The Arab Republic of Egypt has adopted a clear legislative policy aimed at creating a stable and attractive investment climate in order to promote domestic and foreign capital inflows and support economic and social development plans. In this context, Investment Law No. 72 of 2017 and its Executive Regulations were enacted as the principal legislative framework governing investment activities in Egypt. The law establishes an integrated system of guarantees, incentives, and regulatory mechanisms designed to safeguard investors’ rights and regulate the relationship between investors and the State.

Under this law, the legislator has introduced various investment regimes, substantive and procedural guarantees, as well as general, special, and additional incentives intended to strike a balance between encouraging investment and protecting the public interest.

I. Investment Regimes

Investment activities in Egypt may be conducted through several regulatory frameworks, most notably:

• The Inland Investment System
• The Free Zones System
• The Investment Zones System
• The Technology Zones System
• The Special Economic Zones System, particularly the Suez Canal Economic Zone

Each of these regimes is subject to its own regulatory framework depending on the nature of the activity, the geographical location of the project, and the developmental objectives pursued by the State.

II. Guarantees Granted to Investors

The law establishes a number of fundamental guarantees intended to ensure the protection of investments, including the following:

1. All investments established in Egypt shall enjoy fair and equitable treatment.
2. Foreign investors shall be granted treatment equivalent to that afforded to national investors, without prejudice to the possibility of granting preferential treatment pursuant to the principle of reciprocity by a decision of the Council of Ministers.
3. Invested funds shall not be subject to arbitrary measures or discriminatory decisions.
4. The State shall respect and enforce contracts concluded with investors. Investment projects established through fraud, misrepresentation, or corruption shall not benefit from the protections or incentives granted under the law, except pursuant to a final judicial judgment or arbitral award.
5. All administrative decisions relating to investment projects must be reasoned and notified to the concerned parties.
6. Nationalization of investment projects is prohibited.
7. Expropriation of investment project assets shall only be permissible for public benefit and against fair compensation paid in advance, equivalent to the fair economic value of the expropriated asset at the time preceding the issuance of the expropriation decision, with such compensation being freely transferable.
8. The imposition of sequestration, precautionary attachment, freezing, or confiscation may only occur pursuant to a judicial order or final court judgment and within the limits prescribed by law.
9. Administrative authorities may not impose new financial or procedural burdens relating to the establishment or operation of projects subject to the Investment Law except after consultation with the Board of Directors of the General Authority for Investment and Free Zones (GAFI) and the approval of both the Council of Ministers and the Supreme Council for Investment.
10. Licenses granted to investment projects may not be revoked, suspended, or withdrawn, nor may allocated land be repossessed, except after notifying the investor of the alleged violations, hearing the investor’s defense, and granting an appropriate period to remedy such violations.
11. Investors have the right to establish, own, manage, finance, expand, and dispose of investment projects, as well as to repatriate profits, dividends, and liquidation proceeds abroad, without prejudice to the rights of third parties.
12. The State guarantees the free transfer of funds related to foreign investments to and from Egypt without delay and in freely convertible currency.
13. The law regulates liquidation procedures in a manner that ensures clarity regarding the obligations of companies under liquidation within a specified timeframe.
14. Investment projects may import the necessary raw materials, equipment, machinery, spare parts, and means of transport required for their establishment, expansion, or operation without the need to register in the Importers Register.
15. Investment projects may export their products directly or through intermediaries without the need to register in the Exporters Register.
16. Investment projects may employ foreign employees up to 10% of the total workforce, which may be increased to 20% where qualified national labor is unavailable, subject to applicable regulations, while ensuring the training of Egyptian workers.
17. Foreign employees working in investment projects have the right to transfer their financial entitlements abroad.

III. Investment Incentives

(A) General Incentives

General incentives apply to all projects subject to the Investment Law—except those established under the Free Zones system—and include:

• Exemption from stamp duty and notarization and registration fees on incorporation contracts, credit facility agreements, and related security documents for a period of five years from the date of registration in the Commercial Register.
• Application of a uniform customs duty rate of 2% on all machinery, equipment, and devices imported for the establishment of investment projects.
• Permission for industrial investment projects to temporarily import molds, dies, and similar production inputs without customs duties, provided that such items are re-exported after use in production.

(B) Special Incentives

Special incentives are granted to projects established in accordance with the Investment Map in the form of a deduction from taxable net profits as follows:

• 50% deduction of investment costs for projects located in Sector (A), which includes geographic areas most in need of development.
• 30% deduction of investment costs for projects located in Sector (B) across the remainder of the Republic, provided that such projects operate in specific sectors determined by the law, including labor-intensive industries, small and medium enterprises, renewable energy projects, strategic industries, and certain manufacturing sectors.

In all cases, the investment incentive may not exceed 80% of the paid-in capital until the commencement of operations, and the deduction period may not exceed seven years from the date the project begins its activities.

(C) Additional Incentives

The Prime Minister may grant additional incentives to certain projects, including:

• Establishing dedicated customs outlets for the project’s imports or exports.
• The State bearing part of the cost of utilities infrastructure or technical training for employees.
• Reimbursement of a portion of the value of land allocated to industrial projects upon commencement of production within a specified period.
• Granting usufruct exemptions on allocated land for a limited period.
• Contribution by the State to the costs of infrastructure or utilities consumption, in accordance with approved regulations.

Eligibility for these incentives requires compliance with certain criteria, such as export orientation, local content development, reliance on foreign currency financing, or the transfer of advanced technology.

(D) Newly Introduced Incentives

Pursuant to Law No. 160 of 2023, which amended the Investment Law, a cash incentive has been introduced for specified industrial projects. This incentive ranges from 35% to 55% of the tax value paid on income generated from the investment activity. The Ministry of Finance is required to disburse this incentive within a legally prescribed timeframe, and it shall not be considered taxable income, subject to the conditions stipulated in Article (11 bis) of the Investment Law.

Conclusion

The Egyptian investment legislative framework reflects a comprehensive approach aimed at safeguarding investors’ rights, ensuring legal certainty, and providing structured financial and procedural incentives. Collectively, these measures enhance Egypt’s position as a competitive investment destination while maintaining alignment with the requirements of public order and the State’s broader economic policy objectives.