Advantages and disadvantages of Partnership Companies subject to Law No. 72 of 2017

Egypt has a major economy that relies mainly on services, agriculture and various alternative industries. Egypt has taken a number of measures to enhance the investment climate in the country and made the investment as one of its economic priorities. For that purpose, the Egyptian government approved the new investment law, which aims to improve the investment environment and attract more investors to the country.

This law also aims to facilitate procedures and speed up all the project’s approvals and improving legal and tax regulations. The law also focuses on enhancing transparency, protecting the investors’ rights, and improving the business environment in Egypt.

Due to the new investment law, Egypt has been able to attract more of the local and foreign investments in many vital sectors, such as energy, industry, agriculture, tourism, and real estate. With the improvement of the investment environment in Egypt and the development of infrastructure, it is expected that economic growth will be continued, and Egypt’s position as an attractive investment destination for investors will be strengthened.

The new investment law in Egypt represents an important step towards developing the economy and improving the business environment, and makes Egypt an excellent investment destination.

Since the issuance of the Investment Guarantees and Incentives Law, the law has introduced the subjection of partnership companies, whether sole proprietorships, limited partnerships, or partnerships.

Whereas partnership companies were subject to the provisions of the Egyptian Trade Law no.8 of 1990 before they were incorporated within the Investors Service Centers, provided that they were incorporated under the Investment Law No. 72 of 2017 and its executive regulations, which carry out specific activities and the investment incentives and guarantees as follows:

The most important guarantees and incentives by the Investment Law No. 72 of 2017

• The investment residency is provided to the foreign investor (partner/shareholder/founder/owner) of the company for a period not less than one year and not exceeding the duration of the project.
• The investor has the right to provide foreign employees with a percentage of 10% from the total number of the workforce, and has the right to increase this percentage to 20%, after the approval of the General Authority for Investment and Free zone’s (GAFI) Executive Manager.
• The competent administrative authorities may not revoke or suspend the licenses issued for the investment project, or withdraw the properties that have been allocated to the project, except after warning the investor with a registered notice accompanied by acknowledgment of receipt of the violations attributed to him, hearing his point of view, and giving him a period not exceeding sixty (60) days from the date of the warning to remove them.

First: The scope of application of Egyptian Investment Law No. 72 of 2017:

Egyptian Investment Law No. 72 of 2017 applies to the following companies and projects:

1. Joint stock companies, limited partnerships by shares, and limited liability companies established in accordance with investment laws.
2. Individual projects fully owned by a foreign investor.
3. Joint projects between an Egyptian investor and a foreign investor.
4. Projects fully owned by a foreign investor.
5. Public and private free zones.
6. Industrial and technological complexes.
7. Projects that obtain the approval of the GAFI.

According to this law, a foreign investor is any non-Egyptian natural person or any legal person fully owned by non-Egyptians or in partnership with Egyptians at a rate of not less than 10% of the capital.

Second: Supervision and monitoring of the implementation of the Investment Law:

The supervision and monitoring of the implementation of the provisions of the Egyptian Investment Law is undertaken by a group of government agencies, including:

1. GAFI: The authority responsible for organizing and managing investment activities in Egypt.
2. The Ministry of Investment and International Cooperation: The authority responsible for setting policies and strategic plans for investment.
3. The General Authority for Financial Supervision: The authority responsible for supervising and monitoring joint-stock companies and companies listed on the stock exchange.
4. The Ministry of Finance: The authority responsible for implementing the tax and customs exemptions stipulated in the law.
5. The Ministry of Trade and Industry: The authority responsible for granting the necessary licenses for investment projects.

These authorities ensure the effective implementation of the provisions of the law and provide an appropriate investment environment for investors.

Conclusion

In conclusion, the Egyptian Investment Law No. 72 of 2017 is an important legal framework for regulating and encouraging investment in Egypt. This law provides a set of incentives and guarantees for companies and projects subject to it, in addition to a set of services and facilities provided to investors. Effective implementation of this law by the relevant government agencies will contribute to attracting more investments to Egypt and enhancing economic growth in the long term.