[EGYPT] Enhancing Investment Environment: Amendments to Executive Regulations of Investment Law

Introduction:

In an effort to further streamline investment procedures and foster economic growth, the Egyptian government has recently enacted Decree No. 1203 of 2024, amending certain provisions of the executive regulations of the Investment Law issued by Prime Minister’s Decree No. 2310 of 2017. These amendments aim to create a more conducive environment for investment by introducing key changes to facilitate project establishment, operation, and management.

The significant modifications brought about by the following amendments:

1-??? Enhanced Criteria for Priority Investment Zones:

One of the notable changes is the refinement of criteria for identifying priority investment zones. Sector (A), which includes strategic areas such as The Suez Canal Economic Zone, the Golden Triangle Economic Zone, the New Administrative Capital Zone, the Ras El Hekma Zone, and other areas designated by the Council of Ministers, will now be determined based on several crucial factors. These include low economic development levels, high informal sector presence, inadequate employment opportunities, and specific social indicators like population density, illiteracy rates, and access to healthcare.

2-??? Approval Process for Strategic Projects:

This amendment introduces a single approval process for strategic projects. For the new established companies, regardless of their legal form, to establish new investment projects or strategic or national projects that contribute to achieving development in the fields and according to the criteria determined by a decision of the Council of Ministers. The Council of Ministers, or partnership projects between the private sector and the state, the public sector, or the public business sector in public utility and infrastructure activities, new and renewable energy, roads and transportation, or ports that mentioned in the Investment Law may now be granted a single approval encompassing all necessary permits and real estate allocations for project implementation. This single approval, subject to the Council of Ministers' decision, aims to expedite the setup and operation of strategic projects, thereby encouraging investment in vital sectors.

3-??? Comprehensive Application Requirements:

The application process for obtaining a single approval has been refined. Companies are now required to submit a comprehensive set of documents and declarations, including evidence of financial solvency, initial feasibility studies, project timetables, and commitments to infrastructure provision and regulatory compliance. This ensures that only financially capable and committed entities proceed with project implementation.

4-??? Establishment of Compliance Committees:

To ensure adherence to regulatory requirements and project timelines, specialized committees will be formed within the Authority. These committees, comprising representatives from competent authorities, will oversee companies' compliance with project-related regulations and commitments. In case of violations, companies will be duly notified, provided with an opportunity to rectify the issues, and subjected to penalties as deemed appropriate by the committee.

5-??? Expansion of Free Zone Service Projects:

Another significant amendment pertains to the expansion of private free zone service projects. These projects, established through partnership or investment contracts with state/governmental entities, may now include sub-projects exclusively focusing on light industrial activities within the private service free zone. The minimum area requirement for the main project has been set at one million square meters, subject to specific conditions outlined in the contracts and regulations. The management of these projects will be overseen by the Authority in coordination with the Ministry of Finance, ensuring their alignment with national development objectives.

In conclusion, Decree No. 1203 of 2024 signifies the Egyptian government's commitment to fostering a dynamic and investor-friendly business environment. By introducing these amendments to the executive regulations of the Investment Law, the government aims to attract more domestic and foreign investment, stimulate economic growth, and create employment opportunities. These changes underscore Egypt's dedication to ongoing economic reform and sustainable development.