EGYPT Trends and Developments Contributed by: Inji Fathalla, Salma Nasreldine, Haya El Samra and Ismaël Sedky, Shahid Law Firm
publicity fees for a period of five years from the date of registration, as well as a uniform customs duty of 2% on the value of imported machinery, equipment, and devices required for the formation of companies
es and fees on goods exported or imported for project activities. Tools, equipment and machinery required for Free Zone projects are similarly exempt. GAFI is entitled to fees of 1-2% of revenues derived from Free Zone projects (capped at 0.001% of the capital, at a maximum of EGP 100,000), depending on the nature of the activity. To put this in numbers, there are currently nine existing Public Free Zones located across various governo- rates in Egypt, four new Public Free Zones directed exclusively to exports due to become operational by late 2026, and around 230 Private Free Zones , mostly concentrated in Cairo and Alexandria. The “golden licence” A hallmark of the EIL is the introduction of the “golden license”. This one-stop approval, granted by resolu- tion of the Council of Ministers, covers the set-up, operation, and management of strategic or national projects, including all necessary permits and real property allocations. The license is designed to streamline the investment process for large-scale or partnership projects between the private sector and the state, particularly in sectors such as public utilities, infrastructure, and renewable energy. Since its official implementation in September 2022, a total of 29 investment projects have received the gold- en license, spanning a wide spectrum of industries, from renewable energy and petrochemicals to manu- facturing, agriculture, biotech/health and logistics, all of which are critical sectors for national development. Other legislative initiatives contributing to Egypt’s investment boom Alongside the EIL, recently introduced legislation such as Law No 2 of 2024 Regarding Incentives for Green Hydrogen Production Projects and Their Derivatives offer investors a wide range of tailored incentives, and legislative measures such as the Special Economic Zones Law, the Export Subsidy Program and the State Ownership Policy have collectively enhanced Egypt’s investment appeal by proposing targeted incentives, supporting exporters, and encouraging private-sector participation.
or establishments. Special incentives
The EIL introduces special incentives for projects established in accordance with the investment map established by the General Authority for Investment and Free Zones (GAFI). Sector A projects, established in geographic areas most in need of development, are eligible for a 50% discount on investment costs (ie, expenses required to set the investment project up, consisting of equity plus long-term liabilities invest- ed in the establishment of tangible fixed assets or intangible assets, provided that their value is paid in cash, as well as working capital). Sector B projects, which include labour-intensive industries, SMEs, renewables, strategic and national projects, tourism, and certain manufacturing activities, benefit from a 30% discount. These incentives are available for up to seven years from the commencement of activity and are conditional upon the establishment of a new company within three years (renewable once) from the enforcement of the EIL’s Executive Regulations. Nota- bly, expansions of existing projects may also benefit The EIL further empowers the Council of Ministers to grant additional incentives, such as permission to establish special customs ports, state coverage of utility and training expenses, refunds of land value for industrial projects, and allocation of land free of charge for strategic activities. The CEO of GAFI may grant these incentives at their discretion. Investment-free zones The EIL provides for the establishment of both Pub- lic and Private Free Zones. Public Free Zones are designed to host licensed investment projects primar- ily aimed at exportation, while Private Free Zones are confined to one or more projects carrying on simi- lar activities, whenever the nature of such zones so requires. Projects operating within Free Zones enjoy significant privileges, including exemptions from cus- toms procedures, customs duties, VAT, and other tax- from these incentives. Additional incentives
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