Egypt changes laws to woo foreign investors

Egypt’s cabinet has approved a long-awaited investment law draft as the government tries to remove obstacles to foreign investment. The law, which guarantees investors protection from nationalisation and specifies a unified mechanism for settling investment disputes, has been closely monitored by international investors who have been discouraged by political turmoil and violence which has weakened the economy in the past, according to credit insurer, Coface.

In the case of any infraction, the law also imposes punishment on the companies themselves and the guilty employees. Previously, senior officials in large companies could be prosecuted for legal violations by staff members. Egypt has also reduced corporate taxes to 22.5% from as high as 30%. The law now also allows for incentives to encourage the funding of labour-intensive projects.

By implementing this law, the government has indicated its willingness to create a one-stop shop for foreign companies that are discouraged by bureaucracy, according to Coface. “The law will allow investors to interact with one office instead of dealing with dozens of official entities, which is currently the situation.”