The new investment law in Egypt targets to attract foreign investors in huge number and offers special incentives for companies launching projects in particular regions or industries. These include the food manufacturing sector, which according to the analysts is seen as both a defensive play – people will always need to eat – and a means to profit from Egypt’s demographics: its 94 million residents make it the most populous nation in North Africa and the Middle East.
President Abdel Fattah al-Sisi who signed the new law in June, aims and promises to introduce a series of reforms and incentives. These include many measures already included in other legislation and agreements, but bringing them under a single law is still seen as a significant step.
A financial analyst at Cario’s Sigma Capital expressed his views stating, “The government seems committed to its economic reforms plans, which gives investors confidence when it comes to adherence to the new investment law at least in the medium term,” said Kamila.
“I believe that the new investment law will not only help attract foreign investments in food manufacturers but also in many other industries.”
Among the notable reforms are a guarantee of fair and equitable treatment of foreign investors, reduction in custom duties, and tax breaks for investments in regions that are less developed and certain industries such as food and agricultural production, and also including tourism, renewable energy, automotive, engineering, further added by Kamila.
Separately, the government has ended restrictions on foreign investors repatriating profits, while perhaps the biggest mooted change included within the new law is a pledge to create a one-stop-shop for foreign investors to slash bureaucracy.
The very important executive regulations that will dictate in what manner the implementation of the laws will be done have yet to be published, and some experts remain sceptical regarding the government succeeding in arresting a stultifying bureaucratic culture among the dozens of state agencies that are in competition for power and resources.
Yet even with that caveat, the food sector is attractive despite its recent travails that were sparked by November’s flotation of the Egyptian pound.