Gafi's One-Stop Shop

Sherine El Madany
5 Min Read

CAIRO: As part of its mission to streamline business start-up procedures in Egypt, the General Authority for Investment and Free Zone (Gafi) inaugurated a One-Stop Shop in Alexandria on Thursday. This brought around 20 government entities together under one roof and will allow domestic and foreign investors alike to register a company with relative ease.

The One-Stop Shop aims to reduce both the time and cost of obtaining licenses for industrial projects, which previously could only be obtained in Cairo. It simplifies and merges all necessary procedures needed to incorporate an enterprise, namely land allocation approval, building permits, industrial registration, operating license, and tax registration.

“Obtaining licenses has always been the most difficult step in starting up any investment project in Egypt. Now with our One-Stop Shops, we have overcome delay in license issuance, and the whole process has become simpler and more straightforward, said Ziad Bahaa El-Din, Gafi’s chairman. “It is absolutely intolerable that licensing procedures afflict investment and the wellbeing of citizens.

What used to be a bureaucratic non-stop paper chase from one government entity to another and which could take up to several months can now be completed in two days, at a single location.

Starting 2004, Gafi has embarked on establishing One-Stop Shops throughout Egypt, beginning with Cairo then Ismailia, Assuit, as well as Alexandria. The main objective is to create simpler and more transparent procedures that comply with international best practices and boost investment in the country. Gafi’s initiative in Alexandria is part of the Business Start-up Simplification Project, established in collaboration with the governorate, the Industrial Development Authority (IDA), and the International Finance Corporation (IFC).

“Do not be misled into thinking this is another governmental office. This is an extensive reform effort to make it easier to establish private businesses in Egypt. And with private business comes more job opportunities and income for Egyptians, said Frank Sader, IFC chief strategist in the Middle East and North Africa region.

IFC, the private sector arm of the World Bank Group, has allocated $800,000 to fund this project in Alexandria. “From IFC’s perspective, Egypt is truly on the move – a tremendous move towards reform, Sader added.

Quite recently, the Ministry of Investment cut new business registration fees by 40 percent and implemented a flat 20 percent corporate income tax rate. Minimum capital requirement to start a business was also reduced from LE 50,000 to LE 1,000 while total time was reduced from three months to 15 days.

One-Stop Shops will serve all sorts of investors seeking business opportunities in Egypt. “They will serve, more importantly, small and medium-sized enterprises (SMEs). If you are a giant enterprise, you already have a legal framework doing [these procedures] for you. But SMEs don’t have that, Sader added.

Alexandria is a particularly significant location for a One-Stop Shop. Apart from being the second largest city in Egypt, Alexandria is “very dynamic and has a lot of potential to attract private investments, explained Bahaa El-Din. He added that the true success of this One-Stop Shop project would be measured “when it is successfully replicated throughout the entire country.

By the end of December of this year, more simplifications will have been implemented, including automation of almost all procedures. Automation will be divided into two stages.

“First comes automation of processes and procedures, electronically connecting them with all government entities. Afterwards, we will create electronic interfaces and portals for clients out there, Sader stated.

Gafi’s One-Stop Shops aspire to transform Egypt into an investor friendly destination, vying with other countries in the region, particularly the UAE. Sader, however, pointed out that Egypt and the UAE serve completely different market segments.

“If your business is service-oriented, Dubai is a perfect destination. But if your business is production-oriented, you want to be in a country that has a large market, a large labor force, and a large consumer society. [In that case], Egypt is a more logical destination. Dubai is faster. But if you are, say a soap manufacturer, why start in Dubai and have all the soap shipped to Egypt?

IFC’s assistance in business start-up simplification projects is not limited to Egypt, but it extends across the entire region to include countries such as Yemen, Lebanon, Morocco, and Algeria.

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