CAIRO (Reuters) - Egypt’s investment ministry has finalised a much-anticipated set of regulations outlining incentives that it hopes will lure back badly needed foreign investors, Investment Minister Sahar Nasr told Reuters on Wednesday.
Egypt’s economy has been struggling since a 2011 uprising drove foreign investors and tourists away. The government is hoping a $12 billion International Monetary Fund lending program signed last year will put it on the road to recovery, together with a rebound in investment.
Investors have been keen to see the executive regulations in the new investment law, which provide details on what types of projects and investment will be eligible for tax breaks and how the investment process will be streamlined.
President Abdel Fattah al-Sisi on June 1 ratified the long-delayed investment law, which provides a raft of incentives like tax breaks and rebates while reducing red tape for new projects.
Nasr said the related regulations were submitted to the cabinet on Wednesday for the prime minister’s approval, which is required within 90 days of the initial law’s ratification.
She sees the investor-friendly law along with the IMF program as boosting foreign direct investment for the 2017-18 fiscal year starting in July past an initial $10 billion target.
“Within the last 4 months (ending in May) we already achieved $6.8 billion and based on that I am projecting that we go beyond the initial target,” Nasr said from her downtown office.
The executive regulations are likely to take an expansive view on what qualifies as new investment, opening up tax breaks to a broad range of investors, not just those establishing entirely new projects, said Nasr.
“The general consensus is that if it is really a new production line, that entails new land, new business, new recruitment and staffing. The majority are labeling that as new investment and it will be eligible,” Nasr said.
The initial investment law stipulates investors get back half of what they pay to acquire land for industrial projects if production begins within two years, and provides a 50 percent tax discount on investments made in underdeveloped areas.
The executive regulations will for the first time stipulate a specific number of days that the government will have to approve new licenses and clearances, said Nasr, reducing the waiting time for starting new businesses.
By the end of 2017, Egypt will also launch an electronic investor map, which will provide detailed information on what incentives and resources are available to investors based on what part of the country they plan to establish their investment project in, said Nasr.
“(Investors) want to look at a comprehensive map where they see different opportunities and can compare if it’s worth it to invest in Upper Egypt, what are the incentives provided and what is the proximity to the nearest port,” she said.
Reporting by Eric Knecht; Editing by Patrick Markey and Hugh Lawson