Latest Insights

Interested in starting a new business in Egypt?

Read this brief legal guide

Soliman, Hashish & Partners is constantly in the media spotlight!

Read more

Scholarship for studying the Master of Laws in International Trade Law at International Training Centre of ILO

Read more

Covid-19 Legal Alerts

Soliman, Hashish & PartnersInsightsBriefingsCorporateNew Amendments to the Investment Law

Heba El Abd Associate

  • +2(02)28124499

New Amendments to the Investment Law

Briefings Corporate

On July 25, 2023, new significant amendments were issued to the Investment Law No. 72 of 2017 (the “Investment Law”) by virtue of Law No. 160 of 2023 (the “Amendment”), in particular regarding cost exemptions for the implementation of infrastructure and utilities and the payment of cash incentives for projects which have been partially funded by foreign currency funds.

It is worth noting that the three types of incentives regulated under the Investment Law, namely, general, special, and additional incentives are covered by the Amendment.

According to the Amendment, all investment projects shall enjoy the general incentives provided in the Investment Law, irrespective of the legal systems or frameworks to which these projects are subject, including investment projects established prior to the application of the Investment Law, with the exception of projects established under the Free Zone Regime.

The Amendment provides a special incentive for Industrial Projects which have been funded through a minimum of 50% foreign currency injected from abroad. Such projects may enjoy cash incentives ranging between 35% and 55% of the income tax, noting that this incentive is contingent upon the project commencing operations within a period of six (6) years starting from July 26, 2023.

To qualify for the special incentives provided in the Investment Law, the investment project is required to be incorporated within a maximum of three (3) years from the date that the Executive Regulations of the Investment Law are entered into force. The Amendment grants the Cabinet of Ministers the authority to extend this period to additional period(s) provided that the cumulative period does not exceed a total of nine (9) years. It is worth noting that the Cabinet of Ministers has previously extended this period once in 2020. Prior to the Amendment, the Cabinet of Ministers was only empowered to extend this period once limited to a three-year period.

In addition, investment projects may enjoy an exemption of up to 50% of the expenses incurred in implementing their infrastructure and utilities, as well as up to 50% exemption on their utility consumption bills for a maximum period of ten (10) years.

The Amendment mandates the General Authority for Investment and Free Zones (“GAFI”) and other competent authorities to monitor and supervise companies holding the Golden License regarding the implementation, management, and operation of the relevant projects. In the event of violation of any of the requirements or controls, GAFI shall notify the company of such violation by virtue of a registered letter with acknowledgment of receipt and require it to remedy such violations within the appropriate period. Failure to comply with this may result in the suspension of the project’s activity or revocation of any of the granted incentives for a period not exceeding one (1) year. Should the same violation persist, the Golden License may be revoked.

Moreover, specific industries are now permitted to establish their projects within free zones. Previously, industries including oil processing, fertilizer industries, iron and steel, natural gas processing, liquidation, transport, and energy intensive industries were prohibited from setting up their projects within the free zones. The Amendment provides the opportunity for these industries to establish their projects and conduct operations within the free zones, subject to obtaining the approval of the Egyptian Supreme Council of Energy.

Finally, according to the Amendment, the importation of waste from free zones into in-land country shall not be subject to the general rules applicable to importation from abroad.

Member of