Egypt has a mixed economic system in which the economy includes a variety of private freedom, combined with centralized economic planning and government regulation.
Egypt is a member of the African Union (AU), African Economic Community (AEC), Council of Arab Economic Unity (CAEU) and Common Market for Eastern and Southern Africa (COMESA).
Egypt is ranked 109thh out of 185 economies in Doing Business 2013, Egypt’s economic freedom score is 57.9, making its economy the 100th freest in the 2012 Index.
Egypt has devised several schemes intended to attract foreign direct investment into special economic and trade zones.
The General Authority for Investment (GAFI)
The GAFI implements Egypt’s policies and procedures to facilitate doing business, including maintaining Egypt’s one-stop shop for investors. GAFI’s one-stop shop, which aspires to process approvals for new investments within 72 hours, brings together several of the major government ministries needed to establish a new investment.
Investment Incentives Law 8 of 1997
This was designed to encourage domestic and foreign investment in targeted economic sectors and to promote decentralization of industry from the crowded Nile Valley area. The law allows 100 percent foreign ownership of investment projects and guarantees the right to remit income earned in Egypt and to repatriate capital.
Law 94 of 2005 amended the Investment Incentives Law and made companies incorporated under the Investment Incentives Law subject to relatively simpler incorporation. It also granted companies established under the Companies Law or the Commercial Law certain incentives under the Investment Incentives Law, including protection from nationalization, imposition of obligatory pricing and cancellation or suspension of licenses to use immovable property. It also granted companies the right to own real estate required for their activities and the right to import raw materials, machinery, spare parts and transportation methods without being required to register at the Importers’ Register.
Companies Law 159 of 1981
This applies to domestic and foreign investment in sectors not covered by the Investment Incentives Law, whether shareholder, joint stock, or limited liability companies, representative offices, or branch offices. The law permits automatic company registration upon presentation of an application to GAFI, with some exceptions. It also removes a previous legal requirement that at least 49 percent of shareholders be Egyptian; allows 100 percent foreign representation on the board of directors; and strengthens accounting standards.
Public Enterprise Law 203 of 1991
This permits sales of state enterprises to foreign entities. Egypt began a privatization program under the Public Enterprise Law for the sale of several hundred wholly or partially state-owned enterprises and all public shares of at least 660 joint venture companies
Tenders Law 89 of 1998
This requires the government to consider both price and best value in awarding contracts and to issue an explanation for refusal of a bid. However, the law contains preferences for Egyptian domestic contractors, who are accorded priority if their bids do not exceed the lowest foreign bid by more than 15 percent.
Capital Markets Law 95 of 1992
The Capital Markets law and its amendments and regulations govern Egypt’s capital markets. Foreign investors can buy shares on the Egyptian Stock Exchange on the same basis as local investors. Brokerage firms have capital requirements of LE 5 million (US$862,000), and same-day trading on the Egyptian stock market is allowed. Law 123 of 2008 amended the Capital Markets Law to allow local and foreign institutions to issue bonds at a par value of LE 0.10 (US$0.02).
Decree No. 719 for 2007 by the Ministry of Industry and Foreign Trade and Ministry of Finance
This provides incentives for industrial projects in the governorates of Upper Egypt (Upper Egypt refers to governorates in southern Egypt). The decree provides an incentive of 15,000 Egyptian Pounds (US$2,586) for each job opportunity created by the project, on the condition that the investment costs of the project exceed LE 15 million (US$2.6 million). The decree can be implemented on both new and on-going projects.
Land/Real Estate Law 15 of 1963
This law explicitly prohibits foreign individual or corporate ownership of agricultural land (defined as traditional agricultural land in the Nile Valley, Delta and Oases).
Prime Ministerial Decree No. 548 for 2005
This law removed restrictions on foreign property ownership in a number of tourist and new urban areas, namely the Red Sea coast, including of Hurghada, the Mediterranean beach resorts of Sidi Abdel-Rahman and Ras Al-Hekma, also in the Matrouh Governorate. Foreign owners are still limited to a maximum of two residences in Egypt. Companies/citizens of other Arab countries have customarily received national treatment in this area.
Insurance Law 156 of 1998
This Law removes a 49 percent ceiling on foreign ownership of insurance companies, allows privatization of state-owned insurance companies, and abolishes a ban on foreign nationals serving as corporate officers.
Electricity Law 18 of 1998
This Law allows the government to sell minority shares of electricity distribution companies to private shareholders, both domestic and foreign.
Maritime Law 1 of 1998
This Law permits private companies, including foreign investors, to conduct most maritime transport activities, including loading, supplying, and ship repair.
Commercial Law 17 of 1999
This Law has more than 700 articles covering general commerce, commercial contracts, banking transactions, commercial paper, and bankruptcy.
Central Depository Law 93 of 2000
This Law reduces risks associated with trading securities, enhances market liquidity, and tries to streamline the securities exchange process by standardizing registration, clearance and settlement procedures.
Investment Climate in Egypt has been summarized to include the following
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