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Egypt - Apply for Investment Incentives

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Contents

Introduction

One of the steps taken by the government to enhance Investment in Egypt is the provision of investment incentives. This procedure contains steps to follow to be taken in order to be Exempted from income tax under Investment Guarantee and Incentives Law No. 8 of 1997 for investment incentives as laid out by the Council of Ministers in Egypt. The Egyptian Government provides investment incentives.

According to the Income Tax Law No 91 of 2005, the tax exemptions have been cancelled from the Investment Law and the Corporate Tax rate has been reduced to become 20% instead of42%.

The investors can establish their projects either under the Investment Law or under the Companies Law. Both Laws are having the same incentives, privileges and guarantees.

The General Authority for Investment and free zone (GAFI) acts as the official regulator for Investment incentives in Egypt and it is the governmental body responsible for project’s approval and reviewing their articles of association.

Eligibility

All foreign investors who plans to engage in Investment in Egypt,or a domestic one or a partnership of foreign and domestic investors are Eligible for Investment Incentives.

Investment Activities Eligible for Income Tax Exemption.

1. Where an investor engaged in capital market, finance lease,Insurance, ..etc as obliged to pay the taxes as it should be practiced according to other Laws;

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Instructions

  • All Companies must apply for investment permit with the General Authority for Investment and free zone (GAFI), and be familiar with the rules relating to the filing of investment permit and how the charges is calculated.The registration to get a investment incentives generally involves a few minutes.
  • The companies shall comply with the provisions of the laws, regulations and decisions in force and shall be committed to obtain the licenses necessary for practicing its activities.
  • The companies and establishments shall not be nationalized or confiscated.
  • Sequestration shall not be imposed administratively on the companies and establishments nor shall their property and funds be distained, seized, retained in protective custody, frozen or confiscated.
  • No administrative quarter shall interfere in pricing the companies and establishments’ products, nor in determining their profits.
  • No administrative quarter shall cancel or stop the license granted for using the realities of which the usufruct rights is licensed to the company or the establishment wholly or partially, except in case of infringing the license conditions.
  • Contracts of incorporation of companies and establishments and loan and mortgage contracts related to their business shall be exempt from the stamp tax as well as notarization and publication fees for a period of five (5) years. Contracts of registration of lands necessary for the establishment of companies and establishments shall also be exempted from the above mentioned tax fees.
  • The companies and establishments shall have the rights to possess and own building’s lands and properties as necessary for exercising their activities and expanding them, whatever the nationality or place of residence of the partners, or the percentage of their partnership.

Required Information

  • Name of Taxpayer
  • Taxpayer Identification Number
  • Business Name or Trade Name of Taxpayer
  • Status
  • Bank Details
  • Name of Bank
  • Bank branch
  • Account Number
  • proposed Type of Business

Procedure

As per the the Income Tax Law No 91 of 2005,and Investment Incentives Law No.8 of 1997 (as amended), a foreign investor or a domestic investor who is eligible for and wants to get incentives, is required to obtain an investment permit first.

In order to carry out any activity in Egypt, the foreign investors must either establish a branch, or an Egyptian subsidiary (entity

Take the following steps.

Step I

  • Apply for investment permit.

Step II

  • Fill the application for incentives with the General Authority for Investment and free zone (GAFI) prior to commencement of work on the project

Step III

  • The General Authority for Investment and free zone (GAFI) will provide for a professional evaluation of the project (two standpoints) within three months after accepting the application for incentives.

Step IV

  • The General Authority for Investment and free zone (GAFI) issues a decision on granting the incentives to the project, if the investor engages in manufacturing of the the following projects
  • ago-Industrial activities or
  • invest in areas of information and communication technology development or
  • production of agricultural products

The following areas of service and production are not considered for investment incentive in Egypt;

  • Activities activities related to
  • capital market,
  • finance lease,
  • Insurance, ..etc


Step V

  • The income tax exemption under the provisions of the above accepted lists shall be effective when the investor provides the information for the relevant revenue collecting institution and its validity is ascertained for each income tax period.
Note
  • Under special circumstances, grant income tax exemption for a period not longer than 10 years. However, the granting of income tax exemption for a period longer than 10 years requires the decision of the Council of Ministers.
  • An investor who has incurred loss within the period of income tax exemption shall be allowed to carry forward his/her loss for half of the income tax exemption period, after the expiry of such period

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Required Documents

The registration requirements are as follows:

  • A copy of certificate of incorporation.
  • List of staff and their annual salaries.
  • The Directors’ Tax Clearance Certificates (now Electronic Tax Clearance Certificate)
  • Letter of application for registration of Business.


Fees

The issued capital should not be less than L.E. 250000 for a joint stock Business.

Validity

Valid for 10 years

Documents to Use

Please attach documents that can be used by people. e.g. links

Sample Documents

Please attach sample completed documents that would help other people.

Processing Time

Processing is within 30 working days.

Office Locations & Contacts

The General Authority for Investment and free zone (GAFI)

Address : GAFI: 3, Salah Salem st.; Nasr City, Cairo, 11562, Egypt.

Telephone  : +202 240 55 452

Fax  : +202 240 55 425

Email  : investorcare@gafinet.org

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Video

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M". 
	

Information which might help

1. The projects established in the free zones and their profits shall not subject to the provisions of laws of taxes and duties applicable in Egypt (so long as such projects limit their activities to that included in their practice activity license).

2). Goods exported abroad or imported by the free zones projects to exercise their activities shall not subject to imports or exports rules, or customs procedures related to exports and imports. It shall also not subject to the customs taxes, sales tax or any other taxes or duties.

3). Except for the passenger cars, all the equipment, supplies, machines and transportation vehicles necessary for exercise the activity licensed for the projects in the free zones shall not subject to the customs taxes, sales tax or any other taxes or duties.

4). The articles of incorporation of the companies and establishments as well as the loan and mortgage contracts related to their works shall be exempted from the stamp duty and the notarization & registration fees for (5) years from the date of registering in the Commercial Registry , the contracts of registration the land which are necessary for establishing the companies and establishments, within the private free zone system, shall also be exempted from the aforementioned tax and fees.

Other uses of the Document/Certificate

Please explain what are other uses of obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.

External Links

https://www.kpmg.com/EG/en/issuesandinsights/Documents/Issues-Insights%20PDFs/Doing%20Business%20in%20Egypt.pdf

http://www.gafi.gov.eg/en/

http://www.erf.org.eg/CMS/uploads/pdf/0336_final.pdf

Others

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