The new regime for incentives plans to implement customised sector programmes for 10 priority sectors by October 2005. South Africa has also set aside 40% of its technology incentives programme for black-owned companies as part of its black economic empowerment policy. Other incentives programmes will not be affected by these changes. South Africa is also planning to introduce new taxation rules for industrial development zones.
- Saudi Arabia has approved a series of agreements between the Saudi Arabian General Investment Authority and relevant ministries, aimed at removing a number of obstacles facing foreign investors. The agreements include easing restrictions on the recruitment of foreign personnel, simplifying the procedures for granting visas, streamlining dispute resolving procedures, strengthening guarantees for investors and speeding up licensing procedures. Saudi Arabia is also seeking to encourage investment in less developed areas of the country by offering special incentives to foreign investors.
- The United Arab Emirates is planning to revamp its company law, as well as raise the foreign investment ceiling, which currently stands at 49%, to allow foreign investors majority ownership. Full foreign ownership is permitted only in foreign investment in free zones at present. The new company law will also take into account the country’s commitments to the World Trade Organization.
- South Korea is planning to loosen regulations governing the construction of theme parks and industrial facilities in and around Seoul to attract more foreign capital and boost domestic demand. It has also eased regulations that allow parent firms greater flexibility in transferring funds to their affiliates in South Korea by not requiring prior notification. The country is planning to propose that foreign investors who build research and development (R&D) facilities in the country be awarded a 100% cash grant for their investment. This would be a significant increase from the present level of 20% for foreign investors who invest a minimum of $10m in a high-tech centre or $5m in R&D facilities.
- Kuwait is planning to debate a new law that will open up its northern oil fields to foreign investors.
- Japan has amended its corporate law to facilitate the undertaking of cross-border mergers and acquisitions in the country by foreign investors. The amended law, which will apply to both direct and portfolio investment, will allow hostile takeover bids.
- Slovenia has replaced its system of ad hoc financial incentives with more systematic ones for attracting FDI. The incentives are also applicable to investments by small and medium-sized enterprises.
- Malta is offering special financial incentives to attract FDI in the film-making industry. The incentives include cash back for money injected directly into Malta’s economy by film makers. The country has also approved the Film Act, which will come into effect in the near future.
- Russia has enacted the special economic zones bill, elaborating the legal framework, rules and procedures governing business activity in such zones. The law also calls for the establishment of a governing federal agency.
- China has released the full text of its draft law on property rights to the public for comments. The law is expected to come into force next year. China has also passed legislation that will prevent foreign companies from acquiring a controlling stake in major local steel producers.
- India has proposed allowing full foreign-owned ventures in diamond and precious stones mining. The present law requires domestic investors to hold a minimum share of 26%.
- Canada is in the process of introducing a new amendment to its Investment Canada Act that will allow it to review any foreign investment that might compromise the country’s national security.
- Cyprus is planning to establish a new foreign investment centre to promote the island as a business location, target investors and act as a one-stop shop for foreign investors.
New bilateral investment treaties (BIT), double taxation-avoidance treaties (DTT), trade and investment framework agreements (TIFA) and free trade agreements (FTA):
- Singapore and India (FTA, BIT & DTT)
- The US and Mozambique (TIFA)
- South Korea and Thailand (DTT)
- Japan and the UK (DTT)
- The US and Thailand (FTA)
- Hong Kong and China (DTT)