On 9 November 2023, Law No. 178 of 2023 establishing the Egyptian Agency for Export and Investment Guarantee (the “Agency”) was issued (the “Law”). The Law, which entered into force on 10 November 2023, abolishes Law No. 21 of 1992, initially establishing the Export Credit Guarantee of Egypt (the “EGE”), subsequently replacing the EGE with the newly established Agency.
The establishment of the Agency represents a crucial step toward encouraging Egyptian exports and investment by offering modern and adequate services for Egyptian investors and exporters.
Transitional Period and Provisions
- The Law provides that the Central Bank of Egypt (the “CBE”) shall undertake acquisition procedures for the EGE shares within a period not exceeding 3 (three) months as of the entry into force date; and
- the EGE board of directors shall remain competent until the completion of the above mentioned acquisition and the composition of the Agency’s board of directors.
The Agency’s Goals and Duration
The Agency aims for:
- developing and encouraging Egyptian exports and investments abroad by increasing its competitiveness; and
- increasing the Egyptian exporters’ base, enforcing their participation in the international supply chain, and entering new markets by offering guarantee services to Egyptian exports and foreign investments per the Egyptian public economic policy.
Also, the Law determines the Agency’s duration to be 50 (fifty) years as of its entry into force, licensed capital, and shares value, specifying that the Agency is entirely owned by the CBE, which guarantees its financial obligations.
The Agency’s Powers and Competencies
The Law stipulates that the Agency, which takes the form of a Join-Stock Company, shall act as an independent institution aiming for profits and is entitled to have branches, agents, or reporters inside or outside the country.
Therefore, the Agency is empowered to undertake all procedures to achieve its goals, some of which include the following:
- providing guarantee services for:
- exporting goods and services;
- importing raw materials with the aim of creating added value for re-exportation;
- the strategic projects of the state; and
- the Egyptian investments abroad.
- Undertaking the re-guarantee of the above mentioned transactions, the acceptance of the re-guarantee on transactions occurred by similar entities or complementary activities;
- providing financial, economic, or technical consultancy within the export sector;
- concluding financial or legal contracts to ensure the related risk management for its activities, transactions, or portfolio management;
- issuing bonds, financial tools, and securities to finance its activities; and
- cooperating with banks and international or local financial institutions to provide financial services to finance Egyptian exports and investments abroad;
Tax and Fees Exemptions
Finally, the guarantee and re-guarantee services provided by the Agency are exempted from stamp tax, value-added tax, and all other taxes and fees.