SHARM EL-SHEIKH, Egypt – Egypt’s president approved a package of amendments to investment laws on Thursday, aimed at enticing foreign investors on the eve of a major economic conference that will bring together hundreds of business executives and foreign leaders.
President Abdel-Fattah el-Sissi will inaugurate the conference Friday in the Red Sea resort town of Sharm el-Sheikh. The former military chief has stressed that improving Egypt’s economy, which has been gutted after years of turmoil, is his top priority.
The conference, which will be attended by U.S. Secretary of State John Kerry and other western officials, is sponsored by Egypt’s Gulf allies the Emirates and Saudi Arabia, who have contributed at least $20 billion to help bolster Egypt’s battered economy. Foreign investment in Egypt has slowed significantly after four years of political and social instability that began when massive street protests ousted longtime autocrat Hosni Mubarak.
El-Sissi is keen to portray Egypt as having a business-friendly culture, and the amendments are designed to appeal to the top executives who will be in attendance, including BP Group Chief Executive Bob Dudley, General Electric Co. CEO Jeffrey Immelt and Siemens AG CEO Joe Kaeser.
“These are messages to the investors that the country is serious to opening up,” said Tarek Tawfik, a businessman and deputy chairman of Egypt’s Federation of Industries.
The amendments package trims corporate taxes to 22.5 per cent, from as high as 30 per cent previously, and facilitates settling disputes with investors. Sales taxes were dropped to 5 per cent from 10 per cent, and customs duties on equipment used for production were set at 2 per cent. There were non-tax incentives to investors in labour-intensive industries.
Tawfik said the new measures also allow the president to give away land for development for limited periods, a move needed for the “interim basis to jump-start the economy.”
The measures also shield chief executives from criminal prosecution. Previously, senior officials in large companies could be prosecuted for legal violations by staff members.
Critics say the new amendments were drafted in a rush and already face major objections. The measures were passed in the absence of parliament, making them susceptible to criticism that they cater to special interests.
Egypt has had no parliament since 2012. Parliamentary elections were to begin this month but postponed after courts ruled the laws defining voting districts as unconstitutional.