Exception on registering foreign investors in importers’ record in Egypt

user Youssry Saleh & Partners calender 31 Oct 2023 views 416 Views
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Amendment of Law No. 121 of the year 1982 concerning importers’ record Exception on registering foreign investors in importers’ record in Egypt:

Breaking barriers, the Egyptian Government is always seeking to facilitate and improve foreign investment regulations to attract foreign investors and furnish facilitations to the already existing foreign investors. A new law has been issued that is set to mark a significant milestone for foreign investors. After years of anticipation, the doors to register in the importer record are finally opening wide to foreign investors, signifying a remarkable shift in trade regulations and fostering an environment of unprecedented opportunities.

The implementation of this groundbreaking legislation brings with it a myriad of benefits, opening up avenues for foreign investors in Egypt to practice the activity of importation with much greater ease.

This article aims to delve into the details of the newly introduced law, shedding light on its implications for foreign investors, and highlighting the various advantages it entails.

As per Law No. 121 of 1981 on the register of importers, only Egyptian investors or companies in which Egyptian shareholders owned 51% of the total shares or stocks were allowed to register in the register of importers at the competent authority when they are importing goods for the purpose of trading. Following the new amendment that was introduced by Law No. 173 of the year 2023, businesses that are 100% owned by foreign shareholders, or in which the foreign shareholder owns 51% of the total shares or stocks, finally have the right to be registered in the importers’ record at the concerned authority.

Nonetheless, the above-mentioned amendment conditioned the registry of the above-mentioned companies for a certain period of 10 years from the date of implementing the provisions of the enacted Law. At the Council of Ministers’ discretion and based on the proposal of the minister concerned with foreign trade affairs, this period may be extended for another period, and this extension may not exceed the period of 10 years.

The provisions of the new Law include the following:

Article 1

“As an exception to the first paragraph of item (second/e) of article (2) of law no. 121 of the year 1982 on the importers’ register, joint stock companies, partnerships limited by shares, limited liability companies or partnerships, where the stocks or shares of their partners are not owned by Egyptians or owned thereby at a rate less than (51%), may be recorded in the importers’ register, provided that the total periods of entry in the register shall not be more than ten years as of the date of enforcing the provisions of the present law. Such period may be extended to one other period only of not more than ten years, by virtue of a decree to be issued by the cabinet based on the proposition of the minister concerned with foreign trade affairs.”

Article 2

“The present law shall be published in the Official Journal, and shall apply as of the day following its date of publication.

This law shall be stamped with the seal of the State and shall be enforced as one of its laws.

Issued at the Presidency of the Republic on the 13th of Rabei’ II, 1445 (Islamic Calendar), corresponding to the 28th of October, 2023 (Gregorian calendar).”

Based on the aforementioned article, the new legislation has come into force as of October 30, 2023. Henceforth, businesses by which their shares are fully owned or owned by a percentage of 51% to foreign investors will be granted the liberty to register in the importer’s registry when importing goods for the purpose of trading. Comparable to companies where shares are completely or where Egyptians owned 51% of the total shares, unless otherwise mandated at any given moment by any legislation.

Conclusively, the issuance of the new law that allows foreign investors to register in importers’ record when importing goods for the purpose of trading, marks a groundbreaking moment in international trade and heralds a promising future.