2011 & 2012 were all about Politics. 2013 & 2014; Security. But 2015 was all about the Economy. Here is a recap of the major laws issued last year. Looking back at the key laws issued in 2015, it is clear that laws targeting the economy and investment take the lion share. That is not surprising since economic growth and the return of foreign investment are vital for Egypt’s stability and development. We review below the major laws issued last year.

We Believe that Egypt’s Top 4 Policy Directions In 2015 Were:

• Betting on energy.
• Luring foreign investment through regulatory reform.
• Focusing on large-scale national projects.
•  Security & corruption are not entirely off the agenda.

1.    BETTING ON ENERGY

• What are the main sectors receiving the attention of the current government? Energy, Energy and Energy.  Egypt took plunges in its path towards liberating the energy sector in 2015 and maximizing its return from its naturally endowed landscape. There is room now for the private sector in the electricity market, historically dominated by the government. In 2014, the government started its nuclear project and introduced a new framework for feed in tariff directed for solar and wind power plants.  In 2015, several other laws were also issued to regulate the sector.
• The president issued a unified Electricity Law 87/2015.  It allows for private sector participation, in the generation of electricity, for both locals and foreigners, by introducing a simple legal licensing regime; and unifies various regulations relating to the electricity sector. Read S&S’s Guide to the New Electricity Law and S&S Guide to Feed-In Tariffs.
• The Minister of Electricity & Power issued Decision 430/2015, regulating Contracting & Procurement by NREA, the New and Renewable Energy Authority. Overall, the decision complies with the Egyptian Tenders & Bids Law; however, it gives more liberties to NREA. E.g., NREA can suspend the tender if it needs to amend the documents; it can impose severer punishments than the ones mentioned under the tender law, in case of late performance; and it may offer electricity and carbon credit to the public.
• Law 105/2015 introduced regulations governing the transportation and usage of Coal. Read more…

2. LURING FOREIGN INVESTMENT THROUGH REGULATORY REFORM: 

The government presented wide amendments to legislation relevant to investment in Egypt. 

In essence, Egypt is trying to make investment in Egypt more attractive to foreigners, by improving the framework itself and providing incentives in specific targeted industries.

Incentives relate more to better procedures and non-tax benefits and do not amount to tax breaks. (Tax breaks have been the direction throughout the 1990s and early 2000s and have proven unproductive.)

• Financing:  Law 115/2015 regulating the pledge of movables completely shuffled the framework of such pledges.   The law introduced a new online platform, which, once activated, will change how we carry out project finances. Read more…
• Investment Law:  Law 17/2015 introduced amendments to the Investment Law, the Companies’ Law and the Income Tax Law.   Also, the Executive Regulation of the Investment Law was substituted by Prime Minister Decree 1820/2015.  The general direction of this law is centralization; the Ministers’ Cabinet will micromanage the logistics of economic development. It will basically be responsible for determining investment areas, fields, priorities & incentives.  In addition, the amendment to the law introduced non-tax incentives to specific investments, such as lower energy tariffs, and free or reduced price land.  The amendment also introduced new regulations about allocation of land to investors governed by Law 8.   See our power point presentation on the amendments… 
• Customs:  The Minister of Commerce & Industry issued Decision 992/2015 by which more supervision shall be given to importations. The decision sets a list of imports (mostly hygienic, cosmetics, and food) to be subject to this strict supervision.  The supervision aims to ensure that the foreign entity exporting these goods to Egypt is legal and licensed in its home state.  Once the aforementioned entity proves its eligibility, it shall be registered within the relevant authorities’ registers.
• Land Acquisition in Sinai:  Law 95/2015 introduces amendments to the Sinai Law 14/2012, which loosen the restrictions on investors who wish to acquire land rights in Sinai.   Read more…
• Tax:   Law 96/2015 amends the Income Tax Law.   The new law changes the tranches of the taxpayers and the tax rate; changes the rules governing tax over distribution of dividends and capital gains tax realized from the sale of shares.  Read more…  Law 12/2015 increases the tax on tobacco/cigarettes.
• Government Procurement:  Law 5/2015 and its Executive Regulation impose a 40% local component in government contracts.   Read more… 
• Real Estate Mortgage:  The President and the Board of Directors of the Egyptian Financial Supervisory Authority (EFSA) issued several decisions regulating the sector.   EFSA’s decision 39/2015 issues the Egyptian Mortgage Finance Standards.  EFSA’s Decisions 64/2015 and 111/2015 regulate the activities of financing and loaning performed by mortgage companies and the licensing process.  EFSA’s Decision 77/2015 provides detailed regulations on the criteria for Capital Adequacy Ratio (CAR) of Mortgage companies.  Read more…  EFSA’s Decision 87/2015 issues the model internal statutes of mortgage companies.  And, finally,  EFSA’s Decisions 109/2015 and 110/2015 regulate licensing of real estate agents and brokers.
• Private Insurance Funds:  EFSA regulations 99/2015, 101/2015, 102/2015, 103/2015 address the restructuring, administration and governance of private insurance funds.  In addition, the Minister of Investment issued Decision 109/2015 to incorporate amendments to the Executive Regulation of the Law on Private Insurance Funds.   Read more… 
• Telecom:   The Minister of Telecommunication issued Decision 464/2015, which widens the competencies of the National Telecommunication Regulatory Authority (NTRA) vis-a-vis telecom companies.  For example, the decision introduces new violations that were not penalized under the Telecom Law 10/2003, such as (i) change of control without NTRA’s approval and (ii) offering services with low quality or not responding to NTRA’s decision regarding consumers’ complaints.  Read more…
• Minerals:  The Prime Minister issued the Executive Regulation 1657/2015 of the Mineral Resources Law that was issued in 2014.  The new regulation- in extension to the new law on Mineral Resources- adopts a liberal approach and seeks efficiency of that sector.  The law ensures strict supervision during the licensing process, and demands the applicant to possess enough skills that qualify him for the license.
• Pharmaceuticals:  The Minister of Health issued two decisions regulating the industry.  Decision 492/2015 introduces amendments to the registration of drugs by pharmacists and pharmaceutical companies.  The new decision adds amendments that impact financial requirements of applicants; tighten the drug testing process; and change the timeline of the registration process.   Decision 477/2015 regulates pharmaceutical companies that produce drugs for the treatment of virus C.  Read more…
• Intellectual Property Rights (Plant Variety):  Law 26/2015 incorporates amendments to the regulations of plant varieties under the intellectual property law.  The new amendments tend to create a more commercially oriented plant variety market.   They extend the scope of protection to cover members of any entity nested to the WTO and UPOV.   In addition, the law recognizes the commercial rights entailed with the plant variety protection and protect these rights.
• Building Law:  Law 23/2015 amending the building law redefined the authorities responsible for building licenses adding the Engineering Authority of the Armed Forces as a licensing authority in relation to strategic zones and national projects.
• Security Companies:  Law 86/2015 regulates the licensing of security companies responsible of guarding monies and institutions.  Read more…
• Foreign Employment:  The Minister of Manpower & Immigrants’ Decision 305/2015 amends the regulations relating to foreigners’ work permits, slightly – only slightly – liberating the conditions and – substantially -raising the fees.   Read more…
• Special Economic Zones:  Law 27/2015 amends the Law of Economic Zones of Special Nature, generally liberalizing the management of such zones and also suspending the tax incentives granted to such zones.  The new law substitutes such incentives and gives the Prime Minister the right to grant other incentives, such as reduced prices for energy and land.

3. NATIONAL PROJECTS AND RECLAIMING THE PATRIOTIC SPIRIT: 

n 2015, the government still markets giant national projects, laced with national spirit and the contributions and investments of citizens and philanthropists.  Laws were issued in relation to the “Tahya Misr” Fund and the new Suez Canal project. 

• Law 84/2015 regulating the “Tahya Masr” fund replaced the previous Law 139/2014.  The new law gives more independency to the fund and excludes it from the supervision of the Accountability State Authority.   The new law also expressly gives a tax advantage to donors to the fund by determining the donations as expenses.  The fund’s articles of association are passed under the Prime Minister’s Decision 1400/2015.
•    Law 90/2015 that introduces amendments to allow “Suez Canal” authority to establish corporations subject to the Companies’ Law, and Law 19/2015 incorporates amendments to the regulations on the investment certificates in the Suez Canal project. 

4. SECURITY & CORRUPTION ARE NOT ENTIRELY OFF THE AGENDA:

• Law 94/2015 regulates Combating Terrorism.  It increases the powers of the authorities to face the crime and widens the scope of the crime itself.  Read more…
• Law 16/2015 introduces several amendments to the Criminal Procedures Law.  First, the statutes of limitation of claims made against public officers starts from the day the public officer leaves office and not the date of the crime itself.  (This is a response to the verdict issued in the case against Ex-President Mubarak and others, known in the media as the Presidential Palaces Case, where the case was dismissed based on prescription of the claim.)  Second, new regulations in relation to settlements with perpetrators in embezzlement crimes.
• Law 97/2015 introduces amendments to the Illegal Gains Law 62/1975, in relation to settlements with perpetrators in embezzlement crimes.  Read more…
•  Law 89/2015 gives the President authority to remove heads of Autonomous Authorities & Supervisory Organs.  These bodies and agencies include the Central Bank, the Egyptian Financial Supervisory Authority (EFSA), the Central Auditing Organization (CAO), and the Administrative Control Authority. Read more…