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QIZ a terrific opportunity for Egypt, we hope to see more activity over coming years: minister counsellor of US embassy - Daily News Egypt

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QIZ a terrific opportunity for Egypt, we hope to see more activity over coming years: minister counsellor of US embassy

Suez Canal Economic Zone as an interesting investment opportunity for U.S. companies that can leverage the logistical benefits from being close to the canal and the sea ports.

The minister counsellor of the US embassy, James Boughner, highlighted in an interview with Daily News Egypt the opportunities of cooperation between Egypt and USA during the upcoming period.

Has the embassy received requests from some US companies to invest in Egypt? What is the total number of US companies operating in Egypt up until this year? Have some American companies expressed their interest to invest in the Suez Canal Economic Zone? Are there intentions to set up US projects in the private free zones?

Several US companies are aiming to invest or reinvest in Egypt this year and the next. Some of these investments in the oil and gas sector or the agricultural sector will take place geographically close to the projects they support. Others will take place closer to the greater-Cairo area.

We see the Suez Canal Economic Zone as an interesting investment opportunity for US companies that can leverage the logistical benefits from being close to the canal and sea ports. We’ll be watching this closely.

There are over 1,200 US firms operating in Egypt, ranging from large petroleum companies, like Apache Corporation, to small service companies. Total US direct investments in Egypt is over $22bn.

What incentives do US companies need to invest in Egypt?

US companies typically look at a range of parameters, such as those measured in the World Bank’s Ease of Doing Business index. A stable regulatory environment, for example, is one of the keys. We anticipate that new legislations, such as the Investment Law, will make the environment predictable and easy to navigate.

Will Egypt receive US delegations next year?

We expect some visitors later this year and next year.

How much was the volume of trade exchange between Egypt and the United States from the beginning of this year until the end of August? And what are your expectations for trade exchange between the two countries by the end of the year?

A two-way trade between the US and Egypt through the end of July reached $3.4bn. This is a 15 percent increase over the same time period last year. It appears on pace to surpass last year’s total of $5bn, and we’re optimistic that the growth will continue.

What are the mechanisms of increasing trade exchange between Egypt and America?

On the US export side, we have companies with excellent products and services. Many of them have ongoing sales in Egypt while others are testing the waters and hoping to make some deals.

On the Egyptian export side, we have a great tool in the Qualifying Industrial Zone (QIZ) programme. It is a terrific opportunity for Egypt and we hope to see more activity in it over the coming years. It offers duty-free treatment for all exports to the US, across all sectors, for qualifying participants.

What is the latest on negotiations on the signing of a bilateral free trade agreement with the United States?

Currently, the embassy, in partnership with the US Trade Representative’s Office, is coordinating with the Egyptian Ministry of Trade and Industry to hold a new round of talks under our bilateral Trade and Investment Framework Agreement (TIFA). We hope the next round of TIFA talks will take place within the next few months.

What are the most important sectors in which American companies are interested to invest in Egypt during the coming period?

We see interest in oil and gas, agricultural processing, transportation, food processing, data centres, and others. We were very pleased to participate recently in the inauguration of Uber’s new Center of Excellence here in Egypt.

Have you noticed interest by US investors to partner with local companies? Or interest in mergers and acquisitions?

Many US companies choose to work with an Egyptian partner. Others invest on their own or purchase equity stakes in existing companies. It’s a mix.

How do you assess the tax system in Egypt, and is it attractive to foreign investment?

With many tax breaks available in the Canal Zone, within the Free Zones, and under the new investment law, we agree Egypt deserves a look from investors.

What is your assessment of Egypt’s economic legislative system? And how do you see the investment climate in Egypt after the adoption of the executive regulations for both the Industrial Licensing Law and the Investment Law?

Both the Industrial Licensing Law and the Investment Law seem to be positives steps forward for the investment climate. Reducing licensing wait times, streamlining export and import processing, and other provisions in these laws are very useful.

Does the United States intend to review the Qualified Industrial Zones (QIZ) agreement to maximise its scale and include new industrial sectors, especially given the limited Egyptian exports to the US market through this agreement?

There is no limitation on sectors that can be included in the QIZ. All sectors are eligible and welcome. The current companies utilising the QIZ benefits are textile manufacturers and food processing plants, but other industries are welcomed and encouraged to join.

We engage regularly with our Egyptian and Israeli partners to review ongoing business and look at new opportunities in the QIZ. In our last trilateral meeting of the QIZ, we focused on encouraging technology companies to invest in the QIZ.

During the visit of President Abdul Fattah al-Sisi to the United States in September, did some American companies express their interest to invest in Egypt or increase bilateral cooperation?

Our understanding is that President Abdel Fattah Al-Sisi’s meetings with several US companies during his last visit to the US were very positive. Several of these companies are looking to do more in Egypt.

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