The new legislative reforms in Egypt are taking place against a
backdrop of debate over the Investment Law, that took place in
conjunction with the Egypt Economic Development Conference
(EEDC) held in Sharm El Sheikh last March.
Egypt's legislative structure is quite complex, with
thousands of laws in force that require amendment. Egypt is a
country that follows a civil code system (it does not rely on
the concept of stare decisis where effectively court
precedents formulate the law and judgments bind other courts in
most instances). This can also help to explain in many cases
why court judgments do not have to concur with one another in
civil code states like Egypt, even with the moral impact of
higher courts rulings.
Similarly, Egypt's bureaucratic structure is very complex
and must be revamped, particularly considering the millions of
incumbent government officers and their needs.
One source of legislation in Egypt is Islamic Sharia.
Islamic Sharia itself, despite its sacred source, has been
subject to many interpretations. This only confirms that there
can be no prescriptive formula to regulate investment in Egypt.
However, there are basic key principles legal experts look for
to assess the validity of a legislative approach. Pure academic
theory and dogmatic concepts need to give way to a more
pragmatic approach. If the theory or spirit behind Egypt's
legislation does not enable solutions, it needs to be
reconsidered all together. The concern is not lack of
legislation but the availability of provisions that can act as
the starting point for reform on the ground.
The pipeline of projects resulting from the EEDC conference
is not short term. The package of investments announced
arguably represents a medium- to long-term project pipeline in
numerous sectors for Egypt and therefore long-term legislative
planning is required. In this environment, careful research on
a case-by-case basis needs to be conducted in an ongoing
As such, one proposed approach would be to make legal
revisions or unified new laws, sector by sector and in order of
priority, that address the needs of Egypt. In other words, put
the issue at stake into intensive care, where a unified
legislation addressing all its key problems, in isolation from
all other legislations that may negatively impact it, is
This seemed to be the approach adopted by the government
under law 17 of 2015 which amended and introduced new
provisions to the previous investment regime. This law tackled
many business assessment principles used by the World Bank and
is a step in the right direction. Supported by a
well-structured executive regulation that provides appropriate
implementation machinery, this law could be considered a good
Additionally, the Public Service Law was another step
towards addressing government bureaucracy complexities that
threaten the implementation of any good laws.
Arguments have been raised against the new investment
regime. However, it is necessary to work with what the interim
legislature has produced, and appreciate that the legislation
agenda is a long-term plan, not an overnight process.
To change a long track-record of overwhelming bureaucracy,
surrounded by numerous pieces of legislation, remedies with
both a wide and deep scope are required.
For investors, it is all about timing and certainty. For
example, the time it takes to resolve commercial disputes in
court, and certainty over the effective unified window
implementation to secure government approvals under the new
investment regime. This is yet to be tested in practice.
The initial signals for the rise of investment in Egypt are
positive. Investor confidence has started to revive in Egypt as
a result of various factors, including: the E£64 billion
($38 million) financing of the new Suez canal mega-project; the
number of legislative changes undertaken to boost investment as
a key resource for developing Egypt's future; and, Egypt's
In terms of continuing growth, Egypt needs to: regularly
revise its long-term sustainable plan, which is to be proposed
to the upcoming parliament; reward research and development;
boost and encourage public-private partnership projects as
announced by the Ministry of Finance in its strategy; support
small and medium enterprises aggressively with more enabling
legislation (by way of exceptions to un-enabling bureaucracy);
and, ensure the implementation of amended legislation. This
appears to be the approach fostered by the incumbent