Egypt hopes to lure investors back
The Egyptian government is considering a new law to help ease the obstacles investors face and attract future investments.
CAIRO — New proposed legislation aims to make Egypt attractive for investments by eradicating bureaucracy that drains investors’ time and energy while they try to obtain the licenses needed to start their projects. The “investment window” system will ensure this, as it creates a single window through which the investor finalizes all the required conditions to get a license, without having to go to several parties and ministries, as was the case before. An investment committee will represent the investor in all matters and will adopt a mechanism to resolve disputes when they arise. The decision of this committee, as the body in charge of settling conflicts in investment contracts, will be final.
The new law is expected to include several procedures in line with technological progress, setting up a network that links the investment committee, the central bank and other banks. This network will facilitate the credit-query process and the receipt of letters of guarantee in order to save time and eliminate obstacles facing investors in this regard. The Egyptian government is planning to attract direct foreign investment ranging between $8 billion and $10 billion for the 2014-2015 fiscal year, mainly in the oil sector, power stations and the Suez Canal.
Ali Lutfi, the former prime minister and now economics professor at Ain Shams University, told Al-Monitor, “The new law was introduced as the result of obstacles and difficulties that investors have been facing with the current law, which requires investors to go to different ministries and committees that might reach 78 destinations in order to obtain the necessary licenses to launch their projects. After the investment committee emerged, its employees became capable of going to the different ministries, but without having the decision-making power. The investment-window system was created to allow the investment committee to have delegates who make decisions at the ministries.”
Lutfi listed many disadvantages with the old law, among them that it allowed a third party to file a lawsuit to return the ownership of a certain previously privatized company, after an investor bought it and paid large sums of money to restructure and develop it, to the state and win.
