The rationale for the decision
The Egyptian Interior Ministry announced on Saturday that it will grant foreign investors who apply to the General Investment Authority a one-year residency for “other than tourism”, renewable for a period of 6 months or an additional year. , during the period of establishment of companies and economic entities. This was part of facilitating procedures related to establishing investment projects and attracting more foreign investment to the country.
New incentives and removal of barriers
Speaking to “Sky News Arabia”, economist Abdel Nabi Abdel Muttalib said the decisions were “positive and provided many incentives to investors, and eased several obstacles facing investments in Egypt”.
Abdul Muttalib noted several positive points in the decisions, as follows:
“It makes residency permanent and continuous for the foreign and Arab investor and for anyone who wants to invest in Egypt.” “It encourages investors of Egyptian origin who have acquired citizenships of foreign countries and have renounced their Egyptian citizenship, as some countries do not allow dual citizenship.” “Egyptians who renounced Egyptian nationality were treated as foreigners and encountered difficulties in launching private investments.” “The state will benefit from their successes and their money, and will encourage them to invest in their country of origin.” “Some nationalities desire freedom of movement and residence in the presence of clear and fixed rules and laws and non-selective legislation.” “The rulings establish controls that apply to all investors and are not subject to any whims, so the rulings fall within the category of encouraging investment in all forms and types.”
Procedural and temporal fluency
The economist, Abu Bakr El-Deeb, agreed with him, telling Sky News Arabia:
“The latest decision is one of the mechanisms to facilitate investment operations and attract foreign capital.” “The decisions came in response to numerous requests from the business community over the past period to establish investment facilities, and the Egyptian government has responded to that.” “The Egyptian government has launched the economic reform program since 2016 in cooperation with the International Monetary Fund, and one of its aspects is to facilitate investments for businessmen.”
And last Tuesday, the Supreme Council of Investment approved 22 decisions in various sectors and economic fields, aimed at making a leap forward in reducing the cost of setting up businesses, reducing restrictions on incorporation, approvals requirements and the time to obtain them, to facilitate land ownership ownership and expansion of the issuance of the gold license, and other areas.
According to El-Deeb, among the aspects of boosting foreign investment in Egypt are the measures that preceded this decision, as follows:
Publication of Unified Investment Law Publication of Banking Law Publication of Mining Wealth Law The Egyptian government’s withdrawal from dozens of investment sectors in favor of the Egyptian, Arab or foreign private sector The government offers incentives for stimulate the capital market The government provides “facilities and facilitations” in industrial zones throughout the country Facilitation of business start-up procedures through the one-stop shop The golden license, the decision completes these decisions, and any investor can start his project in all simplicity, “procedural and temporal”.
What is the impact on the Egyptian economy?
In one year, the Egyptian pound has lost half its value against the dollar, while the country’s foreign exchange reserves have collapsed.
Abdel Muttalib explained that “the Egyptian economy suffers from a lack of foreign exchange resources”, pointing out that there are 3 tributaries to the arrival of hard currencies in Egypt, which are tourism, exports of raw materials and the investment.
Since the start of the Russian-Ukrainian war in February 2022, many investors have withdrawn billions of dollars from the Egyptian Treasury market.
According to the economist, when one increases investments, the flow of hard currency increases, which solves several economic problems as follows:
Release from customs production requirements. Revitalize the agricultural and industrial sectors. Increase production rates. Increase the growth rates of the Egyptian economy.
On the other hand, El-Deeb pointed out several benefits of increasing investment in Egypt and lists them in the following points:
Increase employment opportunities and reduce unemployment rates. Increase state contributions from taxes and customs. Increase gross national product. Dealing with the shortage of hard currency. Increase foreign exchange reserves in hard currencies. Reduce pressure on the Egyptian pound. The recovery of the Egyptian economy and the increase in the value of the local currency against the dollar.
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