After more than two years of negotiation, Egypt has passed its much-touted investment law with the aim of streamlining business and reducing bureaucracy.
First approved as a draft law in March 2015 and called simply “new investment law”, it is hoped it will boost capital flows into the country and attract international investment following years of instability and economic downturn.
“For the first time in Egypt, the law requires government officers to ease investment measures as one of their key performance indicators,” says Ayman Nour, partner and head of Egypt office at law firm Al Tamimi. “The law provides a realistic approach to the one-stop shop concept setting deadlines for granting licences and reduces the approvals and licences procurement cycle from 36 months to three months. Further, it offers a temporary incentive programme in specific sectors and geographical zones permitting 50% redemption of the investment cost.”
Egypt’s 2011 uprising and subsequent terrorist attacks drove away many investors and tourists. But even excluding these factors, investors still complained of cumbersome bureaucracy, unpredictable regulations and staggeringly slow registration procedures.
“The law, if enacted as proposed, will introduce numerous changes to the existing legal framework for doing business in Egypt,” says Laila Rizik, associate at international law firm Amereller. “By and large, the law has been welcomed by the business community. The effect the law will have on foreign investment, however, will, as always, depend on its implementation.”