Incentives for investment projects...what are the conditions?

Investment Law No. 72 of 2017 specified a number of special incentives granted to investment projects established after the implementation of this law in accordance with the investment map, an investment incentive deducted from the net taxable profits, as follows:

A percentage of (50%) deduction from the investment costs of sector (A):

It includes the geographical areas most in need of development according to the investment map and based on data and statistics issued by the Central Agency for Public Mobilization and Statistics, and according to the distribution of investment activities therein as indicated in the executive regulations of this law.

It includes the rest of the Republic according to the distribution of investment activities, for the following investment projects: Labor-intensive projects in accordance with the controls stipulated in the executive regulations of this law.

A percentage of (30%) deduction from the investment costs of sector (B):

It includes the geographical areas most in need of development according to the investment map and based on data and statistics issued by the Central Agency for Public Mobilization and Statistics, and according to the distribution of investment activities therein as indicated in the executive regulations of this law.

 Small and medium projects.

• Projects that rely on or produce new and renewable energy.

• National and strategic projects determined by a decision of the Supreme Council.

• Tourism projects determined by a decision of the Supreme Council.

• Electricity production and distribution projects that are determined by a decision of the Prime Minister based on a joint proposal from the competent minister, the minister concerned with electricity affairs, and the minister of finance.

• Projects whose production is exported outside the geographical territory of the Arab Republic of Egypt.

• The automobile industry and its feed industries.

• Wooden, furniture, packaging and chemical industries.

• Manufacture of antibiotics, oncology drugs and cosmetics.

• Food industries, agricultural crops, and agricultural waste recycling.

• Engineering, metallurgy, textile and leather industries.

New activities may be added to enjoy special incentives by decision of the Supreme Council.

In all cases, the investment incentive must not exceed (80%) of the paid-up capital until the date of starting the activity, in accordance with the provisions of the Income Tax Law promulgated by Law No. 91 of 2005, and the discount period must not exceed seven years from the date of starting the activity.

For investment projects to enjoy the special incentives stipulated in Article (11) of this law, the following conditions must be met:

1. A new company or facility must be established to establish the investment project.

2. The company or establishment must be established within a maximum period of three years from the date of entry into force of the executive regulations of this law. This period may be extended once by a decision of the Council of Ministers and based on the proposal of the competent minister.

3. The company or facility must maintain regular accounts, and if the company or facility operates in more than one region, it may benefit from the percentage determined for each region, provided that each region has separate accounts.

4. None of the shareholders, partners, or owners of establishments has provided, contributed to, or used in the establishment, establishment, or establishment of the investment project enjoying the incentive any of the material assets of a company or establishment existing at the time the provisions of this law came into effect.

5. Expansions of already existing investment projects may enjoy the incentives stipulated in Articles (11) and (13) of this law.