Free zones in Egypt are a unique investment model governed by the provisions of Investment Law No. 72 of 2017 and its executive regulations, implemented by the General Authority for Investment and Free Zones. These zones play a significant role in attracting foreign investments, increasing exports, and creating job opportunities, thus contributing to economic development.

Definition of Free Zones:

Free zones are areas within the country’s territory, subject to its administrative authority, but with special customs, tax, and monetary regulations, providing a unique environment for investors.

Types of Free Zones:

1. Public Free Zones: Currently, there are 9 public free zones.
2. Private Free Zones: These are independent entities, each representing a single project (or multiple projects in similar activities).

Advantages Granted to Free Zone Projects:

• Freedom to transfer invested capital and project profits abroad.
• Freedom to choose the field of investment and the legal structure of the projects.
• Freedom to set product prices and profit margins.
• No restrictions on the nationality of capital, allowing up to 100% foreign ownership.
• The ability to engage in third-party operations to maximize the project’s capacity.
• Foreign investors are granted residence facilities.
• Foreign employees can be granted residency permits upon the project’s request.

Guarantees Provided to Projects:

• No legal action can be taken against projects operating in free zones without prior consultation with the General Authority.
• Projects and establishments cannot be nationalized or confiscated.
• Projects are protected from administrative procedures such as seizure, freezing, or confiscation of their funds, except through judicial means.

Exemptions Granted to Projects:

• Exemption of all capital assets and production inputs necessary for the project’s activities (except for passenger cars) from any customs duties, sales taxes, or other taxes throughout the duration of operations, even if temporarily needed outside the free zone.
• Exemption of the project’s exports and imports to and from outside the country from any customs duties, sales taxes, or other taxes or fees imposed domestically.
• The project and its profits are exempt from tax laws and customs duties applicable within the country throughout the project’s operations.
• Imports and exports to and from the country are exempt from the usual customs procedures or import regulations in place domestically.
• Exemption from value-added tax (VAT) on local market imports for the project.