The Golden License in Egypt

Creating an investment climate in Egypt is one of the most important gains witnessed during the economic reform period since the start of implementation until now, given the importance of this climate in attracting investments and encouraging business owners to pump new investments, raising employment rates and providing job opportunities, and thus achieving the targeted growth rates.

The investment climate in Egypt, especially in the past few years, witnessed many legislative and institutional reforms with the aim of facilitating and simplifying procedures for investors, which contributed to achieving positive results in the field of establishing companies in terms of time, cost and the number of procedures required to start the activity.

As a result of these reforms, Egypt succeeded in achieving a quantum leap in the company establishment index in the Doing Business Report 2020, to rank 90 instead of 109 in the 2019 report.

The world has also recently witnessed Egypt’s interest in environmentally friendly investments, as it set requirements and rules to control companies and factories to reduce carbon emissions and exhausts polluting the environment, it was noticed by all activities Egypt joined to, such as COP conference, through which the Egyptian government took a lot of decisions that influenced in the investment field.

The most important of these decisions is the establishment of environmentally friendly projects. They also shed light on the importance of the role of women in the investment field and their entitlement to represent a percentage in these projects.

What is the golden license in Egypt?

The golden license is a single approval granted in accordance with the provisions of Article 20 of the Investment Law No. 72 of 2017 and Articles (42) and (43) of its Executive Regulation, which is a single approval for establishing, operating and managing the project, including building permits, and allocating the necessary real estate for it.

It may be granted to companies by a decision of the Council of Ministers, that aim to facilitate procedures and save investors time to obtain the necessary licenses for the investment project.

The golden license maybe granted to companies that set up to establish strategic or national projects that contribute to achieve sustainable development in accordance with the country’s economic development plan.

The golden license includes granting one or more incentives from the Egyptian investment law No.72 of the year 2017,as well as being effective by itself without the need to take any other action.

The incentives granted within the Golden License

According to Article (20) of the Investment Law, the golden license may include the validity of one of the incentives mentioned in the Investment Law No. 72 of 2017, which are:

• General incentives.
• Special incentives.
• Extra incentives.

What are the conditions for granting a golden license?

1. The golden license is granted to companies that take the form of a joint-stock company or a limited liability company in accordance with the provisions of the Investment Law No. 72 of 2017 or the Law of Joint Stock Companies, Partnerships Limited by Shares, Limited Liability Company and one Person Companies promulgated by Law No. 159 of 1981.
2. The issued capital of the joint-stock companies and the capital of the limited liability company shall not be less than 20% of the investment costs of the project.
3. The objective of these companies should be to establish strategic projects that contribute to achieving sustainable development in accordance with the economic development plan through partnership between the private sector and the state or the public sector or the public business sector as projects (public utilities and infrastructure – renewable energy – roads and transportation – communications and information technology).
4. A commitment to provide proof of financial solvency for the implementation of the project.
5. To commit submitting an initial feasibility study for the project prepared by one of the national or international firms of good reputation and licensed.
6. Provide a timetable for the implementation of the project.
7. Submit an acknowledgment of commitment to provide all private facilities in the infrastructure.
8. Submit an acknowledgment of compliance with all requirements and controls related to the company’s activity in accordance with the laws and regulations governing it.

Criteria for considering the investment project as strategic or national

The Council of Ministers issued Resolution No. (56) for the year 2022 regarding determining the conditions for considering the investment project as strategic or national in order to obtain the golden license, and that is when two or more of the following criteria are met:

1. To contribute to increasing exports by exporting a part of at least 50% of its products abroad annually, within a maximum period of 3 years from the date of starting the activity.
2. To rely for its financing on foreign exchange transferred from abroad through an Egyptian bank in accordance with Article (6) of the Investment Law and Article (9) of its executive regulations.
3. It should aim to reduce imports and deepen the local component in its products so that its percentage is not less than 50%.
4. Contribute to the transfer of technology and modern technologies to Egypt and support innovation and scientific research.
5. To be located in one of the areas most in need of development, specified by Cabinet Resolution No. 7 of 2020.
6. It must be a project that is intensive in the use of national labor, according to Article (11) of the executive regulations of the Investment Law.
7. Contribute to reducing environmental impacts and carbon and heat emissions.

The areas for which the golden license is granted

• Electricity and renewable energy.
• The petroleum and mineral wealth sector.
• The transportation sector.
• Industry sector.
• The communications and information technology sector.
• The housing, utilities and urban communities sector.
• Tourism sector.
• Youth and Sports Sector.
• Agriculture sector.
• Environment sector.
• The military production sector.
• The health sector.

Procedures for obtaining the golden license

Companies wishing to obtain a golden license (after fulfilling the controls and conditions) apply to obtain a golden license to the technical secretariat of the golden license unit established in the authority according to the Prime Minister Decree No. 1156 of 2020.

The unit shall study the application and verify the fulfillment of the above-mentioned controls and requirements, determine the real estate necessary for the project and its guardians, construction licenses, licenses for project establishment, operation, management and granting them, as well as determining the incentives that will be granted to the company, and coordinating with the authorities concerned with the company’s activity regarding these applications.

The unit shall present to the Prime Minister a memorandum of the applications of companies that meet the controls and requirements, each application separately, including the allocation of real estate and licenses of The building necessary for the project, as well as the licenses for establishing, operating and managing the project, and the incentives that will be granted to the company.

The company’s request is presented to the Council of Ministers to issue a decision granting the company the golden license (one approval).

The unit coordinates with the authorities concerned with the company’s activity to activate the golden license and facilitate all procedures related to the company’s activity.

Duration of obtaining a golden license

President Abdel Fattah El-Sisi confirmed that the golden license will be granted to all investors who applied to obtain it, for a period of 3 months.

Recently, the issuance of the golden license has been expanded since the date of its issuance, as a state ownership policy document was prepared in order to increase the empowerment of the private sector, in addition to the presence of 15 companies that were granted the golden license.