What are the Free Zones
The free zone is a part of the state’s territory, within its geographic borders and subject to its administrative authorities; the free zone’s transactions are subject to special taxation, customs and monetary regulations.
Free zones permitted activities.
In light of the General Authority for Investment and Free zones’ policy, all desired investment activities are allowed inside the free zones, specially the export oriented industries, with the exception of:
- Wine and spirituous drinks industries.
- Production of weapons, munitions, explosives and other related products concerning the national security of the country.
The law No. 160 of the year 2023 was promulgated amending some provisions of the investment law No. 72 of the year 2017, and allowing the practice of some activities that were restricted under the free zones system; this amendment was clarified in article No. 34 as the following:
- Industry ((…..upon the approval of the Supreme Council of Energy , establishing projects in the fields of Petroleum industries; manufacturing fertilizers; iron and steel; production, liquefaction and transportation of Natural Gas and energy intensive industries, may be licensed)).
Exemptions, Guarantees and Privileges offered to the project.
The state, represented in the General Authority for Investment and Free Zones, provided all the success drivers in the free zones, through an integrated system that grants the best privileges, incentives, exemptions and guarantees, compared to its counterparts in the region.
- Capital assets and production requisites necessary for practicing the project’s activity (except passenger cars) are exempted from any customs duties and the value added taxes or any other taxes, as long as the project is practicing its activity, even if the nature of the project’s activity required their temporary existence outside the free zone.
- All imports and exports of the project from/to foreign markets are exempted from any customs duties and taxes whether value added taxes or any other taxes or the duties applied in the country.
- The project and its profits are not subject to laws and regulations of taxes and customs applied in the country during the period of practicing the activity.
- Imports and exports of the project from/to foreign markets are not subject to any customs procedures or regular import rules applied in the country.
- The project’s imports from the domestic market are not subject to the value added taxes
- Transit goods with determined destination are exempted from any duties applied on goods’ entry and exit under the following conditions:
- The project must exist in the customs area.
- The goods should have a determined final destination, with the invoice and the freight policy.
- All the domestic components of goods produced inside the free zones projects are exempted from the customs duties in case these goods are sold inside the domestic market (inside the country).
- The projects operating under the free zones system may not be subject to legal proceeding, before the consultation of the Authority.
- The projects and establishments shall not be neither nationalized nor confiscated.
- Projects shall not be seized, retained in protective custody, or blocked, nor shall be subject to administrative attachment or expropriation without due process.
In addition to the incentives offered by the investment law to all the projects that operate under its umbrella, one of the free zones most important privileges is that the project deals with a sole administrative body which is the free zones administration; the body with the authority to deal with the project during its lifetime , according to an integrated procedures system oriented with facilitation throughout the different phases of the project.
Issuance of all the approvals needed for the project’s establishment.
• Issuance of the project’s activity practicing license which suffices in transactions with all the governmental bodies without the need to be registered in the industrial register.
• Ending the procedures needed for the project’s land reservation and deliverance, from the free zone administration, as soon as the application is submitted with all related procedures (for the public free zone projects).
• Authentication of building licenses from the zone’s administration, as soon as the project’s engineering designs are submitted and revised (for the public free zone projects).
• Carrying out all the project’s needed modifications.
• Ending all the procedures related to the entry and exit of goods, to and from the project’s headquarter by issuing the imports and exports statements and ending all the related customs procedures.
• Ending the procedures of the project’s liquidation, according to the project’s desires.
Types of free zones
There are two types of the free zones, under the supervision of the Free Zones sector: (Public
free zones- Private free zones)
Private Free Zones
A private entity represented in a single independent project (or more than one project in
similar activities), according to the project’s nature; the project should exist outside the
public free zone, as the project’s activity type may require its proximity to certain sites in
order to benefit from the advantages offered by the site’s: proximity to raw materials
resources and production requisites, export markets, needed workforce, opportunities to
integrate with close projects or the need to be close to a certain port or a land road.
The investor may own or rent the private free zone’s location.
To check the documents and procedures required for the establishment of a private free zone
project, pleasePress here
Public Free Zones
There are currently 9 public free zones spread all over the country, in the cities of
(Alexandria “Al Amerya” – Cairo ’Nasr City” – Port Said – Suez “3 sites: Port Tawfiq, El
Adabeya and Attaqa – El Ismailia – Damietta – Shebin el Kom- The Egyptian Media
Production City – Qena “Qeft city”), these free zones are equipped with utilities and
infrastructure needed for operations and receiving the new projects (roads- electricitysewage treatment stations- water networks – telephone lines) in addition to an integrated
customs unit, port security department and a security unit inside each zone, working round
the clock; the establishment of the free zones observed their existence in the big cities,
distinguished with: unique locations; availability of qualified workers to support the zones’
needs; proximity to sea and air ports, as areas are allocated for investment with an annual
usufruct system / meter square depending on the project’s activity.
To check the documents and procedures required for the establishment of a public free zone
project, pleasePress here