwise, theprocedure regarding the evaluation of the shares in kind provided inthis law shall apply.

3. The incorporating Company shall issue a resolution increasing itscapital pursuant to the result of the assets of the incorporatedCompany.

4. The increase of the Capital of the incorporated Company shall bedivided among the partners of the incorporated Company inproportion to their shares therein.

5. If the shares are the form of stocks and two years have expiredsince the establishment of the incorporating Company, then suchstocks may be negotiable as soon as they are issued.

Article 13 (6)

Merger through incorporation shall take place by virtue of adecision to be sued out by each of the incorporated Companies from

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the competent authority provided in the Memorandum and Articles ofAssociation regarding its dissolution. Then the new Company shall beestablished according to the terms and conditions provided in this law.However, if the new Company is a joint stock Company, then thelatest audited balance sheet or the export’s report related to theevaluation of the shares in kind shall be taken into considerationneedless to refer the matter to the constitutive meeting.

Article 13 (7)

Each incorporated Company shall be assigned a number of sharesor stocks equivalent to its share in the capital of the new Company andsuch shares or stocks shall be divided among the partners of eachincorporated Company in proportion to their shares therein.

Article 13 (8)

The merger shall be announced in two daily newspapers for twoconsecutive times and shall be registered in the Commercial Register.The merger resolutions shall not take effect until after expiration ofthree months from the date of the registration of the merger in theCommercial Register.

The creditors of the incorporated Company shall have the right,during such period, to object to the merger by a registered letter to theCompany, and in this case the merger remains suspended until thecreditor withdraws his objection, or the Authority for the Settlementof Commercial Disputes finally overrules such objection, or theCompany pays the debt if it is matured or gives satisfactory security tosettle such debt if it is a deferred debt. If no objection is receivedduring the aforesaid period, the merger shall be deemed final andconsequently the incorporating Company or the new company shallreplace the incorporated Companies in all their rights and liabilities.

Article 13 (9)

The authority in charge of management of the Companies decidingto merge shall remain until the merger comes into effect.

Article 13 (10)

All rights and liabilities of the incorporated company shall betransferred to the incorporating or new Company after the mergerresolution becomes effective and the new Company is registered in theCommercial Register pursuant to the terms agreed in the mergercontract without prejudice to creditors’ rights.

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Thirdly: Procedures for Subscribing to OCCI:

1. To obtain a Subscription Certificate)

One) The following documents are to be obtained from the Ministryof Commerce and Industry:

- a copy of the Commercial Registration Certificate;- a copy of the Specimen Signature Form;- a copy of the Computer Sheet (Three Parts).

Two) Fill-in the application form signed by the AuthorizedSignatories.

Three) Fill-in the Company Address Form.

Four) Payment of Registration Fee (as per grade).

2. Renewal of Subscription

Renewal can be done yearly or two years. Renewal fees aredifferent from Registration fees, which are fixed according to thegrade. The following procedures are followed for renewal:

One) Production of OCCI Subscription Certificate or OCCI RegisterNumber;

Two) Verification of the validity of CR;

Three) Verification of last date of renewal;

Four) Preparation of a payment voucher for the renewal fee to be paid

at the Bank;

Five) A copy of the payment voucher to be handed over to OCCI

after stamped by the Bank;

Six) The renewed Certificate issued to the Member.

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OMAN’S INVESTMENT LAWS & DIRECTIVES

OCCI PUBLICATIONS :1. Oman Commercial Law (Royal Decree No. 55/90)2. Commercial Agencies Law3. Law of Income Tax on Companies4. Foreign Capital Investment Law5. Trade Directory 19976. Contractors’ Directory 19917. Investment Opportunities in the Sultanate of Oman

MOCI PUBLICATIONS :1. Foreign Capital Investment Law2. Capital Grants and Pre-Investment Feasibilitiy Studies Support3. Financial Support for Industry and Tourism Sector4. Trade Marks Law5. Accounting & Auditing Profession Law6. Real Estate Brokerage Law7. Insurance Companies Law8. Preference in Government Purchase Guide

OTHER PUBLICATIONS :1. Financial Legislation - Office of the Deputy Prime Minister for

Legal Affairs2. Customs Clearance Directory - General Administration of

Customs - Royal Oman Police (ROP)3. Professional Health Requirements - Muscat Municipality

For further information in this regard, OCCI can be contactedthrough internet on the following address:

http: www.omanchamber.com

E-mail address:

[email protected]

* Guide to obtain industrial license: The Single Station System has begun working at the Ministry

of Trade and Industry, and the procedure is through a singleformat for all kinds of industrial projects.* Industrial licensing within Muscat district:

- Existing companies (with CR), need to fill in a format for

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- All industrial projects

- Crackers, marble, other miningprojects

- Water desalination/mineralwater

- Clay, ceramic, goldsmith, silversmith

- Printing press

- Frozen and packing of fish chicken

- Drugs, other products used in hospital

Ministry of regional municipali-ties, environment, water resource.

Ministry of municipalities, envi-ronment, water resource, Hous-ing.

Ministry of water resources

Ministry of Heritage and Culture

Ministry of Information

Ministry of Agricultural & Fishworks

Ministry of Health

The Project Ministry/Directorate

industrial license, and the format for adding new activity,In case of new project (No CR), investor format should befilled.

- All procedures will be completed through one singlestation.

* Industrial Registration- After the establishment of the project and start of

production, a format for industrial registration has to befilled and submitted to the ministry. The follow-up andindustrial control directorate will recommend whether ornot to give the industrial registration for the project.

* Industrial projects outside Muscat district.- The industrial license: Environment friendly projectneeds no evaluation and immediately grant the license afterfilling in Format A. For other projects use Format B, andattach the necessary documents.

Approvals for Licensing

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5. QATAR

The Law No. 19 for the year 1995 on industrial organizingspecified the licensing procedeures as follows:

* A decision issued by the Minister needed to license new,expand, develop of any industrial project.

* An application is to be submitted to the industrial developmentdepartment at the Ministry of Energy and Industry, and to attachprefeasibility study and all necessary documents.

* The application will be transferred to the IndustrialDevelopment Committee, and within 60 days will release itsdecision.

* The department will submit its recommendation to the Ministerwithin 15 days, the Minister within 15 days will give therecommendation. The total period for licensing procedure rangebetween one week to 3 months.

* Time limits for start of the project is 6 months, and to becompleted within one to two years.

* The Minister has the right to cancell the license if theconstruction works did not start within the specified period, or ifthe investor violate any of the laws or regulations.

* The license application: The following information must befurnished:

- Name and nationality of the owner of the project.- The kind of industry, location.- Capital investment, name of partners.- Statement of the products, specification and the production

capacity.- Major used machinery.- Production costs for one year.- Financial indicators for the project.- Statement of the industrial wastes.- Requirements of fuels, electricity, water and raw materials.- Statement of worker.- The proposed schedule program for implementing the

project.* Major criterion for approval of an industrial project focus on

the availability of local raw materials, environment friendly,complementary industries, plus other criterion.

* The industrial license could be used to direct the industriestowards projects of top priorities, whether in the Gulfdevelopment stratgegy, or in the development plans of certainstate.

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* To obtain an industrial license, the following are to becontacted:- Ministry of industry: Licensing and registering of the

project.- Ministry of Municipality: to obtain the industrial land,

permit for construction, water, electricirty, telephone,environment issues.

- Ministry of economy; for the commercial license.- Ministry of Defense: Security and safety license.- Applicant shall pay fees as follows:

- Format for a license QR. 50- Fee for issuing the license QR. 10,000.- Industrial registration QR. 250- Renewal of the industrial registration QR. 250- Format for customs exmption QR. 10.

6. KUWAITThe procedures of the industrial license in Kuwait is as follows:

- Format for licensing an industrial establishment.- A letter from the concerned party- Conditions for approval

o Applicant should be a Kuwaiti (individuals or companies).o GCC citizens (individuals and companies)o Membership of the Kuwait Chamber of Trade and Industry.o Undertaking to abide by the specifications stated in the laws

and regulations.o To comply with environment laws and regulations.o Payment of the stated fees.o Age of the applicant not less than 21 years.o Invested capital not less than KD 250,000.

* Required documents

- Prefeasibility studies- Engineering and technical plan- Copy of the civil card for individuals, and contract of

establishment for comapnies.- A certificate from the social incorporation stating that the

applicant is non-government employee.- Catalogues and offers relating to machinery and equipments.- A copy of the signature of the applicant, or official power of

attorney.

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* Procedures of application

Details Site of imple-mentation

EstimatedTime

1. Comprehensive Service Cen-ter (CSC) receives the study, feesand issue a receipt, and a numberfor follow-up

2. The concerned official regis-ter the application, open a file andsend it to the evaluation section.

3. The evaluation section makesits recommendation and send forapproval by the Director General

4. The evaluation section willinform the applicant of the recom-mendation.

CSC*

CSC

CSC

CSC

One day

One day

7 days

One day

* Comprehensice Service Center

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CHAPTER SEVEN

LABOUR LAWS PROFILE

IN THE GCC STATES

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Labour Laws in the GCC states:

Labour laws in the GCC have many similarities in their essence andthere is only minor differences. The salient features of the law are asfollows:

- Focus and priority is to employ the nationals when it is possible.- Protect the manpower against abuses and insure full rights for

all workers.- Give the employer the guarantee that employees will abide by

laws according to the contracts of work.- All legislations protect strongly and efficiently the children and

women against misuse or hazardous jobs.

* Disputes settlement between workers and employees either tobe solved friendly or through organs stated by the law.

* Salient features of the labour laws in the GCC:

1. UAE* Citizens of the UAE have the right for a job, afterwards priority

is given to the Arab nationals, then other nationals after theapproval of the labour directorate.

* Children less than 15 years old are not allowed to be employed,and women are not allowed to work on night shifts.

* Individual contract should be in Arabic language (two copies)one copy for employee, the second copy for employer.

* Daily working hours is 8 hour/day, or 48 hours/week for adults,and could be increased to 9 hrs. in certain jobs.

* The worker deserve full-paid annual leave, plus other vacationon stated occasions.

* End of service benefit is secured for workers as wage of 21days for the first three years, and wage of 28 days for the secondthree years, and wage of 35 days for more than that.

2. BAHRAIN

Labour law No. 23 of 1976, and the social insurance law No. 24 of1976, both concerned with employment and social insurance. Thelabour laws in Bahrain provide protection for both employers andemployees, and to settle disputes friendly.

* Most salient features of the labour law:- Maximum working hours per week stated at 48 hours, more

than that will be counted as overtime hours.

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- No taxes or restrictions for money transfer.- The social insurance include retirement salary, compensations

for death or disable, sickness or accidents. The subscriptionpercentage is 10% of the basic salary to be paid by theemployer, and 5% by the employee, as for expatriates 3% to bepaid by the employer.

3. SAUDI ARABIAThe work and workers law (system) and its regulations was issued

on 6.9.1389 H, and the social insurance system was issued on6.9.1389 H, and amended on 3.9.1421 H. The salient features of thetwo systems (laws)

* Unfair dismissal could be reported to nearest labour office, ifthe dispute is friendly solved, otherwise the matter will bereferred to the concerned committee.

* End of service benefits is stated as half of the last drawn basicsalary for each year of the first 5 years, and one basic salary foreach year beyond that.

* Penalties and punishments are clearly stated in the system .* The system provide the health care services for workers.* Working hours and vacations are specified clearly.* The new social insurance system, the implementation of which

started on 1-4-2001, aimed at providing social protection for theworkers in the private sector and government sector. Thesystem works through two branches:

(A) the pension branch applies for Saudi subscribers from theprivate and government sectors who are included in thecivil and military pension system.

(B) Vocational Hazards Branch, which is applied for Saudiand non-Saudi in the private sector.

4. OMANThe most salient features of provisions and articles of the labour

law in Oman are as follows:* The labour offices in different parts of Oman assist Omani

seekers for jobs to that end.* Non-Omani are not permitted to pracrtice any work prior to

permission from the ministry.* End of service benefits are stated as 15 days basic salary for

each year of the first three years, and 30 days for each yearafterwards.

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* The government has the right to amend the minimum wageswhenever it is necessary.

* Working hours stated as 8 hours per day, or 48 hours per week.* Restrictions on employing children of 13-16 years in any hard

or hazardous works.* Employer is obliged to take all measures to protect workers.* Disputes are to be solved friendly, otherwise the labour office

will handle it, refer it to the commercial court.* Compensations are provided in case of work injury, vocational

deseases.* The Ministry of man power is recently intending to apply new

system to issue an smart card for expatriate.disputes disputes

5. QATARSalient features of the labour law is as follows:

* Article 11 states the establishment of an office for employing

the nationals.* Article 12 prohibits employing expatriates without permission

and only when necessary* Articles 17, 18 and 20 deal with procedures of terminating the

contract, dismissal and absence of worker.* Working hours are 8 hour per day, more hours will be

accounted as overtime.* The laws state the formation of a committee for settlement of

disputes, its chairman will be appointed by Emiri decree, plus arepresentative for the employers, and a representative for theworkers.

6. KUWAITSalient features of the labour Law:

* Non-Kuwaities are not permissible to be employed, unless theyobtained labour card or registered at the Ministry of SocialAffairs and Labour.

* Hiring contracts include all details, date of hiring, duration ofcontract not exceed five years, renewable.

* Daily working hours not to exceed 8 hours, or 48 hours perweek, more than that will be accounted for as overtime.

* Employment of children less than 14 years is strictly prohibitedwithout the approval of the Ministry of Social Affairs andLabour.

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* Businessmen has the right to formulate unions, worker toformulate vocational federations.

* Disputes settlement will be on friendly basis, otherwise throughthe Ministry of Social Affairs, or further to the arbitrationcommittee.

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CHAPTER EIGHT

STANDARDS, SPECIFICATIONS,

AND TRADE MARKS

IN THE GCC

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First: Standards and SpecificationsIn The GCC States

Being aware of the advantages of a rationalized system of standardsand specifications, the GCC States are giving particular care to thisissue. The standards generally adopted by individual GCC countriesare generally those common in the EEC or in the USA. This hascaused diversity and the best solution was close coordination amongthe Departments in charge of Standardization and Metrology in all themember states. That is the reason why the GCC States decided toestablish the Standardization and Metrology Organization for the GCCcountries (SMO) which started its activities in 1984. The standards itpublishes are adopted by all the member countries and this facilitatesthe tasks of consultants, engineers, traders, in vestors and of all thoseengaged in the development process in the region.

In this section, we will present a quick profile of SMO and theaddresses of national standardization departments.

Quick Profile of the :Standardization and Metrology Organization

for the GCC Countries:

The Standardization and Metrology Organization for the GCCCountries was declared a corporate body on 17.7.1984. It isheadquartered in Riyadh, Saudi Arabia, and has an autonomousbudget. It is governed by a Board of Directors made up of therelevant ministers of the member states, or their representatives, andmanaged by a Secretary General. The Board is presided overalternatively by representative of the member states for one yearterms.

The Organization undertakes the legislative aspects ofstandardization in the GCC countries, and is the sole body in the Gulfempowered to prepare, approve and publish Gulf standards. It followsup the proper implementation of Gulf standards through theappropriate institutes of the member states.

The Organization also collects, stores and retrieves relevantinformation and makes it available to the bodies concerned in themember states. It compiles studies and conducts research in support

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of its activities. It also organizes training courses, provides themember states with technical assistance, and participates as anobserver in the activities of regional and international standardsbodies.

Postal Address: P.O. Box: 85245, Riyadh, Kingdom of SaudiArabia.

Headquarters: Premises of the Saudi Arabian StandardsOrganization (SASO), sitteen Street, Riyadh, Saudi Arabia.

Tel: + 966 4470207 - 4473332

Fax: + 966 4793063

How to obtain Gulf Standards:

UAE

Emirate Authority for Standardization and Metrology,Ministry of Finance and Industry,P.O. Box 2166,Abu Dhabi, U.A.E.Tel: 6711110Fax: 6715999

BAHRAIN

Directorate of Standardization and Metrology,Ministry of Commerce,P.O. Box 5479,Manama, BAHRAIN.Tel: 530264 / 523030Fax: 530730

SAUDI ARABIA

Saudi Arabian Standards Organization (SASO),P.O. Box 3437,Riyadh 11471,SAUDI ARABIA.Tel: 4520000Fax: 4520086

Eastern Province Branch,Damman 31441,

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SAUDI ARABIA.Tel: 8261111,Fax: 8265118.

Mecca BranchP.O. Box 1893,Jeddah 21413,SAUDI ARAB IA.Tel: 6673652Fax: 6673633

OMAN

General Directorate for Specifications and Measurements,Ministry of Trade and Industry,P.O. Box 550,Muscat, OMAN.Tel: 7713238Fax: 7715992

QATAR

Standards & Specifications and Consumer Protection Department,Ministry of Economy & Trade,P.O. Box 1968,DOHA - QATAR.Tel: 4408555Fax: 4478849

KUWAIT

Standards & Specifications Department,Public Authority for Industry,P.O. Box 4690,Safat 13047, KUWAIT.Tel: 4318740Fax: 4316704

It is worth mentioning, that copies of the International StandardsOrganization (ISO), and any other foreign standards could be obtainedthrough the Standards & Specifications Corporation for the GCC.More than 1000 Gulf standards had been approved, plus the onesunder study, it covered different fields: Food, building materials,electric and electronic, environments sectors, plus many other fields.Also a periodical titled “The consumer” issued every two months.

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The Corporation exerted great efforts to encourage and coordinatebetween the national industries, through desiminating the concept ofthe total quality, and encourage the industrial establishments to adhereto it. To that end a Gulf unified systems plan was planned for theconformity certificate and the quality mark.

Second: The Trade Marks Many laws and regulations are organizing the Trade Marks matters

in the GCC. Following is a brief profile of trade marks laws andregulations in the GCC:

* UAEThe Federal Law No. 37 of 1992, organizes all affairs related to the

trade marks, it consists of 50 articles, divided into 7 chapters. Salientfeatures:

* Definitions of the technical terminologies used in the field oftrade marks in the first chapter.

* Chapter two deals with the registration procedures of the trademarks.

* Article 19 states the protection period of a trade mark for 10years, renewable for further periods.

* Chapter three tackles the procedures of transforming theownership of a trade mark.

* Chapter four deals with licensing contracts.* Chapter six contains the frauds and imitation of trade marks,

and the punishments.

* BAHRAINThe salient features of the legalisation protecting and registering of

trade marks in Bahrain is as follows:* Application for registering a trade mark should be submitted to

the Commercial Registrar and Company Affairs Control.* Statement containing details of goods or products or services

for which a registration is to be made.* Location and address for copy contracts.* Drawings and shapes and all related documents to be submitted.

* SAUDI ARABIASince early Saudi Arabia has paid full attention for the registering

of trade marks, and the trade marks registration laws was issued on28/7/1358 H. Due to the progress and development in all fields inSaudi Arabia, and to keep pace with that, the new trade marks was

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released by Royal decree on 4/5/1404 H, following is the most salientfeatures:

* Article one defined the trade marks, while article two states theprohibited trade marks.

* The registration procedures contained in the second chapter.* After the approval , a certificate will be issued for the owner of

the trade mark containing all details of the trade mark.* Article 26 states the duration of the rights of the owner of the

trade mark for ten years, renewable if required.* Chapter four deals with the transfer, mortage or registration of

the trade marks.* Article 43 tackles the collective trade marks.* In chapter seven states the registration fees, which ranges

between SR. 1,000 to 3,000.* Misuse, violation and punishments stated in chapter eight.* The implementing regulations for the trade marks laws was

released upon the ministerial resolution No. 94 on 5/8/1404 H.

* OMANThe Intellectual Property Rights Directorate at the Ministry of

Commerce and Industry is responsible for the registration of trademarks according to the law of trade marks, commercial secrets and theprotection of unfair competition No. 38 for 2000.

The procedures for registration is as follows:* Format No. 1 for registration with four copies of Format No. 2,

duty stamp of 400 Bisa.* Registration certificate of the commercial register, or a copy of

the foundation contract if it is a company.* A certificate of the chamber membership.* Fees of OR. 250 for registration.* Upon approval of registration, fees of OR. 10 plus OR 50 for

the publication in official Gazzette.* Two months after publication in the official Gazzette and a

daily news paper, and if there is no objection, then upon payinga fee of OR 25, registration will be completed.

* Patents: Inventions are registered in Oman according to theGCC patents law No. 14 for 2000. The Sultani Decree No. 82for 2000 was issued, pertain to the patents..

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* QATARThe application for registering a trade mark is to be submitted to the

Commercial Trade Marks Office, after paying the fees.* A number of trade marks could be submitted in one application.* If the application is refused, an appeal could be raised, within

60 days to a committee formed by a resolution from the Ministerof Economy and Commerce. This will be consisted of threemembers, one to be appointed by the Minister of Justice. Theapplicant could further resort to a civil court.

* After approval, a certificate will be issued to contain: The trademark serial number, date of the application, date of registration,name and title and address of the owner of the trade mark, anddetails of the product.

* KUWAIT* An application form is to be submitted to the Trade MarksControl.* One application is designed for one trade mark only.* Registration form includes; title and address of applicant,

nationality and his residence location.* Details of the product, place of the business location,* The following to be attached with the application:

- Three copies of the trade mark- All required information and documents.

* If the trade mark includes a word(s), it should be in Arabic andEnglish languages.

* Registration Procedures:

Applications will be registered and given serial numbers, a receiptis issued containing serial number, name of applicant, date ofapplying, attachments.

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CHAPTER NINE

NATIONAL INSTITUTIONS ANDCORPORATIONS INVOLVED IN THE

INDUSTRIAL DEVELOPMENTIN THE GCC STATES

1. Banks and Industrial Development Funds.

2. Other Related Institutions and Corporations

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1. Banks and Development Funds in the GCC States

UAE

* Industrial Development Fund, Abu Dhabi:

Founded in 1998 with a capital amounted to 100 million Dirhams,aiming at enhancing and encouraging the private industrial sector,through financing and implementing of the industrial projects. Thepartner has the right to buy the share of the fund at any time.

* The conditions upon which the Fund participate:- The project should be in Abu Dhabi district.- The Fund participation in the capital will be less than 26% of

total capital, and not more than 50%.- The project must be economically viable.- The project should conform with the environmental

standards.- The project must be technology-intensive.

The Fund beside sharing in the capital, also gives long-term loanswithout interest, and in case of small industries, the Fund participateup to 50% of the capital, and in the medium industries, the Fundstipulate that the share of the owner of the project should not be lessthan 50%.

At the time of presenting an application to the Fund, a fee of 1,000Dirhams must be paid against each application, and the Fundparticipates in the feasibility study. Applications will be evaluatedand the final recommendation will take 3 months.

* Emirate Industrial Bank

Established in 1982, the Government share amounted to 51%, theobjectives is to help in establishing new industries, and enhancing theexisting ones. Loans are granted to the national industrial projects inwhich the national share in the capital is not less than 51% of the totalcapital of the project. The main functions of the Bank could besummarized as follows:

* Arranges loans up to 70% of the total capital of the project.* Long- term loans (8 years), medium term (5 years), and short

term (less than 2 years), with grace period might reach 3 years.* Credit facilities* Industrial soft loans for industrialists

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* The Islamic Murabaha System is introduced to secure therequirements of goods, machinery and equipment.

* Other different forms of loans.* Conducts feasibility studies against nominal fees.* The bank charges interests on loan amounts to 4% plus

administrative charges ranging between 0.5 - 2%, plus fixed feeof 500 Dirhams for the new project, 300 Dirhams for theexisting one.

* Priority in securing loans is based on:- Technology-intensive projects.- Use of local raw materials.- Production of substitute products for imports.

The following standards are seen important in decision-making tofinance a project:

- The feasibility study.- The experience and reputation of the investors.- The percentage share of the owner of the project not to be

less than 30%.- Availability of guanantees.

The time required to process the financing application rangesbetween 6-8 weeks.

BAHRAIN

* Bahrain Bank for Development

Established late 1991 as a limited participation company, with theobjectives to:

* Present loans to finance the industrial and services projects,which contribute in employing the nationals.

* The financing of the services extends to: education, health,restaurants, hotels.

* The bank presents small and medium loans.* The rate of interest is 5%, plus arrangement cost of 4% for one

time, for large loans the interest rate is 7%.* The grace period extend up to 3 years.

The criterion for granting the loan are:- Availability of a feasibility study.- The percentage of share of the owner in the capital.- Employment of the nationals.- Exports potentialities.

The time needed to complete the procedures ranges between 4-6weeks.

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SAUDI ARABIA

* The Saudi Industrial Development Fund

Established in 1974 as governmental financial institution, attachedto the Ministry of Finance, in order to present loans for the newindustrial projects and expansion of existing ones. Furthermore, togive advice and assistance in financial administrative, technical andmarketing aspects, the capital of the Fund amounts to SR 7 billions,and presents long-term soft loans (15 years), and total amount of loanspresented up to 2001 amounted to more than SR 40 billions.. Thecriterion for granting a loan are:

- Presentation of a feasibility study.- Obtaining an industrial license.- Foreigners with Saudi partners are eligible for a loan.- The share of the owner in the capital not to be less than 25%.- No interest is charged.- A commission for evaluating the project ranging between 0.5 -

2% of the total loan is charged.- A period of grace ranging between 1-2 years.

The criterion of granting a loan:

- Availability of a feasibility study.- Marketing aspects- Experience and reputation of the invester.- Participation percentage of the owner of the project should not

be less than 25% of the total costr.- The fund grant a loan amounted to 50% of the fixed assets of

the project.- The fund charges no interest, but evaluation fees ranging

between 0.5 - 2%.- The fund finances projects owned by foreigners up to 50% of

the total costs.- Usually the evaluation of a project takes about 4 months.- The maximum repay period extends to 15 years.- Maximum loan extends SR. 100 million for individuals, and

joint ventures not less than 25% of the total costs (SR 400million limit).

OMAN

* The Development Bank of Oman

Founded in April 1997, with a capital amounted to OR 20 million.

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The objective is to grant loans to different Omani projects.

* The interest rates for the loan is 9%, of which 6% is paid by thegovernment, and 3% by the owner of the project.

* The Bank presents interest free loans for the craftmen and smallinvestors, with limit ceiling OR 5,000.

* A grace period is not more than 2 years, and the loan repaymentduration is 7 years.

* Small industries have the lion share of the loans.* The bank is very strict in the guarantee issue.* A prefeasibility study is required for project costing OR

100.000 or more.* Also the experience and reputation of the owner of the project

is considered in granting the loan.* The share of project owner not to be less than 40%.* The final decision takes a maximum of 1 1/2 month to proceed.

* Oman Industrial Bank

Established in 1998, with a capital amounted 25 million OmaniRiyals, its objectives to present financial services to the industrial andservices sectors. Also provide economical and financial advice to theinvestors, and provides as well direct finance for the working capital,and arranges for financing through joint ventures. Also the Bankpresents short-term loans to finance the working capital, mid-termloans to finance purchase of equipments.

* The interest rate on the loans ranging between 5 - 9% for shortterm of 5 years, and 5 - 10% for long terms.

Criterion for financing:

* Capability of the customer to repay.* Availability of markets for the products..* Experience and reputation of the customer.* The percentage share of the owner of the project in the capital.* Very restrict relating to the guarantees.* Time needed to finalize the application ranging between 3 - 6

weeks.* The bank focusses on medium and large projects.

QATAR

* Qatar Bank for Industrial Development

It was established in June 1997, paid up capital QR 200 million.

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The objectives of the bank: to participate in developing anddiversifying the Qatari economy, through rendering of soft loans, andsupporting the existing industries.

- Conducting studies, promoting of the viable projects.- Developing of small and medium projects through presenting of

mid and long-term loans, finance the purchase of the rawmaterials, finance the exports.

- Assisting the industrial project in obtaining finance from Gulfand international resources.

- Evaluating and supervise the implementation stages, andpresenting consulting services.

- Preparing of investment opportunities profiles, and contacts oftechnology holders.

- Loan’s guarantee: fixed and transferable assets, bonds,securities.

- Loan repayment : not more than 8 years for the new projects,and 5 years for the existing ones.

- Period of grace: not exceeding 2 years for new projects, andone year for the existing ones.

- The rate of interest is 5%, plus 1% commission, and 5% annualadministratrive fees.

* Standards of the lending policy:

- Usage of local and regional raw materials.- Support industries.- Non-labour-intensive industries.

* Conditions for benefitting from the bank facilities:

- The project should be industrial.- The location should be in Qatar.- Prefeasibility study- To obtain all related licenses.- The owner of the project must be reputable and experienced.

* The procedures:

- Fill the application format for loan.- Attach the prefeasibility study.- Obtain industrial license.- Evaluation fees 5% of the loan amount, refundable if theapplication is not approved.

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For the existing projects, must attach with the application thefollowing:

- Audit Budgets for the last 3 years.- Valid industrial license.

* The volume of the loan.

The loan or credit facilities for new or existing project may reach upto 80% of the value of the equipment, or 60% of the total cost of theproject.

* Cancelling of the approval of the loan:

- If three months elapsed without signing the agreement by theapplicant.

- If 6 months elapsed without withdrawing all or part of the loan.

KUWAIT

* Kuwait Industrial Bank

Founded late 1973, with a capital of KD 10 million, as a jointventure between the Ministry of Finance, Kuwait Central Bank, andthe private sector. Started in 1981, the capital raised to KD 20million.

The objectives of the Bank are to foster the industrial developmentthrough establishing promising project, and through participating inthe ownership of new projects. Also through presenting differentbanking services. The Bank explores new viable industrialopportunities, and promote it. The Bank gives priority tocapital-intensive projects, and renders soft loans. In 2001, the totalfinancing presented by the bank amounted KD 490 million for about607 projects.

The loans ranging between short to long-term, according to thenature of the project.

* Conditions and rate of interest:

- The total loan should not exceed 50% of the total cost of theproject.

- Minimum loan not less than KD 50,000

* The rate of interest:

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- 5% annually for new projects

- 6% annually for expansion of existing projects.- 7.5% annually for industrial services projects.,- 9% annually for overdues.

The Bank gives a period of grace of 12 month.

To grant the loan, the bank adhere to the following:

- Guarantees- Prefeasibility study- Experience and reputation of the owner of the project- Financing small and medium projects given priority.

TABLE 41Approved loans financed by

Qatar Industrial Bank2002

31

35

38

Total

Food, Beverages, Tobacco

Chemicals and chemical products,petroleum products, coal, rubbder, plastics

Metal Fabrication

3

4

3

10

2,849,000

25,375,000

4,146,000

32,370,000

Classifi-cation

Industrial Activity No. ofProject

AmountQR

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TABLE 42Approved Loans

Qatar Industrial Bank Projects Financed to Import raw materials -2002

31

35

38

Food, Beverages, Tobacco

Chemicals and chemical products,petroleum products, coal, rubbder, plastics

Metal Fabrication

Total

1

4

4

9

150,000

3,200,000

700,000

4,050,000

Classifi-cation

Industrial Activity No. ofProject

AmountQR

TABLE 43Kuwait Industrial BankIndustrial Loans 2002

Building materials

Metal & Engg. products

Food, Beverage

Petrolium Marine Services

Chem. products

Paper and products

Printing

Textiles

Other

Total

Industry No. ofProjects

Total Cost(‘000 KD)

BankFinance

Percent-age

6

7

2

1

3

2

2

2

2

27

6,289

21,720

3,585

7,386

10,833

2,597

1,530

1,060

1,120

56,120

3,310

9,445

1,150

5,000

6,250

1,695

1,530

880

700

29,960

11.05

31.55

3.84

16.69

20.86

5.66

5.11

2.94

2.34

100.00

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2. Other relevant Corporations & Institutions

1. UAE

A Ministry of Finance and Industry

Concerned with supervising non-oil industries, and fostering themanufacturing industry sector, in order to increase and diversify thesources of income. Presents incentives and encouragements within theframe work of the Federal Law No. 1 of 1979, and it carried out itsfunctioins through the following organs:

TABLE 44Kuwait Industrial Bank

Total Industrial Loans during 1974- 2002

Building materials

Metal & Engg. products

Food, Beverage

Furniture

Petroleum & Marine Services

Chem. products

Paper and products

Printing

Textiles

Other

Total

IndustryNo. of

ProjectsTotal Cost(‘000 KD)

BankFinance

Percent-age

120

115

69

43

23

112

52

51

19

30

634

232,945

200,010

148,294

26,258

91,306

166,659

70,089

60,268

17,408

27,583

1,040,820

110,612

95,532

72,937

12,350

48,920

83,072

39,737

32,555

8,247

15,550

519,512

21.29

18.39

14.04

2.38

9.41

15.99

7.65

6.27

1.61

2.99

100.00

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* The Industrial Advisory Committee

According to Article 3 of the mentioned Law, it comprisesrepresentatives from different ministries, plus representatives from theprivate sector. The major function is examining the application forestablishing of industrial projects, and the necessary benefits andincentives.

* The Industrial Directorate

Concerned with conducting studies and researches, issuing andregister of industrial licensing, and supervising the implementation ofindustrial projects specifications and standardizations.

Established in 1976, its function is to issue and disseminate thespecifications, and standardizations, and supervise its implementation,operating of the labs, establishing of institutes specialized in theexamination of the specifications and standardizations.

* Intellectual Property Administration

Its concern is to protect innovations, inventions, also it works totransfer knowledge scientific concept of the patents worldwide, andmakes it accessible to interested people.

B. Ministry of Economy & Commerce.

Its function is the propose economic and trade policies leading tothe economic development, and increase of production, and upgradethe standard of living. Also propose the necessary laws andregulations that organizes the economic and trade activities.Collaborate with the ministries in signing economic and tradeagreements. Establishing of regional and international exhibitions,and all that enhances the trade relations with other countries, andconducts studies and researches relating to the economic development.

C. Ministry of Labour and Social Affairs

It deals the procedures of importing manpower, work visas(individual and collective), ensure controls and standards forimporting of foreign manpower. Also works on settling workdisputes, plus the issues of the industrial security, industrial safety,vocational health, investigations on work accidents and diseases.

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D. Ministry of Planning

Established in 1972, according to the federal Law No. 1, thefunctions:

- Study the economic situations in the state.- Study and evaluatethe development projects in collaboration with other relatedsites.

- Prepare the investment programmes.

* In 1973 and according to the federal Law No. 3, the functions andresponsibilities of the National Planning Council is stated as follows:

The Council is constituted under the chairmanship of Prime

Minister or his deputy, and a number Ministers as members, andrepresentatives of the private sector. The Under Secretary of theMinistry of Planning will be the Secretary of the Council. TheCouncil shall: state the objectives of the socio-economic and shortterm development programmes. Plus, examining of the follow-upreports on the implementation of the approved projects. Among otherthings, the Council prepares the proposal of the public plan forsocio-economic development, in addition to studying, examining andevaluating of the follow-up reports.

In 1997, Ministerial Resolution No. 18 was issued to restructure theMinistry of Planning to include in its function the responsibility ofpreparing the proposal of the public plan for development in the state,including the projects, legalisation and suggestions according to thepublic strategy of the state.

* Federation of the Chambers of Commerce and Industry

The Federation and the Chambers of Trade and Industry are playinga major role in the commercial and industrial aspects of the state,through organizing the activities in collaboration with the government,some functions of the Chambers are:

- Promote cooperation between their members.- Organize exhibitions- Issue and authonticate certificates of origin.- Conduct studies, research statistics.- Settle trade disputes- Organize conferences, seminars, training.- Publish directories, periodicals etc.

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* Eco-Industrial Diectorates and Institutions in the UAE.

In order to organize the eco-industrial affairs, the governmentset-up eco-industrial entities in each state of the Emirate; theobjectives: prepare plans to achieve the economical development atthe level of each Emirate.

* Follow-up the implementation of the plans after being approvedby the Ruler of the concerned Emirate.

* Those different entities in collaboration with relevantresponsible directorates e.g.: the economic directorate in Dubai,Sharjah, Ajman and Um Al Quain, and industry and economicdirectorate in Fujairah, and Ras-Al Khaima Municipalitry. Asper Abu Dhbai, there is Public Corporation for Industry, whichtakes care of developing non-oil industries, its functions asfollows:

- Proposing industrial policies.- Supervising implementation of policies.- Preparing the industrial plan for Abu Dhabi.- Supporting and encouraging the private industrial sector.- Prepare and develop the nationals in the industrial activities.

* In 2001, and according to the Law No. 9, the PublicCorporation for Industry was replaced by Abu DhabiCorporation for Investment.

* ADNOC

Specialized in exploration of oil and gas production and marketing,also refining and distributiion. Furthermore, production andmarketing of LNG. There are a number of affiliates e.g. ADCO,ADMA, ADGAS, GASCO etc.

BAHRAINEarly sixties, Bahrain established the Development Office, which

developed to become the Ministry of Development and Industry in1975. In 1997 the Decree No. 23 recognized the ministry under thetitle “Ministry of Petroleum and Industry”. The salient features of thefunctions of the ministry are:

* To compose and implement the plans and programmes of theindustrial development.

* Provide the necessary means and method for succeeding, andselection of the suitable technologies.

* In 2002 another amendment took place, the title become

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“Ministry of Trade and Industry”, and recently changed to“Ministry of Industry”.

* Major functions of the ministry:

- To make-up and implement the plans and programmes of theindustrial development.* To select the suitable technologies.* To specify the new investment opportunities.* To regional and international promotion of the local industrial

products.* To provide industrial data and information.* Bahrain Chamber of Trade and Industry.

- Represents and organize commercial and industrial establishmentsin the Kingdom.

- Safeguards the interests of its members in particular, and thekingdom in general.

- Studies economic projects.- Provides the names of businessmen, commercial and industrial

establishments.- Issues certificates of origins for locally manufactured goods.- Attests foreign certificates of origin.- Represents the commercial and industrial sectors regionally and

internally, plus many other functions and responsibilities.

* Bahrain Center for Research Studies.

The center undertakes research studies in various scientific andtechnical fields to serve the Bahraini community in particular, and theGulf and Arab regions in general. It also provide assistance toresearchers in all related fields. The Center cooperates with othersimilar instituties locally, regionally and world-wide.

Also the Center develops and encourages the nationals in the fieldof scientific research, plus publishing of scientific researches.

SAUDI ARABIA

A. Ministry of Commerce and Industry

Established according the Royal Decree No. A/236, dated8.10.1395 H. The various departments of the Ministry implement thefollowing tasks:

* Achieving study and balanced development in the industrialsector.

* Protecting and encouraging national industries.

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* Drawing up policies for developing remote areas of theKingdom and attracting foreign investment, giving incentives,concessions and exemptions to the industrial projects. TheMinistry is comprising the following agencies:

- The Agency for the industry affairs,- The Agency for the Electricity Affairs, and - The Agency for the Administrative and Financial Affairs.

B. Saudi Arabian General Investment Authority (SAGIA)

Great attention is paid to the consulting services. In 1386 H, theCenter for Research and Industrial Development was established. Inmid-nintees, it was transferred to Saudi Consulting House, as the firstspecialized consulting corporation. In February 2000, it was changedto become the Public Corporation for Investment, as an independentcorporate institution, and directly linked with the Chairman of theEconomic Supreme Council.

C. The Royal Commission for Al-Jubail and Yanbu

The Commission was established in 1975, with the objective ofestablishing the infrastructure necessary for basic, secondary,supporting and light industries, develping institutions to provide civilservices, and implementing training programs to upgrade Sauditechnical skills. Also, responsible for the operation and maintenanceof the infrastructure established or planned for in the two cities ofJubail and Yanbu.

Among other functions and responsibilities, the commission also,constructs airports, seaports, desalination stations, and other utilities.Industrial areas in the two cities are divided into sections for heavy,secondary, light and supporting industries, where industrialinvestment opportunities are available.

D Saudi Basic Industries (SABIC)

SABIC was founded in 1976, with objectives to establish,managing, and marketing of the products of the basic industries.SBIC had established many industrial complexes to producechemical, petrochemical, fertilizders, plastic, metals and industrial gasproducts. Also SABIC created an international marketing net, andsucceeded in exporting to 75 countries, plus satisfying the localmarket. SABIC has established two companies specialized in themarketing fields. SABIC Company for Marketing Ltd., and SABICCompany for Services Ltd. The first is concerned with marketing theproducts of SABIC complexes, and the second is providing marketing

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and technical support services. That in addition to opening marketingcenters abroad.

E. Saudi Arabian Oil Company (ARAMCO)

Established in 1933, it operates most of the Saudi oil fields, anddeals with all activities of the oil industry. The main tasks ofARAMCO are exploration, drilling, extraction, treatment, refine,transporting, storing, exporting and marketing of oil and gas.

F. Saudi Arabian Standards Organization (SASO)

Established in 1972 to take responsibility of all activities relating tostandards and specifications. Also, it put drafts regulations forgranting certificates of conformity and quality for domestic products.

G. Saudi Chambers of Commerce & Industry

In 1945, the first chamber in Saudi Arabia was established inJeddah. There are Chambers in all major cities of the Kingdom. Thechambers are practicing many activities within their stated functions:

- Promoting the national industries- Publishing Directories and Brochures- Holding Conferences, Symposia etc.- Providing data and information for the governmental private

sectors.- Identifying investment opportunities.- Promoting advice and consultations for the businessmen in

disputes-solving.

H. The Saudi Council of the Chambers of Trade and Industry.

Established in 1400 H, headquarter in Riyadh, its main objective isto cater for mutual interest of the chambers in Saudi Arabia; andrepresenting it locally and abroad. Among other functions, theCouncil is to:

- Enhance the role and participation of the private sector in thenational economy.

- Organize and unify the efforts of the Chambers throughsupporting the channels of communications, cooperation andcoordination of its activities.

- Comment and review the rules and legislations.- Convene conferences.- Conducts studies, researches, reports.- Publish directories.- Organize the activities of the national committees.

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- Organize training sessions.

I. Saudi Exports Development Center

Established in 1406 H, by an initiation from private sector andsupport of the government officials. It works under the supervision ofthe Chambers Council, major functions:

* Collecting and desimination of information relating toforeign markets.

* Conducting studies.* Establishing of exhibitions abroad. * Presenting advice services on external trade affairs.* Preparing programmes and technical advice relating to

export of national product.

J. Electricity Services Organizing Corporation established in 1422 H.

Its main objective is to secure the provision of the electricityservices, at a high quality and low prices. Among other functions it:

- Organizes the electricrty sector.- Issues licenses for new projects.

OMAN

A. Ministry of Trade and Industry.

In 1994 the ministry was founded with the following functions:

* Organizing the industrial sector, and supervising all theprocedures, of industrial licensing and registering.

* Establishing of the industrial Statistical Center , to stress theimportant role of statistics and information, query answering,preparing and implementing statistical surveys, and classifyingthe industrial products.

* Industrial Development Directory, Ministry of Trade andIndustry.

Its functions centered on the following:* Presenting technical and administrative advice for new

investors.* Finding suitable solutions for the problems and investment

improvements.* Rendering advice on expansion of factrories, marketiing, and

technology requirements.

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* Providing information on exporting and marketing locally andworld-wide.

* Assisting in the conducting of feasibility studies.* Organizing training programmes to qualify national industrial

directors.

* The Public Corporation for the Industrial Areas.Follows to the Ministry of Trade and Industry, established in 1993,

with the objective of developing the industrial areas, and encouragingthe private sector to participate in the industrialization process and theeconomic development.

* Directorate General for Specifications and Measurements. Established in 1976 with the following functions:

* Preparing and updating of Omani standards for commodities,products and raw materials..

* Examining and analysing of different materials, commoditiesand services.

* Publishing and distribution of standards.* Subscription and exchange of information with regional and

international organizations for standards.* Preparing Omani standards for 10 different sectors: Food

sector, chemical production sector, building materials sectorsand textiles sectors, electrict and electronic products,mechanical and metal products, vehicles, standards andspecifications, safety and industrial health, and exchange ofinformation sector.

* The Council for Development established in 1974, thefunctions of the Council according to the Law No. 1 for 1975 asfollows:- Specifying the public objectives and policies for the

economic development and proposing the policies andprocedures of its implementation.

- Forming of development plans conforming with the publicobjectives and policies.

- Discussing, approving and prioritizing of the developmentproject in the annual development budget.

- Following up of the implementation, issuing of annual report.

* Exports Credit Guarantee AgencyEstablished in November 1991, aiming at encouraging of the Omani

non-oil exports, that by presenting credit coverage against trade andnon-trade risks, and assist the exporters to obtain financing facilities.

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* Oman Chamber of Commerce and IndustryEstablished in 1973 with the objective of representing the

companies of the private sector at local and international areas.Furthermore, providing new investors with economic and industrialinformation.

* Assisting industrialists in selecting appropriate technologies.* Encouraging national exports and assisting exportes.* Training nationals in various econ omic and trade fields.* Providing legal advice and consultancy services to its member,

and attending to trade disputes.* Organizing conferences, seminars, etc.* Setting up of an internationally marketing program, to include

identifying and promoting of local industrial products thoughestablishing specialized international marketing centers.

* Oman Center for the Promotion of Investment and ExportsDevelopment

Established according to the Sultani Decree No. 59 of 1996,following to the Minister of Trade and Industry. Its objectives are:increasing the contribution of the private sector, rendering ofassistance to increase the export of the locl products abroad markets.

QATAR

* Ministry of Energy, Industry, Electricity and Water

Functions and assignments:- Proposing, following up and implementing of policies and plans

of the industrial development.

* Supervising industrial activities and monitoring adherence torealted laws and regulations.

* Conducting and evaluating techno-economic feasibilitystudies.

- Identifying industrial investment opportunities and preparing ofinvestment opportunities profile for potential investors.

- Developing industrial areas and cities.- Utilizing natural resources in a way to increase productivity and

decrease the costs.- Developing the nationals in the industrial fields.

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The ministry includes the industrial development department,which is concerned with:

* Setting up of the industrial development plants, preparingnecessary studies for that purposes and following up of itsimplementation.

* Conducting techno-economic studies for industrial projects.* Conducting studies for developing the industrial areas in

collaboration with concerned organs.* Collecting of technical and statistical data and information.* Receiving new industrial license applications, and submitting it

to the Minister for approval.* Supervising the industrial companies and institutions to check

its adherence to the industrial laws and regulations.* Assist the industrial establishment to increase its productivity

and improve its performance.* Proposing industrial legalisations and regulations relating to the

organizing and developing of the industry,* Participating and cooperating with other concerned

governmental organs in matters of relevance.* Participating in the activities of other Gulf organizations and

institutions (e.g., Gulf Organization for Industrial Consulting,Committees of the Ministerial Committee for industrialcooperation).

* Representing the State in the technical works of the Arab andInternational organisations (e.g. AIDO, UNIDO, IEAE, et...).

* Convening of promotional symposia for the industrial projects.* Training session to develop nationals working in the industrial

fields.* Issuing and updating of the Industrial Directory containing

newly licensed and registered industrial establishments.* Participating in the Arab, Islamic and International conferences.

* Qatar Petroleum QP)

Established in 1974 to undertake the responsibility of the variousprocesses of the petroleum industry, inclusive of exploration, andproduction of oil and gas. QP participates in the formulating andimplementing of the energy policies, as well as giving advice andcomment relating to issuing of oil and gas laws and legalisations.Furthermore, QP is catering for the training and qualifying thenationals working in the oil and gas field.

* Qatar Chamber of Commerce and IndustryThe Qatar Chamber of Commerce and Industry established in 1990.

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Its mandate is to organise, represent, protect and promote thecommercial, industrial, and agricultural interests of the country. TheChamber also works for the enhancement of economic and productiveactivities for the public good in general and for the benefit of itsmembers in particular.

The main office of the Chamber is in Doha. It has a 17-memberBoard of Directors with each member having a five year term. Itprovides miscellaneous services to companies and traders, includingthe certification of documents and definition of trade practice. Thechamber also participates in various conferences dealing with tradeand economic issues.

Qatar Chamber of Commerce and IndustryP.O. Box 402,

Doha, Qatar.

Tel: 4425131 / 4425132

* Qatar Manufacturing Industries Company (QMIC)Established in 1990 as a Qatari partnership company, with the

objective of investing in different available opportunities in Qatar orabroad. Its paid up capital stated at QR. 400 million, divided into 4million shares. The company used to conduct and establish industrialprojects in and out Qatar, in addition to other activities, e.g. marketingof its products.

KUWAIT

* The Public Authority for IndustryThe Industry Law in Kuwait was issued in 1996, which aimed at

organizing the industry affairs, inclusive of establishing the PublicAuthority for Industry,. The main objectives of the Public Authorityis to develop the industrial activity, and supervises it through thefollowing:

* Encouraging, developing and protecting of the local industries.* Expanding the industrial production base.* Diversifying the sources of the national income.* Supporting , developing and encouraging the production of the

strategic goods.* Preparing the attracting environment for the national

manpower.* Supporting, developing and encouraging the craft industries.

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* Coordinating between existing industries, and planned forproject at the level of the GCC, to achieve integration and avoidthe harmful competition.

* Ministry of PlanningThe main concern of the Ministry and its affliates and committees,

is to develop the industrial sector within the framework of the publicplan for socio-economic development, which is prepared and followedup by the ministry. The plan of the indistrial development is aiming atdiversifying the resources of income and production . To achievethose objectives, the Ministry is functioning as follows:

- Collecting, preparing and analising of the data and informationrelating to different aspects of socio-economic activities in thestate.

- Proposing public socio-economic development plans, and thenecessary studies and researches.

- Studying the projects proposed by other government organs.- Participating in the preparation of the development budget with

the public budget of the state.- Proposing and follwing up of the public policies for the

environment planning.- Handling of the state control statistical activities.- Coordinating and following up the economical and technical

affairs with Arab and international entities.- Other technical and consultative functions.

* The Union of Kuwaiti IndustriesThe Union was established in 1989, in order to serve industry and

industrialists, and to care for their interests, improve the performance,and support the Ministry of National Economy. Article 3 of the basicreputations of the Union stated its functions as follows:

- Assisting Kuwaiti industries in improving their performancesand increase their productivities.

- Upgrading the technical capabilities of the industrial manpower.- Carrying out studies and researches related to industry, and

publishing reports and specialized periodicals.- Holding of training, delivering lectures to increase the

professional and technical knowledge of its members, as well asthe national manpower in the field of industry.

- Cooperating with other unions, societies and similar unions inthe Arab countries.

- Convening industrial conferences and symposia, and

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participating in conferences and symposia locally and abroad.

* The Kuwaiti Institute for Scientific Research (KISR)Founded in 1967, and it has the main following objectives.- To up-lift the scientific and applied researches relating the

industry, energy, natural resources, and food resources.

* Kuwait Foundation for Advancement of Sciences (KFAS)KFAS is a private organization oriented towards public service,

founded in 1976. Its main objectives are as follows:

- Sponsoring and encouraging basic and applied researches.- Presenting grants and scholarship to encourage the research

activities.- Presenting grants, prizes to support the Kuwaiti think tanks and

other Arab nationals.- Training of Kuwaiti nationals.- Organizing and participating in conferences and symposia

inside and outside Kuwait.

* Kuwait Chamber of Commerce and Industry.Renders the following services:1. Attesting and certifying official documents, e.g. certificates of

origin, bills etc.2. Providing statistics, information and data.3. Publishing of periodicals.4. Providing legal advice and consultancy services.5. Organizing conferences, seminars and training sessions.

* Kuwait Petroleum Company and AffiliatesEstablished in 1980, and it works through its affiliates to develop

the oil and gas industries and petrochemicals. Also it works onexploration and extraction, drilling, production, storing, refining anddistribution of oil and gas. The Supreme Council is setting up thepolicies relating to the oil and its marketing.

There are many other governmental entities and departments andinstitution that involve directly and indirectly in the industrialdevelopment, e.g.

- University of Kuwait- Commercial Banks- Public Directorate for Application, Education and Training- Ministry of Public Health.

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APPENDICES

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APPENDIX 1

MINISTRIES OF INDUSTRY

AND RELATED ENTITIES

IN THE GCC STATES

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1. UNITED ARAB EMIRATES

A. Ministry of Finance and Industry,P.O. Box 433Abu Dhabi, UAE. Tel: 6726000Fax: 6768414

B. Ministry of Electricity and Water,P.O. Box 629Abu Dhabi, UAE.Tel: 6267030Fax: 6269738

2. KINGDOM OF BAHRAIN

A. Ministry of Industry,P.O. Box 10908Manama, BAHRAINTel: 525520Fax: 290157

B. Ministry of Electricity and Water,P.O. Box 2Manama, BAHRAINTel: 546666Fax: 533035


A. Ministry of Commerce and Industry,P.O. Box 5729Riyadh, Postal Code 11127

SAUDI ARABIA.Tel: 4776666Fax: 4775488

4. SULTANATE OF OMAN

A. Ministry of Commerce and Industry,P.O. Box 550Muscat, Postal Code 113,

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OMAN.Tel: 7714244/7717245Fax: 7711816

B. Ministry of Housing, Electricity and Water,P.O. Box 1491Muscat, Postal Code 112,OMAN.Tel: 693333Fax: 695723

5. STATE OF QATAR

A. Ministry of Energy, Industry, Electricity and Water,P.O. Box 2599Doha, QATAR.Tel: 4832121Fax: 4832024

6. STATE OF KUWAIT

A. Ministry of Commerce and Industry,P.O. Box 2944Safat 13030,Tel: 2480000Fax: 2411089

B. Public Authority for Industry,P.O. Box 4690, Safat 13047,Tel: 4318240Fax: 4318948

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APPENDIX 2

ADDRESSES OF THE CHAMBERS OF

COMMERCE AND INDUSTRY

IN THE GCC STATES

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Federation of the GCC Chambers of Commerce and Industry,P.O. Box 2198Dammam 31451, SAUDI ARABIA.,Tel: 8355006Fax: 8355007

1. UAE

* The Federation of the UAE Chambers of Commerce,Industry and Agriculture,P.O. Box 3014Abu Dhabi,UAE.Tel: 6214144Fax: 6339210

Dubai OfficeP.O. Box 8886Dubai,UAE.Tel: 2212977 / 2213878Fax: 2235498

* Abu Dhabi Chamber of Commerce and Industry,P.O. Box 662Abu Dhabi,UAE.Tel: 6214000Fax: 6215867

* Dubai Chamber of Commerce and Industry,P.O. Box 1457 Dubai, UAE. Tel: 2280000Fax: 2028533

* Sharjah Chamber of Commerce and Industry,P.O. Box 580Sharjah, UAE.Tel: 5843888Fax: 5681119

* Ras Al-Khaima Chamber of Commerce, Industry, andAgriculture,P.O. Box 87Ras Al-Khaima, UAE.Tel: 2333511Fax: 2330233

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* Al Fujairah Chamber of Commerce and Industry,P.O. Box 738Al FujairahTel: 2222400Fax: 2221464

* Umm El-Quin Chamber of Commerce and Industry,P.O. Box 436Umm El-Quin, UAE.Tel: 7653333/7651111Fax: 7657056/7655055

* Ajman Chamber of Commerce and Industry,P.O. Box 662Ajman, UAE. Tel: 7422177Fax: 7427591

2. BAHRAIN

* Bahrain Chamber of Commerce and Industry,P.O. Box 248Manama, BAHRAIN.Tel: 17229555Fax: 17224985

3. SAUDI ARABIA

* Council of Saudi Chambers of Commerce and Industry,P.O. Box 16683,Riyadh 11474, SAUDI ARAB IA.Tel: 4053200 / 4057502Fax: 4024747

* Abha Chamber of Commerce and Industry,P.O. Box 722Abha, SAUDI ARAB IA.Tel: 2271818Fax: 2271919

* Al-Ahsa Chamber of Commerce and Industry,P.O. Box 1519Al-Ahsa 31982, SAUDI ARAB IA.Tel: 5820458Fax: 5875274

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* Al-Baha Chamber of Commerce and Industry,P.O. Box 311, Al-Baha,SAUDI ARAB IA.Tel: 7254116 / 7250476Fax: 7270146

* Tabouk Chamber of Commerce and Industry,P.O. Box 567,Tabouk,SAUDI ARAB IA.Tel: 4222736 / 4220464Fax: 4227387

* Jeddah Chamber of Commerce and Industry,P.O. Box 1264,Jeddah 21431,SAUDI ARAB IA.Tel: 6515111Fax: 6517373

* Al-Jouf Chamber of Commerce and Industry,P.O. Box 585,Al Jouf,SAUDI ARAB IA.Tel: 6249488 / 6249060Fax: 6240108

* Jeizan Chamber of Commerce and Industry,P.O. Box 201, Jeizan,

SAUDI ARAB IA.Tel: 3223624Fax: 3223635

* Hail Chamber of Commerce and Industry,P.O. Box 1291SAUDI ARAB IA.Tel: 5327507 Fax: 5331266

* Riyadh Chamber of Commerce and Industry,P.O. Box 596Riyadh 11421,SAUDI ARAB IA.Tel: 4040044 / 4040300Fax: 4021103

* Chamber of Commerce and Industry for the Eastern Province,

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P.O. Box 719Dammam 31421,SAUDI ARAB IA.Tel: 857111Fax: 8570607

* Taif Chamber of Commerce and Industry,P.O. Box 1005, Taif,SAUDI ARAB IA.Tel: 7366800Fax: 7380040

* Arar Chamber of Commerce and Industry,P.O. Box 440, Arar,

SAUDI ARAB IA.Tel: 6636544Fax: 6624581

* Al Geryat Chamber of Commerce and Industry,P.O. Box 200, Geryat,SAUDI ARAB IA.Tel: 6426200Fax: 6427500

* Qassim Chamber of Commerce and Industry,P.O. Box 444, Buraydah,SAUDI ARAB IA.Tel: 3814000Fax: 3812231

* Al Majmaah Chamber of Commerce and Industry,P.O. Box 165,Majmaah 11952,SAUDI ARAB IA.Tel: 4321571 / 4320268Fax: 4322655

* Al Madina Chamber of Commerce and Industry,P.O. Box 443, Madina,SAUDI ARAB IA.Tel: 8388909Fax: 8388905Telex: 570009

* Mecca Chamber of Commerce and Industry,P.O. Box 1086, Mecca,

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SAUDI ARAB IA.Tel: 5343838 Fax: 5342904Tlx: 540011

* Najran Chamber of Commerce and Industry,P.O. Box 1138, NajranSAUDI ARAB IA.Tel: 5224019Fax: 5223926Tlx: 921061

* Yanbu Chamber of Commerce and Industry,P.O. Box 58, Yanbu,SAUDI ARAB IA.Tel: 3227722 / 3227878Fax: 3226800Tlx: 661036

4, OMAN

* Oman Chamber of Commerce and Industry,P.O. Box 1400,Ruwi 112,OMAN.Tel: 707674 / 707684Fax: 708497

5, QATAR

* Qatar Chamber of Commerce and Industry,P.O. Box 402Doha, QATAR.Tel: 4621131Fax: 4622186

6, KUWAIT

* Kuwait Chamber of Commerce and Industry,P.O. Box 775Safat 13008, KUWAIT.Tel: 2417285 / 2435801Fax: 2404116 / 2446921Tlx: 22198

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APPENDIX 3

ADDRESSES OF THE INDUSTRIAL

BANKS AND FUNDS

IN THE GCC STATES

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1. UAE

* Emirates Industrial Bank,P.O. Box 2722,Abu Dhabi,U.A.E.Tel: 6339700Fax: 6319191

2. KINGDOM OF BANRAIN

* Bahrain Development Bank,P.O. Box 20501Manama,BAHRAIN.Tel: 537007Fax: 534005

3. SAUDI ARAB IA

* Saudi Industrial Development Fund,P.O. Box 4143,Riyadh 11149,SAUDI ARABIA.Tel: 4774002Fax: 4790165

4. OMAN

* Oman Development Bank,P.O. Box 309,Muscat, OMAN.Tel: 7712507 /08 / 09Fax: 7713100

5. QATAR

* Qatar Industrial Development Bank,P.O. Box 22789,

Doha, QATAR.Tel: 4421600Fax: 4350433

6. KUWAIT

* Industrial Bank of Kuwait P.O. Box 3146,Safat 13032,

KUWAIT.Tel: 2457661Fax: 2462057

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APPENDIX 4

MIOP INVESTMENT PROFILES

1988 - 2003

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AGRO-INDUSTRIES SECTOR :

1. Bee Honey (2 Concepts)2. Fresh Cereal Fodder3. Fresh Mushrooms4. Fruit and Vegetable Processing5. Hydroponics Crops ( Lettuce )6. Integrated Ostrich Rearing &Processing7. Packaged Natural Fertilizer8. Specialty Biofertilize9. Spirulina Algae Powder10. Strawboard11. Turkey Rearing and MeatProcessing

FOOD SECTOR :

1. Animal Gelatin Powder2. Chocolate & SpecialtyConfectionery3. Chocolate Flavour Coating4. Dairy Complex (Yoghurt, IceCream, Cheese)5. Dry Baby Food6. Expanded Rice and Grain Biscuits (2Concepts)7. Extraction of Palm Oil Liquid andSolid Fractions8. Faba Beans Canning9. Filled Waffles (Fresh & Frozen)10. Food Additives11. Fromage Frais12. Frozen Potato Chips (French Fries)13. Frozen Yoghurt14. Fruit & Cereal Bars

15. Ice Cream Cones16. Improvers for Bakery Products17. Invert Sugar Syrup18. Lime Marmalade19. Long Life Yoghurt20. Mayonnaise21. Meat Processing22. Microbial Starters for Dairies23. Mini - Dairy24. Non - Alcoholic Beer (MaltBeverage)25. Nut and Chocolate Spreads26. Pasta27. Pulses Canning28. Soya Protein Concentrate29. Soft Waffles (Fresh & Frozen)30. Soy Bean Oil Extraction31. Specialty Biscuits32. Table Sauces33. Vegetable Margarine34. Wheat Breakfast Cereals (3Concepts)35. White Cheese

TEXTILES AND LEATHERSECTOR :

1. Garment Labels2. Men's and Children's Socks3. Men's Shoes4. Needlepunch (Non - Woven )Carpets5. Polyester Fiber & Yarn6. PP/PET Spun Bond Products

LISTING OF INVESTMENT OPPORTUNITY PRO-FILES PREPARED AND PROMOTED BY GOIC

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PAPER & PACKAGING MATERIALSSECTOR:

1. Air Laid Paper2. Biodegradable Packaging Material3. Duplex Cardboard Boxes (2Concepts)4. Palm Trees Pulp & Paper

NON - METALLIC MINERALSSECTOR :

1. Bentonite Waterproof MembraneLining2. Calcium Carbonate3. Decorative Glass Tiles4. Ecosystem Boards5. Expanded Clay6. Glass Tableware7. Glass Reinforced Gypsum Panels8. Gypsum Ceiling Tiles9. Gypsum Fiberboards10. Hollow Bricks & Gypsum Panels11. Insulated Artificial Stone BuildingBlocks (IsoStone)12. Insulated Concrete Blocks (2Concepts)13. Insulated Concrete CompositeBoards14. Lightweight Concrete Roofing Tiles(3 Concepts)15. Natural Stone Carpets16. Porcelain Electric Insulators17. Refractories18. Stoneware Concrete Tiles19. Synthetic Industrial Diamonds

CHEMICALS SECTOR :

1. Activated Carbon2. Acrylic Acid3. Acrylonitrile from Propane4. Adipic Acid5. Additives for Lubricants

6. Alcohol Ethoxylates7. Aluminium Chloride8. Aluminium Fluoride9. Amino Acid Lysine10. Anti - Corrosion ConcreteAdditives11. Argon Recovery Plant12. Building Sealants13. Burnt Lime14. 1,4 Butanediol15. Caprolactam16. Carbon Black17. Carbon Dioxide Recovery 18. Carbon Disulphide from NaturalGas19. Carboxyl Methyl Cellulose (CMC)20. Computer Cleaning Kits21. Cyclohexane22. Epoxy and Acrylic Floorings andCoatings23. Ethanolamins24. Ethyl Acetate25. Ethylene Glycol26. Ferric Chloride27. Gasoline Octane Improvers ETBE& Isooctane28. Household & InstitutionalDisinfectant29. Hydrogen Peroxide30. Isopropyl Alcohol31. Linear Alkyl Benzene (LAB)32. Liquid Household Cleaners33. Lube - Oil Recycling34. Methyl Ethyl Ketone (M.E.K.)35. Molecular Sieves36. Nitric Acid37. Nylon 6 Chips38. Nylon 66 Chips39. Olefins from Methanol40. Pentaerythritol41. Polyacetal Resins42. Polyacrylamide43. Polyacrylic Acid (Superabsorbent)44. Polyethylene Wax45. Production of Soda Ash &Ammonium Chloride by the Dual Process

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46. Propylene by PropaneDehydrogenation47. PVA Emulsion (For Paints)48. PVC Resins49. Raw and Refined Salt50. Scouring Paste51. Soap Noodles & Glycerine52. Sodium Methoxide53. Sulphur Bentonite Fertiliser54. Sulphur Coated Urea55. Sulphur Concrete56. Synthetic Ethanol57. Vehicle Natural Gas 58. White Oils

MEDICAL SECTOR :

1. Absorbent Cotton & Buds2. Beauty & Health Preparations3. Formulated Pharmaceutical Products(OTC)4. Hard Gelatine Capsules5. Hospital Furniture6. Ibuprofen7. Medical Devices for Single Use8. Medical Grade Ethanol9. Moisturised Tissues (Wet Wipes)10. Para- Aminophenol11. Paracetamol12. Round Surgical Sponges13. Toothpaste

PLASTICS AND RUBBER SECTOR

1. ABS Resins2. Acrylic Baths and Tubs3. Acrylic Fibres4. Cast Acrylic Sheet5. Co-Ex Foam Core PVC Sheets6. Colour Masterbatch7. Compact Discs8. Corrugated Plastic Tubes & Pipes9. Decorative Plastic Film10.Extruded Plastic Netting Products(NETLON)11. Fibreglass (GRP) Doors

12. Filter Bags for Cement Industry13. Foam-Cored PVC Pipes14. Free-Foamed PVC Sheets15. Graphic Finishing of Plastic &Metal Products16. Heat Shrinkable Tubing17. Hygienic Embossed Film18. Inflatable Safe Play Equipment19. Irrigation Hoses from RecycledRubber20. Laminated Rubber Marine Fenders21. Mats from Recycled Tyres22. Methyl Methacrylate (MMA) &Polymethyl Methacrylate)23. MF Decorative Laminates("FORMICA" Type)24. Multi-Layer Pipes25. Multi-Layer Squeezable PlasticContainers26. Plastic Bottles (HDPE)27. Plastic Fencing & Netting28. Plastic Film (HDPE)29. Plastic Pallets (HDPE)30. Plastic Suitcases / Briefcases (ABS/ PP) (3 Concepts)31. Polycarbonate Resins32. Polyethylene Bitumen WaterProofing Membranes33. Polystyrene Packaging Chips34. Products from Unsorted PlasticWaste35. Pultruded & PullwoundComposite36. PVC Windows37. Recycled Rubber Devulcanizing38. Recycled Tyres Materials39. Replica Hardwood40. Resin Based Industrial FlooringCompounds41. Smart Cards42. Short Glass Fibre FilledThermoplasic Pellets43. Spectacle Frames (2 Concepts)44. Strapping from Recycled PET45. Surfacing Products From RecycledTyres

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46. Synthetic Marble Bathroom Sets47. Tyre Recycling48. Unsorted Plastic WasteRecycling

ENGINEERING SECTOR : 1. Aluminium Containers2. Aluminium Non - Stick HouseholdUtensils3. Aluminium Geodesic Domes4. Aluminium Radiators5. Bath for the Elderly & MobilityImpaired6. Brass Door Handles and Plates7. Coaxial Cables8. Compact Silvering Line for Mirrors9. Commercial Storage Systems10. Domestic Gas Cookers11. Domestic Solar Cookers12. Dry Cell Batteries13. Engineering Metal Components14. Electric Motors15. Electric Water Heater Elements (2Concepts)16. Electronic Pressure Sensors17. Electronic Windows18. Exhaust Fans19. Flat & Spiral Wound Gaskets20. Flux Cored Wires21. Grinding Wheels22. Hand Tools23. Hermetic Reciprocating A/CCompressors24. High Effciency Dehumidifiers(HED)25. Hydroforming Pipe Tees and Elbows26. Independent Aluminium ExtrusionDies27. Industrial Refrigeration & CoolingEquipment28. Industrial Service Center29. Industrial Valves30. Laser Cutting & Processing Center31. Leaf Springs32. Light Drilling Rigs

33. Limited Edition Sports Cars34. Locks and Hinges35. Metallic Profiles For Plastering36. Micro Floppy Computer Disks37. Mortise Locks38. Moulded-Case Circuit BreakerDistribution Systems39. Oil & Gas Equipment40. Pneumatic Consumables and HandTools41. Pipe-end Fabrication for Oil andGas Wells42. Pipeline Pigging and MaintenanceEquipment43. Portable Electric Generators44. Precision Tool Room &Maintenance Centre (2 Concepts)45. Precision Welded Aluminium Tubefor Radiators46. Resin Sealed Electric Motors47. Round AC Ducts48. Rolled Finned Tubes49. Safety Thermostats &Thermocontacts50. Seabed Oil & Gas ProcessingSystems51. Small Crushing & Grinding Mills52. Spark Plugs Manufacturing53. Special Large Diameter Fasteners54. Specialized Maintenance Electrode55. Staples Paper Clips56. Steel Wire Rope57. Tapered Aluminium Poles58. Teflon Lined/Sleeved Industrial Valves59. Thermo-Electric Coolers60. Tungsten Filament Bulbs61. Turbomachines Service & RepairCenter62. Universally-Mountable AutomotiveAlternators63. Water and Electricity Meters64. Water Filters65. Water Taps, Faucets &Accessories66. Welding Electrodes

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METALS SECTOR :

1. Alloy and Special Steel2. Aluminium Can Stock3. Aluminium Clad Steel Wire4. Aluminium Dross Recyling &Refining5. Aluminium Ladder Fabrication Plant6. Aluminium High Speed Ferries7. Aluminium Foundry For VehicleWheels8. Aluminium Polyethylene CompositePanels9. Aluminium Sheets Anodising forArchitectural Applications10. Aluwood Panels11. Castings for the Cement Industry12. Cast Iron Cookware13. Cold Rolling Mill14. Copper and Copper Alloys fromScrap15. Enameled Copper Winding Wire16. ERW Steel Pipes17. Ferrochrome18. Galvanized Rebars19. High Integrity (HI) AluminiumCastings20. Honeycomb Aluminium Panels21. Hot Briquetted Iron (HBI)22. Laser Applied Tungsten CarbideCoatings23. Light Aluminium Extrusions(CONFORM)24. Light Sections Steel Mill25. Lost Foam Aluminium Foundry

26. Manhole Covers27. Micro Steel Mill (2 Concepts)28. Narrow Cold Rolling Plant29. Powder Injection Moulding (PIM)30. Production of Magnesium31. Recycled Aluminium Alloys32. Seafood Cans33. Seamless Copper Tube34. Seamless Steel Tube35. Silicon Steel Finishing36. Solder Electroplated Copper Wire37. Spin-Cast Metal Parts38. Stainless Steel Cladded Steel Pipes39. Stainless Steel Cold RollingComplex40. Stainless Steel Long Products41. Stainless Steel Precision Tubes42. Stainless Steel Pressed Products43. Stainless Steel Wiremesh44. Steel Foundry (2 Concepts)45. Steel Profiles Accessories, Window& Door Frames46. Steel Sections & Rebars47. Submerged Arc Welded (SAW) Pipes48. Titanium Tubes49. Ultra Thin Aluminium Foil50. Zinc Sherardized Components51. Zinc Smelter

ENVIRONMENT & RECYCLING :

1. Biological Treatment of WasteWater2. Cement from ContaminatedSoil/Sludges

For further information on the above, please contact:Industrial Investment Promotion Dept., GOICP.O.Box: 5114, Doha, QatarTel: (+974) 4858888 - Fax: (+974) 4831465E-mail: [email protected]

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Wherever there is need in the world - poverty, disease, suffering -the Kuwait Fund for Arab Development is ready, willing and able tomake a difference.

Established just seven months after Kuwait gained independence in1961, the Fund’s mandate was truly altruistic - to share some of thewealth with which the country is endowed with less fortunate nationsand peoples. It was also a trail-blazing ideal, the first of such fundsset up by neighbouring oil-rich states.

At first the Fund’s activities were limited to assisting around 16Arab nations, primarily in North Africa, the eastern Mediterranean andthe Arabian Peninsula. In the mid-1970s, however, the decision wastaken to expand operations, making the Fund’s assistance available forthe financing of deserving projects in developing countries worlwideincluding African, Asian, Carribbean, Latin American and, mostrecently, East European and Central Asian nations. Today, despite itsname, the Fund’s reach is global transcending racial, religious andpolitical boundaries.

Originally conceived by the present Emir of the State of Kuwait,H.H. Sheikh Jaber Al-Ahmad Al Jaber Al Sabah, when he was theMinister of Finance, the Fund focused primarily on the provision ofbasic infrastructure in newly independent nations: agriculture,transport and communications, energy, water and sewerage, inaddition to industry. Of late, the remit of the Fund has broadened toencompass human development in areas such as education, health andmitigation of environmental impact deterioration.

Under its charter the Kuwait Fund may only grant loans to states orwith the guarantee of states. Along with loans at favourable rates, theFund advises borrowing countries on all matters related to thepreparation, implementation and operation of the projects its money

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is supporting. Sometimes what’s needed are not loans but technicalexpertise, and the Kuwait Fund can draw a wealth of highlyexperienced in-house talent, as well as outside expertise.

The procedure is effective. On request of a loan, a fully-fledgedteam is sent to appraise the project - including technical, economic,organizational and environmental aspects - and then initial the draftloan agreement with the government concerned. Loans are subject toapproval by the Kuwait Fund’s eight-member Board of Directors.Consultants and contractors are paid directly by the Fund, and projectclosely monitored throughout.

The Kuwait Fund is well-known for the speed with which decisionsare taken - just four months on average - which is a benefit of itsindependent standpoint. All projects are appraised impartially, on atechnical and economic basis and detailed plants for implementationof projects are agreed with borrowers, ensuring that the vital work canget underway without delay.

In West Africa, the fund has been instrumental in the battle againstRiver Blindness, a parasitic disease spread by black fly, which oftenaffects whole families. Through a combined programme ofelimination of the black fly’s riverside breeding sites and use ofpreventative drugs the infection rate has dropped from 75% to under2%, while millions of hectares of farmland are back under cultivation.

The Kuwait Fund was the first to offer assistance to Lebanon,following the end of the devastating civil war, contributing to the taskof restoring power and water supplies to beleaguered Beirut. In theformer eastern bloc, the Fund is also active, contributing to a numberof programmes including the Chernobyl Shelter Fund set up tomonitor and maintain the shell encasing the radioactive remains of theworld’s nuclear accident.

Proud of the fact that its activities have continued uninterrupted -even during the Iraqi occupation when, working through its office inLondon, no less than 11 new loans were granted - the Fund alsoprovides support and contributes to the resources of a number ofregional and international development organizations.

Between its foundation and mid-2003, the Fund’s lending totaledKD 3360 million (US$ 11088 million) covering 634 projects in 99developing countries. While the political face of the world may havechanged over those four decades, the Kuwait Fund’s primary objective- to make it a better place for people - has not. It’s an organization ofwhich all Kuwaitis can feel justly proud.

A GUIDE TOassilconsulting.free.fr/Data/AGuidetoIndustrial... · - 7 - of the Labour Legislation in...

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