Comprehensive Analysis of the Recent Amendments to the Egyptian Investment Law: Impacts and Effects on the Egyptian Economy

By: Tasneem El-Naggar


In the pursuit of fostering economic growth and development, Egypt has undertaken proactive efforts to attract both foreign and domestic investments. A pivotal stride in this direction materialized through the amendment of the Investment Law No. 72 for 2017 (the, “Investment Law“) by virtue of Decree No. 160 for 2023, which sought to cultivate a more favorable and investor-friendly business landscape. In this comprehensive analysis, we shall delve into the recent amendments that have been made to several critical articles of the Investment Law, namely Articles 9, 11, 12, 13, 14, 17, 20, 34, and 40. These amendments encompass a myriad of investment regulations and procedures, spanning incentives, licensing, and environmental considerations.

Our focus shall be directed towards unearthing the core alterations introduced to the Investment Law, discerning the potential positive ramifications they may entail for the Egyptian economy, while equally scrutinizing any possible negative impacts that warrant consideration. By thoroughly examining the intricacies of these amendments, we aim to shed light on the evolving landscape of investment in Egypt and offer insights into the opportunities and challenges that may arise for investors and the nation’s economic trajectory as a whole. In light of the above, we will proceed with discussing each amendment separately as follows:

Article (9)

The recent amendment to Article (9) introduces a notable expansion of eligibility criteria for the Investment Law general incentives. Previously, the Investment Law only allowed projects established after the implementation of the Investment Law to benefit from these incentives. However, the revised Article now extends this privilege to encompass all investment projects, regardless of their establishment date. This means that both existing and future projects fall within the ambit of eligibility, aiming to create a more inclusive and an attractive investment landscape.

Furthermore, the amendment explicitly clarifies that the eligibility for general incentives is not confined to specific legal systems under which investment projects were established. This clarification ensures that all projects, irrespective of their legal status or establishment date, are entitled to avail themselves of the general incentives outlined in the Investment Law.

Despite the expansion of eligibility for general incentives, the amendment maintains the exclusion of projects established under the free zones system. Free zones are designated areas with their own set of incentives and regulations to attract foreign investment and foster economic activities. By excluding free zone projects from the general incentives, the government aims to ensure that the unique incentives offered in these free zones continue to serve their intended purpose effectively.

The amendment’s broader eligibility criteria for general incentives is expected to have several positive impacts on the Egyptian economy as the expansion of eligibility regardless of legal systems is likely to simplify the application process for incentives, reducing bureaucratic hurdles and making investment more accessible for both local and foreign investors.

Article (11) and (11 bis)

The amendment to Article (11) of the Investment Law introduces changes to the investment incentives granted to certain investment projects based on their sector and geographical location. The article focuses on providing tax deductions and cash incentives to encourage investments in specific sectors and regions within Egypt.

The original text of Article (11) allowed for investment projects established after the implementation of the Investment Law to receive investment incentives based on two sectors: Sector (A) and Sector (B). In this regard, Sector (A) includes areas with the highest developmental needs, while Sector (B) covers the remaining areas of the country. Each sector had different percentages of deductions from investment costs based on the type of investment projects.

The amended Article (11) retains the two sectors, Sector (A) and Sector (B), with the same percentage deductions for investment costs. However, Sector (A) is now identified based upon a comprehensive collection of data and statistics obtained from the Central Agency for Public Mobilization and Statistics, as approved by the General Plan for Economic and Social Development, and according to the distribution of investment activities thereof as indicated by the executive regulations of the Investment Law.

Further, the legislature added Article (11 bis), which introduces further investment incentives for specific industrial activities and their expansions in Egypt. The amendment aims to attract foreign investments by offering cash incentives based on the value of the taxes levied on the income derived from the eligible activities. The new provision grants cash investment incentives to investment projects engaged in industrial activities specified in Article (11) and their expansions, as outlined in Article (12) of the Investment Law. The cash incentive amounts to a percentage of not less than 35% and not exceeding 55% of the tax levied on the income directly generated from the investment project or its expansions. In this respect, the Ministry of Finance is responsible for disbursing the incentive promptly within a specified time frame and upon meeting certain conditions.

By offering cash incentives based on tax returns, the amendment aims to attract foreign investments to specific industrial activities in Egypt. The provision incentivizes foreign investors to allocate a significant portion of their capital from foreign currency sources, enhancing foreign direct investment inflows to the Egyptian Economy. Further, the inclusion of investment expansions in the incentive scheme encourages existing investors to expand their operations in Egypt. This promotes long-term investments and encourages companies to reinvest their profits locally, contributing to economic growth and job creation. The provision also requires the Ministry of Finance to disburse the cash incentives within forty-five (45) days of the tax return deadline. This timely disbursement ensures that investors receive their incentives promptly, providing certainty and predictability for investors. And most importantly, the cash incentives provided under Article (11 bis) are not considered taxable income, which benefits investors by reducing their overall tax liability, thereby enhancing their profitability and encouraging further investments.

However, the cash incentives granted under Article (11 bis) may lead to a reduction in government revenue from corporate taxes. The Ministry of Finance must carefully manage the fiscal impact of these incentives to maintain a balanced budget and ensure fiscal sustainability.

Article (12)

Under the amended Article (12), to qualify for the special incentives provided in Article (11) of the Investment Law, investors are required to establish a new company or facility to carry out the investment project. The significant change lies in the extension of the maximum period for founding such entities, which has been increased from three (3) years to nine (9) years. Moreover, the Cabinet is now empowered to grant additional periods of extension, provided that the total extension period does not exceed nine (9) years.

The extension of the establishment period offers investors more flexibility, catering to projects that require longer planning and execution timelines. This change is expected to attract more long-term investments into the country, fostering sustainable growth and development. The amended provision further allows investors to take a more comprehensive approach to their projects, considering various factors that could contribute to successful implementation and operation.

While longer establishment periods may attract long-term investments, they could also delay the realization of the project’s economic impact. Economic benefits, such as job creation and increased productivity, might be deferred until the project becomes operational. Additionally, investors might face uncertainty during the extended establishment period, particularly if external factors or economic conditions change. This uncertainty could lead to hesitation or a reduction in investment commitments.

In brief, the extension of the establishment period for new projects under Article (12) of the Investment Law introduces both positive and negative impacts. On one hand, it attracts long-term investments and offers investors the time needed for comprehensive planning. On the other hand, it might delay the realization of economic benefits and introduce uncertainty. The government must strike a balance between providing flexibility to investors and ensuring timely contributions to the economy. Overall, a sensible approach to implementing this amendment is crucial to harness its positive aspects while mitigating its potential drawbacks.

Article (13)

The amended Article (13) retains the core provisions of the original article while introducing additional incentives to bolster investment opportunities in Egypt. The retained incentives include:

  1. Allowing the establishment of special customs outlets for the exports or imports of the investment project in agreement with the Minister of Finance.
  2. The state bearing the cost of connecting utilities to the allocated property for the investment project or a portion thereof after the project’s operation.
  3. The state bearing a portion of the cost of technical training for the workers.
  4. Refunding half the value of the land allocated for industrial projects if production starts within two (2) years from the date of land delivery.
  5. Allocating lands free of charge for certain strategic activities according to the regulations prescribed by law.

The amended Article (13) introduces exciting new incentives, as follows:

  1. Exemption from the charges for usufruct of the land allocated for the establishment of the project for a maximum period of ten (10) years, starting from the start of operation, based on the proposal of the competent minister.
  2. Exemption from contributing to the costs of establishing infrastructure, public services and utilities at a rate not exceeding (50%), in accordance with the controls to be determined by a decision of Supreme Council.
  3. The public treasury may bear a rate not exceeding (50%) of the consideration for the project’s consumption of basic utilities for a maximum period of ten (10) years, in accordance with the controls to be determined by a decision of the Supreme Council.

Additionally, the Cabinet, based on the proposal of the competent minister, may introduce other non-tax incentives, whenever necessary.

These additional incentives provided by the government, such as the provision for refunding half the value of the land allocated for industrial projects if production starts within two (2) years, creates a sense of urgency for investors. This may motivate them to expedite project implementation, leading to quicker economic contributions and operational efficiencies. In addition, the allocation of lands free of charge for certain strategic activities aligns with Egypt’s vision to bolster critical sectors for economic development. By encouraging investments in these areas, the country can leverage its resources more effectively to drive growth and innovation. Further, the exemption from contributing to infrastructure costs by up to 50% can incentivize private sector investments in Egypt’s infrastructure. This, in turn, will lead to improved facilities and services, benefiting businesses and citizens alike.

However, it is crucial to acknowledge that with the introduction of additional incentives, there might be potential challenges to address. One potential negative impact could be the strain on the government’s financial resources. As the state bears certain costs, such as utility connections and infrastructure development, there could be an increased financial burden in the short term. Managing these expenditures efficiently and effectively will be critical to ensuring the long-term sustainability of the incentives.

Article (14)

The original Article (14) states that the Chief Executive Officer of the General Authority for Investment and Free Zones (GAFI) or whoever he/she delegates has the authority to issue the necessary certificate for enjoying the incentives provided for in Articles (10, 11, 13) for companies and establishments subject to the provisions of the Investment Law. This certificate is considered final and effective on its own, without the need for approval from other entities, and all parties must abide by its contents.

The amendment to Article (14) clarifies that the certificate for enjoying incentives also applies to the projects covered by Article (11 bis) in addition to Articles (10, 11, 13). This ensures that the authority to issue the certificate encompasses all relevant articles of the law. The rest of the article remains unchanged.

Overall, the amendments appear to streamline the process of issuing the necessary certificate for enjoying incentives and ensure its applicability to all eligible projects. This may enhance administrative efficiency and simplify procedures for businesses and establishments seeking to benefit from the incentives provided by the Investment Law.

Article (17)

The original version of Article (17) stated that the investment plan should include the preparation of an investment map. The map would specify the type and system of investment, geographical areas, and sectors. It also required the identification of state-owned properties or properties owned by other public entities designated for investment, along with the system for their management based on the investment system. The competent authority, in coordination with relevant government agencies, was responsible for preparing the investment map. The plan and investment map needed to be reviewed at least every three (3) years or whenever deemed necessary, based on the proposal of the authority.

After the amendment, Article (17) underwent several changes. The revised version emphasizes that the investment plan should include a comprehensive investment map that covers various essential aspects. The key changes are as follows:

  1. The Investment Map’s Content: The investment map must now contain all the necessary data and information related to the investment project. This includes detailed information about the nature and geographical location of the property, the sector activity, pricing, management system, facilities, incentives provided for the activity, guarantees, targeted market size, export incentives, and the required approvals, permits, and licenses for carrying out the activity.
  2. Responsibilities of Relevant Authorities: All relevant authorities involved in the project’s activity are now obligated to provide the necessary data to prepare the investment map. Each authority must contribute within its jurisdiction to supply the required information for the map’s preparation.
  3. Review Frequency: The requirement for reviewing both the investment plan and the investment map at least every three (3) years remains unchanged. However, the revised article adds that the review can take place whenever deemed necessary based on the proposal of the competent authority.

In summary, the amendment aims to enhance the comprehensiveness and accuracy of the investment map by including more detailed information about the investment project. It also emphasizes the cooperation of all relevant authorities in providing the necessary data for the map’s preparation.

Article (20)

The original Article (20) allowed the Cabinet to grant a single approval for companies establishing strategic or national projects that contribute to development or projects involving public-private partnerships in public utilities, infrastructure, renewable energy, roads, transportation, or ports (the, “Golden License”). The Golden License covered the establishment, operation, and management of the project, including construction permits and the allocation of necessary properties. Additionally, the approval could include the application of one or more incentives specified in the law. The executive regulations of the law detailed the conditions and procedures for obtaining this approval.

The amended Article (20), on the other hand, still allows the Cabinet to grant the Golden License to companies, regardless of their legal form, whether they are existing companies or those established to undertake new investment projects or strategic and national projects that contribute to development. However, the specific areas and criteria for obtaining these approvals are now determined by a resolution of the Cabinet, ensuring greater transparency and accountability in the process.

Moreover, the amended Article emphasizes that the Golden License granted by the Cabinet remains effective in its own right without the need for any further actions. This streamlining of the approval process can save time and bureaucratic complexities for investors.

Additionally, the Golden License can now include the application of one or more incentives specified in the Investment Law on the project. This inclusion of incentives further enhances the attractiveness of the Golden License and may encourage more investors to undertake strategic and national projects, promoting economic growth.

The Article further added that the responsibility for overseeing companies that receive these approvals, as well as ensuring compliance with the conditions and regulations for establishing, operating, and managing the projects, falls on GAFI in coordination with the relevant authorities. This improved oversight ensures that approved projects adhere to the established guidelines, contributing to project success and mitigating potential risks.

In addition, the Article mentioned that in case a company violates any of the conditions or regulations, it must be warned through a registered letter, informing it of the violations and providing an opportunity for defense and rectification. This emphasis on corrective measures allows for fair treatment and encourages compliance. If the company does not rectify the violations within the given time frame, the project’s execution or activity may be suspended, and it may lose one or more incentives for a specified period, not exceeding one (1) year. This provision further promotes accountability and ensures that companies uphold their commitments.

In extreme cases of persistent violations, the Council of Ministers, based on a joint proposal from the relevant ministers, can cancel the Golden License previously granted to the company. This serves as a strong deterrent against serious misconduct, safeguarding the integrity of the Golden License system.

In conclusion, the amendment to Article (20) of the Investment Law brings much-needed clarity and streamlined governance to the Golden License process. By providing a more straightforward path for approvals, including incentives, and implementing strict oversight measures, Egypt aims to attract more strategic investments that contribute to the nation’s development goals. The revised Article (20) reinforces the country’s commitment to fostering an investor-friendly environment and driving sustainable economic growth in the years to come.

Article (34)

The original Article (34) specifically excluded licensing projects in the fields of petroleum manufacturing, fertilizers, iron and steel, natural gas manufacturing, and energy-intensive industries from applying to the free zones system. Industries linked to national security, such as alcoholic beverages and weapons manufacturing, were also excluded from the free zones system.

The amended Article (34) introduces noteworthy changes to the licensing of projects in the free zones system. While the provisions for petroleum refining projects under Law No. 133 for 2010 remain intact, the amendment now allows for licensing projects in the fields of petroleum manufacturing, fertilizers, iron and steel, as well as natural gas manufacturing and energy-intensive industries. To obtain these licenses, approval from the Supreme Council for Energy is required.

Despite the expansion of eligible industries, the amendment remains steadfast in its prohibition of licensing projects related to alcoholic beverages, alcoholic substances, weapons, ammunition, explosives, and other industries linked to national security within the free zones system.

By widening the scope of eligible industries, Egypt seeks to attract more foreign direct investment, boosting the country’s economic prospects. Further, the inclusion of natural gas manufacturing and energy-intensive industries in the free zones system supports industrial diversification, leading to a more robust and resilient economy. However, despite its economic benefits, the amendment could raise security concerns related to industries not allowed in the free zones system. Striking a balance between economic opportunities and national security considerations remains crucial.

Article (40)

Article (40) originally regulated the importation of goods from free zones into the country, subjecting them to the general rules of importation from abroad. It allowed an exception for the entry of materials, waste, and residues from projects operating in free zones into the country for disposal or recycling purposes.

After the amendment, Article (40) retains the provisions of importation from free zones, but introduces notable changes and clarifications. The new amendment adds the Waste Management Law No. 202 for 2020 (the, “Waste Management Law”) alongside the Environmental Law as the governing laws for the entry of materials, waste, and residues from free zones into the country for disposal or recycling purposes. This signifies a more comprehensive and updated approach to waste management, aligning with global environmental standards. In addition, the entry of materials, waste, and hazardous residues resulting from free zone activities into the country for disposal or recycling shall not be considered as an import from abroad. This implies that such waste management practices are handled separately from general import regulations, ensuring stricter control over hazardous waste movements.

The amended Article 40 strengthened environmental protection by incorporating the Waste Management Law and explicitly excluding hazardous waste as imports, the amendment reinforces environmental protection measures and ensures responsible waste disposal and recycling practices. Additionally, the clear distinction between regular imports and waste disposal activities provides better guidelines for businesses and authorities, leading to increased compliance with environmental and waste management regulations.


The recent amendments to the Investment Law in Egypt mark a significant milestone in the country’s efforts to attract both foreign and domestic investments, foster economic growth, and create a more favorable and investor-friendly business environment. The amendments target various aspects of investment regulations and procedures, covering incentives, licensing, environmental considerations, and eligibility criteria.

Overall, the recent amends to the Investment Law demonstrate Egypt’s dedication to creating an attractive investment landscape, fostering economic diversification, and aligning with global standards. While the amendments bring forth numerous positive impacts, addressing potential challenges in enforcement, administrative efficiency, and monitoring will be essential for the effective implementation of the revised provisions. As Egypt continues its journey towards economic development and prosperity, the success of these amendments will depend on collaborative efforts between government authorities, investors, and relevant stakeholders.