Wednesday 7 June 2023
Last update on Wednesday, June 7, 2023 At 7:27 PM
On May 16, 2023, the Supreme Investment Council, a body chaired by President Abdel Fattah Al-Sisi, in the presence of Prime Minister Mostafa Madbouli, Governor of the Central Bank of Egypt Hassan Abdalla, as well as ministers, officials and representatives of the private sector, adopted a set of 22 administrative and tax reforms aimed at improving the business environment and thus stimulating private investment in the country.
The stated ambition is to increase the share of the private sector in investments, today 25% against 75% for the public sphere. The Council also wants to boost exports, when only 1% of private companies currently contribute to Egyptian exports.
Five main areas emerge from these reforms:
Transparency: a new public entity will be responsible for collecting data and statistics from public companies (the question of the publication of this information remains unresolved, however). As part of efforts to create a stable legislative and tax environment, the publication of Egypt’s tax policy document for the next five years was also approved.
Competition: the Council aims to strengthen the independence of regulatory authorities, which are currently dependent on their supervisory ministries. The problem of conflicts of interest with certain companies affiliated with the government was addressed. The Council also issued a decision aimed at deleting certain legal articles which grant preferential treatment to public entities.
Simplification: the government will respond to requests for the creation of new businesses within a maximum period of 10 working days. The acceleration of the issuance of “golden licenses”, whose scope of eligibility has been extended to different sectors, has been recorded. For the record, only projects of “national or strategic” importance to the government were eligible for this single authorization allowing access to a simplified process for setting up new projects. The General Authority for Investment and Free Zones (GAFI), in cooperation with all the authorities concerned, has also been tasked with reducing bureaucratic barriers.
Imports: to address import difficulties, Law No. 7 of 2017 should be amended to allow foreign investors to register in the register of importers, for a period of ten years. Finally, the Board decided to strengthen the incentive scheme for investors, with a deadline guaranteeing the rapid reimbursement of VAT (45 days).
Targeting: specific reforms have been adopted in certain priority sectors, notably in agriculture, industry, transport and the real estate market. For the latter, the Council wishes in particular to return to the impossibility for non-residents to acquire more than two properties in Egypt.
These measures, whose normative transcription is not always assured, aim to attract 1.6 billion EGP (53.1 M USD) in FDI for the 2023/24 fiscal year (July to June). In the longer term, the government hopes to increase exports to USD 100 billion per year by the middle of the decade and to attract USD 40 billion in FDI by 2026.
Source Embassy of France in Egypt
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