The investment law no. 72 of 2017 (the “Investment Law”), cancels and replaces the Investment Guarantees and Incentives in the Law no. 8 for 1997 (“Law 8/1997”). The aim of the Investment Law is to attract new investments to Egypt and develop the investment sector as well. It is worth mentioning that this leads to improving the conditions of foreign investments in Egypt. The Investment Law offers more incentives and guarantees, removes obstacles and simplifies the procedures. The Investment Law is a milestone through the way of a better economic future in Egypt.

The Investment Law retained the majority of the amendments introduced by Law 8/1997 in 2015. The amendments of 2015 offered non-tax incentives and investment protection guarantees, in addition to rules for state-land allocation, set amicable settlement in case of investor-state disputes other than the court option, and authorized the GAFI to act as an one-stop-shop for all investment related licensing, permits and procedures. The Investment Law provides a lot of legislative and organizational amendments which are connected to the companies and capital market laws, also other amendments connected to the capital lease and factoring laws, others for liberalizing foreign exchange market. The General Authority for Free Zones and Investment (GAFI) is applying an online system to facilitate all the required procedures within a less period of time. In addition, procedures for inspecting company’s premises by the National Authority for Social Insurance (NASI) was abolished, and an electronic connection is applied between GAFI and NASI."

According to the Investment Law, GAFI is the sole competent authority to allocate state-owned land for investment through its one-stop shop. It shall include representatives of the landowners in this process. Also the Investment Law added a new tax reduction system that is introduced within certain geographical areas as well as within specific sectors. The new companies established after the issuance of the Investment Law can benefit from the said tax system. It is worth mentioning that after being banned by virtue of the 2015 amendments, the Investment Law allows the privately-owned free zones. According to all the mentioned above, the most important outcome is to witness the Investment Law fruitful result on the Egyptian economy.

This article covers the scope of application of the Investment Law, its guarantees and incentives, features of the Investment Law including the investment zones and dispute resolutions.


The Investment Law is applicable to all local and foreign investment projects in Egypt. Investment projects are those working in one of these sectors: manufacturing, agriculture, trade, education, health, transportation, tourism, housing, construction, sports, electricity, energy, natural resources, water, telecommunication and technology.


1- The Investment Guarantees

The Investment Law provided a number of guarantees that improve the business environment for foreign investors, such as:

· The foreign investors shall receive an equal treatment under the Investment Law as the Egyptian nationals.

· The foreign investors may be granted preferential treatment, upon the approval of the Council of Ministers.

· The investments shall be governed by simplified procedures.

· The investment projects shall not be nationalized. Expropriation may be allowed only for public interest, it shall take place against fair market value compensation to be paid in advance and within a reasonable period of time.

· The administrative authorities shall not revoke or suspend investment project licenses without reasoned and proper warning, and shall grant a period of time to correct any wrongful issues.

· The foreign investors are guaranteed residence in Egypt throughout the term of the investment project. This guarantee is considered an improvement due to the fact that according to the law the residency permits for foreign investors were usually delayed due to security clearances, which is not the case after the Investment Law

· The foreign investors are granted the right to make money transfers abroad.

· The investors' projects may include up to 10% foreign employees, and up to 20% for investment companies. This takes place in case of the inability to hire qualified national labor.

· The compensation of the foreign employees of investment companies is subject to outward remittance as well.

· The foreign investor is entitled to own, manage, use, gain the profits and have them transferred abroad. In case of project liquidation, it takes place within 120 days and foreign investor has the right to transfer the proceeds of such liquidation abroad.

2- The Investment Incentives

The Investment Law aims at encouraging significant and targeted investments. Incentives given to investment projects are three types, (1) general, (2) special, and (3) additional incentives:

· General Incentives:

Except for the free zone projects, all investment projects shall enjoy the following incentives:

1- Exemption from stamp tax on company establishments, credit facilities and loan agreements, land contract notarization with relation to the investment for a period of 5 years from the date of registering the company.

2- In addition, companies shall be subject to a unified flat customs duty rate of 2% on the imported equipment, devices and machinery that are necessary for establishment of investment projects or continuing any infrastructure projects.

3- Investment projects of industrial nature have the right to import molds and other production supplies for the temporary usage in manufacturing their projects without being charged for any custom duties.

· Special Incentives:

Article 11 of the Investment Law provides for a new tax deduction system for a period of 3 years for projects established after the issuance of the Law. The investment areas are divided in Sector A (subject to a 50% off investment cost) and sector B (subject to a 30% off investment costs) the reduction amount shall not exceed 80% of the paid-up capital of the project until the date of operation. The reduction shall be from the net taxable profits subject to the following rates:

· 50% off the investment costs for setting up a project in geographical locations that are in urgent need for development (underdeveloped locations).

· 30% off the investment costs of a project that is set-up in other geographical locations other than Sector A, Sector B, and shall be working in one of the following:

o Labor-intensive projects.

o The small and medium enterprises

o Renewable energy projects.

o Strategic projects as defined by the Supreme Investment Council.

o Tourism projects as defined by the Supreme Investment Council.

o Electricity projects defined by the Supreme Investment Council.

o Projects exporting products outside Egyptian territory.

o Automotive and related feeders’ industry projects.

o Wood, furniture, printing, packaging and chemical industries.

o Antibiotic, cancer treatment and cosmetics.

o Food and agricultural products as well as agricultural waste projects.

o Engineering, mineral, textile and leather projects.

Benefiting from this tax deduction system is subject to the following:

1. Establishing the company after the effective date of the Investment Law and during a period up to 3 years from that date.

2. Not to use the assets of any existing company or liquidate an existing company for the purpose of establishing a new company to benefit from the tax reduction system.

3. Keeping regular accounting books.

· Additional Incentives:

The additional incentives can be granted to investment projects listed under Article 11 of the Investment law by a decree of the Egypt's Council of Ministers. These may include subsidized utilities, the allocation of lands free of charge for strategic activities, and other incentives.

o Establishment of special customs gates to an investment project for its imports and exports;

o The state refunds all or part of the expenses of connecting utilities to the investment project upon the operation of such project;

o The state may partially finance part of the personnel technical training costs of the employees;

o Refunding of 50% of the value of the land allocated to industrial projects provided that the project commencement takes place within two (2) years from the date of handing over such land;

o Allocation of free plots of land for free of charges for strategic projects.

A certificate will be issued by GAFI for those projects benefiting from the special and the additional incentives.


Single Approval: Investments undertaking strategic or national interest projects such as infrastructure, public utilities, renewable energy, roads and ports, or public-private partnership, are entitled to receive a unified approval for all the procedures including establishment, operation, and management of their project. This approval shall include the building licenses and allocation of land plots for the project.

Investors Services: GAFI shall provide investors with all licenses from the one-stop shop with not need to visit any other governmental enitity. GAFI provides incorporation and post-incorporation services, fee collection from applicants and shall provide the approval on completed incorporation applications within one business day from the submission. GAFI provides as well electronic means by which establishments procedures shall be conducted. Approval Offices of the Private Sector that are licensed and accredited by GAFI shall assist and represent investors before government authorities.

Investment Zones System: The following Investment Zones are designated by virtue of a Decree from the Prime Minister selecting geographic areas for specific developments, such as logistics, agriculture, and industry. Each Investment Zone is managed by a Board of Directors with the authority of granting a single approval for establishing investment projects. The said approval shall be sufficient before the governmental entities in Egypt.

Technological Zones System: The areas designated for communications and information technology, equipment for these enterprises shall not be subject to taxes or customs duties. These areas shall cover information technology and communication sectors designing and developing electronics, data centers, programming development, technological education, and any related activities.

Free Zones System: These zones may be established in a form of Public or Private Free Zones mainly for the purpose of exportation. The Free Zones may be established in all Investment Sectors except for:

· oil, fertilizers and steal production;

· transportation, liquidation or production of natural gas;

· Heavy Energy Usage Industries as specified by the Supreme Energy Council;

· alcohol and wine productions; and

· Weapons, ordnance and explosive production as well as any other products related to the National Security.

The investment projects in the Free Zones are not subject to regulations for importation and exportation and/or to applicable tax and customs laws in Egypt. They are solely subject to paying the following fees:

Projects in Public Free Zones

  • A fee of 2% of the value of goods imported by storage projects on CIF basis, and 1% of the goods exported by manufacturing and assembling projects on FOB basis.

  • A fee of 1% of the total revenue of projects that do not export or import products.

Projects in Privately-Owned Free Zones

  • A fee of 1% of the total revenue achieved from exporting its products outside Egypt for manufacturing and assembling projects, and 2% in case of exporting these products inside Egypt.

  • A fee of 2% of the total revenue of projects working in projects other than manufacturing and assembling. Projects in both, public free zones and private free zones shall pay an annual service fee to GAFI equivalent to 0.001% of its share capital with a maximum of EGP 100,000.[1]


  • The Investment Law provided for the establishment of an independent arbitration and mediation center (“The Egyptian Center for Arbitration and Meditation” “the Center”) that shall have the authority to pursue the settlement of investment disputes that arise among investors or investors and state authorities.

  • The investor chooses to settle the dispute this center and shall take place according to its arbitration or mediation rules.

  • A ministerial committee shall be established and managed by a board of five (5) directors with the required expertise and qualifications who shall be appointed by the Prime Minister in order to review complaints and disputes between investors and the state authorities.

The Committees within GAFI shall examine complaints against resolutions issued by the center in accordance with this law.


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