World FZO Bulletin

Introductory Message 1 The World FZO is pleased to present the fourth quarterly Bulletin of 2015.

State of the art: Free Zones of the Americas 2 This issue provides an overview on the nature of free zones in Latin America, in addition to an insight on the role of free zones in the development of SMEs. Also in this issue, fDi The Development of SMEs and 8 Intelligence provides an overview of the latest investments Entrepreneurship in Free Zones: around the world on a regional basis. Finally, it includes an atlas of free zones in Egypt. Advantages and Challenges - an overview The World FZO would like to acknowledge the valuable contribution of Juan Pablo Rivera, Chairman of Free Trade Association of Latest Investments throughout the globe 12 Americas and Christin Pfeiffer, Secretary General of INSME to this issue of the Bulletin.

Atlas of Free Zones - Egypt 28 We wish you a pleasant read and look forward to your valuable input and feedback on this issue of the Bulletin and on all our other services.

With best regards,

Te World FZO Knowledge Management Unit

“Articles [and/or videos] sourced from the Financial Times have been referenced and are used under license from the Financial Times Limited and were originally published in 2015. “FT and “Financial Times” are trade marks of the Financial 1090, 1st Floor, 7W-B , Dubai Airport Free Zone Times Limited. The Financial Times Limited has not endorsed, veriﬁed or been involved in the creation of information provided from other sources in this PO Box 371113, Dubai, United Arab Emirates publication, and is not responsible or liable for its accuracy, completeness T +971 4 204 5473 and content.” F +971 4 299 3866 E [email protected] Disclaimer: The views expressed in this bulletin are solely those of the authors W worldfzo.org and do not in any way represent the views of World FZO.

By Juan Pablo Rivera Chairman Free Trade Zones Association of the Americas

2 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 3 Graphic 2: Free Zones in Latin Types of Free Zones in Latin Map of Free Zones in the World Number of Free Zones in Latin American countries American countries 12.7% of the FZs in the world is located in Latin America and the Caribbean. 120 American countries have There are three types of Free Zones classified in this way: 102 100 been used for more than 1. Export Free Zones: There are 3 different identifiable models: 80 55 60 49 # FZs 43 90 years as instruments 40 • Industrial Diversification: They are used to increase 14.9% 6.1% Asia 23 24 North America 17 17 the value added of goods and services produced in FZs. 20 12 11 7 7 2.8% Middle East 3 2 2 to attract Foreign Direct For example Costa Rica and Dominican Republic had 5.8% 1 1 0 a strong textile/apparel industry, but today they also Central America 43.6% Asia 6.2% Africa Haití Chile Brasil Investment, promote the produce high tech products such as electronics, México PanamaUruguay Ecuador 6.9% Colombia Honduras Argentina Paraguay Nicaragua Costa GuatemalaRica medical devices and pharmaceuticals products. South America El Salvador Puerto Rico creation of new jobs and Rep. Dominacana Source: Information Compiled by AZFA to contribute towards • Dependence in “maquilas”: They are generally implemented in the textile/apparel sector in order In regard to employment generation, the Latin American to take advantages of the CAFTA-DR, in countries Statistics of Free Zones in Latin Free Zones play a significant role in the national territories national economic growth. like El Salvador, Honduras, Guatemala and Nicaragua. American countries where they are localized because they provide jobs to a large number of people. Dominican Republic statistically offers the Tese Free Zones usually highest number of created jobs, specifically 153,300 in 2014. • Logistic Services: They are used exclusively for the The first country to establish a Free Zone on its territory However, the average number of generated jobs is 69.000 and distribution of goods and services. This model is used was Uruguay in 1923, followed by Panamá in 1948 and Colombia provide attractive incentives 70.000 for countries such as Colombia and Costa Rica, same in countries such as Panama, Chile, Argentina, and in 1958. It is interesting to note that a first wave of installation of countries that in the previous graph show a different number Uruguay. the Free Zones model took place in the 60´s and 70´s in countries on duties and taxes to such as Mexico, Brazil, Chile and The Dominican Republic. of Free Zones, so it can be concluded that the creation of jobs A second wave took place in the 90´s in countries such as not only depends on the number of Free Zones, it also depends foreign investors. 2. Import Substitution Free Zones: These zones are located Guatemala, Costa Rica, Argentina, Paraguay and Nicaragua. on other factors such as the diversification of activities into the in Brazil and were implemented to help those looking for the Free Zone or the demands of domestic and international markets. supply of foreign goods on the domestic market. Graphic 1: On the other hand, countries such as Haiti and Paraguay have the Tis article provides a Year of Establishment of the Free Zone Regime in Latin lower number of created jobs with 7.000 and 2.500 respectively. 3. Mixed Free Zones: This model operates in Colombia and American countries Uruguay and they use three different types of FZs. Graphic 3: general overview about Number of employment generated in Free Zones in Latin Uruguay 1923 • Permanent: These Free Zones are specially designated American countries Panama 1948 Free Zones localized in by the government on geographical limited areas where Colombia 1958 180,000 economic incentives, on duties and taxes are offered 153,300 Mexico* 1965 160,000 146,000 the Latin American region, exclusively. Brazil 1967 140,000 126,000 Dom Republic 1969 120,000 108,000 • Special or single-company: Consist of special Chile 1973 with references to the 100,000 incentives that are exclusive for companies operating in Honduras 1976 81,000 80,000 69,000 Guatemala 1990 70,730 67,000 the geographical area designated by the government for 60,000 types of Free Zones that are Costa Rica 1990 48,000 single companies that fulfill requirements in the place 40,000 Nicaragua 1991 17,000 15,000 where they are operating. 20.000 15,000 available as well as statistics Argentina 1994 7, 0 0 0 2,500 Paraguay 1995 0 • Transitory: Is the area where the government provides 1870 1890 1910 1930 1950 1970 1990 2010 Haití of generated employment, Brasil Chile authorization for holding international fairs, exhibits, Panama Uruguay Paraguay Honduras Nicaragua ColombiaCosta Rica Source: Information Compiled by AZFA El Salvador Guatemala Puerto Rico congresses and seminars of importance for national Dom. Republic year of establishment, economy and the international trade. Colombia is the Latin American nation that has the largest number Source: Information Compiled by AZFA number of companies of Free Zones in its territory, with 102 in total. Colombia is followed by Central American countries including The Dominican Republic The largest number of companies operating under Free Zone with 55, Nicaragua with 49 and Honduras with 43. Countries such regimes in Latin America are located in Chile, where there are operating under the as Costa Rica, Guatemala, El Salvador and Panama also count 2,850 companies operating in the Free Zones named “ZonAustral” within the regime but in a smaller proportion. Finally, Ecuador, and “ZOFRI” that are characterized for having a high volume of regime and the industrial Brazil, Paraguay and Chile have less than 3 FZs. trade in exports, principally because of their geographic location and advantageous economic incentives. Chile is followed by diversifcation among them. Uruguay and Colombia with 1,560 and 772 companies operating in their Free Zones respectively. Finally, there are countries with a lower number such as El Salvador, Nicaragua and Paraguay.

4 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 5 Graphic 4: The following table shows the different economic incentives • FZs have helped incorporating and transferring technology Graphic 7: Number of companies operating under Free Zone regimes given by the Free Zones in Latin American countries, specifically to production processes and operations in the diversification Affiliates to AZFA from 14 countries in Latin American countries regarding to income tax compared between the Free Zone and of products; the national territory. Chile has the most beneficial regime for 3000 2,850 • Due to the importance of FZs in the economic performance the companies operating in a Free Zone because they give a 2500 of the countries, Labours have been created at a national preferential tax of 0% compared with the 35% that a normal and regional level: ANDI (Colombia), CNZFE (Dominican 2000 Chilean entrepreneur must pay in national territory. In a general 1,560 Republic), ADOZONA (Dominican Republic), CNZF 1500 overview we can affirm that more than 5 countries have a 0% (Nicaragua), CNZF (Paraguay), AZOFRAP (Panamá), income tax for companies operating in a Free Zone, which makes 1000 772 731 AZOFRAS (Costa Rica), AGEXPORT (Guatemala), CZFU 602 Latin America a very attractive place for foreign investors, these 325 Number of Companies 500 260 (Uruguay), AZAFRANCAH (Honduras), CAMTEX (El Salvador) 216 200 173 143 are Nicaragua, Guatemala, El Salvador, Honduras and Dominican and AZFA (LATAM); 0 Republic. Colombia and Costa Rica have income tax of 15% in

Chile their Free Zones Vs. a 25% and 30% in National territory. Uruguay Colombia Honduras Nicaragua Paraguay Puerto Rico Costa RicaGuatemala El Salvador Free Trade Zones Association Dom. Republic Graphic 6: Incentives in Free Zones in Latin American countries of the Americas (AZFA) Source: Information Compiled by AZFA Income TAX in Free Zones Vs National Territory in AZFA is a non-profit Organization that in the regional context Latin American Countries With respect to the industrial diversification in the Free Zones in promotes and defends the FZ regime through integration, Latin American countries, we see a high diversification in countries Income Tax Income Tax research and partnerships among the public and private sector in such as Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Country all countries of Latin America, and whose purpose is the correct FZ NT Dominican Republic and Colombia, because in those countries the development and understanding of the advantages of FZs. companies operating in their Free Zones have economical activities Chile 0% 35% The main objectives of the organization are: covering more than 4 different business sectors. However there Nicaragua 0% 30% are other countries with a low industrial diversification as a Guatemala 0% 25% • To promote the free zone regime in different Latin American consequence of the lack of differential economic activities in their El Salvador 0% 25% countries. Free Zones such as Chile, Argentina, Paraguay, Brazil and Ecuador. • AZFA counts with affiliates from 14 different countries: Honduras 0% 25% • Associate and motivate cooperation and business relations It should be noted that the lack of industrial diversification is not – Argentina República Domin- among FZs, Associations, Governmental Agencies and bad per se because it may be caused by a specialization in some 0% 25% – Brazil icana other Organizations. activity that provides the expected returns. – Colombia Colombia 15% 25%+ 13%* • To provide a platform to channel information that is both – Costa Rica Graphic 5: Costa Rica 15% 30% relevant and of value for the FZs sector. – Spain Industrial Diversification in Free Zones in Latin American Mexico 28% 30% – Guatemala countries – Honduras Source: Information Compiled by AZFA Agri- Textiles Medical Pharma- Elect- Auto- Call – Nicaragua Country BPO Logistics * Colombia applies an equity tax of 13% in addition to the income tax, FZs are Industry Apparel Devices ceuticals ronics parts Centers exempted from such tax – Panama Guatemala – Paraguay El – Puerto Rico Salvador Conclusions – Dominican Republic Honduras – Uruguay Nicaragua • The Free Zones regime has existed in LATAM for more than 90 years and is an important tool in promoting investment, – El Salvador Costa Rica employment and economic welfare; Panama Today, AZFA has affiliates from 14 countries, including Rep. Dom. • Figures of FZs in LATAM are: approximately 400 FZs, the Latin American countries and the Caribbean, Spain, being Puerto 900,000 direct employees and more than 8,000 companies the most important Association of Free Zones in the region. Rico operating under the FZs scheme; Colombia

Ecuador • FZs are used for different activities: Industry, manufacturing,

Brazil logistics, commercial and services; Paraguay • There is an interesting industrial diversiﬁcation into some Uruguay of the FZs of Latin America; Argentina • Countries and/or regions have established selective Chile strategies differentials in terms of: types of companies, legal Source: Information Compiled by AZFA frameworks and incentives to attract investment into FZs;

• Free Zones are present all over the Latin American countries despite the different economic situations and political parties;

6 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 7 Te Development By Christin Pfeifer Secretary General, INSME – International of SMEs and Network for Small and Medium Enterprises Entrepreneurship in Free Zones: Advantages and Challenges – an Overview

8 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 9 The idea of value chains is based on seeing a manufacturing (or Growth ambition, innovation opportunities’ awareness and SMEs – as already mentioned – can attract talent and give space “Quality is not an act. It is a habit.” service) organization as a system, made up of subsystems each loyal leadership skills to afford internationalization challenges to young people to realize their dreams and work on a more (Aristotle) with inputs, transformation processes and outputs. “Inputs, are characteristics of a successful entrepreneur in a globalized sustainable future by fostering inclusive growth. Free Zones might transformation processes, and outputs involve the acquisition and competitive environment. The latest “Global Entrepreneurship be their perfect home and proper management of a Free Zone Small and Medium enterprises are the backbone of most consumption of resources - money, labor, materials, equipment, Monitor” Report (GEM), issued in January 2015 mentioned four (like an innovation Eco-System) becomes a key priority. Especially economies generating a huge part (normally around 66%) of the buildings, land, administration and management. How value chain important entrepreneurial preconditions: if Free Zones act like clusters, it is of added value to upgrade and 1 GDP of a country. By having a look at the European Economy this activities are carried out determines costs and affects profits”. enrich the skills of the Free Zone Manager (leader) and create a percentage raises incredibly: 99% of the companies are small and • Entrepreneurial Connections; homogeneous profile in this regard. medium sized, while it is particularly relevant to keep in mind that In a global supply chain many partnering firms are normally • Awareness of Opportunities; from those 99% the vast majority (nine out of ten) are micro- small and medium sized enterprises supporting a focal firm in • Inherent Entrepreneurial Skills; The mentioned benefits seem exactly in the interest of the whole 4 entrepreneurs, being able to count on less than ten employees. the process of supplying raw materials to the delivery of final • Risk Taking Culture. innovation Eco-System and bring together all actors of the cycle. products and services to end customers. In context to the supply Especially the role of Human Capital becomes vital. According SMEs have often shown to be more flexible than large enterprises chain of the focal firm, SMEs play “a very crucial role in attaining This implicates that if there is intent to integrate SMEs successfully to Deloitte’s Annual Research on “Global Human Capital Trends”, and might therefore adapt more easily to new conditions – a cost efficiencies in procurement and production processes, and in Free Zones, a clear focus on skills development needs to be set people need to be managed in a different way and learn how to fundamental asset in times of worldwide economic crisis and accurate & timely delivery of products and services to the end to make sure the benefits can be achieved and managed properly. innovate and transform human capital. Twelve trends are described uncertainty. As a further advantage, satellite companies to customers. But this requires a close and trustworthy relationship that can be split into three key areas of strategic focus: (1) Lead big multinationals are often able to react immediately and between the focal firm and associated SMEs”.2 Therefore the All participants of the Free Zone Eco-System have to play their and Develop; (2) Attract and Engage and (3) Transform and 5 guarantee timely delivery to locally based industry compared concept of value chain goes beyond the traditional understanding specific role and need to be involved to develop the Free Zone Reinvent. to larger corporations. of a mere supply chain. further, respond to the demands of internationalization and innovation attitudes. Therefore, in addition to the industry and International expert organizations as INSME are offering tailor- SMEs are not only the economic backbone, but also the most As UNCTAD (United Nations Conference on Trade and SME Managers, also the financial participants have to be involved made trainings on actual trends of strategic networking, innovation st important employment generators of the 21 Century – an Development) points out: “there are obstacles that affect SMEs’ (public and private ones including venture capitalists etc.), as well management and innovation performance impact assessment for aspect that is of paramount importance, given the social impact ability to enter global value chains (GVCs) both in developed and as policy makers, public and private intermediaries and finally the multipliers and intermediaries, creativity and pitching that can be of this phenomenon. Free Zones today are creating a huge developing countries.”3 These include: (a) the need to upgrade knowledge providers (as universities and research centers). There extended to upgrade skills for Free Zone Managers. number of new jobs and as such linking both would create technology and innovation capacity; (b) the lack of adequate has to be a strategic planning taking the differences in the short/ a win-win situation. By taking the trend on clustering into account, finance and human capital for this process; (c) the inability to medium/long-term visions of each other into account. Similar to Cluster Managers, it might be worth to brainstorm about the employment generation aspect has to be considered even meet standards and certification requirements; (d) the necessity a certification system or a quality label of Free Zone Managers stronger, as very often the outcome is a creation of innovation to better manage intellectual assets, including the protection of In addition new ways of collaboration and exploitation of focusing on and strongly working with SMEs. hubs, collaborating fruitfully also with local universities and intellectual property rights (IPRs) when appropriate; (e) the difficult technology have taken over the traditional ones: the virtual scientific knowledge providers, having a positive impact bargaining position SMEs face with large contractors; and (f) the opportunities of engaging with each other might often be exploited There are diverse benchmarking facilities available to Cluster on local infrastructure and the territory. need for diversification to reduce dependence on one or a few better by small companies. SMEs need to learn more about Managers that can be easily adapted to Free Zone Managers; customers. user-driven innovation and shall take advantage of crowd thinking an investment in this regard would also help to discuss With those few lines it seems evident that involving SMEs or crowd sourcing linked to the available open innovation tools. certain issues on a Government level, as the investment in more actively in Free Zones would offer a variety of advantages. Value chains today have not necessarily to be limited Collaboration in this “2.0 manner” leads to new ideas as well Entrepreneurship is currently part of most political agendas But there are also challenges to cope with for the people involved geographically and micro entrepreneurs (91% of European as to services, processes and business models innovation, which around the world. The same applies to Competitiveness, in designing the future policies, rules and procedures in managing enterprises) already play a role of paramount importance. might reduce costs and time and improve quality of products Innovation and R&D results exploitation as well as employment a Free Zone. As nearly all products and services are “born global” and could delivery. Internationalization is a must today, skills and knowledge and inclusive growth. serve a variety of markets, international partnerships, exchanges of how to market the proper value proposition globally require Finding a common policy and supporting small companies to of opinions, market analysis and feasibility studies require global access to platforms, toolkits and a portfolio of services often As Free Zones are generating a massive and impressing number successfully comply with today’s conditions in a global competitive expertise, experience and knowledge. Other players of the Free already available and freely accessible to SMEs, who might of work places, they shall definitely play their role and be integral environment is a major difficulty. SMEs are an indisputable part of Zones might have collected proper experiences and best practices just not be aware on how to benefit from them. part of the related discussions in the future. value chains, going beyond the traditional understanding of “supply and could therefore assist the small companies with precious chains”. The Free Zones might be a perfect place to cluster small advice. As an outcome Free Zones might attract more talent thanks to companies and bring the value chain members together. SMEs and the start-up community (that has to be strengthened A further challenge in this regard results from the fact that the especially in and around the Middle East) could notably benefit. To clarify the understanding of value chain it is necessary to SME community is a very heterogeneous one; SMEs are not More interaction between academic and industrial players is recall a proper definition: a value chain is a chain of activities the same and not all suitable and mature to act as added auspicious, as the investment in research with a user-driven that a firm performs in order to deliver a valuable product or value for Free Zones. approach might help to be able to finally commercialize the service for the market. This concept was analyzed, first results of academic studies. described and then popularized by Michael Porter in 1985.

1 “Decision Support Tools: Porter›s Value Chain” Cambridge University: Institute for Manufacturing (IfM) on http://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/. 4 “Leveraging Entrepreneurial Ambition and Innovation: A Global Perspective on Entrepreneurship, Competitiveness and Development “, Global Entrepreneurship Monitor, Report 2015, Retrieved 24 March 2015. Executive Summary, page 2 on http://www.weforum.org/reports/leveraging-entrepreneurial-ambition-and- innovation-global-perspective-entrepreneurship-compe. Retrieved 24 March 2015 2 “Aligning interests of SMEs and a Focal Firm (MNE) in a Global Supply Chain Setup”, K.K. Morya and Dr. Harsh Dwivedi, abstract, page 1 under “SMEs and MNEs in Global Supply 5 “Global Human Capital Trends 2014: Engaging the 21st-century workforce”, Deloitte University Press, 2014, page 25 – 144 on http://www2.deloitte.com/global/en/pages/human-capital/ chain setup” on www.academia.edu. Retrieved 24 March 2015 articles/human-capital-trends-2014.html. Retrieved 24 March 2015 3 “Enhancing the participation of small- and medium-sized enterprises in global value chains”, report 2007, page 8 on http://unctad.org/en/Docs/c3em31d2_en.pdf. Retrieved 24 March 2015

12 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 13 Much has been noted about Latest Investments Consumer Electronics Metals Automotive Components Samsung invests in Argentina Constellium invests in Georgia friction being removed Samsung Electronics, a subsidiary of South Korea-based France-based aluminium processing company Constellium Pioneer to create Mexican jobs conglomerate Samsung, is to invest $65m to manufacture is to open a manufacturing facility for automotive structures from global business Pioneer Electronics Mexico, a subsidiary of Japan-based Pioneer, refrigerators in Argentina. The company will create 300 direct in Bartow County, Georgia. The company will invest $20m is to open a $4m plant in Bajio, Mexico. Pioneer Automotive and 300 indirect jobs. on the 7805-square-metre (sq m) facility, which may be expanded operations. Supply chains de Mexico will have a production capacity of 2 million car up to 20,440 sq m. The project is expected to create 150 jobs, electronic products per year. It will serve Mexico as well as North, and will open in 2017. have expanded: a product South and Central America. The subsidiary will be established in February 2016, and will commence operations in February 2017. It will increase employee numbers from an original base of is designed in one place, 47 to 450 by 2019. its component parts are produced in many places and it is assembled in yet other places.

A hallmark of the new Paciﬁc Trade agreement (the Trans-Paciﬁc Partnership) is to reduce barriers (i.e. take out the friction) to enable a similar expansion in delivery of business services.

A little over 14 years ago, at midnight, I sat at a Cape Cod, Industrial Machinery, Equipment & Tools Massachusetts kitchen table and delivered a presentation via telephone to a gathering in Australia. My colleagues in Melbourne Automotive OEM Dunan opens in Tennessee were happy to advance the slides, but they were also insistent that Dunan Environmental, a manufacturer of commercial and I give the talk and handle the question-and-answer section. Flights New Toyota Facility in Mexico residential central air-conditioners, which operates as a subsidiary were cancelled in the aftermath of the 9/11 attacks, so we needed Toyota, a subsidiary of Japan-based automobile manufacturer of China-based Dunan, is to open a manufacturing facility in to work around this friction. Obviously, others were confronted by Software & IT Services Toyota Motor, plans to establish a new manufacturing facility Memphis, Tennessee, US. The facility, Dunan Precision, will far more severe outcomes, but all were affected and still are. in Guanajuato, Mexico by 2019. It will have an annual capacity manufacture heat exchangers for air conditioning and refrigeration Onomatics expands in NYC of 200,000 units and will be dedicated to the production of the units to be sold in North America. The move is expected to occur In addition to what others do to us, friction also stems from what Corolla sedan for the North American market. The company in early 2016, and will create 104 jobs. Finland-based Onomatics, which provides Trademark Now, an we do to ourselves. Consider corporate tax and regimes and their will create 2000 jobs. The project forms part of a wider $1.3bn intelligent web-based trademark management platform provider, impact on strategic and tactical business decisions, including FDI. investment plan, which will also see an additional plant has expanded its operations in New York City, US. The firm has Remarkably, we should have it within our power to rework these established in Guangzhou, China in 2018. relocated to a larger office on East 28th Street in the heart of to advantage. Sadly, we seldom do. Silicon Valley in response to its expanding US client base. The new office will accommodate the company’s planned growth in 2016. And, when programs are developed to create competitive advantage, things don’t always work out. To overcome ‘friction’ of skilled labour shortages, the US enacted the H-1B Visa program. It seemed a great idea. The US can brain drain the world to win the war for talent, and assure that our most innovative companies are able to get the staff they need but cannot find. However, the reality is that most of the visa recipients are headed to just a handful of global outsourcing firms, and, with a political backlash developing, a thoroughly positive redesign is not assured. Frictions addressed can lead to frictions created; friction is not quite removed.

Daniel Malachuk works with business and government leader on global direct investment strategies. He had advised many of the world’s leading companies and served in the public sector as director of White House operations.

Email: [email protected]

16 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 17 Research by multinational financial services corporation Business Services Rubbers Asian Millennials (aka MasterCard revealed that by 2020, 60% of the world’s Millennials perceive themselves to have less disposable income than any New Office in Singapore Germany’s Lanxess expands global production other age group, they save more and are cautious spenders. Generation Y) are the next Communispond, a subsidiary of UK-based Informa, has opened The Rhein Chemie Additives business unit of Germany-based Of all generations, they are the most likely to do their research a new office in Singapore. The office will support the company’s Lanxess, a chemical company, has opened a production line for by looking for more brand connections, ‘word of mouth’ global presence and will manage business for Singapore, Malaysia, rhenoshape tyre curing bladders at its site in Qingdao, China. key Asia market driver. recommendations and reviews online from social media Indonesia and Vietnam. The new office will add to the company’s The company will expand its global production capacity by influencers before purchasing an item, with electronic gadgets 11 existing offices. about 10%. The firm serves tyre manufacturers in China and and travel being their top two purchases. With increasing property other Asian countries, including Japan, Thailand and Malaysia. US consultancy McKinsey prices, they feel that property ownership is out of their reach & Co has identifed fve and prioritise their spending on experiences. Even in the workplace, Asian Millennial employees will soon Asian Millennial segments. dominate. Already, 44% hold management positions. By 2025, three out of four workers globally will be Millennials. Millennials Te younger segments – the are often highly ambitions and impatient for accelerated career advancements, where career progression is the single most ‘idealists’ (19%) and ‘want-it- important factor for selecting a job. Identifying the target Asian Millennial segment is critical, then alls’ (13%) – are more likely researching, formulating and executing a Millennial segment strategy is next. It is a major challenge. Amid the converging to be motivated by factors technology products with difference social media platforms, how will businesses serve these evolving, diverging Asian Communications such as meaningful work, Millennial segments? I am glad to witness this new wave as I turn fabulous 50 next year! whereas older segments – the NTT expands its Hong Kong Data Centre Semiconductor Lawrence Yeo is CEO if AsiaBIZ Strategy, a Singapore-based NTT Communications, a subsidiary of Japan-based Nippon Avago expands in Malaysia ‘money seekers’ (18%), the consultancy that provides Asia market research and investment/ Telegraph & Telephone, has expanded its data centre in Hong trade promotion services. Kong, as part of an ICT and internet infrastructure project. The Avago Technologies (Malaysia), a subsidiary of Singapore-based expansion has added 4000 racks of server space to the existing Avago Technologies, a supplier of semiconductor devices, plans Email: [email protected] ‘family-focused’ (18%) and centre, and improved energy efficiency by 20%. to expand its operations in Bayan Lepas, Malaysia. It will invest $20m to add a new 4645-square-metre building at its existing the ‘breadwinners’ (32%) – premises, which will feature design and development laboratories, Latest Investments offices and a conference room. The expansion will create 270 jobs. tend to place greater value Alternative/Renewable Energy on more practical fnancial Apple invests in Chinese Solar US-based Apple plans to develop a 50 megawatt photovoltaic and lifestyle factors. power station in Sunit, Inner Mongolia, China. The company is partnering with China-based Zhonghuan Semiconductor and a US-based photovoltaic company, with about Rmb181m ($28.3m) to be invested. Apple will account for 40% of the investment in the project, which represents part of a plan, recently announced by the company, to make its Chinese supply chain more environmentally friendly. Electronic Components

Foxconn opens base in Lanzhou

Foxconn, a subsidiary of Taiwan- based Hon Hai Precision Industry, has entered into an agreement with Gansu Radio and Television Network to establish a joint electronics processing base in Lanzhou, China. The processing base will focus on a combination of new IT, such as cloud computing and big data, as well as areas such as manufacturing and productive services.

20 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 21 Generation Y, also known as Millennials, are a much studied Chemicals Non-Automotive Transport OEM As from 2014, the working- demographic group, and are continually under the scrutiny of social and economic scientists because of their importance as a Linde Gas opens $15m facility in Turkey Honda expands motorcycle facility in Spain consumer market and their current (and future) contributions to age population of Europe Linde Gas, a subsidiary of Germany- based chemicals company Montesa Honda, a motorcycles manufacturer and a subsidiary the workforce. By 2020, Millennials will comprise half the global Linde, has opened a new $15m carbon dioxide (CO2) production of Japan- based Honda, is to invest $3.51m to expand its workforce. In Europe, they currently account for about 33% of it, facility in Denizli, Turkey. The plant has the capacity for 240 tonnes facility in Santa Perpètua de Mogoda, Spain. The company has been shrinking, and and by 2025 they will account for 47% of the European workforce. per day and sources its CO2 from emissions from the nearby will manufacture a new 4RIDE model for a wider audience. Zorlu Energy geothermal power plant. The facility features pipeline is expected to continue to There is a duality to Europe’s Millenials. While the demography infrastructure connected to the Organised Greenhousing Zone boffins have classified them as well-educated, multi-lingual, in the region, though the majority of gas will be sold to local food decline until 2050. People mobile and confident, many are still living with their parents, are and beverage clients.. unemployed or on low wages, and are anxious about their future. aged 80-plus are now With many coming into the labour force after 2007, all they have Europe’s fastest growing known are recessionary times. Notwithstanding this sweeping stereotyping about an entire generation, there is one big important and positive attribute population segment. So, about Europe’s young. It is their comfort with technology. They have grown up with internet and with their trusty smartphone as Europe grows older, what in hand, they are connected on a daily basis to all sorts of technology. Online for an average of five hours per day, technology does this mean for those is central to their lives. This is good, for if ageing Europe is to continue to be productive and competitive, then it will need to Plastics know as Generation Y harness technology. It will have to be smart. With the European Commission’s ‘digital agenda’ being one of the seven pillars of Australian’s Amcor create 100 jobs in Poland (in Europe, generally the Europe 2020 Strategy, the people in power need to make sure that Generation Y is given the opportunity to play it full Australia-based Amcor, a food and beverage packaging Food and Tobacco considered to be people born part in helping to shape the continent’s future. manufacturer, has expanded its production facility in Lodz, Poland. The plant now totals 25,000-square-metres and will Moy Park expanding in the UK Douglas Clark is director of Location Connections, produce a wide range of paper packaging products for the between 1980 and 2000)? a site selection and FDI consultancy. Poultry processing company Moy Park, a subsidiary of Brazil-based tobacco industry. The expansion has created 100 new jobs, Email: [email protected] Marfrig, is set to expand operations at its hatchery and processing bringing the total headcount at the site to 500. plant in Ashbourne, the UK. The company will invest $15m in the installation of a new cutting line, processing equipment and refrigeration chilling technology. This will enable the company Latest Investments to increase its capacity to more than 1 million birds a week. Aerospace It will also increase the hatchery’s capacity to 1.2 million chicks a week. The investment will create 100 new jobs. Terma to develop logistics Centre in the Netherlands

Defence and security company Terma, a subsidiary of Denmark- based Thomas B Thriges Fond, has signed a Letter Of Intent with the Royal Netherlands Air Force to establish a centre of excellence logistics centre at the Woensdrecht airbase in the Netherlands. The firm is one of five companies to sign the agreement with Fokker Services, Nedaero, NLR and Thales also participating. The facility will support the F-35 fighter jet programme with specific focus on the LM-STAR, performance-based logistics software, test capabilities and mainte- nance repair overhaul. The new site will also allow the firms to maintain their presence in the Netherlands and increase industrial participation in the programme.

24 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 25 Therefore, the difference in this eternal fight between ‘the young’ Building & Construction Materials Food & Tobacco Tere is something mystical and ‘the ruling’ lays not in the goals but in the measures and the technological possibilities of the young generation today compare Dangote creates 1300 jobs Skretting expands Egypt operation to the past centuries. The endless possibilities of the internet, the about the name Millennials Dangote Cement, a subsidiary of Nigeria-based construction Skretting, a producer of feed for farmed fishes and shrimps and global reach of social media and the ease of travelling around the materials company Dangote Group, plans to open a new factory a subsidiary of Netherlands-based Nutreco, has expanded globe in a short time give Millennials the possibility to be active, in Mugher, Ethiopia. The $450m development is expected operations at its plant in Bilbeis, Egypt. The firm has invested compared with the Baby reach their audience and mobilise their peers more effectively than to double the site’s capacity to 5 million tonnes per annum. in an extra produc-tion line to triple its tilapia fish feed capacity any generation before. Boomers or the ‘fower The plant, which is to be situated near to an existing factory, in Egypt to 150,000 tonnes. The extra capacity allows Skretting will encompass 560,000-square-metres and create 1300 jobs. to better serve the local tilapia sector with fish feed as well They can attract attention to politics in Gaza from San Francisco, The cement produced will be distributed in Ethiopia and as technical expertise and support. power’ generation, which like the founder of all-digital news channel AJ+ Dana Takruri; exported to neighbouring countries. or develop an impressive renewable energy initiative for a multinational corporation in east Africa, like entrepreneur Patrick implies that people born Business Services Ngowi. They are well educated, often multilingual with close ties to different cultures, and quite entrepreneurial in their approaches in the past two decades Aegis opens new call centre in Durban, South Africa towards changing the status quo of their neighbourhood, country are somewhat special. or regions. Aegis Limited, an outsourcing services partner and a subsidiary of India-based Essar Group, plans to establish a new call centre All these aspects are important cornerstones for an economy in Durban, South Africa. The facility is expected to be able to But a closer look at history in search of foreign investment. However, it all comes back again accommodate 500 members of staff. to the same historical question: will those in power today create and relevant studies in a peaceful framework for young to build upon? After all, all those Millennials shows that positive characteristics are useless without stability and peace. Mazdak Rafaty is managing partner of Ludwar International these young people have Consultancy and SME advisor to the joint Emirati-German Chamber of Commerce. the same dreams and Email: [email protected] Metals ambitions as their parents Strong structural steel plans new Nigerian plant Latest Investments US-based Strong Structural Steel, a steel product and architectural and grandparents when they Alternative/Renewable Energy steel manufacturer, plans to establish a plant in Nigeria. The $36m factory aims to bring the firm’s expertise to the domestic were young: break existing Norway’s scatec to build solar facilities in Egypt market, and will create 300 jobs when opened in May 2017. The development is expected to be a joint venture initiative Scatec Solar, a subsidiary of Norway- based Scatec, plans to with the Nigerian government or a local entity. boundaries, be free in their establish three solar generation facilities in Aswan, Benban, Egypt. Chemicals The development is part of a wider $600m growth initiative, choices, and change the which will see two facilities established in Zaafarana. The Benban France’s Sodamco to build plant in Saudi Arabia projects are set to be launched in the first half of 2016. status quo in the name of Sodamco, a subsidiary of France- based Saint-Gobain, plans to establish a new manufacturing plant in King Abdullah Economic equality, justice and freedom. City, Saudi Arabia. Expected to become opera- tional in 2017, the plant will provide adhesives and construction chemicals destined for Saudi Arabia and markets in east Africa.

This investment news and data has been provided by fDi Markets, a crossborder investment tracking service that is part of The Financial Times Ltd’s fDi Intelligence division (www.fdiintelligence.com)

Compiled by the University of Reims, France

Conception: F. Bost Data collected by D. Messaoudi Map and layout: S. Piantoni

28 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 29 Lebanon 200 km Syria Year of promulgation of the frst Damietta Public Port Said Public Ofcial Terms for Free Zones Free Zone Free Zone West Port Said East Port Gaza text of law concerning the Free Alexandria Dumyat Public Free Zone Dumyat Bank -Free zones Port Said Strip Port Said Marsa Alexandria Ismailia Israel Jordan -Qualifying Industrial Zones (QIZ) Zones 1975 (Policy of “Opening Alexandria Public Matruh Free Zone Ismailia Public Cairo Free Zone Suez -Special Economic Zones (SEZ) Shibin el Kom the Door”) Public Free Zone Nasr City Public Ismailia Al Jizah Free Zone Suez Public Abu Media Public Free Zone Zenima Free Zone El Tur Cairo Suez Saudi Exact number of Free Zones Al Jizah Arabia Economic Zone Asyut Suez Economic and Northwest Al Ghurdaqah -10 public free zones (since 1997) Trade Cooperation El Faiyum Gulf of Suez Sohag Qena L -15 Qualifying Industrial Zones (since 2004) i Abu Zenima b Egypt -2 Special Economic Zones (since 2002) y El-Kharga a Aswan Free Zones General information

Number of active companies -Free Zones : no information Sudan Wadi Halfa in Free Zones -QIZ : 680 companies in 2010 Asyut -Special Economic Zones : no information Free Zones in Egypt Main sectors of activity Food processing alimentary industries and food products, chemicals & petrochemicals industries, Sohag fertilizers, petroleum services, and natural gas industrialization and liquefaction, engineering and International borders Main cities elevations electronics industries, manufacturing of medical equipment, pharmaceutical industries and medical Qena Qeft Public Free Zone Main rivers Main roads (meters) equipment, spinning and weaving, fabrics, readymade garments, ready-made clothes, leather and leather products, petroleum services and petroleum equipment leasing, Ships, yachts and ﬁshing 50 km 1000 Public Free Zones 500 boats industry, navigation services, ship supplying and provisioning. Special Economic Zones (SEZ) 200 Total job numbers -Free Zones : no information 0 -280 000 in 2014 in QIZ -Special Economic Zones : no information Qualifying Industrial Zones (QIZ) Distribution of investors Europe economic zones : an Union, United States, Middle East countries Alexandria Greater Cairo Exports and sales In 2013, the Egyptian free zones accounted for 10 billion dollars in annual exports, representing a quarter Central Delta Beni Suief of the industrial exports of Egypt Suez Canal Al-Minya Free zones contribution to the 5% of total FDI in the country national economy Corporate Tax Companies operating in free zones are exempted from customs duties, sales taxes or taxes and fees on capital assets and intermediate goods © Sébastien Piantoni Conception: François Bost Free Zone law http://www.gaﬁ.gov.eg/content/EN/macro/investmentlawno8en.pdf EA 2076 Habiter University of Reims - 2015 Map Projection: WGS 1984 Contacts

General Authority General Authority For Investment and Free Zones 3 Salah Salem st, Nasr City, Cairo, P.o. Box 11562, Egypt. Tel.: + 202 24055464 Fax: +202 24055429

Free Zones Sector El Sefarat District, Nasr City, Cairo, P.o. Box 8044, Egypt. Tel.: + 202 22748493 Fax: + 202 22748465 gaﬁ-fz@gaﬁnet.org www.investment.gov.eg

Name Location Surface area Observations / Contact Alexandria Public Situated at 220 km from Cairo, 20 km from 5 700 000 m² Ameriyah- Alexandria/ Cairo desert road Qeft Public Free 45 km from Luxor city, 180 km from 905 000 m² Qeft Public Free Zone Free Zone Nozha International Airport, Borg El-Arab P.O.Box: 2351 Alexandria Zone El- Quseir Port, 250 km from Safaga Port, Industrial Park – Kallahein – Qeft – Qena Airport, Alexandria port and located at the Telephone: (+203) 4500002 / 4500011 650 km far from Cairo Governorate center of a network of roads. Alexandria Public Fax: (+203) 4500010 / 4500012 Administrative headquarters: Tahrir Street- free zone is at 7 km from Dekheila Port. E-mail: alexandria-fz@gafinet.org Extension of Elmohafza Street- In front of the Nasr City Public Located within Cairo governorate in the 705 000 m² Industrial activity represents 90% of the Courts of the State Council. Free Zone vicinity of Cairo Airport. Connected through zone’s projects. Telephone: (+2096) 5347482 a network of roads and railroads in the Nasr City Public Free Zone: Fax : (+2096) 5347483 vicinity of Cairo airport (15 km). Nasr city- El-Safarat district behind El-Wafaa E-mail: keft-fz@gafinet.org Wal Amal Port Said East Port 35 400 000 m² Established in 1995, focused on containers P.O.Box: 8044 Cairo Public Free Zone and transit activities, its borders were Telephone: (+202) 22748129 adjusted in 2003 to be parallel to the borders Fax: (+202) 22748467 of the pivotal Port Said East port. E-mail: nasrcity-fz@gafinet.org An intermediate location between the Port Said Public Located near Port Said Port. 160 km from 729 000 m² Port-Said Public Free Zone Port-Said City international trade lines makes it an Free Zone Cairo P.O.Box: 242 Port-Said important distribution and logistic business Telephone: (+2066) 3729752 center, serving the entire Mediterranean Fax : (+2066) 3728724 area and neighboring regions. E-mail: portsaid-fz@gafinet.org A good potential of industrial integration and commodities exchange with the adjacent Suez Public Free Established in 1975 on two locations: Port 75 660 m² + 247 Port-Said Public Free Zone Port-Said City industrial zones and its projects. Zone Tewfik location (an area of 75660 m²), 208 m² P.O.Box: 242 Port-Said Port Said authority port is the one entitled adjacent to Suez port’s fence. Adabeya Telephone: (+2066) 3729752 to implement basic infrastructure facilities. location (an area of 247208 m²) overlooking Fax : (+2066) 3728724 It accomplished the implementation of Suez bay coast at 5 km distance from E-mail: portsaid-fz@gafinet.org new entry canal streaming directly from Adabeya Port. 120 km from Cairo the sea, inaddition to the establishment Ismailia Public Free Situated at Cairo/Port Said Desert Road. It’s 325 000 m² Ismailia Public Free Zone of a containers (dock). Zone 30 km away from Mubarak’s El-Salam Bridge Ismailia/Port-Said desert road, Ezz-El-Din The Suez Canal for Containers Company, crosses over Suez Canal to the continent of Ismailia has built a container station according Asia, it is located near the ports (85km from P.O. Box: 121, Ismailia to the B.O.T system, with a capacity Port Said port, and Suez Port, 120 km from Telephone: (+2064) 3482870 of 600 thousand containers yearly, estimated Cairo Airport and 125 km from Damietta Port. Fax : (+2064) 3482869 to leach 1.2 million containers in the next The Free Zone is located near the first E-mail: ismailia-fz@gafinet.org few years. and second industrial parks, and near the Technology Valley. Damietta Public 220 km from Cairo. 55km West of Port 798 000 m² Damietta Public Free Zone Damietta, Free Zones Web sites selection Free Zone Said’s port East of Damietta Port • http://www.tpegypt.gov.eg/Eng/FreeZone.aspx P.O. Box: 191 • http:www.gafinet.org Telephone: (+2057) 290140 • http://www.tpegypt.gov.eg/Eng/FreeZone.aspx Fax : (+2057) 292222 • https://www.kpmg.com/EG/en/issuesandinsights/Documents/Issues-Insights%20PDFs/Doing%20Business%20in%20Egypt.pdf E-mail: damietta-fz@gafinet.org Media Public Free 40 km from Cairo 3 000 000 m² Zone Shebin El-Kom 70 km far from Cairo 84 000 m² + 200 Shibin El-Kom Public Free Zone Public Free Zone 000 m² (situated Inside Misr / Shebin spinning and weaving on 20 feddans Company area as a first Telephone: (+2048) 2236946 phase (84 thousand Fax : (+2048) 2236986 m²), to be Email: shibinelkoom-fz@gafinet.org extended to 48 feddans on its second phase)

32 © 2015 I World Free Zones Organization I Bulletin issue 04 © 2015 I World Free Zones Organization I Bulletin issue 04 33 Qualifying Industrial Zones (QIZ) Protocol Between Egypt and Israel Incentives and Benefits: SEZONE presents unrivaled incentives & guarantees comparing Qualifying Industrial Zones (QIZ) are designated geographic areas, Forteen currently designated industrial zones, with nearly 700 Protocol between the government of the arab republic of Egypt to the other economic zones in the region: within Egypt, that enjoy a duty free status with the United States. qualified companies, and more qualifying each quarter, amounting and between the government of the state of Israel on qualifying 1. 10% unified income tax in the SEZONE (versus 20% outside Companies located within such zones are granted duty free access to more than $1 billion annual revenues. industrial zones : http://www.mfti.gov.eg/english/Agreements/qiz. of SEZONE) applicable on the profit of the capital companies to the US markets, provided that they satisfy the agreed upon htm and on income of natural persons and on revenues derived Israeli component, as per the pre-defined rules of origin. from land and non residential buildings. 2. 5% income tax. (versus 10% - 20% outside the SEZONE) Main sectors of activity Textiles & garments, animal products, articles of stone, Base metals, Chemical products, Electrical QIZ Web sites selection 3. A one-stop shop through legislation that provides the body equipment, Footwear and headgear, Leather products, Machinery equipment, Paper products, Plastic with single-point authority over other government agencies products, Prepared food stuff, Vegetable products. • http://www.qizegypt.gov.eg/ in core areas. • http://196.205.98.231/About_QualifiedLocations.aspx Number of active companies 700 companies entitled to QIZ Duty-Free Treatment in 2013 4. The Authority has a supreme committee that supervises • http://www.moit.gov.il/NR/exeres/2124E799-4876-40EF- QIZ Total job numbers 280 000 in 2014 the taxation system in SEZONE. 831C-6410830D8F02.htm 5. The Authority has a special customs service under the Exports and sales In 2013, the Egyptian free zones accounted for 10 billion dollars in annual exports, representing a quarter • http://www.mfti.gov.eg/english/Agreements/qiz.htm supervision of a Supreme customs committee. of the industrial exports of Egypt • http://itrade.gov.il/us-dc/2013/04/19/qizs-boost-egyptian- 6. Lowest cost production center in the Middle East-North Africa Qualifying Industrial Zone program spurred $823.6 million in Egyptian exports to US in 2013 exports-to-the-u-s-124-growth-since-2004/ in many sectors. 7. Allowing enterprises access to the domestic market, duties The Qualifying Industrial Zones (QIZ) are spread out on four large geographical regions. on sales to domestic market will be assessed on the value Special Economic Zones (SEZ) of imported inputs only. Name Include 8. Access to productive skilled Egyptian labor in a number There are two Special Economic zones (SEZ) in Egypt: Alexandria of manufacturing sectors at competitive costs. • Economic Zone Northwest Gulf of Suez (SEZONE) 9. Except for those submissions laying within the jurisdiction Greater Cairo Area Nasr City, Shoubra El Kheima, South Giza, 15th of May, 10th of Ramadan , 6th of October, El Obour, • Suez Economic and Trade Cooperation (SETC) Badr City, Giza, Kalioub, Gesr Al Suez, Other areas in Cairo of the Summary courts and requests to revoke administrative decisions accompanied by submissions to suspend their Middle Delta Governorates Ismailia, Port Said, Suze enforcement, the dispute shall only be referred to court Suez Canal Area Economic Zone Northwest Gulf after having been submitted to the Dispute Settlement Beni Suif of Suez (SEZONE) Center and that the panel has rendered its decision or Al Minya after 60 days from the date a motion was filed to appeal The first Special Economic Zone (SEZ) established in Egypt by the decision and the panel did not decide the appeal. law 83 of 2002 for Economic zone of special nature, is located QIZ Advantages (Ministry of Trade and Industry) in Ein El Sokhna - Egypt, infront of Ein El Sokhna Port, near the Targeted Cluster’s: SEZONE Authority aims to develop proposed southern entrance to the Suez Canal. The land area earmarked industries on a «Cluster Based Policy». This will enable specified industries to achieve more productivity, efficiency in terms of time Duty Free Market Access: Egypt is one of a few countries which The Protocol provides flexibility by monitoring the commitment for the SEZONE 1st phase is approximately 20.4 km2. management and operating costs, innovation through establishing can promise duty free access to the US, the world’s largest of manufacturers to the agreed upon ratio of their manufactured R&D centers, and new business formation by filling in niches and consumer market, for all products manufactured in its Qualifying products on a quarterly basis, not on a single shipment basis, It is an experimental Zone for opening up and carrying out reform, expanding the boundaries of the cluster map. It will also improve Industrial Zones (QIZ) provided that they comply with the rules hence giving them a wider time frame. establishing and improving the structure of the market economy access of local SME’s to the international market and increasing of origin requirements as specified in the Protocol. The tariff in Egypt. their productivity. exemption applies to all products, regardless of the industry No Export Quotas: Exports are neither limited by minimum/ or whether they are produced by the public or private sector, maximum quotas on quantities, nor by seasonal requirements. The development of SEZONE is intended to provide an attractive • Automotive Assembly and Components. and irrespective of the size and volume of the enterprise. environment for medium and light industries as well as logistics • Chemicals and Petrochemicals. Open-ended Validity of the Protocol: The Protocol is not services, thus enhancing economic activity in the region and • Construction and Building Materials. Egypt also provides competitive duty free access to several other time-limited, nor does it have a preset end date. creating new employment opportunities. • Textile and Readymade Garments. substantial markets such as the European Union (EU), other Arab • Agribusiness and Food Processing. Countries, the Common Market of Eastern and Southern Africa http://www.qizegypt.gov.eg/About_QizAdvantages.aspxto Development Objectives: • Home Appliances and Electronics. (COMESA) countries, and Turkey. As a result, companies operating more than $1 billion annual revenues. • Logistics and Warehousing. have competitive access to virtually all major commercial markets. 1. Establish and develop the North West Gulf of Suez Economic Zone according to the highest International standards. • Pharmaceuticals. Simple and Flexible Requirements: As per the rules of origin, 2. Attract foreign direct investments to the Zone for the purpose Contact: manufacturers must ensure that 35% of the product’s value of establishing industrial and service projects capable of K.M. 114, Kattameya old road, Ain Sokhna, Suez - Egypt be manufactured in an Egyptian QIZ, of which a minimum competing with their counterparts regionally and internationally. Tel. : +2 062 3590004/7 of 10.5% must be Israeli inputs. 3. Direct employment creation, labor skills upgrade, and income generation. Fax : +2 062 3590003 4. Increase Egypt’s share in the international trade. E-mail: [email protected] 5. Increase exports, not only in terms of accelerating export Website: www.SEZONE.gov.eg growth, but export diversification as well.

Cooperation (SETC) AWNI Ali, SHAFEI Karim, (2012) “Beyond duty free access: export Table 1: Qualifying Industrial Zone: Exports and Imports Value From 22/2/2005 until 31/12/2013 (Value in Million US$) readiness assessment for Qualifying Industrial Zones (QIZ) apparel Textile & RMG Food Value Exports Since 2008, on the model of Tianjin SEZ (China). 10 km². Total Exports Value Total Imports Value companies, Measuring Business “Excellence, Vol. 16 Iss: 3, Exports Value Products Products 58 entreprises & 2 000 employees pp.3-16 2005 288,3 0,207 288,6 36,0 Location: 3rd sector, North-west Gulf of Suez Economic Zone, 2006 636,2 1,259 637,5 73,7 Ain Sokhna, Suez, Egypt. AZMEH Shamel. Labour in global production networks: workers 2007 688,3 0,553 688,8 80,4 Nearby cities: Badr City, Kerdasa, Katia in the qualifying industrial zones (QIZs) of Egypt and Jordan. 2008 743,7 0,954 744,7 78,6 Coordinates: 29°40’11”N 32°18’51”E Global Networks, Volume 14, Issue 4, October 2014, pp. 495-513. 2009 761,5 2,266 763,5 80,5 Contacts: BOOZ Allen Hamilton (2008), The Rise of Economic Zones 2010 855,7 2,508 858,2 90,4 Yangzhiqiang in the MENA Region: A Telecommunications Perspective. 2011 924,1 7,511 931,6 97,5 022-66286168 2012 880,6 4,1 884,7 93,0 [email protected] BRUYAS Frédérique (2000). “Port Saïd (Egypte), lieu d’articulation 2013 820 3,2 823,6 77,7 du local au mondial. Zone et ville franche : questions d’échelles”. Total 6 597 22,6 6 620,5 707,6 Maxia Annales de géographie, n° 612, p. 152-171. 022-66286041 http://www.qizegypt.gov.eg/QIZ_Data.aspx [email protected] HANDOUSSA Heba, (1990), Egypt’s Investment Strategy, Table 2: Distribution of Firms Registered in QIZ in 2008 Policies and Performance Since the Inﬁtah, in : Said El-Naggar Number of (éd.), Investment Policies in the Arab Countries, papers presented Sector Graphic 1: Egyptian exports Other information about SEZ at a seminar held in Kuwait, December 11-13, 1989 (International Firms Special Economic Zone law: Monetary Fund), Washington, D.C, p. 143 ets. Animal products 2 to theU.S. United Imports from EgyptStates 2008-2012 by Import Program Articles of Stone 12 in million of U.S. dollars http://www1.umn.edu/humanrts/research/Egypt/Special Foreign Investment Advisory Service (2008), “Special Economic Base metals 14 $3,500 U.S. Imports from Egypt 2008-2012 by Import Program Economic Zones Law No_ 83 of 2002.pd in million of U.S. dollars Zones: Performance, Lessons Learned, and Chemical products 13 $3,000 $3,500 GSP Implications for Zone Development”. 7 Electrical equipment 8 $2,500 SEZ Web sites selection: $3,000 GSPQIZ Footwear and headgear 14 $2,000 • http://www.sezone-egypt.com/ http://www.gaﬁ.gov.eg/ SCOTT Emma. China goes global in Egypt: Special Economic $2,500 Furniture 9 English/StartaBusiness/InvestmentZones/Pages/Special- Sone in Suez. Discussion Paper. Stellenbosch, August 2013, 36 p. $1,500 QIZ Leather products 7 $2,000 No Economic-Zones.aspx - http://www.ccs.org.za/wp-content/uploads/2013/08/CCS_DP_ Program Machinery equipment 8 $1,000 • https://www.kpmg.com/EG/en/issuesandinsights/Documents/ China_Goes_Global_ Emma_Scott_2013_Final1.pdf $1,500 No $500 Program Issues-Insights%20PDFs/Doing%20Business% 20in%20 Paper products 1 $1,000 Egypt.pdf YADAV Vikash (march 2007). “The Political Economy of the Plastic products 14 $0 $500 2008 2009 2010 2011 2012 • http://www.ccs.org.za/wp-content/uploads/2013/08/CCS_ Egyptian-Israeli QIZ trade Agreement”. Middle East Review Prepared food stuff 26 DP_China_Goes_Global_Emma_Scott_2013_Final1.pdf of International Affairs, vol. 11, n°. 1, p. 74-96. $0 Stationery 2 2008 2009 2010 2011 2012 Vegetable products 18 Ready-made-garments and textiles 585 Composition of QIZ Imports 2008-2012 in million of U.S. dollars Total 733 $1,200 Composition of QIZ Imports 2008-2012 Source: QIZ Unit, Ministry of Trade and Industry in million of U.S. dollars $1,000 $1,200 Other

$800 $1,000 Other $600 $800 Textile and Apparel $600$400 Textile and Apparel $400$200

$200$0 2008 2009 2010 2011 2012

$0 http://itrade.gov.il/us-dc/2013/04/19/qizs-boost-egyptian-exports-to-the-u-s-124-growth- 2008 2009 2010 2011 2012 since-2004/ *GSP: Generalized System of Preferences

Free Zone Outlook 2nd Annual International Conference and Exhibition Global Value Chain: Opportunities for the Free Zone of the Future