Steps and Procedures for Establishing an Industrial Facility in Egypt

The process of establishing an industrial facility is a multi-stage operation that requires meticulous planning and proper execution. It is essential to select the appropriate industrial activity and conduct comprehensive economic and technical feasibility studies before initiating any other steps. Furthermore, all necessary licenses must be secured prior to project execution, along with obtaining the required financing from reliable sources. Finally, the project must be implemented according to standard specifications and criteria, and operated only after fulfilling all requirements and conditions.

 
 

Step 1 Step 1: General Steps

: Establish your company • Establishing a company provides a legal framework that regulates your business and protects your interests. Moreover, the Egyptian government has introduced numerous facilitations regarding company incorporation procedures and offers several incentives to investors,including tax exemptions,concessionary loans,and technical support.For more information,please visit the website of the General Authority for Investment and Free Zones (GAFI) as well as the website of the Internal Trade Development Authority (ITDA)
 
 

Step 2Step 2: Select the type of industrial activity/activities to be established

  • 1- Market Research: Study the market size and its needs before selecting the type of activity.
  • 2- Competition Assessment: Evaluate market competition to determine the best strategies for market entry.
  • 3- Selecting the Right Activity: Choose activities that possess a distinct competitive advantage.
 
 

Step 2Step 3: Determine the appropriate location for the industrial project 

  • - Site Selection Factors: It is crucial to choose a suitable location for the industrial project that offers competitive advantages, such as robust infrastructure, labor availability, proximity to markets, and proximity to suppliers.
  • - Site Feasibility Study: Evaluate land costs, construction costs, and transportation expenses

You can visit the Egypt Industrial Digital Platform website (www.madein.eg) to view available investment opportunities as soon as they are announced, vacant land plots with their exact coordinates, required activities, and the price per square meter for each plot.(www.madein.eg).

 
 

Step 2Step 4: Conduct a feasibility study

  • - Conducting a technical and economic feasibility study is an essential step before launching any industrial project. It helps the investor assess the project's viability from both technical and economic perspectives, identify success and failure factors, and make informed investment decisions.
  • - The Technical Feasibility Study includes: Factory design, selection of equipment and technology, raw materials required for the intended activity, production capacity, and expected energy consumption, etc.
  • - The Economic Feasibility Study includes: Identifying the target market size, determining initial investment costs, operating expenses, projected revenues, the break-even point, as well as potential project risks along with risk mitigation plans.
  • - Crucial Tip: Preparing an accurate feasibility study helps avoid costly mistakes in the later stages of the project.

Therefore, it is highly important to develop a comprehensive technical and economic feasibility study before starting any industrial project

 
 

Step 2Step 5: Project financing

  • - Securing Necessary Project Funding: There are various funding sources available to investors, such as bank loans, self-financing, Foreign Direct Investment (FDI), and support programs for Small and Medium Enterprises (SMEs).
  • - The appropriate financing source must be selected based on the project's specific needs and terms.
 
 

Step 2Step 6: Project execution

  • - Commence project execution while adhering to standard specifications and criteria, by obtaining a building permit, starting construction, and procuring machinery and equipment..
  • - Project Supervision: The implementation of the project must be meticulously supervised to ensure the quality of work
 
 

Step 2Step 7: Obtain the necessary licenses for operation

  • - Obtain the required licenses from the Industrial Development Authority (IDA) before commencing operations.
  • - There are two types of industrial licensing systems in Egypt:
    • - Licensing by Notification (Notification System): Applies to industrial establishments whose operations do not pose a threat to the environment, health, public safety, and security.
    • - Prior Licensing (Pre-Approval System): Applies to industrial establishments whose operations pose potential risks to the environment, health, public safety, and security. This system requires obtaining all necessary approvals before starting the activity.
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