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Suez Canal Economic Zone
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06 Jan 2016
Suez Canal Economic Zone
EFFORTS are underway to attract investors to the New Suez Canal Area Development Project (SCADP), which is subject to zero customs rates, Ahmed Darwish, head of the Authority formed to oversee the management of the zone, told members of the American Chamber of Commerce in Cairo recently. He added that if a project within the zone was exporting to Egypt, it would only pay customs on materials not the value added. Exports to Egypt from elsewhere are subject to customs on the whole product.
The SCADP covers an area of over 600 square km and includes six ports within its boundaries. The target is to develop it into a logistics hub and industrial centre for the new Egypt.
Darwish, who has been in post for around one month, has said he wants to set up a conducive environment for investors to work in and to focus on establishing the regulations that will govern all aspects of the investment cycle, from registration and licensing to arbitration and dispute settlement.
“This is what will keep the relationship with investors smooth,” he said, adding that the legal structure of the authority he heads is “flexible” and that decision-making has deliberately been kept in a single place. “The authority of ministers is delegated to the board of directors of the authority,” he said, adding that “if we receive a request for a project, we will study it ourselves and approve it without having to send it back to the cabinet.”
The law also allows the authority to work as an investor or to partner with other investors to establish projects. “Going into partnerships gives more confidence to investors,”
Darwish said, promising that he would also commission a study to look into the effect of the 22.5 per cent tax that will be collected from projects in the zone.
He believes that lower taxes are needed if the zone is to compete with similar economic zones in Dubai, Singapore or Hong Kong. Before the law governing the zone was amended, it subjected projects to a 10 per cent tax but now projects are liable to the same tax rate throughout Egypt.
) Al-Ahram Weekly(