FILE - Investment Zone
CAIRO - 12 August 2019: The Official Gazette published last week the decision of President Abdel Fatah El-Sisi approving the amendment of the Investment Law No. 72 of 2017.
Egypt Today reviews the approved amendments in Q&As:
Q : what is the purpose of the amendments of the investment law?
A: The purpose of the amendments is to promote an investment climate and equal incentives for new projects and expansion of existing projects, where the law only provided incentives for new projects.
Minister of Investment Sahar Nasr said earlier that the objective of the new amendments drafted by the government is to address problems and challenges on the ground, said who attended the session of the Economic Committee of the Parliament.
The goal of the amendments is to invest in the neediest provinces and improve the standard of living of citizens, and diversity in the sources of growth nationwide, Nasr said.
Q: Will incentives for existing projects actually be beneficial to the economy?
A: It would be useful because the amendment encouraged companies to expand their existing business to enjoy incentives.
Investment Minister noted that the amendments to Articles 11-13 aim at granting incentives for expansions of existing investment projects in accordance with the rules and conditions to be determined by a decision of the Council of Ministers.
Q: How many articles have been amended in the law?
A: Four articles in the law have been amended and added.
What are the amendments taken on the law?
A:“The [newly-added] conditions include the establishment of new production lines or products, and creating new business opportunities with an increase in the capital,” Nar stated earlier
The second amendment relates to imposing new fees in exchange for ratification of contract signatures of the companies, regardless of the investment system subject to it, the Minister added.
Nasr praised a new article in the Investment Law stipulating that the General Authority for Investment shall calculate the foreign inflows and foreign direct investment in order to reach accurate figures on the volume of investment.
Q: What is the content of these incentives amendments?
A: Amendments to the law included the addition of a final clause in article 12 stating that the expansion of existing investment projects shall be granted the opportunity to enjoy the special incentives provided for in articles 11 and 13 of this law. Expansion in this article means o increase the capital used by adding new assets to increase the production capacity of the project. All this in accordance with the rules and conditions to be determined by a decision of the Council of Ministers.
Q: Why was a paragraph in article 48 amended?
A: A final clause is added to Article 48 of the law stating that “the signatures of the partners or their representatives shall be ratified on the contracts of companies whatever the investment system is subject to, with a ratification fee of a quarter percent of the value of the paid up capital up to a maximum of 10,000 or the equivalent of foreign exchange, as the case may be, whether ratified in Egypt or with the Egyptian authorities abroad."
This amendment came to preserve and protect the assets of companies.
Q. What are the reasons behind adding an article related to foreign direct investment (FDI)?
A: The amendments included the addition of clause 14 to article 74 to ensure that information and data required for the calculation of direct and indirect foreign investment assets from public and private entities for statistical purposes, in accordance with established international practices. The Investment Authority may, for this purpose, prepare forms and questionnaires to complete such information and data and apply them by all means, including electronic means, provided that a decision is issued by the Prime Minister.
This is based on UNCTAD proposals for the calculation of foreign investment, which shows its exact size.
Q :What is the ruling on those who do not cooperate in providing FDI data in different entities?
A: The amendments include the addition of a new article No. 91, in which the person responsible for the effective management of the legal person shall be punished for violating the provision of article 74, paragraph 14, of the law, with a fine not exceeding LE 50,000 if he is aware of the violation.
In July, Egypt’s House of Representatives (the lower house of the parliament) chaired by Ali Abdel Aal, has initially approved on Sunday new amendments to the Investment Law promulgated by Law No. 72 of 2017.