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The answers of the most asked questions about investment laws

Mahmoud Mostafa, Executive Director of MM Law firm in conjunction with Ola Mostafa Abdullah, MM Law Firm’s Senior Legal Researcher, held an explanatory session about the new investment law, its implications, and the different types of companies under the Egyptian Law with a special focus on the limited liability company type.

Concerning the new investment law, Abdullah expressed that it offers many favorable incentives to entice foreign direct investment (FDI), thus, improving the investment climate in Egypt. She elaborated that the new investment law offers three types of incentives investors: general, special, and additional incentives. Some of the highlighted general incentives  were  to provide just and fair treatment to all investors, ensure equal treatment between the foreign investors and local investors, expedite the initial stage of doing investment,  grant residence to foreign investors during the project’s duration, guarantee against expropriation of the investment, and ease of transferring profits oversees and liquidation of the investment.

Under the special incentives, Abdullah highlighted that the 50 Percent and the 30 Percent off the investment cost for zones A and B will undoubtedly boost FDI. These reductions will be awarded in the form of tax reductions over a maximum period of seven years and will be capped at 80 percent of the value of the paid in capital. For the additional incentives, Abdullah stressed on some of the granted benefits under the new law; this includes refund of 50 percent of the land value if investment starts within two years from land delivery date as well as jointly sharing the cost of training between the government and the investor.

With regards to the types of companies under the Egyptian Law, Mostafa explained that the limited liability company type is a favorable for investors as the minimum of initial is 100 pounds with minimum of two shareholders and maximum of 50 shareholders.

Mostafa also pointed out to the other two types of companies which are commandite company limited by shares and joint stock companies.

The Egyptian Parliament passed the new investment law in May 2017 and President Abdel Fattah al-Sisi ratified it on June; however, its executive regulations are still pending final approval.

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