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Egyptian and foreign private investments are of the utmost importance to the local economy. Its direct impact on the economic growth rate and its efficiency, as well as generating job opportunities will raise the national standard of living.

In this regard, the Egyptian government is keen on realizing an annually planned 6% continuous growth rate, an annual capital and savings of 70 billion L.E. is needed; out of which Egypt only has 45 billion.  It is therefore necessary to attract about 25 billion L.E. each year in the form of grants, loans and a greater part in the form of direct investments in projects constructed in Egypt.  Building an investment fertile soil should be through:

• Development of Investment Services

• Provision of transparent information and data  

• Development of legal framework affecting the investment

• The investment process.

In order to overcome all difficulties facing investors, and to develop increased incentives, advantages and facilities for increasing the private sector share in Promotion and attraction of direct foreign investment flow, the following was achieved.

1) The General Authority for Investment & Free Zones (GAFI):

It is the party responsible for overcoming all difficulties facing investors:  

(i)   A new unit for investment services was established where all parties related to investment have representatives. The Authority has also responded to investors desire to add new fields to Investment Law No. 8/1997 including natural gas receiving stations and their expansion.

(ii) An integrated Information Center was established including quick response services.

      - For more information about free zone GAFI please visit there web site at www.GAFI.eg.com

2) Investment Related Laws:

Several investments related laws are issued to develop the legal framework for the investment environment such as:

• Investment Guarantees and Incentives Law

• Capital Lease Law   

• Capital Market Law

• Real Estate Financing Law   

• Monopolistic Practice and Free Competition Law

• Law of Companies Formation

• Egyptian General Exporters Federation Formation Law

• Economic Private Zones Law

• Intellectual Rights Safeguarding Law

• Private Medical Insurance Law  

• Private Insurance Funds Law. 

• Central Depository Law

If you should require more information about the above laws please contact us or register and join the E-Business Center online and get full access to a wealth of data and resources.

3) Encouragement and Reciprocal Protection of Investment:

Egypt signed a number of treaties for the “Encouragement and Reciprocal Protection of Investment” with a long list of countries.

4 Providing Against Double Taxation: 

Egypt signed tax treaties for “Providing Against Double Taxation” with Sweden, Germany, Austria, Norway, Finland, Italy, Iraq, Japan, India, Sudan, United Kingdom, Romania, France, the United States of America, Canada, Switzerland, Yugoslavia, Denmark, Morocco, Tunisia, Libya, Syria, Hungary, South Korea, Cyprus, United Arab Emirates, Czech Republic, Belgium, Jordan, Turkey and Lebanon. 

Other countries have also signed tax treaties with Egypt to come to effect soon with Oman, Malta, Holland, Mongolia, Macedonia, Ireland, North Korea, Armenia, Pakistan, Singapore, Poland, Ukraine, Malaysia, China, South Africa, Bahrain, Russia, Yemen, Bulgaria, Indonesia, Palestine and Belarus.  

5) Relaxed Regulatory Environment:

To promote the continuous growth objectives of its people, the Egyptian government took further steps to attract investment and support the growth of businesses.  These consist of specific incentives ranging from tax holidays to exemptions from certain laws.  

All regulatory obstacles to market entry and business operations have been revised over the past few years.  Licensing for local and international investment is automatic and open to private businesses. Furthermore, there are no minimum local content conditions.  

In the infrastructure sector, private investment in telecommunications, transportation and water utilities is actively encouraged and expected to increase significantly in the near future.  Already the government has approved private sector investments in the form of Build Operate Transfer (BOT) projects in power generation, telecommunications, airports and highways.  

In May 1997, the government passed the “Investment Guarantees and Incentives Law” (Law No. 8/1997) to unify all investment incentives in a single piece of legislation.  The principal purpose of the law is to boost production and foreign direct investment by affirming all existing incentives, maximizing them and streamlining the means by which they are granted.

Source: Ministry Of Foreign Trade