Incentives and investment opportunities

These incentives are granted to all Investment projects established under the provisions of this Law, excluding only those projects operating under the Free Zones system. These incentives include the following:

1	Exemption from Stamp Duty and Notarisation and Registration Fees for contracts related to the incorporation of Business Entities (Companies or Establishments), as well as credit-facility agreements and mortgage contracts linked to their operations. This exemption is valid for a period of five (5) years from the date of their registration in the Commercial Register..
2	Exemption from the aforementioned tax and fees for contracts related to the registration of land required for the siting of the Companies and establishments.
3	A Uniform Customs Duty is Applied at a Rate of 2% to: Machinery, equipment, and apparatus imported for the establishment of the Business Entities. Machinery, equipment, and apparatus imported for the establishment or completion of Business Entities operating in public services and utilities projects. Without prejudice to the provisions of Temporary Admission stipulated in the Customs Law (Law No. 66 of 1963), Industrial investment projects under the provisions of this Law may import moulds, dies, and similar production inputs without customs duties for a temporary period to be used in manufacturing their products and subsequently re-exportation. The release and re-exportation shall be based on arrival documents, provided that the entry and re-shipment documents are recorded in dedicated registers maintained by Industrial Development Authority (IDA), in coordination with Ministry of Finance (MoF)..

Special incentives are provided to Investment projects that commence operations following the Law's enactment and align with the Investment Map. These incentives are granted as deductions from the Net taxable profit and are structured as follows:

1. Sector (A): 50% Deduction from Investment Costs:

   A deduction equivalent to fifty percent (50%) of the Investment Costs is granted to Sector (A). This sector encompasses the Geographical regions most in need of development, as designated by the Investment Map and based on data and statistics issued by Central Agency for Public Mobilisation and Statistics (CAPMAS). These areas are those officially approved within the General Plan for Economic and Social Development and are subject to the distribution of investment activities as outlined in The Law’s Executive Regulations.

2. Sector (B): 30% Deduction from Investment Costs :

   A deduction equivalent to thirty percent (30%) of the Investment Costs is granted to Sector (B). This sector includes the rest of the country [the territorial governorates] and applies to the following Investment projects established therein, according to the distribution of investment activities:
   - Projects requiring high labor intensity, subject to the controls stipulated in The Law’s Executive Regulations.
   - Small and Medium-Sized Enterprises (SMEs).
   - Investment projects that rely on or generate Renewable Energy.
   - Nationally Strategic Projects approved by a resolution issued by the Supreme Council for Investment (SCI).
   - Tourism Investment projects approved by a resolution issued by SCI.
   - Electricity generation and distribution Investment projects, as determined by a Prime Minister’s Decree based on a joint proposal from the Competent Minister, the Minister concerned with Electricity Affairs, and the Minister of Finance.
   - Investment projects with 100% of production allocated for export.
   - Automotive assembly and its complementary industries.
   - Woodworking and furniture, printing and packaging, and chemical industries.
   - Industries producing antibiotics, oncology drugs, and cosmetics.
   - Food industries, agricultural produce processing, and Recycling of agricultural residues.
   - Engineering, metallic, textile, and leather industries.
   - Industries related to telecommunications and information technology.

3. In all cases, the investment incentive shall not exceed 80% of the Paid-Up Capital up to the Date of commencement of operations. This is regulated in accordance with the provisions of the Income Tax Law (Law No. 91 of 2005). Furthermore, the period for applying the deduction shall not exceed seven (7) years from the Date of commencement of operations.

Conditions for Eligibility for Special Incentives: Investment projects are eligible for these special incentives subject to the following conditions:
• A new business entity (Company or Establishment) must be founded to undertake the Investment project.
• The entity must be founded within a maximum period of three (3) years from the Date on which the Executive Regulations of this Law entered into force. This period may be extended once by a Cabinet Resolution based on a proposal from the Competent Minister.
• The entity must maintain regular accounts. If the entity operates in more than one zone, it may benefit from the rate prescribed for each zone, provided that separate accounts are maintained for each zone.
•None of the shareholders, partners, or owners of the commercial entity must have contributed, used, or participated any physical assets from an existing entity at the time of the Enforcement of this Law to create or establish the project benefitting from the incentive. Furthermore, they must not have liquidated that entity during the period specified in Clause (2) of this Article with the purpose of creating a new Investment project to enjoy the said special incentives. Violation of this condition shall result in the forfeiture of the specified incentive and the obligation of the entity to pay all outstanding tax dues.
 

1. Permitting the setting up of specialized customs facilities to handle the investment project's exports and imports, following consultation and agreement with Minister of Finance. 
2. The State shall reimburse the Investor for the value of the costs incurred for connecting utilities to the property allocated to the investment project, or a portion thereof, after the project commences operation. 
3. The State shall cover a portion of the technical training costs for employees.
4. Half the value of the land allocated for industrial projects shall be refunded, provided production commences within two years from the date of land handover. 
5. 5. Allocation of land at no cost (gratis) for certain strategic industrial activities, subject to the legally prescribed controls.

Conditions for Eligibility for Additional Incentives: For Business Entities (Companies or Establishments) to be granted any of the additional incentives stipulated in Article (13) of Investment Law No. (72) of 2017, they must meet the following criteria:
• The Entity must have commenced production or engaged in the industrial activity, as applicable, confirmed by an accredited report from IDA; 
Or The Entity must fulfill at least one of the following conditions.
• Origin and Domicile: Arab Republic of Egypt is designated as the primary domicile for the products manufactured by the Entity, or the products specialized by the Entity originate primarily from Arab Republic of Egypt.
• Foreign Currency Financing: The Entity finances its projects using foreign currency resources transferred from abroad, in line with the controls specified by the Board of Directors of Central Bank of Egypt (CBE) and processed through an Egyptian bank.. 
• Export Volume: The Entity exports a portion of its products to foreign markets that is no less than 50% of total production.
• Technology Transfer: Companies operating in modern advanced technology are required to transfer advanced technology to Egypt and actively support the growth of local feeding industries.
• Local Content Deepening: The Entity shall increase the local content ratio of the project’s products, provided the use of local raw materials and production supplies is not less than 50%, as stipulated by IDA.
• Research-Based Activity: The Entity’s core business is derived from research outcomes generated by projects carried out in Arab Republic of Egypt.
 

Prime Minister’s Decree No. 104 of 2022 stipulates the distribution of sub-sectors for investment activities across the geographical scope of Sectors (A) and (B), as specified in the attached tables: