CAIRO: Aiming to streamline Egypt’s business start-up procedures, the International Finance Corporation (IFC) announced Wednesday it would roll out its successful One-Stop Shop project nationwide.
The IFC – the private sector arm of the World Bank Group – signed Wednesday a memorandum of understanding with Egypt’s Industrial Development Agency (IDA) that seeks to streamline and decentralize the process of obtaining industrial licenses, reducing cost and time needed to register a company.
“Under this protocol agreement, the IDA will receive an LE 1.2 million grant to streamline and decentralize industrial license procedures throughout the country, explained Amr Assal, head of the IDA. “This project will help boost Egypt’s industrial development, employment opportunities as well as exports capacity through attracting domestic and foreign investments into the country.
Over the next two years, the project will help create an integrated platform for business start-up procedures at the national level. Managed by the IFC, the project will involve the government as well as the private sector in identifying issues that hinder processes for obtaining licenses and permits. IFC will introduce international best practices, replicate pilot reforms at the municipal level, and streamline approval procedures required by public entities.
“For us at the IFC, this is a particularly important and critical project here in Egypt. We had a really excellent experience in the first phase of this project working jointly with the IDA, General Authority for Investment and Free Zones (GAFI) and the Alexandria Businessmen Association to implement the project in Alexandria, explained Frank Sader, IFC’s senior operations manager.
In 2006, the IFC joined forces with Egypt’s General Authority for Investment and Free Zone (GAFI), in a bid to simplify business start-up procedures in Alexandria on a pilot basis. The first phase of the project yielded into inauguration of a One-Stop Shop in Alexandria last May. This brought around 20 government entities together under one roof, allowing domestic and foreign investors alike to register a company with relative ease.
It has helped simplify all necessary procedures needed to incorporate an enterprise, namely land allocation approval, building permits, industrial registration, operating license and tax registration. IFC allocated $800,000 to fund the Alexandria project.
“This first phase generated tangible results that showed you can reform the administration. But most importantly for us, these working relationships were a reflection of the reform spirit of this administration that drives the current economic reform process, Sader added.
He explained that the project’s first phase created a new process for industrial licensing in Alexandria that yielded into reducing time for applicants by 42 percent and costs by 27 percent. In cooperation with the IDA, the IFC will help roll out simplified and decentralized business procedures that were initially developed in Alexandria to One-Stop Shops throughout the entire country.
According to the IDA, Alexandria’s One-Stop Shop has cut time taken to register an enterprise from four or six months to 15 days. “[Prior to launching this project], business start-up procedures overburdened investors, Assal stated. “These One-Stop Shops bring together some 15 entities to allow investors to complete all start-up procedures, from obtaining a license to registering an industrial project, under one roof in two weeks only.
The second phase of the project will replicate such simplification solutions in cities including Cairo, Assiut and Ismalia as well as further enhance business procedures in Alexandria. Moreover, the IFC will support operating license reform within industrial zones as well as help develop a new law reflecting best regulatory practices within these zones. The project comes at a strategic time for Egypt, as the Ministry of Trade and Industry has recently embarked on establishing a number of private industrial zones throughout the country, attracting investors from Turkey, Spain, China and Russia, among others.
“The purpose of this project is to create regulatory processes and procedures that make it easier to establish a project in Egypt, Sader pointed out. “The question of how to register a business in Egypt.the question of obtaining licenses and permits.they all matter to the average investor in the street.
IFC expects the project’s second phase to reduce cost and time required to register a business across major Egyptian cities by 40 percent. The IFC will co-finance the project, but the lion’s share of funding comes through a $500,000 grant from the Swiss government.
“Egypt is extremely important to the Swiss government in this region, said Madiha Nasr, commercial attaché at the embassy of Switzerland. “This project will help facilitate trade and investment between both countries.. Switzerland sees in this project an opportunity to boost its investment capacity into Egypt by improving regulatory environment for new investors.
As part of this initiative, IFC signed late March a similar agreement with Egypt’s Ministry of Housing to help simplify building permit processes. The corporation will sign a similar protocol next week with GAFI.
