Fresh incentives for hospitality sector: The Madbouly cabinet has approved a new EGP 50 bn tourism initiative that will see the government offer financial incentives to encourage hospitality players to increase their hotel room capacity. This came during the cabinet’s latest weekly meeting.

What’s being offered? The government will offer hotel companies payouts not exceeding EGP 2 bn depending on their size to build, set up, or acquire new hotel rooms. Companies can start receiving the funding as of 1 January, the initiative will run for a full year.

Tax breaks: Tourism projects established after the implementation of the 2007 Investment Law will receive an income tax break.

The FX fine print: To be eligible, a company will need to exchange 40% of their hard currency revenues through the banking system for a five-year period. The initiative only applies to hotels operating in Greater Cairo, Luxor, Aswan, the Red Sea, South Sinai, and the North Coast.

What’s next? The mechanisms under which the initiative will be implemented will be drawn up by the finance and tourism ministries, alongside the central bank.

ALSO APPROVED-

  • A better industrial land allocation system? A draft law better regulating the allocation and pricing of industrial land plots, a topic that has long been an issue for industrial players.
  • Fresh green funding: A EUR 500k green grant from the European Investment Bank to help realize the targets of the country’s Green Sustainable Industry (GSI) project.
  • Fresh German funding: A funding agreement with the German government that will target waste management and vocational training.
  • Goodbye, Libor? Amending our agreements with the Islamic Development Bank to use SOFR — a measure of the cost of borrowing collateralized by US Treasury securities — instead of the LIBOR.
  • Pushing back higher usufruct fees: A one-year postponement to the 15% increase on usufruct fees collected from companies operating in free zones, until the beginning of 2025.
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