Investments in Egypt, from both Egyptian and foreign investors, are regulated by Law No. 72 of 2017 (the "Investment Law") irrespective of the size of the investment. Investment projects performed under the Investment Law provide many advantages and guarantees for the investor.
Recently, Egypt has introduced amendments to the Companies Law (Law No. 159 of 1981) under Law No. 4 of 2018, which are considered the most important amendments made to the Companies Law since 1981. Among the many modifications, the Companies Law now, for the first time, recognizes the concept of piercing the corporate veil for corporate shareholders and allows the setting up of a One Person Company (with limited liability) ("OPC"). Further, limited liability companies are no longer required to have at least one (1) Egyptian manager, and it can now be simply managed by at least one manager of any nationality.
The new Importation Registrar Law (Law No. 121 of 1982) was amended by Law No. 7 of 2017 and further liberated the Egyptian market for foreign investors, whereby:
- non-Egyptian investors can hold up to 100% of the entire capital of production and services companies operating in Egypt; and
- non-Egyptian investors are now allowed to hold or acquire up to 49% of the share capital in any company carrying out importation business for re-sale purposes in Egypt.
The General Authority for Investment and Free Zones ("GAFI") is the responsible authority for incorporating the investment projects.
The Investment Law provides, among others, the following incentives to the investment projects:
- fair and equitable treatment to both foreign and Egyptian investors; however, the Prime Minister will be having the right, subject to the principle of reciprocity, to grant favorable treatment to foreign investors;
- granting a residence permit to foreign investors throughout the term of their investment projects in Egypt;
- none of the Egyptian Authorities will have the right to suspend or terminate any license and/or allocation of properties granted to any investor without satisfying the following conditions:
- serving a notice to the said investor outlining the relevant breaches and/or violations made thereby;
- giving a reasonable time to the said investor to legitimize the breaches and/or violations above; and
- taking an opinion from GAFI before issuing the said suspension or termination.
- the right to directly import raw materials, equipment, spare parts, and/or transportation means as necessary for investment project without requiring the registration with the Importers' Registry;
- the right to export the investment projects' products, whether directly or indirectly, without requiring the registration with the Exporters’ Registry;
- free Zones can be established in the form of Public or Private Free Zones under a Decree from the Prime Minister mainly for the exportation purpose. Free Zones can be established in all Investment Sectors except for:
- oil, fertilizers, and steel production;
- transportation, liquidation, or production of natural gas;
- heavy energy usage industries as specified by the Supreme Energy Council;
- alcohol and wine productions; and
- weapons, artillery, and explosive production, as well as any other products related to national security.