Egyptian Legislative Framework
Egypt presents many guarantees and incentives to provide the best investment climate and maintain the rights of investors as well. In this regard, laws have been issued to give companies and individuals the right to import all the required materials, equipment and spare parts besides entitling them to export their products without obtaining any permission from any part.
The issued laws provide tax exemption for five years on the revenues of trade and industrial activities as well as the profits of the companies and institutions.
The tax exemption extends to ten years as regards the companies established in remote areas and new urban communities.
The issued laws provide tax exemption for five years on the revenues of trade and industrial activities as well as the profits of the companies and institutions.
The tax exemption extends to ten years as regards the companies established in remote areas and new urban communities.
- Investment Law No.8 which is known as “the favorable non-free zone regime”. The law was enacted to attract foreign investors and thus applies only to a specific number of activities. Investors engaged in sectors not covered by Law 8 are subject to Corporate Law No.159 of 1981. In both cases, the General Authority for Investment and Free Zones (GAFI) acts as the official regulator for all incorporations and licenses.
Among the incentives and guarantees are protection against expropriation and compulsory pricing; full right of profit and dividend repatriation; no export requirements; access to dispute resolution committees administered by GAFI; and unfettered access to land in Upper Egypt.
Other incentives include a standard income tax rate of 20 %( oil and gas sector companies at 40.55%); a 10-year tax exemption for land cultivation and production activities related to livestock, poultry and fish; export duties ranging from 5-25% of the value of all sales transactions; and import duties ranging from 2-32%.
- Law 83/2002 established Special Economic Zones (SEZ) that provides significant incentives and competitive advantages for investors. Each of the zones is autonomous and has its own Board of Directors who handle incorporation, licensing procedures as well as other and investor ser vices. The North West Suez Special Economic Zone was the first zone created under the said law, and will serve as a model for the future development of other SEZs in Egypt.
The North West Suez SEZ stretches over 20 square kilometers strategically located directly adjacent to the Sokhna Port about 45 kilometers southeast of Suez City, near the southern entrance of the Suez Canal. A master development company (MDC) was established by the SEZ Authority in 2006 to create a master plan for the promotion and management SEZs. The final zoning and infrastructure strategy for SEZs will be put in place by the second half of 2008.
Within close proximity to the North West Suez SEZ are several projects incorporated under the general Inland Investment regime, which create an additional flow of commercial activities to the Sokhna Port.
The privately managed Red Sea port of Sokhna is being hailed by the cargo industry as a quiet revolution in Egyptian logistics. The port will serve more than 20,000 vessels sailing through the Suez Canal each year. The Sokhna port is strategically positioned to serve as a trade and logistics hub between the EU, the Far East and West Africa.
SEZ incentives and guarantees include a 5% at rate on personal income tax; integrated custom administration, tax administration, dispute settlements, licensing as well as general investor ser vices for projects incorporated within the zones; a 10% tax rate on all activities within the SEZ; and Egyptian certificates of origin for SEZ-based exporters, allowing them to make use of Egypt's international trade agreements.