Thursday,21 February, 2019
Current issue | Issue 1342, (27 April - 3 May 2017)
Thursday,21 February, 2019
Issue 1342, (27 April - 3 May 2017)

Ahram Weekly

Easier licences

Egypt’s new industrial licences law is energising the business community, reports Safiya Mounir

The new law could encourage the construction of more factories
The new law could encourage the construction of more factories

Minister of Trade and Industry Tarek Qabil said this week that the provisions of the new industrial licences law were being finalised after parliament passed the law recently. They would be complete within one month, he said, with the legislation addressing a number of key problems facing the industrial sector.

The law was adopted by parliament on 26 March with a view to shortening the time needed for licensing industrial facilities. The Ministry of Industry is keen on finalising the executive provisions of the law in order to begin its implementation as soon as possible.

“In the past, it could take an investor 643 days to receive an industrial licence before the start of operations, but the new law has cut this period down to just two weeks,” Ahmed Samir, chairman of parliament’s Industry Committee, told Al-Ahram Weekly. The new legislation allows some 83 per cent of industries to acquire licences simply by notification.

Samir explained that the new law created a committee that decides on the criteria needed to open a factory in any sector, including environmental, health, and civil defence requirements, and on the authorisations required from up to 30 different offices.

A body affiliated to the Industrial Development Authority (IDA) was being set up where investors could submit their paperwork depending on the type of requirements stipulated by the committee.

Qabil said that in order to guarantee the effective application of the new licensing law and to facilitate procedures for investors, nine regional offices would deal with investors directly. These would gather applications and grant licences without investors needing to travel to IDA headquarters in Cairo.

Branch offices of the Social Fund for Development and the Industrial Modernisation Centre would also provide such services, with a representative of the IDA present at their offices.

The new regulations would include a comprehensive directory of activities for each category of industry, whether micro, small, medium-sized or mega-projects. They would specify the requirements needed for licensing in each category, he said.

“Once an investor completes the necessary steps, he submits the paperwork to the body affiliated with the IDA, and two weeks later he will receive a licence. If for any reason this does not happen, he proceeds as if he had received the licence,” Samir said.

The new law outlines a comprehensive risk system for the first time, pinpointing facilities that will be licensed as soon as they submit notification. Other facilities presenting higher risks will need to wait until they have completed requirements for health and safety, industrial security and the environment.

These procedures will be carried out by the IDA as the sole authority issuing licences to investors.

Ahmed Abdel-Razek, director of the IDA, believes the new law will attract projects from the informal sector of the economy into the formal system because of simplified procedures. A key feature of the law was that it gave factory owners a permanent licence, whereas in the past licences were renewable every five years and the criteria used could differ, Samir said.

“Law 453 of 1954 used to regulate industrial licensing. But the difficulties facing investors who wanted to get a licence was a major obstacle that placed Egypt at the tail end of international indices, including the World Bank Doing Business Index,” he said.

The enforcement of the new law, according to Ali Hamza, head of Assiut Investors Association, would make investors’ lives easier as currently the number of entities they had to deal with and the list of procedures they used to go through were endless. The requirement to renew the factories licences each year, is an example of tireless measures included in the current law.  

The Egyptian Centre for Economic Studies (ECES), a think tank, reported that the previous licensing law was a factor in Egypt’s low international doing business ratings and that the new law reflected the keen interest of the government in the industrial sector.

It added that a key feature of the new law was facilitating pre-licensing for all industries and adopting licensing by notification for some, speeding up the process.

The writer is a freelance journalist.

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