The new Investment Law (No. 72/2017) encourages domestic and foreign investments that contribute to sustainable development and meet the standards of responsible business conduct.

It also provides incentives and facilitation, as part of a balance between the rights and obligations of investors and States.

According to this law, Investment involves "using the money for the purpose of establishing, expanding, developing, financing, owning or managing an investment firm in a manner that contributes to the sustainable and overall development of the State" (Art. 1).

The new law also identifies eight principles governing investment that apply to both investors and the state. These principles include (art. 3-8):

1. Equal investment opportunities and non-discrimination,
2. Support for emerging businesses, entrepreneurs and micro, small and medium-sized enterprises (MSMEs),
3. Taking into account the social dimension, public health and environmental protection,
4. Free competition, the prevention of monopolies and consumer protection,
5. Compliance with the principles of governance, transparency, prudent management and non-competing interests,
6. Maintaining the stability of investment policies,
7. Speed and facilitation of investor transactions,
8. The preservation of public interests and national security.

 

Full text of the Investment Law:

 

The Investment law :

The new Investment Law (No. 72/2017) established the Investor Service Centre to facilitate the establishment of enterprises and the issuance of approvals, permits and licenses required to establish or manage investment firms, and to offer, inter alia, monitoring services, in accordance with Egyptian law (Art. 21).

In the same vein, the law requires the automation and unification of procedures relating to pre- and post-establishment services, including electronic establishment (art. 48). In addition, it requires the provision on the websites and in the publications of the competent authorities of an "Investor's Manual" containing the conditions, procedures and dates for obtaining immovable property and issuing approvals, permits and licenses relating to the investment (Art. 19).

Source link

Investment regimes

Zones	(Read more)
Onshore	(Read more)
Investment zones	(Read more)

 

 

Legal Form of companies :

• Corporations Company
• Partnerships Company
• Sole Proprietorship Company
• Single Market Company

Read more aout the Legal Forms Of Company Incorporation

 

In the context of streamlining procedures for investors, the prime minister issued  the decree No.982 of  2022, which enact that The competent authorities receiving applications of investors to issue the approvals, permits, or licenses necessary for the establishment and operation of new investment projects, or for the expansion of the existing investment projects shall decide on such applications within twenty (20) business days from the date of application submission fulfilling the necessary documents; the competent authority shall notify the applicant with the decree issued regarding the application, whether approved or rejected, by a registered letter with acknowledgment of receipt or via any of the modern technological means agreed upon with the investor when submitting the application, within five (5) business days from the date of the elapse of the aforementioned period.

 

Investment Incentives :

A. General Incentives:

All Investment Projects governed by the provisions of this Law, exception being made for Investment Projects set up under the Free Zone System, shall enjoy the following  incentives:

Memoranda of incorporation of companies and establishments, along with credit facility and pledge contracts pertaining to the business thereof, shall be exempt from stamp duty as well as notarization and publicity fees for a period of five (5) years from the date on which such memoranda and contracts are entered in the Commercial Register.

Contracts of registration of lands required for formation of companies and establishments shall be exempt from the aforementioned duty and fees.

The provisions, on the collection of a uniform customs duty at two percent (2%) of the value of all imported machinery, equipment and devices required for formation of companies or establishments, as stipulated in Article (4) of Law on the Regulation of Customs Exemptions enacted by Law No. 186 of 1986, shall apply to the companies and the establishments governed by the provisions of this Law.This uniform customs duty shall apply to all machinery, equipment and devices imported by companies and establishments, operating on public utility projects, and required for the formation or completion thereof.

Without prejudice to the provisions of temporary release stipulated in the Customs Law enacted by Law No. 66 of 1963, Investment Projects of industrial nature, governed by the provisions of this Law, may import  casts, molds and other production requirements of a similar nature without customs duties, to use them for a temporary period in the manufacture of their products, and re-export them abroad. The release and return abroad shall be according to the arrival documents, provided that the entry and reshipment documents are recorded in records prepared for this purpose at the authority, in coordination with Ministry of Finance.

B.  Special Incentives :

Projects set up, after the coming into force of this Law, in accordance with the investment map shall be granted an investment incentive, in the form of a discount of f the taxable net profits, as follows:

50% discount off the investment costs of Sector(A): This sector comprises the geographic areas designated as most in need of development, based on the investment map, the data and statistics issued by the Central Agency for Public Mobilization and Statistics (“CAPMS") and the distribution of investment activities in such areas as specified by the Executive Regulations of this Law.

30%  discount off the investment costs of Sector (B): This sector covers the remaining geographic areas of the Republic, as per the distribution of investment activities, in respect of the following projects:

Labor-intensive projects, subject to the controls prescribed in the Executive Regulations of this Law;

Small and Medium Enterprises;

Projects depending on or producing new and renewable energy;

National and strategic projects to be listed under a resolution of the Supreme Investment Council;

Tourism projects to be listed under a resolution of the Supreme Investment Council;

Electricity generation and distribution projects to be listed under a decree of the Prime Minister, based on a joint proposal of the Appropriate Minister, the minister concerned with electricity affairs and Minister of Finance;

Projects exporting products thereof outside the geographic territory of the Arab Republic of Egypt;

Automotive manufacturing and the supplying industries thereof;

Wood, furniture, printing, packaging and chemical industries;

Antibiotics, tumor drugs and cosmetics industries;

Food, agricultural crops and agricultural waste recycling industries; and

Engineering, metallurgical, textile and leather industries.

Pursuant to the provisions of the Income Tax Law enacted by Law No. 91 of 2005, an investment incentive may not, in all cases, exceed 80% of the capital paid up until the date on which engagement in the activity starts.The discount period may not exceed 7  years from the date on which engagement in the activity starts.

 

Conditions to Enjoy special incentives:

An Investment Project shall, in order for it to enjoy the Special Incentives, satisfy the following conditions:

A new company or establishment shall be incorporated to launch such Investment Project;

Said new company or establishment shall be incorporated within a period not exceeding 3 years from the Executive Regulations enforcement date; upon a resolution of the Council of Ministers and pursuant to a proposal of the Appropriate Minister, such period may be renewed for once only;

Said new company or establishment shall keep regular accounts; should such company or establishment be operating in more than one zone, it may benefit from the percentage prescribed for each zone respectively, provided it keeps separate accounts for each zone respectively; and

Neither shareholders nor partners nor owners of establishments have offered, contributed or used any of the tangible assets of a company or an establishment, existing since the date on which the provisions of this Law come into force, in setting up, incorporating or launching an Investment Project enjoying the incentives accorded by this Law, nor have they liquidated such company or establishment, within the time period specified in Item 2 of this Article, for the purpose of setting up a new Investment Project enjoying the incentives of this Law; violation of this condition nullifies said incentives, and accordingly such company or establishment shall pay all taxes due.

C.  Additional Incentives :

Permission to establish special customs ports of entry for Investment Project importations or exportations, in agreement with Minister of Finance;

Upon Investment Project becoming operational, payment, whether in whole or in part, by the State for the expenses incurred by Investor in course of providing utilities to the premises of Investment Project;

Payment by the State for a part of the expenses incurred in course of providing personnel technical training;

Refund at 50% of the value of the land allocated for the industrial projects, should production start within 2 years from the date on which the land was handed over;

Allocation of lands free of charge to some strategic activities in accordance with the legally prescribed rules in this respect.

 

Conditions for additional incentives:

In order for companies and establishments to be granted the Special Incentives stipulated in Article (13) of the Investment Law, they must have started production or engaged in activity, as the case may be, in accordance with the report approved by GAFI, and shall satisfy one of the following conditions:

The Arab Republic of Egypt is one of the principal places of production of products in which such companies and establishment specialize, or the principal place of the products in which such companies and establishments specialize is the Arab Republic of Egypt;

Such companies and establishments, in course of financing their projects, depend on foreign cash transferred from abroad through an Egyptian bank in accordance with the rules specified by CBE BoD;

Such companies and establishments export abroad no less than 50% of their products;

The activity of a company or an establishment includes operationin any cutting-edge modern technology field and cutting-edge technology transfer into Egypt, and support of industriessupplyingsuch field or transfer;

The local component is strongly included in the products of an Investment Project, provided that the percentage of local components, including raw materials and production requirements, in the products of the Investment Project, is no less than 50%, in accordance with the applicable rules of the Industrial Development Authority;

The activity of a company or an establishment is based on research conclusions reached through research projects carried out inside the Arab Republic of Egypt.  

Read more about Investment Regulations And Investment Incentives

Corporate Income Tax (CIT) Rate	22.5%
CIT return due date	Within four months from the end of the financial year.
CIT final payment due date	Within four months from the end of the financial year.
CIT estimated payment due dates	Advance payment is due on a quarterly basis.
Headline Personal Income Tax Rate	25%
Standard value added tax Rate	14%
Headline corporate capital gains tax rate (%)	0, 10, 25%

Employment contract	Fixed-term contract Contract of indefinite duration
Probation Period	Maximum 3 months
Trail schedules	8 hours a day Or 48 hours per week (6 days)
Weekly rest  days	Friday
Annual leave	21 days a year 30 days for employees who have worked  more than 10  successive years or who are over 50 years old
Official public holidays	Max 14 days
Other leave	Pilgrimage (max one month) after spending five years at work
Maternity leave	90 days
Contributions to social security	Fixed - 26% (employers) 14% employees (max 1510 lEGP) Variable- 24%(employers) 11% employees (max 4040 EGP)
Wage increases	Min 7% per year Min : 105,79 EGP
Overtime	Min 35% - 70% (night) – 100% (weekend) – 200% (official holidays)
Minimum wage	750 EGP per month
Unions	representing the labour rights in the private sector to bargain with the government in different areas (Annual salary increase , Special salary increase, Minimum level of wages , The labour disputes between employers and employees).
Dismissals in  permanent employment contracts	- 60 days’ notice period for dismissal if the period of service does not exceed 10 years, - 90 days’ notice period if that period exceeds 10 years. - Should the employer desire to dismiss the employee without giving him the relative notice period, the employee shall receive two or three month’s salary payment instead of such notice. - Court decisions have tended to award payments of not less than the wage of two months’ salary for each year of employment for unjustified dismissal.
Legal obligations	Under the profit share, employees of a Joint Stock Company, Limited Liability Company, or Foreign Branch are entitled to a share in the distributable profits. The share is fixed at an amount not less than 10% of distributable profits and not more than the total annual salaries of the employees. However, Limited Liability Companies with capital less than EGP 250,000 are not subject to this distribution of profit share

 

Source : Labour Law No. 12 of the year 2003 and its amendments