• engineering and mineral production. • The Prime Minister may grant any of the following additional incentives: (i) establishment of special customs gates for imports and exports related to an investment project; (ii) the Government, upon the operation of such project, bearing the cost of connecting utilities to investment projects by the State; the Government bearing the personnel technical training costs; a 50% refund of the value of any plot of land allocated to industrial projects provided that the operation thereof shall take place within 2 years starting from the date of handing over that plot of land; and allocation of plots of lands for free of charges for strategic business activities. The Incentives are available to both foreign and Egyptian investors providing that a number of conditions are satisfied including, inter alia: • The incorporation of a new company in Egypt ( NewCo ) with the exception of companies established not more than 30 months before the issuance date of the New Investment Law and which have not yet made any investment in Egypt; • NewCo shall be incorporated by no later than 3 years from the date of enforcement of the Executive Regulations, unless extended for another term by virtue of a decree from the Prime Minister; • Having clear and regular books providing that, if NewCo will carry out investment activities in different zones, then NewCo shall have separate clear and regular books for each zone; and • NewCo and/or its shareholders shall not (i) use any asset(s) of any company existing as of the date of the New Investment Law, or (ii) liquidate any company during the term specified in the second item above for the purpose of establishing NewCo. For the first time in Egypt and as an important step towards the liberalization of the Egyptian market, the Importation Registrar Law No. 121 of 1982 (the Importation Registrar Law) was amended on March 04, 2017 by Law No. 7 of 2017 (the Amendments), which Amendments were published in the Official Gazette on March 7, 2017 and entered into force as of March 8, 2017, whereby: (iv) (v) (iii)
• production and services companies operating in Egypt are now not required to be registered with the Importation Registrar in order for said companies to import anything that is essential for their operation in Egypt in accordance with Article 2 (bis) of the amended Importation Registrar Law and, therefore, up to 100% of the entire capital of the said companies can be held by non-Egyptian investors to the extent allowed under Egyptian law; and • non-Egyptian investors are now allowed to hold or acquire up to 49% of the share capital in any company carrying out importation business for re-sale purposes in Egypt. Immigration, Employment and Local Content Employment in Egypt is governed by the Egyptian Labour Law (the Labour Law ) which provides the following: Type of employment contract Labour law provides for three broad types of employment contract in Egypt: • Employment Contract for Specific Work - this is concluded for a specific work and ends once the relevant work is completed. • Employment Contract for a Definite Period - this ends with the expiry of its period and can be renewed for one or more periods. In the event that the work period ends and the employee continues to work for the employer without renewal of the Employment Contract, it will be considered as being an Employment Contract for an Indefinite Period (see below). • Employment Contract for an Indefinite Period - this can be terminated by the employee by virtue of a resignation, after providing the employer with a notice period. The employer can also terminate the Employment Contract for an Indefinite Period in specific cases whereby the employee has committed serious or gross error specified in the Labour Law. In the event that an error is not considered a serious or gross error by the Labour Court, the employee shall be entitled to a compensation amounting to at least two months of salary for each year of service. Employee’s Profit Sharing According to the law on Companies and its Executive Regulation (the Companies Law), the employees of Egyptian Joint Stock Companies and Limited Liability Companies having a capital of at least EGP 250,000 (approximately USD 13,824) are entitled to at least 10% of the profits distributed by the Companies, which shall not exceed the annual payroll of such companies.
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