GAFI Issues Guide for Investment Zo

On 14 March 2019, the General Authority for Investment and Free Zones (“GAFI”) published an “Investors’ Guide on Investment Zones” (the “Guide”),[1] a 66-page document containing different procedures for the establishment of an investment zone, its management, the required documentation and fees, and the requirements for the ratification or amendment of the zone’s general plan. In addition, the Guide contains detailed procedures on the issuance of project approval, activity license, and building, infrastructure, and utility permits, as well as several templates of application forms for the aforementioned. The Guide relates to approvals from GAFI’s Investor Services Centre, the zone’s board of directors, and the procedures for approvals required from other governmental bodies, such health, safety, and environmental approvals. In a statement published on the same day, GAFI stated that operation according to the manual started on the same day of its publication. According to the Investment Law No. 72 of 2017 (the “Law”), GAFI was to issue a guide containing the conditions, procedures, timelines, and requirements for obtaining all approvals and licenses in relation to investment activities, including land allocation. The recently issued guide, however, is specific to investment zone projects only. Investment zones were first introduced in 2007 through an amendment to the old 1997 investment law.  The new investment Law contains provisions that govern public and private free zones, investment zones, and technological zones. It also contains some provisions pertaining to special economic zones (which are separately regulated under Law No. 83 of 2002 for Special Economic Zones). They are specialized areas focused on a specific industry that are established by way of a Prime Minister decision. The goal is to create areas for integrated clusters assigned to professional industrial and service developers with the idea of making them ready for ‘plug and play.’ In other words, the developer prepares the zone – including infrastructure, utilities, and services – to be readily available for investors to come in, plug their projects, and commence operation. Accordingly, investment zones could act as promising venues for small and medium industries. Investment zones do not enjoy special tax and customs provisions. They do, however, benefit from the provisions in the Law relating to guarantees, general incentives (not applicable to free zone projects), and special and additional incentives including tax breaks, if provided for in their licenses. Similar to other special zones, a board of director administers the management of the investment zone. GAFI’s website currently has a list containing 13 established investment zones in Egypt.[2] Following the enactment of the new Investment Law in 2017, an investment zone that is specialized in the manufacturing of furniture was established in Damietta in April 2018. In addition, a zone that existed in Maadi, Cairo, since 2008 was transformed in February 2019 into a technological zone with a particular focus on ICT manufacturing services, outsourcing services, and ICT entrepreneurship.   [1] General Authority for Investment and Free Zones, “Investors’ Guide on Investment Zones”, available through this link (in Arabic). [2] General Authority for Investment and Free Zones, Investment Regimes, “Investment Zone”, available through this link.