Cyprus: The Island of Business Opportunities in the Mediterranean

Francisco A. Laguna & Wojciech Kornacki

Cyprus is a rising regional transport hub in the Mediterranean.  The island’s economy has recently been rated one of the top 10 fastest improving economies with great potential in 2016, and thereafter. What is unique about Cyprus is that it is located near the Middle East but is also member of the European Union, and its official currency is Euro.

Cyprus (dark green) is a member of the European Union (EU members are in light green) that is located in the Southeastern Mediterranean. With its brand new multi-million private main port                    for trade, Cyprus it set to become a major transport and logistics hub in the Mediterranean.

Cyprus (dark green) is a member of the European Union (EU members are in light green) that is located in the Southeastern Mediterranean. With its brand new multi-million private main port for trade, Cyprus it set to become a major transport and logistics hub in the Mediterranean. Courtesy of http://en.wikipedia.org.

Cyprus: Business Intelligence Summary

Cyprus is the largest island in the eastern Mediterranean, and although it is divided between Turkey and Cyprus, the whole island is considered to be European Union territory.  It population is approximately 800,000.  In 2015, country’s GDP was 17,421 billion Euros (~ US$ 19 billion), and it is expected to grow rapidly in the future. After significant reforms in business regulations, Cyprus is showing significantly improved economic performance. In addition, Cyprus is pushing hard to re-unify the entire island which would most likely create many new investment opportunities on the Turkish side of the island.

Currently, transport, trade and accommodation are some of the most important sectors of Cypriot economy.

Regional Transportation Hub

Cyprus’s commercial fleet is third largest in the European Union. Recently, the European Union has invested millions of euros to make Cyprus one of its main sea transport and logistics hubs.  In the last 2 years, that investment has transformed Cyprus’s main port, Limassol, into one of the most efficient and modern ports in the southern Mediterranean. The estimated economic benefit to the island approaches 2 billion Euros. In 2015, the port was privatized, and since then, it has breathed new life into Cyprus. Additional construction projects for oil and gas offshore bases and terminals are in progress. The port is expected to be fully operational in early 2017. Since the European Union is seeking to make Limassol a critical logistics hub in the region, and many European and international companies have already invested in it, this offers a great opportunity for additional business prospects in Cyprus.

Cyprus’s tourism and accommodation sectors are very well developed and continue to attract new investors. In addition to many very favorable tax and investment incentives, Cyprus is engaged in re-unification discussions which will create additional business opportunities in the areas of gas exploration, banking, and tourism on both sides of the island.  Courtesy of http://en.wikipedia.org

Cyprus’s tourism and accommodation sectors are very well developed and continue to attract new investors. In addition to many very favorable tax and investment incentives, Cyprus is engaged in re-unification discussions which will create additional business opportunities in the areas of gas exploration, banking, and tourism on both sides of the island. Courtesy of http://en.wikipedia.org.

Opportunities in a Re-Unified Cyprus

While Cyprus has experienced significant economic growth, the Turkish Cyprus remains less developed, and its economy is much smaller. It is estimated that by 2035, a reunified Cyprus could generate 45 billion Euros or (~ US$ 50.5 billion) in economic output – more than double than what it is now. Re-unification would make it very easy for many companies to start developing the recently discovered gas fields on the Turkish Cyprus side. It would also lift the Turkish embargo on Cyprus-flagged ships which would dramatically increase shipping and transshipment of containers through Cyprus to Asia and the Middle East. Since the re-unification appears almost imminent, and both sides are aware that it makes economic sense, the time to consider Cyprus for investment and business opportunities is now.

Contact TransLegal with your questions concerning business opportunities in Cyprus.

Long-Term Business Opportunities Await in Morocco

Francisco A. Laguna & Wojciech Kornacki

Morocco’s business and foreign direct investment opportunities are red hot. The World Bank reports that in the last 5 years, Morocco has been undergoing sweeping economic reforms which are expected to generate high potential growth in the country. Most recently, Morocco was listed in the top 48 most innovative economies in the world. The UK Trade & Investment Ministry reports that Morocco has been identified as a member of a group of “fast-growing nations described as ‘African Lions’.”

About Morocco

Map of Morocco Photo Credit: US CIA WF via Wikimedia Commons

Map of Morocco
Photo Credit: US CIA WF via Wikimedia Commons

Morocco is located in Northeastern Africa, between Algeria and Western Sahara. It is separated from Europe by the Mediterranean Sea. Spain and Portugal are its Northern neighbors. Its economy has been growing at the rate of approximately 4.5% since 2001. Its population of slightly over 33 million offers a qualified and relatively inexpensive labor force. Morocco also offers political and economic stability to potential investors – two key advantages – which prove elusive for other Northeastern African countries.

Strengths and Weaknesses of the Moroccan Market:

Morocco offers following strengths: (1) Strategic location between Europe and North and West Africa; (2) improving communication and transportation networks; (3) competitive labor costs; and (4) tax incentives and ease of repatriation for profits. Potential weaknesses include: (1) growing competition from non-EU countries; (2) corruption and bureaucracy; (3) informal economy; and (4) delays in implementing reforms. Despite the weaknesses, most experts agree that Morocco offers attractive growth and investment opportunities.

Free Trade Agreement

Moroccan government has prioritized the development of its renewable energy industry. This creates countless opportunities in infrastructure projects, safety, financing, security and other related industries. This picture shows solar cell panels in Eastern Morocco.   Courtesy of http:// http://en.wikipedia.org

Moroccan government has prioritized the development of its renewable energy industry. This creates countless opportunities in infrastructure projects, safety, financing, security and other related industries. This picture shows solar cell panels in Eastern Morocco. Courtesy of http:// http://en.wikipedia.org

Morocco is a signatory of the U.S.-Morocco Free Trade Agreement and other free trade agreements giving potential investors access to over 1 billion consumers world-wide. For U.S. exporters, this also means that almost all goods exported to Morocco are tariff free. According to the Moroccan Investment Development Company, Morocco has lower business taxes than China and Spain and lower export costs than Turkey and Egypt. Thus, smart and well-timed investment in Morocco may be less expensive, and has the potential to offer greater return in the future.

Solar and Renewable Energy Investment Opportunities

Morocco has recently completed Stage I of one of the world’s largest solar thermal power plants located at the edge of Sahara desert, near the town of Ouarzazate. Once the project is completed, Morocco will become a major world solar power. The new design allows the plant to deliver the energy at night as well. Recently, even NASA commented on the project.

Morocco is also heavily investing in wind and water energy projects. Direct foreign investment opportunities in renewable energy in Morocco will continue to expand in the years to come as Morocco is aiming to become energy self-sufficient, and eventually sell its energy to Europe.

Infrastructure Development Project Opportunities

Infrastructure projects as another investment opportunity in Morocco. In the last several years, Morocco has been spending billions of dollars to improve its transportation infrastructure to become more attractive to international investors. This includes expanding the high speed rail system, road system and electric power grid. The Moroccan construction industry is expected to grow at the rate of over 6% per year until 2020. Its proximity to Europe and ready access to many emerging markets in Africa make the country a regional project and infrastructure powerhouse, and US investors are looking at Morocco when exploring to expand in the region. Earlier this year, Renault and its partners announced that they would invest $1 billion in Morocco. Shell Vivo Energy, GlaxoSmithKline, Unilever, and many other companies already operate in Morocco.

Investment Opportunities in other Moroccan Industries

Morocco offers pristine beaches, Mediterranean climate, countless historic sites, and well developed and growing hospitality industry. In addition, its open skies policy has allowed many airlines establish direct flights to Morocco.  Courtesy of http:// http://en.wikipedia.org

Morocco offers pristine beaches, Mediterranean climate, countless historic sites, and well developed and growing hospitality industry. In addition, its open skies policy has allowed many airlines establish direct flights to Morocco. Courtesy of http:// http://en.wikipedia.org

The stock exchange in Morocco is the second largest in Africa and has recently partnered with the London Stock Exchange. This creates tremendous opportunities for banking, insurance, capital markets and public private partnerships.

The national Investment Development Agency reports that other sectors of Moroccan economy are also growing.  Between 2005 and 2010, the number of tourists visiting Morocco has increased by 3 million.

The new infrastructure, renewable energy and tourism projects also offer opportunities in fire safety, border control, surveillance, cyber security and greater education and training.

If you would like more information about investment opportunities in Morocco, contract TransLegal.

Exciting Business Opportunities in Jordan

Francisco A. Laguna & Wojciech Kornacki

Jordan has a stable government, strategic location, and one of the most open economies in the region.  Jordan is an active trading partner with the European Union and the United States, and it has a well-educated and skilled labor force.  In addition, English is widely spoken, and Jordan is safe and very popular with tourists and students.  These attributes make Jordan one of the best places for foreign direct investment in the Middle East.

Country Background

Jordan is located between Israel, Palestinian Authority, Saudi Arabia and Iraq.  Its population is 8,117,564.  Jordan’s economy is one of the smallest in the region, but it is also one of the fastest growing.  While other developing economies in the region are declining, Jordan’s economy is forecasted to grow.

Zahran district in the capital city of Amman.  Courtesy of http:// http://en.wikipedia.org

Zahran district in the capital city of Amman. Courtesy of http:// http://en.wikipedia.org

International Trade

Jordan is very pro international trade.  The largest exporters to Jordan include the EU, Saudi Arabia, China and the United States.  Since Jordan has signed a Free Trade Agreement with the United States, bilateral trade between both countries has surged ten-fold in the last 13 years.

Jordan’s Priority Sectors for Economic Development

Energy: 

Jordan spends approximately 15 % or US$  5.4 billion of its Gross Domestic Product on energy.  To increase its energy independence, Jordan is likely to invest in energy-efficient projects, renewable energy, rooftop solar panels and sun-powered water heaters.  The EU and Jordan are going to invest US$ 100 million in solar energy.  This sector of Jordan’s economy offers significant potential growth in the future.  The investment into the energy market is also likely to benefit many refugees which are currently living in Jordan.

Information and Communications Technology (ICT):

The information and communications technology sector is one of the best sectors to invest for US companies.  The number of mobile subscribers in Jordan is expected to grow.  It is estimated that on average, the mobile sector grows 10% annually.  While weak consumer purchasing power could be a concern, it has not stopped the market from growing.

A solar powered charging station in King Hussein Business Park allows a driver to recharge his / her car.

A solar powered charging station in King Hussein Business Park allows a driver to recharge his / her car.

Defense and Security:

Jordan is in the process of rearming its armed forces in order to better support its regional missions.  This means significant spending to obtain new military equipment and improve capacity.  Currently, Jordan possesses a highly trained but rather small military force.  To highlight its Western ties and military needs, Jordan is a host to the XI Special Operations Forces Exhibition and Conference which will be held in May 2016.

Other industry sectors that also receive significant attention are healthcare, education and business services.  If you are interested in learning more about future business opportunities in Iran and how to increase your chances of harnessing them, contact TransLegal or call 703-566-9427.

Cyber Security is the New Business Opportunity

Francisco A. Laguna & Wojciech Kornacki

Recent massive and coordinated cyber-attacks on governments and businesses alike reveal the urgent need for global cyber security.  As digital transformation and technical advances have changed the way we communicate and do business, cyber threats and cyber-attacks have become more common.  In order to respond to the ever increasing demand for cyber security, in the next several decades billions of dollars will be spent around the world to combat the new and emerging cyber threats and prevent attacks.  This creates new business opportunities for information technology entrepreneurs.

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

What is Cyber Security?

Cyber security is the activity or process, ability or capability, or state whereby information and communications systems and the information contained therein are protected from and / or defended against damage, unauthorized use or modification, or exploitation.

Chances are that most of us received an email from an unknown source asking us for personal information, and we did not know that we were under a cyber-attack.  However, this is actually called “phishing”, and phishing is considered a form of a cyber-attack.  Other forms of cyber-attacks include:

  • “pharming”: fraudulently redirecting a website’s traffic to another, fake website
  • “malware”: software that performs unauthorized functions without your knowledge
  • “Trojan horse”: software that appears to have a useful function, but also it has hidden and potentially malicious functions, or
  • “spyware”: software that enables a user to obtain covert information about another’s computer activities by transmitting data covertly.

The particular challenge with cyber security is that most governments and businesses are completely unprepared for these new types of constantly evolving attacks and threats.  In addition, some businesses and governments are not even aware that they are being attacked.  This means that they may lose critical operational information, trade secrets and business information, without even knowing.

Domestic Cyber Security Opportunities 

The U.S. Government requested US$ 19 Billion to improve cyber security defenses in the 2017 budget.  In addition, the U.S. Department of Defense plans on spending an additional US$ 5 Billion on cyber security.  Most likely a significant portion of these amounts will be awarded to private businesses specializing in cyber security, and many of the large defense contractors are rapidly developing their cyber security capabilities.  However, even the biggest cyber security contractors will require a number of subcontractors to meet the demand.

While the U.S. Government is attempting to counter cyber threats for itself, it cannot protect private businesses from similar attacks.  It is likely that private businesses will also have to improve their cyber security.  Thus, many private businesses will have to develop their own cyber-attack detection and prevention safeguards and protocols.

estonia

Tallinn, Estonia. In the past, Estonia has been a subject to multiple well-coordinated cyber-attacks. The attacks have taken down many official and private websites including webpages of the Estonian parliament, and many Estonian newspapers. The attacks coincided with the heavy Russian criticism over the removal of the Bronze Soldier Statute from Tallinn. Courtesy of http:// http://en.wikipedia.org

International Cyber Security Opportunities

The cyber security market is expected to grow from US$ 77 Billion in 2015 to US$ 170 Billion by 2020.  While North America and Europe greatly contribute to the growth of the international cyber security market, the Asian and South East Asian markets are quickly developing.

Similarly, many Arab governments have experienced cyber-attacks in the energy sector.  Increasing their defenses will result in spending of approximately US$ 9.5 Billion by 2019.

Cyber Security Stocks are Increasing in Value

Many companies that specialize in cyber security are seeing their stocks increase.  This rise is largely due to the perception that cyber-attacks benefit private cyber security companies.  Close analysis of the ISE Cyber Security Index reveals that this index has gone up by 22% in 2015 alone.  There seems to be a correlation between the number of cyber-attacks and the rise of stocks of companies specializing in cyber security.

Cyber Security Insurance gains Importance

Cyber security insurance has also seen rapid growth.  Many insurance companies have begun to offer it to private business.  These new policies also cover third-party loss resulting from the cyber-attack, all costs associated with the cyber-attack, extortion, and on-line trade secret protection.

Cyber security is here to stay.  The domestic and international markets show tremendous opportunities for growth.  If you are interested in learning more about future business opportunities involving cyber security, contact TransLegal or call 703-566-9427.

New High Speed Silk Road from China to European Union

Francisco A. Laguna & Wojciech Kornacki

This week, we continue our discussion of China’s One Belt – One Road project to establish a 21st Century Silk Road over land and by sea, focusing on the development of high speed rail connections between China and the European Union.

China is creating a network of new high speed train rail links connecting it to the European Union via Central Asia.  As more and more factories move deeper into the Western parts of China, Chinese officials and businessmen alike realize that it is very expensive and time consuming to move their products to the international markets by air or water.  To remedy this, China is spending billions of dollars to build new rail links across Central Asia.

US$ 242 Billion in Investments over the Next 8 Years

Currently, China plans to build two rail links to Europe.  One going directly through the Russian Federation (marked in light blue).  The second one going through Kazakhstan and Ukraine to Poland and beyond. (marked in green).  Both rail links will dramatically reduce the time and costs for all businesses using the rail system to connect the European Union with China, and offer countless business and investment opportunities.  Courtesy of http:// http://en.wikipedia.org

Currently, China plans to build two rail links to Europe. One going directly through the Russian Federation (marked in light blue). The second one going through Kazakhstan and Ukraine to Poland and beyond. (marked in green). Both rail links will dramatically reduce the time and costs for all businesses using the rail system to connect the European Union with China, and offer countless business and investment opportunities. Courtesy of http:// http://en.wikipedia.org

China envisions two major train rail links.  The first one will go through the Russian Federation and Belarus to Poland and the rest of Europe.  The second one will travel through Kazakhstan and Ukraine to Southern Europe.  It is expected that China will spend approximately US$ 242 billion over the next 8 years on a 7,000 km high speed rail link from China to Moscow alone.  This will mean massive Chinese investment and spending across Central Asia.  It will also mean thousands of new jobs, major growth potential for many cities, and the need for supporting infrastructure.  When finished, this will be the longest rail network in the world moving trillions of dollars in goods.

The Benefits of Shipping Goods by Train

Shipping goods by train is cheaper, faster and more environmentally friendly.  According to the Eurasia Express Bridge, transporting goods from China to and from Europe takes approximately 14 days.  This also includes customs clearance for many different countries.  The delivery of the same products by sea takes almost twice or three times as long, and is more expensive.

Typically, China transports its manufactured goods to its coast, and then uses maritime shipping companies to ship it to Europe or elsewhere via the Suez Canal. To mitigate time and expense, China is currently looking to utilize train links to transport it directly to Europe, in essence creating the 21st century version of the Silk Road.

Chongqing, People’s Republic of China.  It is located in central China.  This city is expected to be the starting point for the high speed iron silk road.  Courtesy of http:// http://en.wikipedia.org

Chongqing, People’s Republic of China. It is located in central China. This city is expected to be the starting point for the high speed iron silk road. Courtesy of http:// http://en.wikipedia.org

Several European businesses have been sending products to China by train for years.  This includes BMW and other major manufacturers.  It is similarly cheaper for European businesses to transport goods to China by rail than by sea or air.

In 2013, one of the first trains from China loaded with electrical supplies arrived in Łódź, Poland.  Since then, the number of connections and the volume of products have grown rapidly, and they expected to grow even more.  These trains also travel to other parts of Europe, including France and Spain.  Beijing estimates that the annual trade between Europe and China is expected to exceed $ 2.5 trillion in a decade once the rail links are completed.

If you are interested in learning more about future business opportunities involving the new high speed silk road, TransLegal or call 1.703-566-9427.

Future Business Opportunities in Iran

Francisco A. Laguna & Wojciech Kornacki

Under normal conditions, a country with a well-educated population, a large middle-class, 9% of proven world oil reserves, 18% of proven global gas reserves and an abundance of strategic minerals would be an excellent place to invest.  Unless, the country is Iran, which is currently subject, rightly, to complex and multi-faceted international financial and other sanctions that have reduced its economy by about 15 to 20%.  This may change soon, however, as Iran attempts to end its economic isolation.

According to a 2007 Goldman Sachs report, Iran’s energy sector, technology, and human capital could make it particularly attractive for foreign direct investment.  Now that there is a possibility that sanctions may be lifted, many national and private investors want to position themselves to benefit from the new and very attractive market when (and if) it opens.  Countries such as China, Russia, Turkey and various European countries are already preparing for the sanctions to be lifted.

Currently, the United States and Iran are engaged in extensive negotiations over Iran’s nuclear program.  Depending on the outcome, certain sanctions could be lifted against Iran.  This would open its oil, gas, technology, human resources, natural resources, automotive, airline, hospitality and tourism, and many other industries to foreign direct investment, and it would create billions of dollars’ worth of business opportunities in Iran and the world.   Courtesy of http:// http://en.wikipedia.org

Currently, the United States and Iran are engaged in extensive negotiations over Iran’s nuclear program. Depending on the outcome, certain sanctions could be lifted against Iran. This would open its oil, gas, technology, human resources, natural resources, automotive, airline, hospitality and tourism, and many other industries to foreign direct investment, and it would create billions of dollars’ worth of business opportunities in Iran and the world. Courtesy of http:// http://en.wikipedia.org

The expectation is that once sanctions are removed, new opportunities will create billions of dollars’ worth of business for local and international companies.  Essentially, Iran could be the “next big thing” (once the sanctions are lifted) after the opening of the markets in Central and Eastern Europe.  Some of its regional trading partners expect that their economies will also grow once the sanctions are removed.

Investors are already holding discussing Iran’s oil industry and auto industry.  Indeed, many international energy companies are very interested in Iran, including Royal Dutch Shell Plc, British Petroleum and Total SA.

Not all sanctions will be lifted overnight, and some sanctions may continue for years to come.  In addition to keeping an eye on the international sanction regime, a prudent investor should also consider the following Iranian industries, once the sanctions are removed.

Banking: New businesses and residents will require both domestic and international banking services.  The international banking community has started looking at the country’s potential.  It will be interesting to see which banks move in first.  Will the Swiss join?

Iran’s domestically developed drone capable of traveling almost 2,500 miles.  Due to sanctions, Iran has been forced to develop its own technologies.  Collaboration between international and domestic businesses partners is estimated to create millions of dollars’ worth of business, once the sanctions are lifted.  Courtesy of http:// http://en.wikipedia.org

Iran’s domestically developed drone capable of traveling almost 2,500 miles. Due to sanctions, Iran has been forced to develop its own technologies. Collaboration between international and domestic businesses partners is estimated to create millions of dollars’ worth of business, once the sanctions are lifted. Courtesy of http:// http://en.wikipedia.org

Construction / Real Estate:  Many Middle Eastern businesses are interested in Iran’s real estate market.  The lifting of sanctions is likely to result in the return of some of the Iranian diaspora as well as representatives of multinationals and other companies that will invest in the country.  This will create the need for housing and, as the economy progresses, more luxury condominiums and residences with Western amenities.

Consulting Services: International businesses are likely to begin working to pre-position themselves in a post-sanctions Iran.  To be successful in the country, businesses will need reliable consultants to assist them navigate cultural nuances, language barriers and business practices, including the practice of gift-giving.

Natural Resources and Minerals: After years of sanctions, Iran desperately needs billions of dollars to make its oil industry profitable again.  In 1974, Iran pumped 6 million barrels per day; today, it only pumps 2.8 million.

Cube of Zoroaster.  Iran’s rich culture spans over thousands of years.   This tower-like construction was in the 5th Century BC.  Iran’s tourism and industry are likely to grow fast once the sanctions are removed.  Courtesy of http:// http://en.wikipedia.org

: Cube of Zoroaster. Iran’s rich culture spans over thousands of years.
This tower-like construction was in the 5th Century BC. Iran’s tourism and industry are likely to grow fast once the sanctions are removed. Courtesy of http:// http://en.wikipedia.org

Tourism and Hospitality: Before the Iranian Revolution, Tehran was touted as one of the most cosmopolitan cities in the region.  Years of isolation and religious extremism have crippled Iran’s tourism and hospitality sectors.  As Iran seeks to re-open itself to the world, it will have to modernize these sectors, and FDI is the perfect means of accomplishing this goal.  There is much work to be done, however, for these sectors to be viable contributors to the Iranian economy.  Currently, tourism in Iran accounts only for 2% of the entire GDP; in most countries, it is typically around 5%.

It will be interesting to see how the government will approach FDI in strategic sectors such as banking, minerals, natural gas and oil, as well as non-strategic sectors.  How will it allow such investments to be structured?  What ownership percentage will be permitted?  What about repatriation of capital / profits or termination of investments?  How will corruption manifest itself? Equally important, how will it treat different religious views and cultural morés?

If sanctions are lifted, Iran will be an emerging economy.  It will not have the bargaining power of economies such as China that can exact concessions from investors.  The manner in which the government treats international investors will largely determine the success of a post-sanctions Iran.  Given the political and religious turmoil plaguing the larger region and the very real threat of terrorism, corporations will be cautious of investing financial and human resources for a deal that is overly burdensome with uncertain financial returns.

If you are interested in learning more about future business opportunities in Iran and how to increase your chances of harnessing them, contact TransLegal or call 703-566-9427.

Business Opportunities in Iraqi Kurdistan

Francisco A. Laguna & Wojciech Kornacki

Iraqi Kurdistan offers the security and numerous investment opportunities that are currently hard to find in other parts of Iraq or Central Asia. Since the fall of Saddam Hussein in 2003, the region has experienced dramatic economic growth and political stability that continue today, despite the violence in other parts of Iraq. Iraqi Kurdistan has become a magnet for foreign investors and foreign direct investment.

Background on Iraqi Kurdistan

Currently, Iraq is a federated state, and Iraqi Kurdistan is one of the federally recognized regions of Iraq. Iraqi Kurdistan is located in a strategic location between Turkey, Iran and Syria. It has enjoyed local autonomy for the last 45 years. Since the fall of Saddam Hussein, it has had a democratically elected Parliament and vibrant government institutions which are openly pro-Western. The population of Iraqi Kurdistan exceeds 5.2 million and estimated GDP per capita was ~ US$ 4,500 as of 2011.

"Autonomous Region Kurdistan en" by Maximilian Dörrbecker (Chumwa),derviative work by ilyacadiz - Autonome Region Kurdistan (Karte).png. Licensed under CC BY-SA 3.0 via Wikimedia Commons

“Autonomous Region Kurdistan en” by Maximilian Dörrbecker (Chumwa),derviative work by ilyacadiz – Autonome Region Kurdistan (Karte).png. Licensed under CC BY-SA 3.0 via Wikimedia Commons

In the last several years, Iraqi Kurdistan has been undergoing rapid development. The region has experienced an estimated 12 percent growth, one of the highest in the world.  Major trade partners for Iraqi Kurdistan are Turkey, the United Arab Emirates, the United States, and the European Union.

The capital of the Kurdistan Regional Government is Erbil – perhaps one of the oldest cities in the world.  According to the Kurdistan Regional Government’s official website, the Kurdistan Parliament has passed progressive investment and oil and gas laws which have contributed to economic growth and stability. The region has 2 international airports and approximately 12 major international airlines offer direct flights there.

Investment Opportunities

Iraqi Kurdistan appears to be one of the best places to invest in the region because of its current need for foreign direct investment, security and flexible and transparent investment laws. The Kurdish Regional Government allows for full repatriation of profits, investment with or without local partners, a 10-year exemption from corporate taxes, and a 5-year exemption from customs duties. Needless to say, this makes Iraqi Kurdistan much more investment-friendly than the rest of Iraq or the region.

Canyon in Rawanduz in northern Iraqi Kurdistan, offers some of the most beautiful scenery in Asia.  While exports of natural resources are highly profitable for the Kurdish Regional Government, the tourism industry accounts for almost 20% of the region’s GDP.   It is likely that this industry will also experience substantial growth as the interest in Iraqi Kurdistan continues to accelerate, and 2 international airports with multiple international airlines offer easy access the region.  Courtesy of http:// http://en.wikipedia.org.

Canyon in Rawanduz in northern Iraqi Kurdistan, offers some of the most beautiful scenery in Asia. While exports of natural resources are highly profitable for the Kurdish Regional Government, the tourism industry accounts for almost 20% of the region’s GDP. It is likely that this industry will also experience substantial growth as the interest in Iraqi Kurdistan continues to accelerate, and 2 international airports with multiple international airlines offer easy access the region. Courtesy of http:// http://en.wikipedia.org.

The Kurdistan Board of Investment makes it easy to identify foreign direct investment opportunities in the Kurdistan region. It lists numerous business opportunities in the areas of real estate, communication, transport, agriculture, education, banking and many others.

Current investment priorities are agriculture, tourism, and various industries that have been largely underdeveloped over the last several decades. In addition, with oil reserves estimated at 45 billion barrels, many international companies have been already heavily investing in the oil and gas industry.

The turning point for Iraqi Kurdistan came when Exxon became interested in its natural resources.  Several years ago, Exxon, the largest international oil company, signed major exploration contracts with the Kurdish Regional Government, and many other international companies followed in recent years, including Total, Gazprom and Chevron.

Sofi Mall, Erbil, Kurdistan.  With its rapidly growing economy and international investment, Erbil and the rest of Iraqi Kurdistan are undergoing massive economic development.  In fact, currently, Iraqi Kurdistan needs approximately $32 billion in investments.  Courtesy of http:// http://en.wikipedia.org.

Sofi Mall, Erbil, Kurdistan. With its rapidly growing economy and international investment, Erbil and the rest of Iraqi Kurdistan are undergoing massive economic development. In fact, currently, Iraqi Kurdistan needs approximately $32 billion in investments. Courtesy of http:// http://en.wikipedia.org.

Currently, the Kurdish Regional Government continues to export oil to markets around the world, including the United States. Despite igniting a legal battle with the Iraqi Government, the highly profitable exports have not stopped.

If you would like to take the first step and learn about investment opportunities in Iraqi Kurdistan, contract TransLegal – your one source for comprehensive international commercial consulting services.