Introduces further tax incentives for investment
25 Jul 2023
On July 25, 2023, the Parliament unveiled Law No. 160 of 2023 (Law 160) in the Official Gazette. This new legislation introduces significant changes to Investment Law No. 72 of 2017, aimed at enhancing the incentives offered to foreign investors, promoting widespread investment distribution across the country, and broadening the scope of eligible companies permitted to initiate, operate, and manage projects in Egypt.
Key highlights of Law 160 include:
Cash Investment Incentive: Law 160 introduces a fresh cash investment incentive for projects and expansions falling under specific industrial activities covered by the existing special incentives program. Under this provision, investors are entitled to receive a refund ranging from 35 percent to 55 percent of the taxes paid in their corporate tax returns on income generated from their business operations.
Extension of Special Incentives: The law allows for an extension of the special incentives period if a company is established within three years from the effective date of the Executive Regulations of the Investment Law, and if the Egyptian Cabinet approves an extension of up to nine years in total.
Additional Exemptions: Law 160 introduces various exemptions to further incentivize investment, including:
- Exemption from usufruct charges for lands allocated to project establishment for a maximum of 10 years from the commencement of operations, subject to approval by the competent minister.
- Exemption from contributing to infrastructure, public services, and utilities costs, up to 50 percent, as determined by a decision of the Prime Minister and parameters set by the Supreme Council.
Exemption from paying up to 50 percent of basic utilities consumption for a maximum of 10 years, following parameters established by the Supreme Council.
Free Zones Expansion: Under Law 160, it is now permissible, subject to approval by the Supreme Council of Energy, to license projects under the free zones system in sectors such as petroleum manufacturing, fertilizer industries, iron and steel manufacturing, liquefaction and transportation of natural gas, and energy-intensive industries.
These amendments came into effect on July 26, 2023, ushering in a new era of investment opportunities and incentives for both domestic and foreign investors in Egypt.
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Type:
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Promotion and facilitation (Investment incentives, Special economic zones)
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