The Egyptian investment ministry has perfected its long-awaited regulations highlighting incentives it hopes will lure back foreign investors that had long ended business relationships with the North African Country.
Interested Investors have been anticipating the executive regulations in the new investment law, which will provide details on the type of projects and investments that will be eligible for tax breaks, and how the investment process will be streamlined.
Egyptian President, Abdel Fattah al-Sisi has ratified the long-delayed investment law, which seeks to provide a raft of incentives like tax breaks and rebates while reducing red tape for new projects.
The Egyptian government is hopeful of a robust foreign direct investment following the country’s economic turmoil since the 2011 uprising which drove foreign investors and tourists away.
The government intends to utilise a $12 billion International Monetary Fund lending program which was signed last year aimed at putting it on the road to recovery, together with a rebound in investment.
The Investment Minister Sahar Nasr confirmed the latest development during an interview with a news source.
Nasr said the related regulations were submitted to the cabinet on Wednesday for the prime minister’s approval, which is required within 90 days of the initial law’s ratification.
She sees the investor-friendly law along with the IMF program as boosting foreign direct investment for the 2017-18 fiscal year starting in July past an initial $10 billion target.
“Within the last 4 months (ending in May) we already achieved $6.8 billion and based on that I am projecting that we go beyond the initial target,” Nasr said.
Also, it is expected that the executive regulations will likely take an expansive view on what qualifies as a new investment, opening up tax breaks to a broad range of investors, not just those establishing entirely new projects.
“The general consensus is that if it is really a new production line that entails new land, new business, new recruitment and staffing. The majority are labelling that as new investment and it will be eligible,” Nasr said.
The initial investment law stipulates investors get back half of what they pay to acquire land for industrial projects if production begins within two years, and provides a 50 percent tax discount on investments made in underdeveloped areas.
The executive regulations will for the first time stipulate a specific number of days that the government will have to approve new licenses and clearances, said Nasr, reducing the waiting time for starting new businesses.
By the end of 2017, Egypt will also launch an electronic investor map, which will provide detailed information on what incentives and resources are available to investors based on what part of the country they plan to establish their investment project in, said Nasr.
“(Investors) want to look at a comprehensive map where they see different opportunities and can compare if it’s worth it to invest in Upper Egypt, what are the incentives provided and what is the proximity to the nearest port,” she said.