Decisions of the Supreme Investment Council on May 16, 2023

The Decision Of The Supreme Investment Council

With regard to restrictions on establishing companies, a draft decision was approved to study the amendment of some articles of the executive regulations of the Investment Law No. 72 of 2017, and a draft decision to amend the text of Article No. 34 of the Investment Law No. 72 of 2017, to allow licensing projects for industries based on natural gas as one of the production inputs, to operate the free zone system.

With regard to the multiplicity of approvals and the length of time obtaining them, it was approved to issue a decision to be circulated to all parties, to determine a specific time period for all approvals of 10 working days, and once upon establishment, in a way that adds more confidence in the investment climate in Egypt, with guidance to the General Authority for Investment and Free Zones in cooperation with all concerned authorities to establish a “unified electronic platform for establishing, operating and liquidating projects” and approving amendments to the Electronic Signature Law (Law No. 15 of 2004) and referring it to Parliament, in a way that works on Reduce bureaucratic barriers and simplify procedures.

With regard to land allocation, the Ministry of Justice has been tasked with preparing a set of legislative amendments necessary to overcome restrictions related to land ownership and facilitate foreign ownership of real estate. With regard to permits to practice the activity, it was approved to expand the issuance of the golden license and consider not limiting it to companies that establish strategic or national projects, and amend Articles No. (40), (41) and (42) regulating the golden license to ensure that companies established before the Investment Law of 2017 may be granted the golden license.

Assigning the Council of Ministers to study the transfer of the subordination of regulatory agencies in the utilities sectors, in order to ensure their independence, with the aim of strengthening the separation between ownership and management in a number of state sectors, as well as approving a draft decision to amend some legal articles that grant preferential treatment to companies and state-owned entities, with the aim of enhancing competitive neutrality in the Egyptian market.

In order to unify the frameworks of all state-owned companies, a draft decision was approved to issue a law establishing a unit in the Council of Ministers to collect data of state-owned companies, and its decisions are obligated to restructure, whether by sale or transfer of dependency from one party to another, provided that the result of its work is submitted every 3 months to the President of the Republic and the Council of Ministers, and a draft decision was approved to enhance governance and transparency.

To address the difficulty of importing production inputs, a draft decision was approved to amend the text of Law No. 7 of 2017 to allow the registration of foreign investors in the importers register, even if he does not hold Egyptian nationality, for a period of 10 years, and this comes within the framework of efforts to allow the facilitation of import procedures for foreign investors.

To meet the additional burdens imposed on investors, a draft decision was approved that no entity may issue general regulatory decisions that add financial or procedural burdens related to the establishment or operation of projects subject to the provisions of the Investment Law, or impose fees or fees for services on them, or amend them, except after consulting the Board of Directors of the General Investment Authority and the approval of the Council of Ministers and the Supreme Council of Investment.

In connection with the same subject, and within the framework of reducing the financial and tax burdens on investors, a draft regulatory decision was approved binding on clear mechanisms and controls in cases of imposing improvement fees in accordance with the regulating laws, and the bases for calculating each case, and considering the work of classifications of the required values according to the purpose of investment, whether health, tourism, or hotel, and it is circulated to all administrative authorities. This comes to get rid of the issue of multiple entities that impose improvement fees on investors, as the investor pays the same fees to several parties.

A draft decision was also approved directing the Ministry of Finance to introduce a clearing system between investors’ dues and their tax or other burdens in favor of government agencies, with a time limit (45 days) that ensures speeding up the refund of VAT and speeding up procedures.

Within the framework of efforts to create a stable tax legislative environment, a draft decision was approved to expedite the announcement of the state’s tax policy document during the next five years, in order to eliminate the instability of tax legislation and the multiplicity of authorities entrusted with it and to impose additional fees from various authorities.

A draft decision to instruct the Ministry of Justice to quickly finalize the amendments to the law on transferring profits to holding companies and subsidiaries to ensure reducing tax burdens and avoiding double taxation, and this comes within the framework of stimulating local and foreign investment.

A draft decision assigning the Ministry of Justice to amend the Civil and Commercial Procedures Law No. 13 of 1968, allowing the lifting of the value jurisdiction of economic and summary courts, expanding their substantive jurisdiction to settle commercial disputes, and raising the quorum for non-appeal, in a way that enhances the mechanisms for settling commercial disputes and thus accelerating the enforcement of contracts.

A draft decision instructing the Ministry of Justice to issue a binding regulatory decision with clear controls to determine a specific time frame for the payment of compensation to investors in cases of expropriation not exceeding 3 months, while obliging administrative authorities to intensify negotiations with investors on appropriate compensation, thus adding more confidence in the investment climate in Egypt.

A draft decision to take advantage of the International Finance Corporation (IFC) to contract with a global consulting office to develop a participatory vision and a clear strategy for investment in Egypt, and mechanisms to improve Egypt’s ranking in the ease of doing business index in the coming years, to achieve the national target of raising investment rates to between 25% and 30%.

Studying the amendment of 9 articles of the Law of Economic Zones of a Special Nature 83 of 2005, with the introduction of a number of additional articles to the text of the law, in order to grant benefits and exemptions to the economic zone.

Establishing a permanent unit in the Council of Ministers headed by the CEO of the General Investment Authority, to develop policies, laws and regulations appropriate for the growth and prosperity of startups in Egypt, as well as receiving complaints from startups in coordination with the Investor Problems Solving Unit and developing appropriate solutions for each of them in coordination with the competent authorities.

Adopting a package of incentives in support of a number of sectors and projects, including those related to supporting the agricultural, industrial and energy sectors with regard to green hydrogen production, in addition to the housing sector, real estate developers and investment projects in new cities, as well as the transport sector with regard to export duties and customs, and unifying the pricing strategy.