Foreign companies allowed to preserve capital increase deposit in FX

CAIRO – 16 January 2024: In a significant move aimed at supporting foreign companies operating in Egypt, the General Authority for Investment and Free Zones (GAFI) has reached an agreement with the Central Bank of Egypt (CBE) to allow these companies to preserve their capital increase deposit in foreign currency. This decision, which eliminates the requirement for banks to convert the deposit into Egyptian pounds (EGP), provides foreign companies with increased flexibility in utilizing their funds for the procurement of essential production inputs.

 

The CEO of GAFI, Hossam Heiba, expressed that the primary objective of this measure is to alleviate the burden on foreign companies by facilitating their access to foreign currency. This is especially crucial for companies that do not have sufficient dollar liquidity, enabling them to purchase raw materials and meet their manufacturing requirements effectively.

 

Heiba emphasized that this initiative is part of GAFI's broader efforts to encourage investment and address the challenges faced by companies operating within the country. These companies play a pivotal role in enhancing Egypt's global investment standing and contributing to its economic growth.

 

Under the new regulations, companies are required to submit a document to GAFI from their respective banks, detailing the transfer value and confirming their retention of foreign currency. This documentation ensures transparency and accountability in the process.

 

In a recent interview with Ashraq Bloomberg, Heiba also revealed that Egypt has received substantial investment requests from Gulf and international investors looking to obtain new licenses for renewable energy projects. The total value of these requests exceed $6 billion, signaling a strong interest in Egypt's renewable energy sector.

 

Heiba further explained that the investment requests originate from various regions, including Europe, the Gulf, China, and India. Each project carries a significant value of around $2 billion. Heiba emphasized that these investments aim not only to target the local market but also to promote the exportation of green energy.