Investment Guarantees and Incentives24 Jun 2016 2105 Views
In general : Business entities in Egypt that have been incorporated after the enactment of the Law 8 of 1997 enjoy further guarantees and incentives.
The main areas that are affected by the above mentioned benefits consist of land retrieval, manufacturing and mining, all aspects of touristic business
, trade and shipping of agricultural and industrial products, air and maritime transportation, services for the field of oil and gas, accommodation and infrastructure projects, medical centers that apply a policy of granting 10 per cent of their facilities for the purpose of free treatment, computer programs and systems.
In case the entity under question has a variety of other activities, the appliance of the guarantees takes place only for the activities discussed in the Law № 8.
The following guarantees and incentives are discussed in the Law № 8:
- Exemption from nationalization or expropriation
- Exemption from administrative attachment or asset freezing
- The right to purchase lands and buildings necessary to proceed with the operations of the business
- The right to import tools, vehicles and raw material required for operations
- The right to export the production
- Discharge from specific provisions of the Egyptian Company’s Law
- Exemption from stamp taxes
- Exemption for 5 years from the date of registration with the Commercial Registry from the payment of charges related to legalization and registration. Such fees apply for the loan and mortgages agreements concerning the business
- Land title registration is also under exemption from the said fees
- 5 per cent import customs are applied for the establishment of the company
GAFI is the authorized institution responsible for the regulations monitoring of the process of business establishment under the Investment Law.
According to the amendment to Law 8 of 1997 the newly incorporated companies have the right to transfer the capital in foreign currency from abroad with a condition that the sum is transferred in full.
Free Zone Investment
The above mentioned law also touches on the setting up of the structure for incorporation and management of general free zones in Egypt. They have been established as an addition to Cabinet decrees.
GAFI is the primary authority responsible for outlining the regulations and guidance for activities that take place in the free zones along with the business licensing procedures and regulations for land and buildings utilization. The Board of Directors holds the responsibility of managing the free zones with each free zone having a separate BOD. The Chairman of BOD issues the decrees for operation licensing.
The projects at the free zones are exempted from taxes with a payment of annual fees payable being retained. The fee includes 1 per cent of the worth of goods for storage added to 1 per cent of the added value of the existing goods. Transit products trading is exempted from the fees. Moreover, there are projects that are not related to the movement of products. The realized revenue from such projects is subject to a 1 per cent annual fees. Added to those are annual service fees of 0.5 per mille of the project capital cost in a range of $100 to $1,000.
Import and export laws do not apply for the project at the free zones along with all the technology, equipment and vehicles needed for the business operations.
There is a further possibility of GAFI setting up private free zones and supporting a transformation of an in-land project to a private free zone.