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Programme to transfer profits of foreign companies operating in Egypt abroad promotes confidence in economy - Daily News Egypt

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Programme to transfer profits of foreign companies operating in Egypt abroad promotes confidence in economy

CBE coordinates with international institutions to export share of production, experts demand raising competitiveness of Egyptian economy, currency reform


The Central Bank of Egypt (CBE) is preparing a programme that guarantees easy and fast transfer of profits for international companies that pump foreign direct investment in Egypt during the coming period equipped to their parent companies abroad, according to CBE Governor Tarek Amer.

This move comes as a part of Amer’s attempts to restore confidence in Egypt’s economy.

The Egyptian administration is struggling to regain the international financial and business community’s confidence in its economy, which has been suffering with slow growth and weakened tourism and foreign direct investment resources since 2011.

Amer did not disclose the details of the programme or whether it will ensure that investors transfer their profits at the same exchange rate as when they started their activity.

“Reassuring international institutions is a must in order to attract investments that contribute to higher growth rates, lower unemployment rates, and increased production,” head of the research department at Prime Holding, Abu Bakr Imam, told Daily News Egypt.

Easy exit of corporate profits from the market is important and increases the competitiveness of the Egyptian economy, rather than locking the money inside, which could drive away investments, Imam said.

Egypt is working to improve the environment for business practices by making entering and exiting the market easy and fast, revising legislation governing economic activity, and fixing tax policies to attract more investments.

CBE will work on providing dollar for companies currently operating in Egypt to exercise their business and transfer their profits, according to Amer.

According to Amer, and as a result of recent reforms, Egypt will receive approximately $30bn in foreign direct investment from China over the next two years. He also revealed an upcoming visit of a delegation from CBE to China to discuss Egyptian projects.

China is interested in Suez Canal development projects and gas exploration. The deputy prime minister of China is currently visiting Cairo to discuss strengthening economic ties between the two countries.

In the framework of strengthening the Egyptian economy, Amer said that CBE is currently coordinating with international institutions operating in Egypt to export a share of their production to ensure the flow of foreign resources to the Egyptian market.

Director of the Egyptian Private Equity Association, Hany Tawfik, said such a move requires raising competitiveness of the Egyptian economy as well as better currency reforms.

Amer said: “Foreign investors must export to provide foreign currency to the country, whereas most international institutions in Egypt do not export.”

Exports are among the most important dollar sources for Egypt, valued at about $22bn a year, besides tourism and foreign direct investment.

Tawfik added that negotiating with companies to export a share of their production requires more currency reform to ensure competitiveness of such exports in international markets.

 

https://www.dailynewsegypt.com/2016/03/27/417248/
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