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24 July, 2017
There are many challenges that Egypt is facing but one challenge is to encourage foreign investment in to their property market. The Central Bank of Egypt relaxed the exchange rate of the Egyptian pound against the US dollar which resulted in the pound being devalued by over 50%. This lead to inflation increased sharply in April 2017. This made life difficult for Egyptian families but also meant that the rate of unemployment also increased. Therefore, a new investment law was introduced to attract foreign investment at a time when Egypt needs it.
There was an economic development conference held in Sharm El Sheik, which was put in place for foreign investors. However, it did not turn out as expected because foreign investors have concerns about the future of Egypt, as well as Egyptian Bureaucracy, land allotment problems, the time it takes to issue licenses and dealing with the many different ministries. The Egyptian President then called for action on the new investment law and so, Egyptian parliament approved the law.
The new law brings with it a shorter approval procedure, which has been reduced from three months to one day. There is also full investment protection regulations put in place and so, the Egyptian State will treat foreign investors in the same way as they treat Egyptian investors. There is also protection for investment projects from arbitrary decisions such as having licenses revoked or financial burdens that can be added.
Investors will also be afforded more flexibility when it comes to importing and exporting things that they require. This can include raw materials, production needs, spare parts and machinery as well as allowing transportation that fits around the type of project without having to go through the registration process.
An Investors Service Center has been set up to offer assistance while it can offer establishment services for the companies looking to invest which includes approvals, licenses and permits.
The investment climate of Egypt will be improved by this new law and it will also help to improve and encourage the link between Egypt and China’s Belt and Road initiative. The Chinese President visited Egypt in 2016 and the Egyptian president then approved the participation of Egypt in the initiative.
There is a lot going for Egypt while it has the ability to compete on an economic development level. They’re new policies will work favourably for the Belt and Road initiative while also enhancing the trade with Middle Eastern Countries.
In agreement with the values of mutual complementarity and mutual benefit, China is looking to co-operate with a wide range of countries situated along the Belt and Road route. This is aimed at biotechnology, new technology for energy and many other growing industries.
Over the years, Egypt has developed a bad reputation in many ways. However, the Government is doing all it can to encourage foreign investors to take advantage of investing in Egypt properties for sale, in a country that still has so much potential. Only time will tell whether the new law will actually work but it is a positive step in the right direction.
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