The General Authority for Investment and Free Zones has launched a new e-service to ease the establishment of companies.
E-incorporation for investment
E-incorporation for investment
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The General Authority for Investment and Free Zones (GAFI) launched a new digital platform allowing companies to be established electronically this week. The move, meant to promote local and foreign investment, is an outcome of the Supreme Council for Investment meeting presided over by President Abdel-Fattah Al-Sisi in May.
“This move is part of the GAFI’s efforts to enhance the quality of services extended to investors and indicates the state’s commitment to economic growth,” said Hossam Heiba, chairman of the GAFI.
“It is also meant to indicate a commitment to the highest standards of competitiveness and transparency in the investment landscape,” he added at a press conference announcing the launch of the platform.
Prime Minister Mustafa Madbouli was resent for the electronic establishment of Damietta Green Ammonia as the first company to be established electronically through the platform on 9 August.
According to a cabinet statement, the platform serves as a comprehensive hub offering a spectrum of services for company establishment to prospective investors, including contract documentation at real-estate offices and registration via electronic signature, among others.
Foreign investors opting to establish companies through the platform will be able to receive residence permits in Egypt initially valid for one year that can be extended up to the beginning of business activities. The permits are attainable within 10 days through the digital platform.
Heiba had earlier said that the amount investors will pay to establish their companies via the GAFI portal will be the same as through conventional investor services centres.
He expects the new e-service to propel Egypt’s ranking upwards on key indicators of competitiveness, ease o doing business, and other metrics. The development is also poised to capture the attention of reports and analyses devoted to scrutinising the investment environment in Egypt.
The new service allows investors to establish a company using a personal computer or mobile phone and then to complete all procedures using electronic signatures. The payment of fees can be done through credit card transactions, rendering physical visits to investor service centres or other direct interactions unnecessary.
The GAFI portal provides a comprehensive guide to the establishment process, acquaints investors with the optimal company structure suitable for their intended activity, outlines the essential documents and associated fees, and provides clarity on the expected timeline.
An investor can track the progress of an application by accessing the authority’s portal or receiving updates via e-mail.
The deputy chairman of the GAFI had earlier said that the authority receives more than 30,000 applicaions to establish companies every year. Before the introduction of the digital platform, investors had to visit one of the 15 service centres across the country.
The portal does not only benefit large corporations, as it is also particularly beneficial for young entrepreneurs managing small and medium-sized enterprises (SMEs), helping them to manage a seamless and transparent process.
According to the GAFI website, the electronic establishment of a company can be done through seven steps. These include registering and creating an account and dedicated workspace to initiate the incorporation process.
Users can then select the most suitable legal form for their company, review the necessary documentation and associated fees, and gain insights into the expected delivery timeline. Once this is done, they can proceed to submit their application.
Users download relevant application forms and enter details about the company. The completed application is then submitted for review, and user can easily track the status of their application throughout the process.
The next step involves the e-payment of fees followed by e-signing the incorporation documentation issued by the Notary Public Authority. The final stage involves the GAFI taking over the remaining incorporation procedures on behalf of the user.
Electronic incorporation is not the only initiative the GAFI has introduced to facilitate investment. In September 2022, the cabinet announced the implementation of a “golden licence” for a number of projects. This licence, established by law in 2017, had not been operational until then.
The electronic incorporation process and the golden licence are distinct from each other. A company can pursue electronic incorporation while simultaneously obtaining a golden licence, said an official source at the GAFI.
In the case of electronic incorporation, a designated representative from the GAFI manages the entire process on behalf of the investor. This entails handling variou tasks, such as securing residence permits from the Ministry of Interior, completing real-estate registration procedures, and conducting security inquiries.
The representative acts as a proxy for the investor, the GAFI source said.
The entire process takes around 14 days or 10 working days, while the golden licence — issued within 20 days — focuses on finalising procedures related to operational activities, such as obtaining building permits, addressing industrial security requirements, and ensuring civil protection compliance.
To acquire a golden licence, a project must adopt the legal structure of a joint-stock company or a limited liability company as per Investment Law 72/2017 or under the law governing joint-stock companies, limited partnerships by shares, limited liability companies, and single-member companies outlined in Law 159/1981.
To obtain a golden licence, the minimum issued capital for joint-stock companies and the capital of limited liability companies should not fal below 20 per cent of the total investment costs of the project.
Applicants must comply with all regulations that pertain to the company’s operations, as mandated by the relevant laws and regulations.
Moharam Helal, head of the Investors Union, praised moving to the electronic establishment of the companies as it excludes the human element from the process and thus would put an end to any manipulation or malpractices in the establishment process. “Investors used to face lengthy and complicated procedures to establish a new company. As investors we have called several times for applying the electronic establishment of companies to avoid dealing with bureaucracy and inefficient employees,” he noted.
The country has been working recently to increase FDIs as a means to boost its foreign currency receipts.
The value of FDIs in 2021-22 hovered around $9 billion compared to $7.9 billion in the first nine months of the fiscal year ending in June 2023.
* A version of this article apears in print in the 17 August, 2023 edition of Al-Ahram Weekly
