Egypt’s Investment Law allows for new incentives; introduces new governance measures; eases cross-border trade and profit repatriation; guarantees protection from decisions that are arbitrary or capricious; and provides new tools to ease establishing, starting, and operating a business.
Key advantages of the new Investment Law
- 1- It cuts red tape, allows for new incentives, enforces existing ones, creates new tools for dispute resolution; all conducive to a modern business environment.
- 2- For the first time, investors can process investment related services through the internet, and online payment is also made available.
- 3- Timelines are set for processes and government authorities have to respond within those timeframes.
- 4- The single window concept has finally been realized after successfully implementing necessary administrative reforms that allows investment authorities at the investor service centre to process submitted documents. Now the investor does not need to collect approvals from several of government authorities, saving time, cost and easing the way of doing business in Egypt.
Key advantages of the Executive Regulations of the Investment Law
- 1- Foreign investors eligible for residency, as per the Executive Regulations, must be founders, shareholders or partners of a company or owners of an establishment. The residency period shall not be less than one year and shall not exceed the duration of the project.
- 2- The investment project shall have the right to employ foreign labor that represents 10% of the total number of employees, which may be increased to 20% of the total number of employees, in case suitable, trained calibers aren’t available and replacements are not found in the country, after approval from GAFI.
- 3- Concerned public administrative authorities may not revoke licenses issued to an investment project, nor may they suspend such licenses, nor withdraw land, or other assets, or property allocated to the project, without previously warning the investor, by certified mail, of the violations attributed to him/her, and hearing their point of view and giving him/her a period that does not exceed 60 days from the date of warning the investor to rectify his/her position. If such time limit elapses without the investor rectifying his/her position, the concerned public administrative authorities shall first take the opinion of GAFI before issuing its decision on the matter. The investor has the right to appeal against the decision of license cancellation, or properties withdrawal, or operation suspension, before the Grievances Committee stipulated in the law.
- 4- Cash transfer and repatriation is allowed if foreign currency was used to establish a company, buy an establishment, buy stocks, or if foreign currency are a company’s profits or are a foreign worker’s salary.
- 5- To become eligible for special and additional incentives, two investment categories/sectors (“A” and “B”) have been determined;
A. Category/Sector “A” includes:
- The Suez Canal Economic Zone.
- The Golden Triangle Economic Zone .
- Other lagging, underdeveloped, regions that are in need of development, are determined by a Ministerial Cabinet’s decision.
B. Category/Sector “B” includes:
- Labor-intensive projects in accordance to regulations and restrictions stipulated in the Executive Regulations.
- Small and medium enterprises.
- Projects that depend on or produce new or renewable energy.
- Megaprojects, projects defined as strategic projects, and as defined by an issued statement by the Supreme Council for Investmen.
- Touristic projects, defined by an issued statement by the Supreme Council for Investment.
- Projects established for the production and distribution of electricity, defined by an issued statement by the Supreme Council for Investment.
- Projects that export no less than 50% of their production output and volume to countries outside the region.
- Automotive projects and auto-feeding industries.
- Wood, furniture, printing, packaging and chemical industries.
- Manufacturing projects of antibiotics, oncology pharmaceuticals and cosmetics.
- Food and beverage industries, agricultural crops production companies and projects for the recycling of agricultural waste.
- Engineering, metal and leather tanning industries.
- Communication and Information Technology (ICT)-related industries.