Egypt: Amendments to Executive Regulations of the Investment Law10 Jul 2023 451 Views
Egypt has become the focus of attention in the recent period, due to the support and development in the investment in Egypt, in all sectors and fields. Investment has been receiving great attention from the state, given that investment is one of the basic elements of the state’s materials. In addition, the President of the Republic always deliberately gives direct confrontations to the competent authorities regarding facilitation of consequences for investors as is evidenced by the issuance of Decree of the Prime Minister No.2140 of the year 2023 regarding the amendment of some provisions of the Executive Regulations of the Investment Law issued by the Prime Minister’s Resolution No. 2310 of the year 2017, as follows:
Aforementioned decree was issued based on what was presented by the CEO of the General Authority for Investment and Free Zones; And after the approval of the Council of Ministers based on studying the investment reality, it was decided to issue this decision to provide investment opportunities in a large sector to attract investment and to expand the establishment of investment areas that enjoy a special character in accordance with the requirements stipulated in the text of the decree.
The decree granted authority to the Council of Ministers, based on a proposal submitted by the President of the General Investment Authority, to establish special areas for an investment project after studying, evaluating, and ascertaining seriousness of the project, if the following conditions are met in the company that needs to establish this project, according to the text of article No. (1) of the aforementioned decree, the following will apply:
- The company that owns the project should be a Joint-Stock Company or a Limited Liability Company;
- The percentage of the local component shall not be less than (30%) within a maximum period of three years from the start of operation;
- The percentage of exports outside the country should not be less than (80%). An exception may be made from this percentage in the case of strategic projects of special importance; and
- Private free zone projects shall abide by the conditions of industrial security, civil defense and fire according to the Egyptian code, or in accordance with the decisions issued by the Minister concerned with industrial affairs regarding industrial establishments. and at the expense of the project.
Accordingly, the competent authority following up the activities of the project in the private free zone in a manner that guarantees the proper performance of its work and ensures the procedures followed for carrying out the activity, the companies operating within the project are obligated to submit periodic reports to the competent authority, including the work that has been accomplished. In order to ascertain the feasibility of the continuity of the project to work with the system of private free zones or not, all free zone projects must put all records and books at the disposal of the Authority during the examination and follow-up processes, and the Authority may seek the assistance of whoever it deems appropriate in this regard, and the final approval of the project will be forfeited if the investor does not by taking serious executive measures, including starting the incorporation procedures, submitting engineering drawings, obtaining the necessary approvals to establish the project from the concerned authorities, and the timetable for starting the activity, within six months from the date of being notified of the decision to approve the project, and this period may be extended for other period and this upon experiences provided by the stakeholders and approval of the free zone administration.
Moreover, the decree provided an opportunity for the service project to also enjoy some advantages and investment facilities based on a proposal submitted to the competent authority, which in turn presents the matter after study to the Prime Minister to approve the establishment of a private service free zone that collects a service project and provides places for service projects that carry out similar activities, according to the following conditions:
- The main project in the service private free zone should be a Joint-Stock Company or a Limited Liability Company;
- The main project in the service free zone adheres to the conditions of civil defense and fire, in accordance with the Egyptian code followed in this regard.
- The Board of Directors of the Authority shall issue a decision approved by the Council of Ministers regarding the procedures and requirements for establishing sub-service projects within the private free zone based on the proposal of the competent Minister; and
- The board of directors of the public free zone in which the service private free zone is located is concerned with approving the establishment of projects within the private service free zone and is also concerned with cancelling them. The license includes a statement of the purposes of the project, its validity period and limits, and the value of the financial guarantee that is presented to meet the obligations that may be due on the project.