Until recently, there have been two laws that regulated investment in Egypt; the Investment Law No. 8 of 1997 and the Companies Law No. 159 of 1981 and their amendments. In April, 2017, the new Investment Law and Industrial Licenses Law have been approved by Egypt’s House of Representatives.

3.3.1 New Investment Law
The new Investment Law No. 72 of 2017 is issued to signal that Egypt is open for investment, and aims at attracting foreign investments, granting a set of incentives and measures to be adopted by relative constituencies. There are notable amendments over the previous investment law No. 8 of 1997. This includes restoration of tax benefits and incentives, and the expansion of the General Authority for Investment and Free Zones (GAFI) as a one-stop shop, not only for setting up companies, but also for issuing operating licenses and serving investors; hence, cutting-down bureaucracy for starting businesses. GAFI also has a detailed strategic transformation plan that aims at making processes more investor-friendly along with a full automation plan. There are very attractive tax incentives with a 50% tax reduction on investments in underdeveloped areas, in addition to a governmental support for the cost of connecting utilities to new projects. The land incentives include returning back to investors half the amount if production begins within two years. It is also worth noting that private sector free zones are restored under the new law. In other words, the new Investment Law opens new frontiers for investments with private sector leading investment projects.

The new Investment Law introduces targeted incentives with the objective of making Egypt one of the top investment destinations in the region, mainly:

• Granting a residence permit to foreign investors throughout the term of their investment projects in Egypt;
• Fast track for projects licenses;
• The right to transfer profits abroad and/or receive international finance without any restrictions;
• Any investor may recruit 10% of foreign employees in their projects. In investment companies, this percentage may be increased to 20%. In strategic projects, the regulator may authorize higher percentages of foreign labour;
• The right to directly import raw materials, equipment, spare parts and/or transportation means as necessary for investment projects without requiring registration with the Importers’ Registry; and the right to export the investment projects’ products, whether directly or indirectly, without requiring registration with the Exporters’ Registry;
• Tax incentives are granted for a period of 3 years from the effective date of the Executive Regulations of the Law, extendable for one year only, for investors who set up in certain areas and in certain sectors;
• Exemption from stamp duty tax and notary public fees on constitutional documents of a company and on loan agreements for a period of 5 years from the date of registering the company;
• Exemption from notarization fees for the land used in the project;
• Application of a unified flat customs duty rate of 2% on the value of imported machines and equipment needed for establishing the investment project.

The law provides the establishment of an independent arbitration and mediation centre titled “The Egyptian Arbitration and Mediation Centre”, to be located in Cairo.

• The Centre shall pursue the settlement of the investment disputes which may arise among the investors, or among the investors and the government or one of the country’s public or private bodies, subject to the provisions of Egypt’s laws which regulate the arbitration and dispute settlement.
• During the first three years from the date that this Law enters into force, sufficient financial resources shall be provided for the Centre from Egypt’ Public Treasury.

3.3.2 Industrial Licenses Law
The new Industrial Licensing Law is issued to address the lengthy registration and licensing requirements of industrial establishments in Egypt. It shortens the length of procedures for issuing industrial licenses, in addition to overcoming bureaucracy and overlap in some specialisations of government agencies. The new law reduces the current duration of issuing licenses to just 30 days down from 634 days, which represents a significant administrative revolution in the investment climate in Egypt. The new law’s main aspects are as follows:

• The Industrial Development Authority (IDA) is the entity responsible for granting industrial licenses;
• IDA will grant one-year temporary licenses to operating unlicensed establishments to rectify their situation (to be renewed for another one year based on a case-by-case basis and a ministerial decree based on IDA’s recommendation);
• Heavy and hazardous industries as well as some specific locations need special approvals and procedures for licensing;
• For the licensing of non-hazardous industries, the licensing authority will be granted 90 days to inspect the establishment, after which any non-complying establishment will be granted 180 days maximum to rectify its situation. This can be renewed for one time if needed, and doubled for micro and small enterprises (MSEs);
• A “Licensing Requirements Committee” will be formed at the licensing authority to define all requirements necessary for industrial licenses and all related issues, without any constraints from any other laws and regulations;
  » This entity can set special requirements to match the nature of micro, small and medium enterprises (MSMEs), and MSMEs will be defined by a ministerial decree by the specialised minister.
• Certification offices and licensing services companies can assist industrial establishments in inspecting their procedures and ensuring their compliance. In this respect, the law includes several clauses related to the registration, approval and operation of these offices/ companies;
• A committee will be established to investigate any complaints submitted.

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