Despite its colorful history and impressive pyramids, Egypt is a heavily populated Middle Eastern/African country that has attracted investors. Investors view Egypt as a major frontier market, as well as a member of Goldman Sachs' Next Eleven economies (N-11s), which have as much potential as BRIC countries to supplant the G-20 countries.
In line with international best practices and approved international standards, the General Authority for Investment and Free Zones (GAFI) has been promoting Egypt as a promising investment destination and enhancing cooperation with investment agencies worldwide, especially in Africa, by developing stimulating investment strategies.
The law of Investments in Egypt guarantees equal and fair treatment for both local and foreign investors. The law protects against the nationalization of all investment projects and forbids the freezing of assets or investments unless a judicial ruling mandates it. Furthermore, foreign investors may convert their EGP profits into any currency they desire without restriction. As part of the liquidation process, all relevant and enforceable laws are disclosed to the liquidator within a maximum of 120 days of the process.
The law also guarantees the following:
- Any investments held in the Republic of Egypt will be subject to fair and just treatment.
- The country will provide the same treatment for both foreign and local investors.
- No invested assets or capital will be subject to discrimination.
- The country will provide non-Egyptian investors residence permits for the duration of their investment project.
- The country will implement all laws in case of cheating, corruption, or theft. Any investment projects found to be breaking the law will be dealt with accordingly.
- All decisions relating to the investment projects are causative, and all those related to it shall be informed.
- No investment projects shall be subjected to nationalization.
- The removal of ownership of investment capital is not allowed, unless for the benefit of the country. In this case, restitution that is just will be paid immediately and without installments- that is equal in the amount of investment capital. This amount is transferrable to whichever currency.
- Investing in projects is not subject to administrative sequestration through legal situations, except if a final court ruling requires it. It also may not be subject to attachment, save if a court order or judgment so rules.
- Assets of an investment project may neither be seized, confiscated, nor frozen unless a court order or final judgment requires it, with the exception of tax debts and social insurance contributions; such debts and contributions may be collected by all kinds of seizure, without regard to the contracts that have been signed.
- GAFI's board of directors must approve any administrative body's decision to impose financial or procedural burdens on projects governed by this law, or to set or alter fees or consideration for services, except after having obtained the council's opinion.
- An administrative body may not revoke or suspend an investment project's license, nor may it reclaim the real estate allocated for it, unless it has given the investor notice of the violations, allowed Investor to present evidence, and provided an adequate grace period for rectification. GAFI's opinion must be sought before any of the actions specified in that paragraph take place. It can be filed before the committee specified in Article (83) of this Law within seven days of sending a request satisfying all proper legal procedures.
- An investor may establish, run, and develop an investment project without any constraints and with foreign currency. An investor may own, manage, utilize, and dispose of an investment project, earn income from it, transfer profits out of the country, liquidate it, and transfer, in whole or in part, the proceeds of its liquidation out of the country, without interfering with the rights of third parties.
- All cash transfers in relation to overseas investment must be freely and promptly transferable to and from the country, using a freely convertible currency. The country must allow for the conversion of local currency into a freely usable currency without delay.
- Investment projects may import the necessary raw materials, production necessities, machinery, spare parts, and transportation means—all subject to the nature of the business—without registering with the Register of Importers. This law governs importation, and it is not subject to any regulations or decrees governing it.
- An investment project, as per the Law, may export its products without a license or registration in the Register of Exporters.
- A Project Investment may employ foreign workers up to ten percent (10%) of its workforce. This limit may be raised to twenty percent (20%), provided the required skills in national labor are not available. Strategic projects of special significance as determined by the SCI can be exempted from the aforementioned limits, provided training is provided to the national workforce.
- Employees involved in the investment project may transfer all or part of their financial claims abroad, noting the following:
- Paying back all capital of the company according to the transfer currency.
- Finances are transferred from abroad either through persons or a loan.
- Using the money transferred from abroad to establish or develop projects subject to investment law.
- The value of liquidation must be transferred from overseas.
- All transfers are to be from a bank verified by the Central Bank of Egypt.