Egypt

No restrictions on foreign ownership

There is no restriction under Egyptian law on foreign ownership of telecoms, media and information technology companies and therefore, 100% of the investment capital of these companies may be owned in full by non-Egyptian natural person(s) and/or juristic person(s), except in the event that such person(s):

  • undertake the activities of importation for the resale purpose, commercial agencies, and intermediary business; and, or
  • are located or doing business in Sinai and/or North or South Kantara.

Your investment is protected in Egypt

Egypt is committed to more than one hundred bilateral investment treaties (the “BITs”) by which foreign investments are protected and most of such BITs grant foreign investors a number of guarantees such as free transfer of means, protection from expropriation, equitable treatment and the right to resort to international arbitration.

Egypt is an important offshore destination

According to the Egyptian Investment Law, investors operating inside the Egyptian free zones are exempted from all taxes and customs duties and, therefore, foreign investors use the free zones that are available in Egypt as offshore areas for the purpose of reducing investment cost. In this regard, such investors are also allowed by law to sell percentage of their production domestically provided that they pay the applicable custom duties.

Modern customs and simple post-registration procedures

According to the World Bank’s Doing Business Report of 2011, Egypt has modernized its customs procedures and port Infrastructure to facilitate trade and align with international standards. Egypt also cut and simplified postregistration procedures (tax registration, social security registration, licensing) since 2009/2010.

Egypt is an active reformer

Egypt is among the world’s 10 most active reformers for the fourth time according to the World Bank’s rankings of Doing Business 2010. Egypt made business start-up less costly, expedited the construction permit process, expanded the information available from the private credit bureau, and created commercial courts to speed up contract dispute settlements and, therefore, Egypt moved up to 106 from 116 among 183 economies worldwide in the overall ease of doing business ranking.

Investment

In 1997, Egypt has adopted the Investment Law No 8 of 1997 for the purpose of regulating and facilitating investment in Egypt. The General Authority for Investment and Free Zones (“GAFI”) is the competent authority concerning the application of the provisions of the Investment Law. GAFI was established by Presidential Decree No. 384 of 1997 and it is affiliated to the Ministry of Investment.

The Investment Law grants investors certain incentives and privileges providing that they invest in specific fields of investment such as the following:

  • Infrastructure projects for communications;
  • Computer software and high-tech products;
  • Operation and maintenance of wire and/or wireless communications network, TV channels and satellites stations;
  • Production, development, classification, creation or design of any kind of software, databases and/or operating systems;
  • Production of any kind of e-content;
  • Manufacturing and assembly of computer components;
  • Production and development of integrated systems and to provide training thereof;
  • Design and classification of Data Transmission Networks;
  • Installation, operation and maintenance of information and audio-video transmission networks;
  • Provision of value added services and internet services;
  • Establishment and operation of technological area and scientific computing & nurturing;
  • Establishment and operation of training centers for building the capacity of researchers in the ICT sector;
  • Establishment and operation of Information Technology Transfer Centers; and
  • Establishment and operation of Consultation Centers specialized in the fields of studying and developing the ICT.

Companies incorporated under the provisions of the Investment Law enjoy many privileges such as (1) they are exempted from complying with certain strict import/export regulations; (2) they are authorized to import by themselves into Egypt any goods such as materials, machinery, equipment, tools, spare parts or appropriate means of transport that are required for proper performance of their investment projects in Egypt; (3) project may be wholly owned by non-Egyptians; (4) any seizure of the asset of a project is to be effected only through a court judgment; (5) output of the investment project is not subject to price control; (6) projects are allowed to repatriate their capital and profits; and (7) contracts and agreements concluded by these companies are exempted, for five years starting from the date of their registration in the commercial registry, from stamp duty and registration and notarization fee. Those contracts and agreements include articles of incorporation, loan agreements, real estate and commercial mortgage contracts, real-estate purchase agreements, equipment purchase agreements and agreements concluded with contractors. For instance, a registration fee of three quarters percent (3/4%) calculated on the total amount of the loan plus the amount of two years interest must be applicable to the registration of mortgage contracts; however, this fee is not applicable to companies incorporated under the provision of the Investment Law for five years starting from the date of their registration in the commercial registry.