Wednesday 19 December 2018

Egypt’s net FDI reaches $13.3bn in 2017

CAIRO, March 8, 2018

Egypt’s net foreign direct investment increased 6.5 percent to $13.3 billion in the last financial year ending June 30, 2017, up from $12.5 billion in the previous fiscal year, according to the country’s central bank.

Egypt – the third largest Arab economy after Saudi Arabia and the UAE – has enacted a new Investment Law in May 2017 that is expected to boost foreign and domestic investment and create enough jobs to absorb an estimated 700,000 new job-seekers every year, said a statement.

The new law strengthens non-tax incentives and investment protection guarantees, added new rules for state-land allocation, set new out-of-courts forums to amicably settle investor-state disputes, and authorised the General Authority for Investment and Free zones (GAFI) to act as a one-stop-shop for all investment related licensing procedures, it said.

The aim of the law is generally to attract new investments to Egypt through offering further incentives and guarantees, removing obstacles and streamlining the procedure.

The Investment Law introduces a new tax reduction system for investment in certain geographical areas as well as investment in specific sectors. Only new companies established after the issuance of the law can benefit from this tax credit system. The new investment law offers a fair and equitable treatment to both foreign and Egyptian investors. The cabinet has the authority, subject to reciprocity, to grant foreign investment, a more favourable treatment.

Invested money will not be subject to any coercive or discriminatory measures. Foreign investors will be given a residence permit throughout the term of their investment project. Investment is protected against nationalisation. Expropriation is allowed only for public interest and against fair market value compensation to be paid in advance and without delay.

The law allows again the establishment of privately-owned free zones after being banned by virtue of the 2015 amendments. Housing, tourism, information technology and industries are some of the key areas of investment in to Egypt.

The new law has also accelerated an influx of foreign direct investment (FDI) that rose to $3 billion in the first quarter of the current fiscal year (FY) 2017/18, the Central Bank of Egypt (CBE) said in January.

The International Monetary Fund (IMF) in a recent report, said ‘Egypt’s economic growth is projected to strengthen to 4.8 per cent in 2017/18 and rise further to around 6 per cent in the medium term. Improved external competitiveness, reforms of the business environment and a further recovery in tourism would help narrow the current account deficit.’

Egypt will lead a large delegation to participate at the Annual Investment Meeting (AIM) – the largest global investment platform of its kind in the world participated by dozens of ministers, secretaries, large pool of banks, financial institutions, investment promotion bodies, global institutions and individual investors, which will take place from April 9 to 11, at the Dubai World trade Centre, in Dubai, UAE.

The Central bank of Egypt (CBE) said that the total remittances from Egyptian expatriates recorded $29.1 billion during the period from November 2016 to December 2017, compared to $24.4 billion in the same period of 2015/2016.

Dawood Al Shezawi, chief executive officer of Annual Investment Meeting organising committee, said: “Egypt is one of the most important players in the Middle Eastern economy and the country offers one of the best returns on investment.”

“Egypt’s GAFI will promote the investment climate in the country through AIM and make its best presentation,” he said.

“As a country, Egypt has the potential to grow faster powered by FDI. However, the country needs to promote its economy and AIM offers the best promotional platform for investors,” he added. – TradeArabia News Service

Tags: | Egypt | FDI | 2017 |

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