Promulgation of Egypt’s New Investment Law

An amendment to the 1997 Investment Law No. 8, the aim of which is to attract new investments into Egypt as well as to ensure fair agreements between foreign and local investors, has been enacted as of May 31st, 2017. It includes a number of incentives directed at creating an attractive and promising business climate for investors across various fields and industries. According to Article 9 of the new Investment Law, the executive regulations are meant to be issued with 90 days of law’s issuance. Please note that the new Investment Law will be known as “Law No. 72 for the year 2017”

We are relocating our Cairo office!

We are relocating our Cairo office!

As of June 1st, 2017, please note our new address:

Intersection of Mokattam Road and Autostrade,

Facing the Citadel, Mokattam

Cairo , 11411

Egypt

Tel: +20 2 2510 0000

Fax: +20 2 2510 5555

Email: mail@eldib.com

Please note that this change of address will not affect existing Power of Attorneys issued by our clients to the firm. 

Thank you for your continued patronage.

Kind regards,
Eldib & Co

For any inquires please contact info@eldib.com

www.eldib.com

Further Developments for Egypt’s Economic Reform

After several years marked by economic turbulence and uncertainty, two major political actions earlier this year launched Egypt towards a more optimistic and stable path. The first action is an amendment to the 1997 Investment Law No. 8, the aim of which is to attract new investments into Egypt as well as to ensure fair agreements between foreign and local investors. The law, which still requires the approval of President Abdel Fattah El-Sisi, seeks to boost direct foreign investment. It includes a number of incentives directed at creating an attractive and promising business climate for investors across various fields and industries. These incentives will create more job opportunities, increase production and exporting activities, and allow the country to produce certain goods that have been traditionally imported in the past. Furthermore, the new legislation provides tax exemptions of up to 50 percent for investments in the country’s most vulnerable and underdeveloped regions, in sectors such as electricity and renewable energy. Based on the new law, authorities will have a 60-day deadline to provide investors with all requested authorization. It offers a 2% unified custom tax on imported equipment and machinery. Investors will also be exempt from stamp taxes and fees for documenting the company, according to Article 25 of the law. In addition, Article 20 states that the total amount of foreign employees may amount to 20% of the total work force in their projects, instead of 10% as stated in the previous law. The second action consists of a proposal, as suggested by the head of the Arab Union for Direct Investment Sameh Sedki, that grants Egyptian citizenship to foreign investors who deposit either $3.5 million during a span of five years, or $5 million during a span of three years with no interest. The deposit would eventually be refunded to the foreign investor in Egyptian pounds. Middle Eastern and African investors may be interested in obtaining the Egyptian citizenship as they share a similar language, culture, and due to geographical proximity. European countries have launched similar initiatives to face their economic crises. In the United States, residency permits are offered in exchange for a $500,000 investment in a project that provides jobs for at least 10 people, or $1 million in the applicant’s own business. The ranges of efforts in the new economic zones will improve investment output and eventually lead to an expansion in direct foreign investments. These efforts will lead the country through a very tough economic reform in a stable manner. Although there are still challenges to be tackled, the country’s outlook is brighter than it has been since the 2011 revolution. Egypt is currently well positioned to compete with global investment markets.

Libya – Promising Future Ahead

This year, we are excited to sponsor the Libya Investment Summit 2017 which is scheduled to take place at Pera Palace in Istanbul, Turkey on May 9 to 11. This summit addresses several opportunities for investment in construction, engineering, hydrocarbon and banking sectors; specifically on how the concerned sectors and regulators can work together to enable innovation.

Save Representing Eldib & Co at the conference are Mr. Amr Eldib, our Managing Partner, as well as Mr. Khaled Aljazwi, Head of our Libya office. The program will include Panel Discussions, Presentations and Breakout Sessions. The event will also develop business in Libya and considering their options with the appropriate companies to provide a mutual understanding within the current situation and crisis worldwide. Mr. Eldib commented on today’s event, by describing it as “a vital step to reviving and rejuvenating the Libyan economic and legal infrastructure, which we predict is going to be a regional economic power as soon as stability returns to Libya, given Libya’s vast resources and strategic positioning in the African continent and the Mediterranean Sea.” Kindly contact libya@eldib.com or mail@eldib.com should you have any enquiries or comments related to Libya and its legal framework. Save Save Save Save Save

Egypt: Jurisdiction Update

The State Council has dispatched the new investment draft law back to the cabinet for reconsideration of its conclusions relating to some of the provisions on the bill. Article 51 of law No. 17 of 2015, states clearly that the General Authority for Investment and Free Zones (GAFI) is the only responsible party to offer available land for investment which includes representatives of the landowners in the process. The State Council added that articles 53 to 67 did not determine the entitled authority to terminate the final contract for real estate investment. The government approved the movement of tax laws, including the recent application of the Value Added Tax (VAT) Law and the Law to End Tax Disputes. In addition to drafting amendments to the Income Tax Law, in order to defer applying the tax on capital gains for three years, after the Supreme Council for Investment approved the deferment decision and added tax incentives to the Investment Law, which were approved by the cabinet. The Presidential Decree No. 89 of 2017 was issued by President Abdel Fattah Al-Sisi to establish the National Council for Payments under his chairmanship. The council will work to decrease the use of banknotes outside the banking sector, support and encourage the use of electronic payments, and develop national payment systems and their supervision frameworks to lessen the risks associated with them.

Egypt – New Amendments to Importation Law

Amendment to Importation Law   On March 7, 2016, the Arab Republic of Egypt witnessed major amendments to Law No. 121 of 1982 through the implementation of Law No. 7 of 2017. According to key amendments of article 2 of the amendments, the registration of natural persons requires:
  • Individuals to be Egyptian nationals
  • Having been engaged in business for at least two consecutive years prior to applying for registration; this can be proved with a certificate from the competent Chamber of Commerce approved by the General Union of Chambers of Commerce. The minimum volume of business in the last year, as indicated in the tax return submitted to the Tax Authority, shall not be less than EGP 2,000,000. Holders of an importation license, at the time of issuance of this law, shall be exempted from such requirement.
  • When applying for registration, the amount of capital indicated in the commercial register shall not be less than EGP 500,000
  • Holders of importation licenses, at the time of issuance of this law, shall reconcile their conditions within six months in accordance with provisions of this law and the implementing regulations to be issued within six months of the effective date of the law.
According to the key amendments of article 2, registration of companies requires:
  • Company to be registered in the commercial registry. Partnerships and limited liability companies should have been registered in the commercial registry for at least one year. The minimum volume of business in the last year, as indicated in the tax return submitted to the Tax Authority, shall not be less than EGP 5,000,000. Companies which hold import licenses shall be exempted from such requirement at the effect date of the implementing regulations of this law
  • The paid capital of the partnerships and limited liability companies shall not be less than EGP 2,000,000
  • The issued capital of the joint stock companies and partnerships limited by shares shall not be less than EGP 5,000,000. 51% of the shares of the partners in the joint stock companies, partnerships limited by shares, limited liability companies and partnerships must be owned by Egyptians. Companies which hold importation licenses, at the time of issuance of this law, shall reconcile their conditions in accordance with the provisions of this law within six months of the effective date.
  One of the many results of the latest amendments, and in order to promote foreign investment in regards to companies with importation objectives, foreign nationals now have the ability to enter into joint ventures with Egyptian companies for up to 49% equity and the newly established company will be entitled to import finished goods, as opposed to before the implementation of the new amendment.   Eldib & Co invites you to send all your queries, in regards to the amendments of the importation to mail@eldib.com.      

Increase of Patent Examination Fees in Egypt

Please be advised that the President of the Academy of the Scientific Research and Technology has issued a new Executive Decree, No. 1 of 2017, which has increased the examination fees for patents in Egypt (Attached herein with English translation). In accordance to the attached Executive Order No. 1 of 2017 and associated announcement, the cost for patent examination shall be the equivalent of USD 1,000.00 in accordance to the exchange rate at the time of the executive order`s issuance. Please be advised that the equivalent of USD 1,000.00 on 13 February, 2017 (the issuance date) is EGP 17,530.00 and this rate shall be subject to review on an annual basis. Eldib & Co will make sure to provide you with the equivalent EGP 17,530.00 in USD at the time of the examination fees` payment. Please bear in mind that the exchange rate has been fluctuating recently; for example, the equivalent of EGP 17,530.00 in USD on 13 February, 2017 was USD 1,000.00 and has rose to USD 1,094.00 as of today, 22 February, 2017. We shall keep you updated with the latest developments and kindly send your queries in this regard patents@eldib.com.

Mandatory GOEIC Registrations for Importing Products into Egypt

Egypt’s Ministry of Trade and Industry issued decree 43 for the year 2016, on January 16th, amending the rules organizing the registration of factories qualified to export listed products to Egypt. The new decree requires factories and companies, who own trademarks in Egypt, to export listed products and to register their trademarks with the General Organization for Export and Import Control (GOEIC). A Ministerial decree concerned with foreign trade; however, will be issued where they may exempt any or all registration conditions determined thereby. The decree that is based on the proposition of trade agreements and foreign trade shall come into effect two months after the date of its publication and will, in turn, cancel all previous decrees contradicting the provisions of this Decree. As a global law firm with Egyptian roots, Eldib & Co is ready to provide assistance to our clients throughout the registration process and all the related procedures. Relying on its extensive expertise across a multitude of sectors, Eldib & Co can offer comprehensive and precise advice covering corporate and commercial matters; ensuring highest standards and proficient service. Commodities to be released for trade purposes under condition of being the production of registered factories, or being imported from companies, owners of trademarks, or their distribution centers are as follows:
No. Commodity
1 Milk and dairy products (except for children milk), not exceeding 2 kg
2 Preserved and dried fruits prepared for retail sale, not exceeding 2 kg
3 Oils and greases prepared for retail sale in packs, not exceeding 5 kg
4 Sugar products
5 Chocolates and other food items that include cocoa prepared for retail sale, not exceeding 2 kg
6 Dough and foods prepared for cereals, bread products, and baked goods
7 Fruit juices prepared for retail sale in packs not exceeding 10 kg
8 Fresh/ mineral waters and soft drinks
9 Cosmetics and oral or dental care products, deodorants, bathing products and perfumes
10 Soap and detergents, prepared for retail sale
11 Table, eating, and kitchen utensils
12 Tubs, basins, wash-basins, toilet seats, toilet covers and other sanitary products
13 Sanitary paper, cosmetic paper, diapers, towels and table cloths
14 Floor and wall tiles
15 Glass items for table and kitchen use
16 Reinforcing steel
17 Household appliances (refrigerators, ACs, fans, washing machines, electric water heaters, televisions, radios, etc…)
18 Home and office furniture
19 Bicycles and motorbikes
20 Watches
21 Light sets for household use
22 Toys for children
23 Furniture, except that used for professional protection, diving and medical uses
24 Rugs, floor and wall coverings, and textile and non-textile rugs
25 Shoes
Decree 43 for the year 2016 will be enforced starting the 16th of March, 2016. Eldib & Co invites you to send all your queries, in regards to the required documents or any other questions, to mail@eldib.com or trademarks@eldib.com

Africa Rising

In recent years, Africa has faced numerous challenges, and is still facing difficult times; however, the continent still poses an investment destination. This year, the African Economic Summit took place in the Red Sea’s coastal city of Sharm El Sheikh in Egypt, between February 19th and 21st, 2016. “Africa 2016” hosted 1,200 delegates who discussed how to attract private sector opportunities and build a 26-nation free trade deal signed last year to establish a common market. Delegates, for two days, discussed pushing forward the economy of the continent that accounts for 2% of world trade, despite having an economic growth rate of more than 4%. Eldib & Co attended the grand event at Sharm El Sheikh, where they were one of a select few law firms attending from Egypt. The forum was aimed at “pushing forward trade and investment in our continent to strengthen Africa’s place in the world economy”, Egyptian President Abdel Fattah El Sisi said during his opening remarks. President Abdel Fattah El Sisi said that the conference aimed to present investment opportunities in Africa and create a direct communication channel between African businessmen and overseas investors. Promoting investment is one thing that will lead to extending Eldib & Co’s services to new areas of practice and fields. This will allow Eldib & Co to extend their services to potential investors who would like mergers or acquisitions or consultation regarding contracts from different countries within or outside the continent. “Africa 2016 forum is expected to position Egypt as a gateway for foreign investments into African markets,” Omar Ben Yedder, a member of the organizing committee, told AFP. There are high hopes that African investors lead the growth process through developing the continent’s infrastructure. “When our own people invest then other investors get convinced,” said Sindiso Ngwenya, head of COMESA. The private sector’s role will be very important in addressing energy challenges, where 645 million people in the continent do not have access to electricity. “We plan to invest 12 billion dollars in the energy sector over the next five years… so that people in Africa can have universal access to electricity,” Africa Development Bank president Akinwumi Adesina said. Africa’s economy is expected to grow 4.4 percent in 2016 and 5% in 2017 versus 3% growth expected in developed countries.

Trademarks & Patents Registrations

Eldib & Co is pleased to announce the latest expansions that have taken place. We have extended our IP services to more than 40 countries within the continent: Expansion

Algeria, Angola, Benin, Botswana, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Congo, Egypt, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Kenya, Lesotho, Liberia, Libya, Malawi, Mali, Mauritania, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia and Zimbabwe.

We shall have the pleasure of assisting you with existing and upcoming matters. Should you wish to receive our schedule of fees for a specific jurisdiction, please contact us at