The Supreme Council for Investment, headed by President Abdel Fattah Al-Sisi, held its first meeting on 2 November after announcing the first draft of the new Investment Law, in order to discuss attracting new investments. The council decided to lift taxes and offer free or discounted land in a bid to attract investors amid economic and political instability. Egypt has been courting international investors since the 25 January Revolution which drove many away. Will the country be able to attract new investment through the new law and
investment incentives? What do investors need in order to inject money in to new projects in Egypt? Aliaa Mamdouh, a former economist at CI Capital investment bank, said that Egypt’s main problem does not lie in the law, but rather in investment procedures.
She believes that the new law has very good articles regarding investment incentives in special areas in Egypt to improve economic conditions, such as in Upper Egypt and Sinai, adding that the law makes the procedures of application for new investment projects easier. However, this still needs more work, she added. Mamdouh noted that the incentives mentioned in the law are for local investors, explaining that foreign investors do not seek tax cuts or lower land prices, but rather fast procedures to rapidly complete their projects.
Mamdouh pointed out that there is an overlap between the authorities responsible for allocating lands for investments, which needs to be fixed if the government really wants to attract investments. She added that the law also does not differentiate between the role of the Ministry of Investment, the General Authority for Investment and Free Zones, and the Supreme Council for Investment.
The economist said that it is important for the government to find a suitable way to implement the new law. One of the positive aspects of the new law is that it dictates 15 days during which conflict resolution committees have to reach a conclusion.
I believe the main difference between the new and old law is the new incentives, Mamdouh said. She added that it is necessary to implement easier procedures by applying a serious one-stop shop system, explaining that if the government pursued the old way of letting investors suffer between several institutions and authorities, investors would not inject a single US
dollar into Egypt.
From another viewpoint, Eman Negm, an economist at Prime Investment Bank, said that the decisions announced by the Supreme Council for Investment are positive, adding that the participation of the president is a good sign that shows his focus on attracting investments. Negm said that the council announced that it would hold meetings with businesspersons and investors to improve the current investment climate, explaining that this is a good thing. However, she noted that the law did not give a clear picture of how to implement the one-stop shop system, partnering with the private sector, or resolving conflicts.
It is important to clarify every important article that concerns foreign investors, especially the ability to transfer their profits abroad, Negm stated.