What are the latest trends shaping business growth and creating opportunities in MENA for clients in your jurisdiction? What markets offer the most stability and growth and where would you advise your clients to invest?
Germany - UB I suppose other countries are only interested in cash while we in Germany are the only ones with morals (laughs). As I said before, Saudi Arabia and Germany were very close, but this has changed recently. In Germany, the rules around best practice are fairly strict compared to most countries and human rights have become an important issue. But you have to remember that this also works to an investor's favour. These strict rules protect businesses against malpractice that you often find in other countries.
Germany is a solid place to invest in. If you have a company here, the rule of law is very strong, and you can protect your rights. It doesn't matter where you come from. If you think you can do it like in Portugal (laughs), where you're just interested in the money, it doesn't work like that here.
And sometimes clients from the MENA region - or further afield in China - think they can negotiate the rules, but they find that these rules are non-negotiable. And often emerging market businesses and investors find that a very difficult place to invest in.
Regarding sectors in Germany, the car market has taken a hit from electric cars coming out of the Far East. IT and technology are doing very well, and the agricultural sector is really performing well. Germany is selling farm produce as well as high tech farm machinery worldwide.
I'm sure in three or four- or five-years' time the German car industry will bounce back, but they overlooked the trend towards electric cars and that has cost the sector dearly.
UAE - TP In the UAE there's a big incentive towards technology and sustainability, including the production and use of renewable energy, investing in the green economy and increasing environmental efficiency and infrastructure projects.
There are significant opportunities for investment and businesses in high tech technology, particularly the fintech and blockchain start-ups environments. Dubai and Abu Dhabi are competing with each other to provide opportunities for investors in these areas. In Abu Dhabi, for example, if you invest in the programme, there are moves to offer staff accommodation and waive office space costs for a few years. That's one of the reasons why we decided last year to open our office in Abu Dhabi, so we could be close to start-up companies specialising in digital innovation.
We work with these start-ups and go through the entire process, and partner with them. And they're not just in the UAE; these high-tech firms are from all over the region. Even Saudi Arabia is creating a hub for high tech start-ups in the MENA region.
Turkey - YMO The most important sectors in Turkey for business growth and opportunities are in software development and gaming. There are a lot of start-ups and many Turkish gaming companies and mobile game developers who have been acquired in recent years. For instance, the first Turkish unicorn was a mobile game development company, which was acquired by Zynga, the American game developer company, for $1.8 billion. And now we are seeing similar deals, maybe not in size, but many Turkish game developer companies are growing amazingly fast and en route to being acquired.
This industry has grown up around Turkey's very big youth population; gaming is huge among young people in Turkey. So that fits in well. It's a very young demographic. The entrepreneurs starting up and running these companies are generally below 30 years old. And it's really interesting. We were recently talking with a gaming company that was only established in 2017 and now they're one of the top gaming companies in the world by downloads in the app stores. It's incredible.
Again, government incentives are more than helpful for these start-ups as there are incredibly significant incentives for them, particularly under export grants. Of course, these software and gaming companies have a global footprint. Essentially, all these companies are considered as "exporting" their products.
These export grants include cash support for trademark protection, market research reports, consultancy services, advertising, store commissions, localization and web design, licensing of software, and employee salaries. To put this into perspective, let's say a game development company spends $700,000 advertising a mobile game. This business will receive $400,000 in grants. This is really huge. 60% of the advertising cost can be retrieved from the government. This company could spend $3 million on supported costs in a year and could retrieve almost $1.6 million in grants. Turkey is encouraging this - it's a real growth area.
Greece - ME Clients who are interested in investing in the MENA region focus on free zones, which can be a gateway to the region and central/east Asia. Maritime activity such as supplies and repairs/maintenance, which can be provided onboard, are keen to use a free-zone vehicle to act through. Clients are also interested in scrapyards for a vessel's demolition.
Cooperation between different jurisdictions is increasing cross-border synergies and helping to implement cooperation. Our law firm assists both Greek and MENA entrepreneurs and companies to take advantage of the opportunities offered in either in Greece or across the MENA region. Also, the IR Global network ensures that the proper professionals assist wherever the need of local assistance appears.
On the other hand, as far as Greece is concerned, it is now a great moment for investments in Greece for the following reasons:
- Increase by 68% of exports value of Greek products
- Adoption of measures in order to reduce bureaucracy, to digitize public sector services and increase transparency
- Significant decrease of labour costs
- Increase of Greek GDP Opportunities in the Greek Real Estate Market
- Attractive residence visa programme for non-EU citizens based on two pillars: real estate purchase (for a minimum value of €250K, the lowest in Europe) or strategic investment (€100m minimum or creation of 150 work positions). The beneficiary and family enjoy renewable residence visa entitling unrestricted travel to Schengen countries, and have access to Greek public services.
- Residence visa programme for financially independent individuals (€2,000/month approximately), without entitling them working or exercising financial activity.
- Transfer of tax-residency to Greece in order to enjoy income tax exemption for 7 years and further tax benefits.
- Creation of Family Office, as a special purpose vehicle for family members to enjoy taxation benefits.
Lebanon - WA As I said earlier, the primary investment trends are in agribusiness and small industry as well as technical (i.e. IT & apps developers, engineering, etc) and professional services support.
One area that I think is worth mentioning here too is that Lebanon is a hub for the regional medical industry. People from all over the Arab world come here, especially from Iraq, Syria, Jordan etc, for treatment. The country is renowned for its high calibre of doctors and in this sense it's an ideal place to set up medical research centres. This is still something that's very much in its infancy, but it's a very interesting and dynamic sector with large potential growth.
I do not want to only promote Lebanon as a place for inbound investment alone. There is actually also a lot of outbound investment, where Syrians and Iraqis come seeking advice looking to relocate or invest their wealth abroad, particularly into real estate and industries. We're not talking about refugees, but businesspeople who are using Lebanon as a base to expand their businesses from Lebanon to the rest of the world such as in Turkey, Egypt, Germany, the Emirates, etc.
Regarding banking, banks have been restructuring with potential mergers on the horizon since the financial crisis about a year and a half ago. Islamic banking has become a more viable option for investors as these banks don't play into the risk factors like traditional ones. And, like Joao, there's a lot of discussion around wine and the wine industry in Lebanon, which is very popular at the moment and will continue to grow.
Portugal - JVC The agenda for the Portuguese government in terms of grants and incentives for the next few years is really focused on digital transformation and renewable energies and infrastructure. Combined EU grants until 2030 amount to €43 billion.
We have a very good network in terms of broadband. We have a highly educated, multilingual work force. We have a myriad of corporate incentives; I shall give as an example one where you can reinvest up to euros 3 million of your profits in private equity funds that are certified to invest in research and development. And you deduct this investment from corporate tax. This is similar to how it works in Germany and across the EU. Again, for Portugal it is digital transformation, renewable and clean energy, technology, tourism, wine making. We have the best, most affordable wine land in Europe.
On the other hand, real estate is very popular. There are no restrictions in foreign ownership and there is an urgent need for middle class housing. The agrobusiness, ranging from wine to early fruits, intensive olive groves to medicinal cannabis, is thriving. We also see opportunities in the tourism sector - a lot of operators will not survive the pandemic unfortunately.
Greece - DM The biggest area for any investment in Greece is tourism and all of the activities related to that. Consequently, the business opportunities mostly include;
a) Hotel accommodation and restaurants,
b) Water planes,
c) Energy based in the photovoltaic systems and wind farms,
d) IT systems for the Public and Private sector,
e) IT engineers working remotely with reasonable fees,
f) Infrastructure for the State (IT, big highways, metro, trains etc) and the Private sector,
g) Agriculture in special products and packaging,
h) Construction for buildings and flats