New Regulations for Investment

28 September, 2015

New Regulations for Investment, Guarantee and Incentive Laws Egypt’s Prime Minister has recently issued a decree, no. 1820 of 2015, modifying Investment, Guarantees and Incentive laws. Said modifications have been introduced to ease foreign investment and to increase competitiveness in the Egyptian investment climate. One of the many changes that took place is that the Financial Control Authority now have the right to issue a decision to regulate the rules, conditions and procedures of any factoring activities and Monetary Supply with the aim to accommodate foreign and local investment. Furthermore, it is now possible to convert your company’s capital from EGP to any free exchangeable currency through specific procedures and applications. On the same basis, regulations and standards comparing applicants have been added and the availability of the required permits shall be granted based on the the company’s total investment, background experience and the kind of technology used. It is also to be noted that certain articles have been amended to support the aforementioned motive of these modifications. According to Article 31, appeals challenging the decree of tax exemption cancelations must be submitted within 30 days of the decree’s issuance. While Article 35 now states that unified custom class on machines, equipment, devices and production lines are now 2% rather than 5%. Another significant amendment occurred in Article 40; transient goods are now exempt from fees when imported into the free zones. This decree also took the opportunity to add new chapters of legislation and which further support the investment culture that Egypt is aiming to implement in the near future. A new chapter on Investment Policy was issued and it discusses the methods of application through the free zones, as well as the licenses, rules and regulations required for establishing in said zones. In addition, a new chapter on Land and Real Estate regulations indicates that the administrative authorities are now obliged to submit detailed maps to the general authority in order to ease related investments. These maps must identify the lands’ estimated value as well as which lands are up to the Republic’s standards in terms of fulfilling investment criteria. Finally, an alternative method to challenge the General Administrative Authority for Free zones and Investments’ decisions has been imposed. Formerly, the authority used to be the litigant and the judge. Now, with the presence of a neutral committee, GAFI’s decisions are now regarded as comprehensive decisions.
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