Inland investment is governed by the Investment Incentives and Guarantees Law 8/1997 and Companies Law 159/1981 and their amendments. The General Authority for Investment (GAFI) acts as the official regulator for all incorporations and licenses governed by both legislations.
Incentives and Guarantees:
• Protection against expropriation and compulsory pricing.
• Full right to repatriate profits and dividends.
• No export requirements.
• Access to dispute resolution committees administered by GAFI.
• Unfettered access to land in Upper Egypt.
Other incentives include a standard income tax rate of 20% (oil and gas sector companies at 40.55%); a 10-year tax exemption for land cultivation and husbandry activities related to livestock, poultry and fish; export duties ranging from 5-25% of the value of wholesale transactions; and import duties ranging from 2-32%.
Investment Law No. 8/1997, enacted specifically to ease the bureaucratic burden on investors, has been a resounding success. The law established GAFI; allows 100% foreign ownership of ventures; guarantees a number of rights; calls for the establishment of one-stop shops; and groups a number of exemptions and incentives to investment into one law.
The Provisions of the Investment Law:
• The right to remit income earned in Egypt.
• 100% foreign ownership of ventures.
• Guarantees against confiscation, sequestration and nationalization.
• The right to own land.
• The right to maintain foreign currency bank accounts.
• Freedom from administrative attachment.
• The right to repatriate capital and profit.
• Free hiring of Egyptian staff.
• Absence of price control or restrictions.
• Equal treatment regardless of nationality.
Investment Law Fields:
• Air transportation and related services.
• Animal, fish and poultry husbandry.
• Industry and mining.
• Land reclamation and cultivation of barren and desert lands.
• Maritime transportation.
• Refrigerated transportation for agricultural products and processed food.
• Tourism (including hotels, motels, tourist villages and transportation).
• Real estate development.
• Oil production and related services.
• Hospitals and medical centers that offer 10% of their services free of charge.
• Water pumping stations.
• Venture capital.
• Computer software production.
• Development of new urban zones.
• Software design and production of electronics.
• Establishment and management of technology zones.
• Credit classification.
• River transportation activities.
• Management of industrial projects and utilities.
• Waste collection and treatment projects.
• Projects financed by the Social Fund for Development.
Some projects require prior approval from relevant ministries in addition to GAFI. Such projects include investments in the Sinai peninsula, all military product manufacturing and related industries, and those involving tobacco and tobacco products.
Investment Law No. 8/1997 also establishes “one-stop shops” for investors to facilitate and simplify approval, registration, licensing and certification for new projects. The OSS brought registration time down to 72 hours and gathered all the necessary entities for licensing under one roof.
Corporate Law No. 159/1981 and its amendments cover investors in sectors not specifically mentioned in Investment Law 8/1997. The law allows for automatic registration of a company upon presentation of the application to the Companies Department and for acquisition of legal status 15 days after annotation in the Commercial Register.
Law 159/1981 also provides for the right of petition for denial of incorporation; removes the restriction that 49% of shareholders must be Egyptian; allows 100% foreign representation on the board of directors; and redefines accounting standards.