The Investment Law in Egypt

The recently ratified Investment Law by Egypt (No. 72 of 2017) guarantees fair treatment to all local and foreign investors and protects invested capital and projects from unjustified government intervention, unless decided by a court.

It also provides additional guarantees and benefits to projects specializing in specific activities, through a Prime Minister's decree, based on the principle of fair treatment. Foreign investors are also guaranteed without delay, profit and repatriation of capital.
In the event of liquidation, all outstanding financial liabilities must be disclosed to the liquidated company within a maximum of 120 days to ensure timely exit for investors.

General incentives
The articles of association, credit facilitation agreements and loan agreements are all exempt from stamp duty and notary fees for five years from the date of registration of the company in the commercial register.
Land registration contracts necessary for the establishment of a company are exempt from the related taxes.
All imports defined as equipment needed to establish and manage a project are subject to a unified customs tax of 2%.
In accordance with the provisions of the Customs Law, industrial projects, subject to the provisions of the Egyptian Investment Law, are exempt from customs taxes on imported production inputs and used - for a temporary period - in the manufacturing process for export purposes.

Special Incentives
Investment projects established after the implementation of this law, according to the investment map, are granted special incentives through deductions from their net profit before tax. Two areas ("A" and "B") have been determined for application and eligibility for special incentives under Article (11) of the Investment Law and are defined as follows:

Sector / category projects (A):

Sector / Category A projects benefit from a 50% reduction in the cost of the investment in the form of tax deductions over a period of time. These projects are located within geographic areas that are under development, according to the investment map and data and statistics published by the Central Agency for Public Mobilization and Statistics.

In addition, investments in the Suez Canal Economic Zone and the Golden Triangle Economic Zone are also classified as Sector / Category A projects.

Type (B) projects:

Type B projects benefit from a 30% reduction in their investment costs in the form of tax deductions over a period of time. These projects are found throughout the country and are classified as:

Labor-intensive projects

Small and medium-sized enterprises (SMEs).

Projects that depend on or produce new and / or renewable energy.

Projects in the field of electricity production and / or distribution.

National and strategic projects to be listed in a resolution of the SCI.

Tourism projects to be listed in a resolution of the SCI.

Wood, furniture, printing, packaging and chemical industries.

Sectors associated with information and communication technology.

Export driven projects.

Automotive manufacturers or manufacturers in the automotive power supply sectors.

Pharmaceutical projects that produce antibiotics, cancer drugs and cosmetics.

Food and beverage projects, crop producers and agricultural waste recyclers.

Engineering, metal, leather and textile projects.

Article no. 12 of the law clarifies some conditions that must be present to receive special incentives.

Additional incentives
Additional incentives can be provided through a Prime Minister's decree such as:

It is allowed to establish custom points dedicated to the import or export of an investment project, subject to the approval of the Minister of Finance.

The State reimburses the costs of connecting the utilities to the buildings relating to the investment project.

The state reimburses part of the costs of professional training.

50% of the value of the land allocated to industrial projects will be reimbursed, provided that production starts within two years from the date of receipt of the land.

The free land can be assigned to some strategic projects according to the regulations required by law.

If necessary, non-tax incentives can be added by a Prime Minister's decree and according to a proposal by the relevant Minister.