In recent years, the Egyptian government has been introducing a number of laws, offering services, and implementing infrastructure and housing projects as part of an economic reform program, aiming to help improve its business competitiveness and attractiveness for private investments in many sectors, especially the real estate sector. Invest-Gate delves into this file to explore incentives and projects carried out in the past period, while interviewing a number of investors to know how they perceive the government’s achievements and what they still need.
New Laws For Ease Of Doing Business
Egypt has approved a number of long-awaited laws that sparked optimism among investors. Invest-Gate introduces the most important laws that have been approved in the past years and which are perceived as an improvement to the investment environment.
New Investment Law
President Abdel-Fattah El-Sisi approved the new investment law in June 2017, while the Cabinet passed regulations for the law in August 2017 and executive regulations in October 2017.
The 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, according to the Investment Ministry.
New Contractors Compensation Law
President Abdel-Fattah El-Sisi officially issued the New Contractors Compensation Law in July 2017, aiming to compensate the Egyptian contractors’ losses due to local currency floatation.
Under the law, a supreme committee of compensation is established. The newly formed committee is responsible for setting compensation rates for each company that has suffered losses due to the harsh economic conditions experienced between March and December 2016, according to a statement released by the State Information Service Center.
The parliament preliminary approved the bankruptcy law – which mainly abolishes imprisonment in cases of bankruptcy- in early January 2018, and gave its final approval to the law late the same month in a plenary session attended by Investment and International Cooperation Minister Sahar Nasr.
According to Moody’s, the new bankruptcy law “allows for out-of-court company restructurings, permits a stand still on creditors that allows a viable company to reorganize, and provides safety nets for creditors.”
Under the law, courts have the right to enforce a restructuring plan if a consensual solution is not reached; the plan must be completed within 60 days of filing for a standstill, although a judge has the right to extend that period.
The bankruptcy law also reduces the liquidation period for a non-viable company to nine months, instead of the current average of more than two years.
Industrial Permits Act
President Abdel-Fattah El-Sisi approved the 15/2017 Industrial Permits Act in May 2017, and its executive regulations were issued in August 2017.
“The new regulation aims at facilitating the licensing process; cutting paperwork and reducing bureaucracy; hence, making it easier for investors and enterprises to obtain industrial permits, as well as resolving the issue related to operation permits,” Minister of Trade and Industry Tarek Kabil said in an official statement.
The process would take about seven days for a license by notification and almost 30 days for a prior license instead of 600 days, in addition to the automatization of procedures and the adoption of a new system for complaints.
The Companies Act
The parliament approved a set of amendments to the Companies Act no. 159 of 1998 in December 2017. The most prominent amendment to the law is the establishment of sole proprietorship companies along with other types of companies such as joint stock companies, partnerships limited by shares, and limited liability companies.
Services Offered To Stimulate Investments
As part of the new reform measures, the Egyptian government has launched services to further ease the way of doing business. Invest-Gate explores some of the new services provided.
Investors Service Center
President Abdel-Fattah El-Sisi officially inaugurated the main center in February 2018 in Cairo, in addition to a number of branches in 6th of October, Suez, Gamasa, and Minya through a video conference.
The centers provide necessary approvals, certifications, and licenses needed for the establishment, operation or dissolvent of a company, according to the Investment Ministry.
The centers house representatives from relevant government authorities to facilitate required approvals and accelerate the investment process.
First Comprehensive Investment Map
The Investment Ministry has launched Egypt’s first comprehensive investment map in March 2018, including more than 1,000 investment opportunities across Egypt. The map covers a wide range of sectors, including real estate and infrastructure, tourism, transportation, and energy, among others. The investment map will also include Upper Egypt as well as national projects such as the New Administrative Capital and the Suez Canal Development Project.
Industrial Investment Map
Minister of Trade and Industry Tarek Kabil announced launching Egypt’s first comprehensive industrial investment map in October 2017, offering 4,136 real investment opportunities in eight sectors including engineering industries and metal industries.
To know about the government’s hattricks in investment to promote development and improve the business climate, click here.