Multiple Country Investment Climate Statement 2015

Part 1 includes the Investment Climate Statement 2015 for the following countries: Argentina, Armenia, Bahrain, Belgium, Bermuda, Bosnia and Herzegovina, Botswana, Brunei, Canada, Costa Rica, Czech Republic, Denmark, Dominican Republic, Finland, Georgia, Guatemala and Guyana.

Part 2 includes the Investment Climate Statement 2015 for the following countries: Indonesia, Kosovo, Lebanon, Luxembourg, Macedonia, Malawi, Mexico, Mongolia, Oman, Poland, Republic of the Congo, Slovenia, Spain, The Netherlands, Venezuela, West Bank and Gaza.

The Republic of Kosovo declared independence from Serbia in 2008. Kosovo's neighbor to the north, Serbia does not recognize it as a sovereign state, but has begun to normalize relations in accordance with the Brussels Agreement of April 2013. With a population of 1.8 million and land area 6,765 square miles, landlocked Kosovo is considered Europe's poorest country, yet it does have some mineral and coal deposits. Kosovo's official unemployment rate is 30.9 percent, although some estimates are as high as 45 percent. In an effort to foster economic development, the Government of Kosovo (GoK) has implemented reforms to improve the investment climate, prompting improved rankings in the World Bank's Doing Business reports from 81 (2014) to 75 (2015). Kosovo is continuing efforts to transform its socialist legacy to a market-oriented economy, and the GoK is working to strengthen the legal environment necessary to attract and retain foreign investment. Corruption, practiced and perceived, and a lack of contract enforcement create high barriers to foreign investment. According to the World Bank, Kosovo's economy is characterized by: limited integration into the global economy; the success of its Diaspora in foreign labor markets, resulting in a steady stream of remittances; pro-growth budgetary priorities; and continued international financial support. Vocal political opposition to the government's privatization policies, corruption, political or self-interested interference by government officials, disagreements over asset ownership between Kosovo and Serbia, and unreliable energy supply increase the risk and cost of investments in Kosovo. Despite these challenges, Kosovo's relatively young population, low labor costs, and abundant natural resources have attracted foreign investment, with several international firms and franchises already present in the market. There are opportunities for U.S. businesses to invest, especially in the food, IT, infrastructure, and energy sectors. The newly-elected government is seeking to further improve the business climate through the adoption of a multi-year development program focused on providing incentives for economic growth. These include amendments to tax and foreign investment legislation. The banking sector in Kosovo is stable and liquid, but high interest rates stifle commercial endeavors, prompting the government to enter into credit-guarantee arrangements with international donors to improve access to credit for businesses.

While Indonesia's population of 245 million, growing middle class, and stable economy remain attractive to U.S. investors, investing in Indonesia remains challenging. This report focuses on challenges foreign investors face rather than the range of investment opportunities. Since October 2014, the Indonesian government under President Joko Widodo has prioritized boosting investment, including foreign investment, to support Indonesia's economic growth goals, and has committed to reducing bureaucratic barriers to investment, including announcing the creation of a "one stop shop" for permits and licenses at the Investment Coordination Board. However, factors such as a decentralized decision-making process, legal uncertainty, economic nationalism, and powerful domestic vested interests create a complex and difficult investment climate. The Indonesian government's requirements, both formal and informal, to partner with Indonesian companies and purchase goods and services locally, restrictions on some imports and exports, and pressure to make substantial, long-term investment commitments, also factor into foreign investors' plans. While the Indonesian Corruption Eradication Commission continues to investigate and prosecute high-profile corruption cases, a recent case involving the National Police has led some to question the Commission's future influence. Investors continue to cite corruption as an obstacle to pursuing opportunities in Indonesia. Other barriers include poor government coordination, the slow rate of land acquisition for infrastructure projects, poor enforcement of contracts, an uncertain regulatory environment, and lack of transparency in the development of laws and regulations. New regulations are at times difficult to decipher and often lack sufficient notice and socialization for those impacted. The lack of coordination among ministries creates redundant and slow processes, such as for securing business licenses and import permits, and at times, conflicting regulations. Indonesia restricts foreign investment in some sectors with a negative investment list. The latest version, issued in 2014, details the sectors in which foreign investment is restricted and outlines the foreign equity limits in a number of sectors. Some of the restricted sectors include: telecommunications, pharmaceuticals, e-commerce, film and creative industries, and construction. Of note, the energy and mining sector face significant investment barriers. Indonesia began to abrogate its more than 60 existing Bilateral Investment Treaty agreements (BITs) in February 2014, allowing the agreements to expire as soon as they allow. While the United States does not have a BIT with Indonesia, the Indonesian government's action reminds foreign investors of the unpredictability of Indonesia's investment climate. Despite these challenges, Indonesia continues to attract foreign investment. Private consumption is the backbone of the economy and the middle class is growing, making Indonesia a promising place for consumer product companies. Indonesia has ambitious plans to improve its infrastructure with a focus on strengthening its maritime transport corridors, which includes building roads, ports, railways and airports, as well as improving agricultural production, telecommunications, and broadband networks throughout the country. Indonesia continues to attract U.S. franchises and consumer product manufacturers. For many companies, Indonesia's investment grade rating, growing middle class, and young population make the country an attractive destination for long term investment.

While Indonesia's population of 245 million, growing middle class, and stable economy remain attractive to U.S. investors, investing in Indonesia remains challenging. This report focuses on challenges foreign investors face rather than the range of investment opportunities. Since October 2014, the Indonesian government under President Joko Widodo has prioritized boosting investment, including foreign investment, to support Indonesia's economic growth goals, and has committed to reducing bureaucratic barriers to investment, including announcing the creation of a "one stop shop" for permits and licenses at the Investment Coordination Board. However, factors such as a decentralized decision-making process, legal uncertainty, economic nationalism, and powerful domestic vested interests create a complex and difficult investment climate. The Indonesian government's requirements, both formal and informal, to partner with Indonesian companies and purchase goods and services locally, restrictions on some imports and exports, and pressure to make substantial, long-term investment commitments, also factor into foreign investors' plans. While the Indonesian Corruption Eradication Commission continues to investigate and prosecute high-profile corruption cases, a recent case involving the National Police has led some to question the Commission's future influence. Investors continue to cite corruption as an obstacle to pursuing opportunities in Indonesia. Other barriers include poor government coordination, the slow rate of land acquisition for infrastructure projects, poor enforcement of contracts, an uncertain regulatory environment, and lack of transparency in the development of laws and regulations. New regulations are at times difficult to decipher and often lack sufficient notice and socialization for those impacted. The lack of coordination among ministries creates redundant and slow processes, such as for securing business licenses and import permits, and at times, conflicting regulations. Indonesia restricts foreign investment in some sectors with a negative investment list. The latest version, issued in 2014, details the sectors in which foreign investment is restricted and outlines the foreign equity limits in a number of sectors. Some of the restricted sectors include: telecommunications, pharmaceuticals, e-commerce, film and creative industries, and construction. Of note, the energy and mining sector face significant investment barriers. Indonesia began to abrogate its more than 60 existing Bilateral Investment Treaty agreements (BITs) in February 2014, allowing the agreements to expire as soon as they allow. While the United States does not have a BIT with Indonesia, the Indonesian government's action reminds foreign investors of the unpredictability of Indonesia's investment climate. Despite these challenges, Indonesia continues to attract foreign investment. Private consumption is the backbone of the economy and the middle class is growing, making Indonesia a promising place for consumer product companies. Indonesia has ambitious plans to improve its infrastructure with a focus on strengthening its maritime transport corridors, which includes building roads, ports, railways and airports, as well as improving agricultural production, telecommunications, and broadband networks throughout the country. Indonesia continues to attract U.S. franchises and consumer product manufacturers. For many companies, Indonesia's investment grade rating, growing middle class, and young population make the country an attractive destination for long term investment.

The Republic of Kosovo declared independence from Serbia in 2008. Kosovo's neighbor to the north, Serbia does not recognize it as a sovereign state, but has begun to normalize relations in accordance with the Brussels Agreement of April 2013. With a population of 1.8 million and land area 6,765 square miles, landlocked Kosovo is considered Europe's poorest country, yet it does have some mineral and coal deposits. Kosovo's official unemployment rate is 30.9 percent, although some estimates are as high as 45 percent. In an effort to foster economic development, the Government of Kosovo (GoK) has implemented reforms to improve the investment climate, prompting improved rankings in the World Bank's Doing Business reports from 81 (2014) to 75 (2015). Kosovo is continuing efforts to transform its socialist legacy to a market-oriented economy, and the GoK is working to strengthen the legal environment necessary to attract and retain foreign investment. Corruption, practiced and perceived, and a lack of contract enforcement create high barriers to foreign investment. According to the World Bank, Kosovo's economy is characterized by: limited integration into the global economy; the success of its Diaspora in foreign labor markets, resulting in a steady stream of remittances; pro-growth budgetary priorities; and continued international financial support. Vocal political opposition to the government's privatization policies, corruption, political or self-interested interference by government officials, disagreements over asset ownership between Kosovo and Serbia, and unreliable energy supply increase the risk and cost of investments in Kosovo. Despite these challenges, Kosovo's relatively young population, low labor costs, and abundant natural resources have attracted foreign investment, with several international firms and franchises already present in the market. There are opportunities for U.S. businesses to invest, especially in the food, IT, infrastructure, and energy sectors. The newly-elected government is seeking to further improve the business climate through the adoption of a multi-year development program focused on providing incentives for economic growth. These include amendments to tax and foreign investment legislation. The banking sector in Kosovo is stable and liquid, but high interest rates stifle commercial endeavors, prompting the government to enter into credit-guarantee arrangements with international donors to improve access to credit for businesses.

Guyana is a country located in South America's North Atlantic coast. During 2014, Guyana's investment climate showed no signs of recovery from the downward turn of 2013. Political gridlock and infighting hampered the country's development efforts on several fronts. The Amaila Falls Hydropower Project, which would have been the largest capital project in the country's history, fell apart after a decade of planning when U.S. developer and equity partner Sithe Global withdrew from the multinational development team in August 2013. The company had concerns related to political risk following objections to the venture by the country's largest opposition party. Guyana has failed to crack down on money laundering, and parliament has been unable to pass legislation strengthening Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) laws. Consequently in November 2014, the Caribbean Financial Action Task Force (CFATF) recommended that its members implement counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana. CFATF also referred Guyana to its parent body, the international Financial Action Task Force (FATF), for review. Although FATF has not concluded its review of Guyana, consumers and importers are already complaining of increased costs and delays in processing international financial and trade transactions. The government continues to encourage foreign investment but with limited success outside of the gold mining sector. Perceptions of corruption, inefficient government, inadequate infrastructure, and crime remain barriers to attracting foreign investment. Early general elections were held on May 11, 2015. The APNU-Alliance for Change party won 33 out of 65 seats in the National Assembly and David Granger was sworn in as President on May 16th, 2015.The impending elections slowed down current and prospective investment since implementation of many governmental projects were either put on hold or curtailed, until after the elections. Presentation of the National Budget, which has a constitutional deadline of April 30th, was also affected.

Bermuda is a British Island territory located in the North Atlantic Ocean. The government of Bermuda (GOB) welcomes foreign direct investment (FDI). Bermuda's economy is almost wholly dependent on FDI which derives primarily from the influx of international businesses - principally insurance, reinsurance, and financial services - with a small contribution from tourist sector. In the mid-1990s, foreign investment overtook tourism and this became Bermuda's economic foundation. In 2013 it contributed to approximately 85 percent of the total GDP, compared to tourism's 5.2 percent. Bermuda's has entered into its seventh straight year of economic recession. In 2013, the GDP was at USD 5.6 billion, or USD 4.7 billion after adjusting for inflation, down 2.5 percent from 2012. Continued job losses and business closures have affected the overall economy. According to the National Economic Report, Bermuda's GDP may have contracted by 0.0-1.5 per cent in 2014. For 2015, the GOB has predicted a GDP growth in the range of 0.0 percent to 1.5 percent, while all other indicators seem to foresee another year of recession. In February 2015, the GOB announced that it would borrow another USD 125 million to cover its current fiscal budget; in addition to the USD 800 million it borrowed in 2013 to cover deficits for 2014-16 period. Fitch Ratings reaffirmed Bermuda's A+ rating with a stable outlook in May 2015. It said Bermuda's ratings are supported by its "high income, consistent current account surpluses and strong net external creditor position," along with its sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the U.S., and skilled human capital which, it said, will allow Bermuda to continue to compete as a domicile for re/insurance and financial services companies. The GOB has not yet implemented its 2014 plan to privatize, mutualize (a form of privatization in which employees are shareholders), and/or outsource non-core government functions. The GOB signed an exclusive agreement with the semi-public Canadian Commercial Corporation to build a new USD 200 million airport terminal pursuant to a public-private partnership to be financed by future airport revenues. Bermuda's investment climate presents a series of advantages for potential investors including a stable, democratic government; low personal and corporate taxes; a pool of skilled professionals; proximity to the U.S.; and extensive air and communication networks. Its currency, the Bermuda dollar (BMD), is pegged par to the USD. As part of a British Overseas Territory, Bermuda's legal system is grounded in UK common law. Its legal, regulatory and accounting systems adhere to high ethical and transparency standards. It generally effectively and impartially enforces its laws to combat corruption and money laundering. Bermuda law recognizes and enforces secured interests in real property. The GOB's policies facilitate the free flow of financial resources in the product and factor markets, and the U.S. Securities and Exchange Commission recognizes the Bermuda Stock Exchange (BSX) as a Designated Offshore Securities Market. There is a general awareness of responsible business conduct among both producers and consumers. There were several strikes and non-violent, labor-related marches on Parliament during 2014 and 2015.