LegislationGoverning The Investment Climate
Saturday، 24 September 2022 - 10:59 PM
The investment climate in Egypt is one of the most important gains witnessed by the economic reform period since the start of the implementation until now due to the importance of this climate to attract investments and encourage business owners to pump new investments, raise employment rates and provide job opportunities, thus achieving the targeted growth rates, and the legislative amendments came At the forefront of efforts to create the appropriate investment environment, and to open the door for the Egyptian and foreign private sector to contribute to increasing employment rates, growth, and providing job opportunities for young people.
Since the start of the economic reform program, the Egyptian state has been keen to provide a legislative environment that supports investment through a comprehensive reform of all laws affecting the investment climate and business environment in Egypt. It seeks to provide incentives, achieve governance, facilitate cross-border trade, provide guarantees that protect against arbitrary decisions, and come up with regulatory tools and procedures to facilitate the investment process and start practicing the activity, in addition to a set of other complementary laws to this law related to all economic fields and sectors.
Legislative reform in Egypt has also witnessed amendments to the law on joint stock companies, partnerships limited by shares, limited liability companies, and one-person companies, which are classified as the largest since the inception of this law in 1981, and aim to strengthen corporate governance and related disclosures, and improve Egypt's position in relevant international reports. Linking to the investment climate, such as the Global Competitiveness Report issued by the World Economic Forum, which required amendments to the current corporate law to keep pace with developments in the investment process globally. The amendments activated the working mechanisms of single-person companies and limited liability companies, regulating the issuance of companies' shares and registering them in the central depository, with the addition of the permissibility of using preferred issuance shares - even if this was not stipulated in the company's statute - while setting the controls for their issuance to protect the rest of the shareholders.
The adoption of the Restructuring and Prevention of Bankruptcy Composition Law during 2018 was enough to bring about a radical change in the mental image taken from the investment climate in Egypt for all those who wish to secure safe exit from the market in case of default. An easy and uncomplicated mechanism for investors to exit the market, in addition to sparing defaulting investors the penalty of imprisonment, which contributes to attracting more investments.
1 ) Investment Law No. 72 of 2017 and its Executive Regulations:
Investment Law No. 72 of 2017 sets out the principles for promoting and encouraging investment in Egypt, taking into account the development goals. The law guarantees equitable treatment of investors regardless of the project size or nationality, promotes entrepreneurship, develops small and medium enterprises, ensures fair competition, and applies corporate governance, as well as simplifying investment procedures to reduce the risks associated with them; in addition to other complementary laws, foremost of which is the enactment of Investment Law.
Investors can apply for services and pay investment-related fees through the internet, in addition to setting schedules for investment services, and government entities shall respond to investors during that period. The one-stop-shop has been activated for the first time after the successful implementation of the administrative reform that allows representatives of various government entities in Investment Service Center “ISC" to decide on the submitted documents and applications. The investor does not need to obtain multiple approvals from different government entities, which saves time and cost and facilitates the way to do business and investment in Egypt.
The Executive Regulations of Investment Law No. 72 of 2017 were issued by Prime Minister Decree No. 2310 of 2017 on October 28, 2017. Such Executive Regulations consist of 133 Articles divided into 5 Parts: General Provisions; Facilitations and Incentives Relating to Investor; Investor Service Center; Investment, Technological and Free Zones; and Regulation of Investment Environment.
The Executive Regulations of Investment Law stipulate the following:
All investments established within the Arab Republic of Egypt shall be accorded fair and equitable treatment.
The State shall guarantee that the foreign investor receives the same treatment accorded to the national investor. In application of the principle of reciprocity, foreign investors may, as an exception subject to a resolution of the Council of Ministers, receive a preferential treatment.
Invested Assets may neither be subject to any arbitrary measures nor discriminatory decisions.
The State shall grant non-Egyptian Investors residence in the Arab Republic of Egypt throughout the term of the Investment Project, without prejudice to the provisions of the laws regulating this respect.
The State shall honor and enforce the contracts entered into thereby. Investment Project, set up on a basis of fraud, fraudulent misrepresentation or corruption, may not enjoy the protection, guarantees, privileges or exemptions stipulated under the provisions of this Law; proof of the foregoing shall be produced by an irrevocable judgment – delivered by the judicial authority of competent jurisdiction – or by an arbitration award.
All decisions on Investment Project affairs shall be reasoned decisions. Service of notice of such decisions on the parties concerned shall be carried out.
Investment Projects may not be nationalized.
Companies incorporated in accordance with the Egyptian Investment shall be granted a set of incentives by virtue of said Law; in addition, it prohibits nationalization, confiscation and freezing of assets, and government interference in the pricing of companies' products. The abovementioned law identifies a set of new incentives as well as implementing existing incentives, and it provides new ways to resolve investment disputes, and achieves procedural reforms that contribute to eliminating bureaucracy and simplifying procedures for doing business in order to enhance transparency and ensure equal opportunities.
The Most Prominent Advantages of Investment Law No. 72 of 2017:
Obtaining Finance: A strong foundation has been laid for the growth and development of the SME sector by promoting financial inclusion.
Ease of Business Commencement: Multiple options are provided to investors to facilitate registration procedures and issuance of licensing approvals. The recent administrative reform simplifies investment procedures and reduces the time required to issue investment licenses, purchase land, and obtain utility services.
Activation of the One-Stop-Shop Framework at GAFI: The one-stop-shop framework is effectively implemented in the new Investment Law through decentralization, in addition to the presence of a number of representatives of relevant entities in ISC, and allowing them to sign investors' documents.
Approval Offices all over the Republic: For the first time, third parties from the private sector will assist the government and will assess investor applications and documents for obtaining licensing approvals through these independent approval offices.
Investor Protection: Mechanisms have been developed to ensure that the investor's property is not nationalized, as well as the non-implementation of arbitrary or discriminatory decisions, or the abuse of power, whereby projects may not be nationalized, placed under guardianship, or frozen, except on a basis of a court ruling. Investment Law also activates the guarantees for investor protection through a number of committees, such as the Ministerial Committee for Investment Disputes Resolution" "MCIDR", the Ministerial Committee for Investment Contracts Disputes Settlement" "MCICDS", and the Grievance Committee.
Enhancement of Competitiveness: Competitiveness has been enhanced, monopoly has been eliminated, governance and transparency have been encouraged, and most importantly, clear timelines for approval processes have been determined; Therefore, the Egyptian Investment Law is a revolutionary step towards getting rid of red tape and reducing bureaucracy.
Governance: The rules of good governance of GAFI have been clarified, and the roles and powers of the Supreme Council of Investment “SCI" have been defined, which is responsible for setting investment policies and strategies in accordance with Egypt's social and economic goals.
General, Special and Additional Incentives: Investment Law provides investment incentives in three different forms, including general, special, and additional incentives as follows:
All Investment Projects governed by the provisions of Investment Law shall enjoy the general incentives, an exception being made for Investment Projects set up under the Free Zone Framework, which are:
Articles of incorporation and association of companies and establishments, along with credit facility and pledge contracts pertaining to the business thereof, shall be exempt from stamp duty as well as notarization and publicity fees for a period of five (5) years from the date on which such articles and contracts are entered in the Commercial Register.
Contracts of registration of lands required for formation of companies and establishments shall be exempt from the aforementioned duty and fees.
The provisions, on the collection of a uniform customs duty at two percent (2%) of the value of all imported machinery, equipment and devices required for formation of companies or establishments, as stipulated in Article (4) of Law on the Regulation of Customs Exemptions enacted by Law No. 186 of 1986, shall apply to the companies and the establishments governed by the provisions of Investment Law. This uniform customs duty shall apply to all machinery, equipment and devices imported by companies and establishments, operating on public utility projects, and required for the formation or completion thereof.
Without prejudice to the provisions of temporary release stipulated in the Customs Law enacted by Law No. 66 of 1963, Investment Projects of industrial nature, governed by the provisions of Investment Law, may import casts, molds and other similar production requirements, subject to no customs fees; however, such imported items shall be for the purpose of temporary use in manufacturing the products of said Investment Projects, and shall be repatriated thereafter. Said temporary release and repatriation shall be affected by virtue of the arrival documents, provided the documents of admission and reshipment are entered in ad hoc registers at GAFI designated for that purpose; this shall be in coordination with the Ministry of Finance.
Projects set up, after entry into force of Investment Law, in accordance with the investment map shall be granted an investment incentive, in the form of a discount off the taxable net profits, as follows:
1 . A fifty-percent (50%) discount off the investment costs of Sector (A):
This sector comprises the geographic areas designated as most in need of development, based on the investment map, the data and statistics issued by the Central Agency for Public Mobilization and Statistics (“CAPMS") and the distribution of investment activities in such areas as specified by the Executive Regulations of Investment Law.
2 . A thirty-percent (30%) discount off the investment costs of Sector (B):
This sector covers the remaining geographic areas of the Republic, as per the distribution of investment activities, in respect of the following projects:
Labor-intensive projects, subject to the controls prescribed in the Executive Regulations of Investment Law;
Projects depending on or producing new and renewable energy;
National and strategic projects to be listed under a resolution of the SCI;
Tourism projects to be listed under a resolution of the SCI;
Electricity generation and distribution projects to be listed under a decree of Prime Minister, based on a joint proposal of Appropriate Minister, the minister concerned with electricity affairs and Minister of Finance;
Projects exporting products thereof outside the geographic territory of the Arab Republic of Egypt;
Automotive manufacturing and the supplying industries thereof;
Wood, furniture, printing, packaging and chemical industries;
Antibiotics, tumor drugs and cosmetics industries;
Food, agricultural crops and agricultural waste recycling industries; and
Engineering, metallurgical, textile and leather industries.
Pursuant to the provisions of the Income Tax Law enacted by Law No. 91 of 2005, an investment incentive may not, in all cases, exceed eighty percent (80%) of the capital paid up until the date on which engagement in the activity starts. The discount period may not exceed seven (7) years from the date on which engagement in the activity starts.
Permission to establish special customs ports of entry for Investment Project importations or exportations, in agreement with Minister of Finance;
Upon Investment Project becoming operational, payment, whether in whole or in part, by the State for the expenses incurred by Investor in course of providing utilities to the Refund at fifty percent (50%) of the value of the land allocated for the industrial projects, should production start within two (2) years from the date on which the land was handed over;
Allocation of lands free of charge to some strategic activities in accordance with the legally prescribed rules in this respect.
premises of Investment Project;
Payment by the State for a part of the expenses incurred in course of providing personnel technical training
2 ) Law on Joint-stock Companies, Partnerships Limited by Shares, Limited Liability Companies, and Single Member Companies enacted by Law No. 159 of 1981:
The Companies Law No. 159 of 1981 governs the controls of the formation and incorporation procedures of Corporations (joint-stock companies – Partnerships Limited by Shares – Limited Liability Companies). In addition, it regulates capital formation and distribution, the profits and losses of these companies, their management, the liabilities of those who undertake management, the method of management, the legal liabilities arising from incorporation and management, the manner of decision- making, and the elapse and merger of Corporations. The Law did not stipulate specific commercial activities, though all commercial activities may be practiced under the umbrella of this Law.
The law stipulated many advantages for companies, as follows:
Protection: provide protection for shareholders through measures that encourage and increase transparency, such as improving voting procedures and other decisions taken at BoD meetings and general meetings.
Ease commencement of operation: improving the registration and incorporation processes to bring them into line with international standards, and diversifying the options for establishing and incorporating companies (to include sole proprietorships, for example).
Governance: Inclusion of additional transparency and disclosure standards that companies are committed to.
Obtaining finance: diversification of financial options for companies and approve some instruments such as preference shares, financing instruments, and convertible bonds.
Transparency: Allow cumulative voting and prevent abuse of power such as trading activities using confidential information within companies.
3 ) Economic Zones Law:
In May 2002, the Egyptian Parliament approved the Special Economic Zones Law No. 83 of 2002, which provides for the establishment of special zones for industrial, agricultural and service activities that are primarily concerned with export markets. The law allows companies operating in these zones to import capital equipment, raw materials, and goods The intermediary is exempt from customs duties, and companies established in the new areas are also subject to lower corporate taxes, exemption from sales taxes and excise taxes, and these companies will operate under more flexible labor procedures, and they enjoy another set of incentives. The executive regulations of the law were issued in September 2002, and one special economic zone is currently operating in the northwest region of the Gulf of Suez, and it is managed by the General Authority for the Special Economic Zone in the northwest of the Gulf of Suez .
Financial Laws (1).jpg
1 ) Laws regulating procurements concluded by public entities:
Law No. 182 of 2018 was issued on the regulation of public procurement by public entities, which repeals Law No. 89 of 1998 on the Regulation of Tenders and Auctions that governed the work of the government for 19 years. A comparison was made between the new and old laws to spot the fundamental differences that distinguish the new procurement law, as it includes new modalities for procurement, sale, rent operations, allowing renting movables such as vehicles or buses to transport employees and rent same from specialized companies, including maintenance, the provision of spare parts, and the provision of drivers, in contrast to the old law where the leasing entity had to provide the maintenance, drivers, and spare parts, and it allowed only the lease of properties.
The law governs all entities included in the State's general budget, units of the State's administrative apparatus, encompassing units that have a special budget, local administration units, service and economic authorities, and the affiliated units of a special nature and special funds, with the exception of social welfare funds established therein, which mainly depend for their financing on financial contributions from their members. In addition, the Law regulates procurements made through electronic.
purchase via the Internet, keeping pace with the requirements of the modern era. Moreover, it provided an opportunity for medium and small enterprises to deal with the State's administrative apparatus, by making many facilitations, the most important of which is exempting companies from temporary insurance to encourage investment and in line with the sustainable development system that aims to encourage medium and small enterprises. The new law also exempted small companies from submitting track record putting into consideration their growth stage, and this helps reduce the chances of large companies monopolizing projects, and also contributes to eliminating corruption.
2 ) Unified Public Finance No. 6 of 2022:
The Law aims to integrate the state budget law and the government accounting law into a consolidated law that reflects the philosophy of financial performance in the Egyptian economic system, taking into account modern mechanization systems, and putting the programs and performance budget into use, a move that aims to raise the efficiency and effectiveness of public spending by linking the allocations to the desired results.
In addition, the Law aims at achieving the highest levels of transparency and disclosure in the preparation, implementation, and control phases that are indicated in the Parts of the budget, committing to same as a basic component in building the whole phases of the financial policy that include preparation, implementation, and control, and obliging the administrative entities with it. Nevertheless, the law achieves levels of flexibility in budget execution and maintaining financial allocations by reusing them the following years in cases were conditions prevent it from being spent in the year of accreditation, in accordance with a governing and regulating terms and conditions.
3 ) Customs Law No. 207 of 2020:
The new Customs Law enacted by Law No. 207 of 2020 came to address the negative sides encountered during the application of the old law, and to keep pace with the many transformations that society witnessed during that period, especially the fundamental changes in the Egyptian economic system towards the transition to a free system. Such system is governed by the principles of market, supply and demand, liberalizing international trade, opening markets for Egyptian exports, and cooperating in the economic field with other countries.
The new customs law contributes to simplifying procedures to enhance governance and facilitate issues to the business community, facilitate the movement of internal and external trade in achieving strategic directions of Egypt's Vision 2030, improve Egypt's position on international benchmarking indicators in the areas of facilitating international trade, encouraging investment, and doing business, in addition to encourage national economic projects, facilitate international trade, and approve electronic transactions instead of paper to simplify the procedures and reduce the time of customs release.
The new customs system includes the introduction of a risk management system and the development of an electronic system to track information on goods before they are shipped from the port of export to the Egyptian ports. Such system leads to the release of goods without detection or inspection through the green path in accordance with the governing controls in order to simplify procedures and speed up customs release. Moreover, the new customs law has many advantages such as installments for customs tax, and speedy customs release with subsequent review, which leads to reducing the release time and lowering the prices of goods. The new law accepts documents electronically, and electronic signature along with tough penalties for violators.
4 ) Income Tax Law No. 91 of 2005:
Income Tax Law repeals the income taxes law enacted by Law No. 157 of 1981, provided that the Challenge Committees formed in accordance with the provisions of the aforementioned income taxes law shall resume its work until December 31, 2005 to consider tax disputes related to the years until the end of 2004, after which disputes that have not been resolved will be referred to the committees formed in accordance with the provisions of the new law, as well the exemptions for which periods are stipulated in the aforementioned law shall remain valid for the persons for whom the periods of exemption began before the effective date of the new law, until these periods lapse.
Each person shall be exempted from paying all amounts of tax due on his/her income and all amounts of the General Sales Tax for the tax periods prior to the date of enforcement of this law, and the fees related to those taxes in terms of delays, fines, additional tax, etc., subject to the following two conditions:
The person must not have been previously registered or submitted a Tax Declaration or subjected to any form of tax audit by the Egyptian Tax Authority.
The Taxpayer must submit his/her tax return on his/her income for the last tax period, including all relevant data, and apply for registration with the Egyptian Tax Authority upon reaching the tax registration threshold, before the lapse of one year from the date of enforcement of this law, and the exemption is forfeited if the taxpayer does not regularly submit his/her Tax Declaration on the income for the following three tax periods.
5 ) Value Added Tax Law:
Egypt began implementing value-added tax laws in 2016. It is a tax that is imposed based on the increase in the value of services or products at all stages of production or distribution. The tax amount is determined by the state as a percentage of the final market price. The value-added tax was applied instead of the sales tax in order to simplify the tax system and reduce tax evasion. The value-added tax system essentially becomes a “self-regulatory" system, as Parliament put in place a system that requires companies to submit papers indicate their business transactions with suppliers and customers, before they can refund the tax. The law provides incentives for small and informal activities to join the formal economy.
Upon the issuance of the new Law No. 3 of 2022, some provisions of the Value Added Tax Law were amended, which comes within the framework of the state's commitment to develop the tax system, boost economic development, stimulate the investment, enhance tax compliance, and raise the efficiency of tax collection without imposing additional burdens on citizens. The amendments aim to address some of the problems that emerged during the practical application of the provisions of this law. The Unified Tax Procedures Law repealed a number of provisions stipulated in the Value-Added Tax Law, in addition to the conflict of some provisions stipulated in the two laws. One of the most important amendments is that goods or services exported by projects of economic zones of a special nature outside the state or imported to the state enjoy the same tax treatment for goods or services exported by projects of zones, cities and duty-free shops outside the country or imported to it to be subject to tax at a rate of (zero). Such important amendment was made to encourage investment in economic zones of a special nature by not imposing value added tax to the goods or services imported for these projects.
6 ) Capital Market Law and its Amendments:
The most important amendments to the Capital Market Law No. 95 of 1992 were the introduction of new financial instruments to the stock exchange, including sukuk, and allowing the establishment of A Futures Exchange. The amendments allow to attract a large segment of local and Arab investors, who refuse to invest in fixed income instruments by making new financial instruments available for investment, such as Islamic banks and Takaful insurance companies. The Futures Exchange allows dealers to agree on the details of purchasing and selling a commodity at a long-term price, which means that the seller agrees to deliver a certain quantity of a commodity at a future date, in return for a price determined when the contract is concluded regardless of the commodity price on the delivery date. Such futures contract can be traded and transferred from one trader to another.
Through these amendments, the government aims to control the rhythm of the market, achieve transparency for the circulation of commodities according to supply and demand, combat smuggling practices, monopoly, and commercial fraud, and maintain consistent and fixed prices for basic commodities, such as cotton, wheat, sugar, and rice. Futures Exchange deal in grains and their relevant products, legumes, dry agricultural products, dairy products, poultry, livestock, meat, vegetables, and fruits. Upon closing, a bulletin is issued from the exchange that includes all transactions encompassing the quantities and prices. These amendments also aim to provide greater protection for investors, and to address any violations may arise from securities trading companies, and tighten penalties against violators in the capital market.
7 ) Real Estate Tax Law:
Law No. 196 of 2008 regarding real estate tax does not levy a new tax. Such tax is already imposed by Law No. 56 of 1954, and the community has known it as “revenues", its provisions have been reorganized by the current law. The taxpayer is the natural or the legal person who has the right of ownership, usufruct or utilization of the property, where the tenant is not considered a taxpayer, but is a joint partner with the taxpayer to pay the tax within the approved lease.
Such tax shall be applied on all properties established on Egyptian land other than the non-taxable properties, whether rented or occupied by the owner himself who is the taxpayer, whether they are finished and inhabited, finished and uninhabited or inhabited and unfinished. This means that all current established properties shall be subject to taxes, whether established villas, buildings, floating houses or chalets regardless their geographic location.
The tax shall not be levied on vacant lands used for garages, arboretums, rented and others, and tax- exempted if not utilized. In addition, installations that are established on roofs or buildings interfaces shall be subject to taxes if they are rented or built-in return for rent or utilization. The property in the new law means each residential and non-residential unit in a building not the entire building.
State-owned properties built for a public utility, as well as state-owned properties as private possession, shall not be subject to tax, provided that they are subject to tax from the beginning of the month following the date of their disposal to individuals or legal persons, moreover, buildings allocated for religious rites or religious education, and properties expropriated for the public utility as of the date of the actual seizure by the relevant authorities, in addition to the courtyards and cemeteries, and the buildings under construction shall not be subject to tax.
Buildings owned by registered associations in accordance with the law and labor organizations designated for their management offices or for the purposes designated for their establishment, buildings and educational institutions, hospitals, dispensaries, orphanages and charities, and headquarters owned by professional political parties, provided that they are used for the purposes for which they were intended, shall be exempted from tax. The real estate unit that the taxpayer takes as a prime residence for his/her family, whose net annual rental value is less than EGP 24000, shall be exempted from tax but if the rent exceeds such limit, the unit will be subject to tax. The word 'family', in application of the provision of this article, includes the taxpayer, his/her spouse and the minor children .
Commercial Laws (1).jpg
1 ) Law Regulating Restructuring, Protective Composition and Bankruptcy:
The Law Regulating Restructuring, Preventive Composition and Bankruptcy as enacted by Law No. 11 of 2018 sets out mechanisms and controls regulating the restructuring process of companies. The Law said, “Each trader – whose capital is no less than one million Egyptian Pounds (EGP1000000), who has been continuously carrying out trade in the two years precedent to the submission of the application and who has not committed a fraud – may apply for a restructuring. The company shall not be restructured within the liquidation period. Pursuant to Law, the trader's business or property may be restructured after decease upon the request of the heirs during the year following the trader decease, provided that all heirs so agree. The submission of an application for restructuring may not be made in the event of passing a judgment on the declaration of bankruptcy or a judgment on the commencement of the Preventive Composition proceedings.
The submission of the application for restructuring shall result in the suspension of the two applications on the bankruptcy declaration and the Preventive Composition until deciding on the restructuring application. Another application for restructuring may not be submitted unless after the elapse of three (3) months from the rejection or the archiving of the preceding application. The restructuring shall aim at developing a plan to reorganize the financial and administrative business matters of the trader, including the manner in which the financial and administrative difficulties are overcome, the debts are paid off and the proposed financing sources are stated. The foregoing shall be made by various means that include but not limited to assets revaluation, restructuring of debts including State debts, capital increase, internal cash in-flows increase, the external cash out-flows reduction, and by an administrative restructuring. Pursuant to the Law, the application of restructuring shall be submitted indicating the financial difficulties' grounds, the starting date, the measures taken to avoid the difficulties or to address the consequences and the necessary procedures to overcome such difficulties.
The law stipulates that the application must be accompanied by the following documents:
Documents evidencing data therein;
A certificate from the Commercial Register Office evidencing that the trader has complied with the rules pertaining to the Commercial Register during two (2) years preceding the submission of the restructuring application;
A certificate from the Chamber of Commerce evidencing that trade has been continuously carried out during the two years preceding the submission of the restructuring application;
A copy of the balance sheet and profit and loss account for the two years preceding the submission of the restructuring application;
A statement of the total personal expenses in the two years preceding the submission of restructuring application, except for the application submitted by a joint stock company;
A detailed statement of the movable and immovable property and its approximate value upon the submission of the restructuring application;
A list of the names and addresses of creditors and debtors and the amount of their claims or debts respectively and guarantees thereof;
A certificate evidencing that a restructuring application has not been submitted by the trader before or that the trader has submitted an application that was previously archived and a period of three months has elapsed since then; and
A certificate evidencing that the trader has not been declared bankrupt or entered into a Preventive Composition.
In case the application is relevant to a company, in addition to the documents mentioned in the previous paragraph, a copy of the following shall be attached thereto: (i) the company's articles of incorporation and association ratified by the Commercial Register Office; (ii) documents evidencing the capacity of the applicant; (iii) the resolution of the partners or the general meeting to apply for the restructuring; and (iv) a list of the names of the joint partners, and their addresses, and nationalities. The documents shall be dated and signed by the applicant; in case some documents cannot be submitted or completed, the application shall indicate the reasons therefor.
2 ) Commercial Register Law:
Law No. 198 of 2020 amending some provisions of Law No. 34 of 1976 regarding the Commercial Register is one of the important legislations approved by the House of Representatives to support workers in the industrial sector and give them the right to be registered in the Commercial Register after their struggle with the law before the amendment, which was preventing the registration of those who work in the field. The law entered into force after enactment by the President and being issued and publicized in the Official Gazette.
Whoever is registered in the Commercial Register shall have the following: (i) Egyptian nationality; (ii) an approval to engage in trade from the competent Chamber of Commerce for individuals and companies established to practice a commercial activity; (iii) an approval to engage in industrial activity from the Competent Chamber of Industry regarding industrial companies.
Pursuant to the law before its amendment, such amendment comes because the commercial register office of the Federation of Industries refused to register individuals in the commercial register regarding the industrial activity, subject to Article (3) where the registration of companies shall not be allowed except for those operating in industrial activity, while thousands of workers who operate in such activity shall not be registered. There is no doubt that such article wastes their right of registration, and hence a legislative amendment was a necessity to correct such situation. Individuals operating in the industrial activity have experienced many difficulties to be registered in the commercial register since the issuance of the previous amendment of the law in 2017, although most registration applications are submitted by individuals.
The new law relied on the definition of the industrial establishment mentioned in Law No. 15 of 2017 enacting Facilitation of Granting Licenses to Industrial Establishments. The new Law defines the industrial establishment as ''any establishment, company or workshop, whatever its size, which carry out one of the following activities:
Physical or chemical transformation process to raw materials.
Conduct changes on any product, including, assembling, grading, packaging, sorting, recycling or other processes.
3 ) Law on the Protection of Intellectual Property Rights:
Law no. 82 of 2002 stipulates that any party, who undertakes the following, shall be subject to a fine of not less than EGP 20000 and not more than EGP 100000:
The imitation, for trade purposes, of the subject matter of an invention or a utility model for which a patent has been granted in accordance with the provisions of this Law;
The sale, offer for sale or circulation, importation or possession with the intention to trade, of products known to that party as imitations, where the patent for the invention or the utility model for such products is granted or the methods of production thereof is valid in Egypt;
The unlawful use, on products, advertisements, trademarks, packaging or others, of indications that may lead to believe that such party has obtained a patent for an invention or a utility model;
In case of recidivism, the punishment shall be imprisonment for a period of no more than two years and a fine of not less than EGP 40000 and not more than EGP 200000.
In all cases, the court shall order the seizure of the infringing imitated products and the tools used in the imitation. The passed conviction judgment shall be published in one or more daily newspapers, at the expense of the convicted party.
The holder of a patent or a utility model may request the chief justice of the competent court, as the case may be, to order conservatory measures against products or goods that are claimed to imitate a patented product, according to the detailed description established in the patent or utility model document. The necessary conservatory measures shall be ordered to preserve such products and goods in their state.
The aforementioned order may be issued before bringing a prosecution. Such order shall lapse if the prosecution is not instituted within 8 days from the date of the passing the judgment.
The identical product was made by the direct use of the patented process;
He has exerted reasonable efforts to determine the process actually used in the production. In such case, the court may require the defendant to provide an evidence indicating that the identical product was obtained by a process other than the patented process owned by the plaintiff.
In the commencement of evidentiary proceedings, the court shall take into account the legitimate right of the defendant in protecting his manufacturing and business secrets.
The chief justice of the competent court dealing with the merits of the case may, at the request of any interested party and on petition, order one or more of the appropriate conservatory measures to ensure the payment of the decided fines or ad damnum. He may also order destruction of the objects in question, where necessary.
Regarding works, books, recordings and any work relevant to creativity, the Law stipulates that all shops, that put in circulation thereof, through sale, rent, borrowing or licensing, shall be required to:
Obtain a license thereof from the competent minister in consideration of a fee prescribed by the Executive Regulations, not exceeding EGP1000;
Keep regular books in which data and circulation year of each work, recording or radio broadcast shall be recorded.
Without prejudice to the more severe penalties stipulated in other laws, violation of the provisions of this Article shall be punishable by a fine of not less than EGP 5000 and not more than EGP 10000. In case of recidivism, the penalty shall be a fine of not less than EGP 10000 and not more than EGP 20000.
4 ) Real Estate Registration Law and Its New Amendments:
The new draft law on Real Estate Registration presented by the government aims to amend some provisions of Law No. 114 of 1946 regulating Real Estate Registration. The draft law submitted by the government included the possibility of limiting registration to the extent stipulated by a final verdict proving the original real right or part of it. Moreover, it included the possibility of submitting the application for registration electronically, in order to save the administrative fees, whereas the Minister of Justice issues a decree on such matter without the need to stipulate the matter in the article.
The new amendments in the Law stipulated reducing the documents required for registration to a minimum, setting time limits to verify the availability of ownership conditions, and setting a specific fee for the application instead of the proportional fee. In addition, it stipulated to solve the problem of submitting more than one application regarding one property by not allowing continuing the procedures for examining any subsequent application except after deciding on the application that precedes it. The new amendments to the Real Estate Registration Law indicated that the draft law prohibited the registration of the application if the data and documents were not fulfilled, and this is to solve the problem of prolonging the period of registration and overcome the obstacles of fulfilling the application. Furthermore, the new law has reduced documents required for the registration of the right in inheritance.
1 ) Small and Medium Enterprises Law:
Law No. 152 of 2020 issuing the Medium, Small and Micro Enterprise Development Law enables the role of the Enterprise Development Authority, established by Prime Minister Decree No. 947 of 2017, and amended by Decree No. 2370 of 2018, to be the responsible authority and the legitimate father supporting this sector, and reconciling the conditions of medium, small and micro enterprises operating in the informal economy to rehabilitate and integrate them into the formal sector. Below there is a review of the most prominent definitions of medium, small and micro enterprises:
Medium Enterprises: Each enterprise its annual turnover is EGP 50 million and does not exceed EGP 200 million, or every newly established industrial project its paid-in capital or invested capital, according to the circumstances, is EGP 5 million and does not exceed EGP 15 million, in addition to each newly established non-industrial project that its paid-up or invested capital, according to the circumstances, amounts to EGP 3 million and does not exceed EGP 5 million.
Small Enterprises: Small enterprises refer to each enterprise its annual turnover is EGP one million and less than EGP 50 million. Moreover, it refers to each newly established industrial project that its paid-in capital or invested capital, according to the circumstances, is EGP 50 thousand and less than EGP 5 million, or every newly established non-industrial project that its capital is paid-in capital or invested capital, as the case may be, is EGP 50 thousand and less than EGP 3 million.
Micro- Enterprises: Every enterprise its annual turnover is less than one million pounds, or every newly established enterprise whose paid-in capital or invested capital, as the case may be, is less than 50,000 pounds.
The newly established Enterprise: An enterprise that its establishment, registration, or activity engagement has not exceeded two years.
2 ) Mineral Resources Law:
The Mineral Resources Law stipulates that the licensee who is licensed to exploit mining ore annually pays a rental value to the authority for the area under license, and their proceeds will go to the State's public treasury. The executive regulation of this law determines the rental value payable by the licensee for each license for mining ores, and such value is paid annually and in advance.
According to the Law, the Authority's Board of Directors may, every three years, propose an amendment to the rental value of the mining areas, and a decree shall be issued by the Prime Minister based on the proposal of the competent minister. The rental value may not be less than 5% and not more than 15% of the value of the annual production of the ore exploited by the licensee. In accordance with what is specified by the executive regulations of this Law for each ore, 6% of this value is allocated to the competent authority in which the exploitation area is located for community development. Moreover, the licensee pays to the Authority 1% of the value of the annual production of mining ores to be allocated to contribute to community development in the governorate in which the exploitation area is located, in accordance to the controls determined by the executive regulations of this law.
3 ) Electricity Law:
The most important provisions of the Electricity Law include separating the Egyptian Electricity Transmission Company (EETC) from the Egyptian Electricity Holding Company (EEHC), in order to ensure impartiality in the purchase of energy generated from generating stations, whether affiliated to EEHC or the private sector. Moreover, the law stipulates that EETC purchases electricity at the lowest price whether from the generation plants affiliated to EEHC or the plants affiliated with the private sector. This law encourages investors to expand in the field of electricity projects. In addition, the law obliges whoever engages in the production, distribution or sale of electricity activities to take the form of an Egyptian joint stock company, and the activity of electricity transmission and network operation are limited solely to EETC.
EEHC and EETC shall, during a transitional period of no more than ten years starting from the date of enforcement of this law, participate in the following:
Preparing studies for expansion in production and transportation to meet the needs of subscribers.
Studying and implementing electrical interconnection projects and exchanging electrical energy with other countries.
Conducting research and testing of electrical equipment with high voltages.
During the transitional period indicated in the previous paragraph, the government will take the necessary measures to restructure EETC. The Unified Electricity Law also dealt with determining the competencies of the entities licensed to produce electricity and regulating the activity of transmitting and operating the electricity transmission network. The law chose EETC to carry out the tasks of operating the network and the rules that ensure its independence from the rest of the other parties to the utility. The new Electricity Law draft is responsible for defining mechanisms to encourage the establishment of plants to produce electricity from renewable energies, and to establish a fund its mission will be to provide the necessary support to purchase electric energy from production plants of renewable energies.
4 ) Law Regulating the Partnership with the Private Sector in Infrastructure Projects, Services and Public Utilities:
Amendments to some provisions of the law regulating the partnership with the private sector in infrastructure, services and public utilities issued by Law No. 67 of 2010 stipulated the formation of a joint committee of specialists from the Ministries of Finance and Planning and Economic Development as well as the Central Unit for Participation, in addition to the previous control over the selection of projects that can be implemented in partnership with the private sector, which enhances the standards of governance, and gives investors an investment map of projects that can be contracted in partnership with the private sector. The Law defines the principles to which contracting projects implemented in partnership with the private sector is subject to, namely, the economic and financial balance of its provisions and the mutual gains for its parties, transparency of contracting methods, equal opportunities and equality between those having similar positions, all in accordance with the provisions regulated by the contract and the rules and procedures stipulated in this law and its executive regulations. The Law also aims to achieve a number of objectives represented in:
Expanding the business patterns carried out by the private sector in infrastructure projects, utilities, and public services.
Introducing new methods of contracting commensurate with the nature of some projects, such as (direct contracting, contracting a project submitted at the initiative of the private sector, and limited tenders and auctions).
Establishing specific controls and criteria for selecting projects that can be implemented in partnership with the private sector.
Introducing a mechanism for selecting projects that can be implemented in partnership with the private sector.
Making the pre-eligibility stage optional for projects whose nature requires prior verification of the eligibility of the contracted projects, instead of making such stage mandatory in the current law.
Shortening the time period for the offering stages and reducing the period of grievances to speed up the completion of procedures in the pre-contracting stage.
Allowing the most economically beneficial bid to be excluded from the tender or auction offered if its price is unusually different compared to other bids and the public sector comparator.
Giving the permission to negotiate with the most economical bidder in the tender or auction whose value is unjustifiably lower or higher than the public sector comparator to reach an appropriate value for it that achieves the public interest of the State.
5 ) The New Labor Law Draft:
The articles of the New Labor Law 2022 include many important benefits for employment in the private sector, whether in relation to the annual increment or other benefits related to training employment, as well as the insurance benefits obtained under the drafting of the new employment contract, which imposes on the employer many obligations towards employees.
Eligibility for Annual Increment:
According to Article 12 contained in the articles of the new Labor Law, employees who are subject to the provisions of this Law shall be entitled to a periodic annual increment on its due date of not less than (3%) of the insurance contribution wage (1), and this increment shall be due upon the lapse of one year from the date of appointment, or from the due date of the previous periodic increment, in light of the rules regulating such increment, which are issued by the National Council for Wages.
Categories Not Covered by the New Labor Law:
The articles of the draft law include categories to which this law does not apply, and include employees in State agencies, including local administration units and public authorities, as well as domestic workers and the like, unless otherwise stipulated.
Rights of Disabled Persons in the Labor Law:
The articles of the new labor law include the rights of people with disabilities, so that every act, behavior or procedure that would lead to discrimination or distinction among people in terms or conditions of work, or the rights and duties arising from the work contract, because of religion, belief, gender, origin, race, color, language, disability, social level, political, trade union or geographical affiliation, or any other reason that leads to a violation of the principle of equality and equal opportunities, shall be prohibited. Moreover, every advantage, preference, benefit or protection decided by the provisions of this law, and the decrees and regulations implementing it for a woman, a child, or a person with disabilities, shall not be considered prohibited discrimination, if they are decided to the extent necessary to achieve the goal for which it was decided.
Each condition or agreement that contradicts the provisions of this law, even if it was prior to its enforcement, shall be null and void if it includes a derogation from the employees' rights established therein. Any agreement that includes a derogation or discharge of the employees' rights arising from the work contract during its validity period, or within three months from the date of its expiry, whenever it violates the provisions of this law, and any benefits or better terms that are established or decided in individual or collective work contracts, statutes, or other regulations of the facility, or according to custom as it applies in case of changing the legal entity of the facility or transferring its ownership, shall be null and void.