- Investment Zones were created under Law no. 19 of 2007, which introduced a new investment scheme never included before in the Investment Guarantees and Incentives Law, which is the Investment Zones system. The new law allowed the establishment of investment zones as per a Prime Minister decree to be specialized in whatever investment domain stipulated by the law, and the provisions of articles number 30, 31.38, 41, 42.46 which are mentioned in the investment law are applied on these zones.
- The Prime Minister's Decree No. 1675 of 2007 was issued to regulate work at investment zones.
Objectives
- Establishing integrated clusters in all fields,
- Mandating the private sector to develop, manage and promote these zones,
- Widening the scope of economic and social development across the country with the best employment of the nation's competitive advantages,
- Investment Zones’ activities are not limited to industrial activity but also include other activities as ( Education & Scientific research – SME -Commercial Services – Tourism).
Advantages
- Business homogeneousness in the single zone, offering competitive costs for operation and marketing thanks to industrial integration,
- Unique administration system that facilitate the application of all management procedures through dealing with one single regulator,
- No restrictions over projects' capital and legal form,
- Streamlined customs system for smoother importation and exportation for the projects at the zone,
- Availability of a package of logistic services for projects,
- Goods manufactured within investment zones enjoy the Egyptian origin feature as regards to bilateral agreements with Arab and African countries (COMESA - European Association),
- Projects established in the investment zones enjoy the incentives that are mentioned in the investment law,
- Projects established in the investment zones have the right to deal with the local market.
Establishment Procedures
- The entity willing to establish a zone fills in and submits an application form attached with other required documents.
- The application is checked by the unit of investment zones to see if any of the required documents are missing.
- The application is submitted to the committee in charge of examining the investment zones establishment applications.
- GAFI - via that committee and jointly with the applicant – obtains approvals from the bodies concerned with the type of business or main types of business in the zone named in the application, and approvals from the Armed Forces Operations Authority, the National Center for Planning State Land Uses, the Supreme Council for Antiquities, Environmental Affairs Agency and the Civil Aviation Authority.
- The committee submits the application to GAFI's board of directors for approval to establish the investment zone. Once obtained, GAFI's approval is referred to the Prime Minister in order to get a final decree on establishing the investment zone.
- GAFI's chairman - based on GAFI's board of director’s approval - issues a decree for forming a board of directors for the investment zone within 2 weeks at most as of the date the zone establishment decree was issued.
Required Documents
Pursuant to the Prime Minister's Decree No. 1675, the following documents must be obtained in order to issue an investment zone establishment decree:
- A description for the site needed to be transformed into an investment zone, including its area, location, coordinates, a recent cadastral map, and the legal nature of the site acquisition,
- A report on all already-existing and required utilities and infrastructure elements and a statement on how much water and energy is needed throughout the phases,
- The zone development and promotion strategy, including a general description of the type of projects likely to be attracted, how many projects, their capital and their estimated total employment opportunities,
- A layout of the zone, including the services to be provided by the developer,
- Information about the company making application, including its experience history, stockholders and capital structure,
- Time schedule for zone establishment and utilization,
- An affirmation from the applicant on their full compliance with all environment, health, security and safety standards and compliance with the zone establishment decree,
- The contract to be signed with willing-investors at the zone, including their compliance with standards and conditions specified in the previous paragraph, as well as conditions of land retrieval in case the land remained unused for a certain period of time.
Administrative System of the Investment Zone
- The investment zone will be run by a board of directors comprised of a representative of the General Authority for Investment (GAFI), a representative of the developer in charge of the zone's development, one or more investors in the zone, in addition to representatives of the Ministry of Finance, the governorate where the zone is, and the bodies concerned with the licensed activities. The board shall develop standards, regulations and rules of investment in the zone.
- The board will have an office within the investment zone, provided that the members of the Executive Office shall be from staff at GAFI. The Executive Office shall be responsible for the following:
Executive Office's Tasks
- Receiving applications from investors wishing to establish projects within the investment zone and presenting them to the board of directors for decision,
- Issuing all license for projects within investment zones after receiving the board's approval.
- Implementing the board of directors' resolutions,
- Ensuring compliance with the zone's general rules,
- Following up procedures for the entry and exit of goods,
- Engaging with external bodies in supervision and follow-up,
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The main role of the developer of the Investment Zones
The investor or developer bears the main burden of the establishment of the zone, the implementation of infrastructure and also provide all the services to the zone, whether the developer is a private company or governmental authority.
Existing Investment Zones
Until May 16, 2011, there have been 13 investment zones specialized in various fields and distributed among 8 Egyptian governorates as follows:
|
Zone |
Activity |
Governorate |
1 |
CBC Egypt for Industrial Development |
Building materials |
Giza |
2 |
Polaris International Industrial Park |
Textile industries |
Giza |
3 |
The Industrial Development Group |
Auto-feeding industries |
Giza |
4 |
Pyramids Industrial Parks |
Engineering industries |
Sharqiya |
5 |
Al-Tajamouat Industrial Park for industrial cities and mortgage development |
Textiles and ready-made garments |
Sharqiya |
6 |
Meet Ghamr |
Small and medium enterprises (SMEs) |
Dakahlia |
7 |
Al-Saf |
SMEs |
Giza |
8 |
City of Scientific Research and Technology Applications |
Nanotechnology and biotechnology |
Alexandria |
9 |
Cairo University |
Higher education and scientific research |
Giza |
10 |
Ain Shams University |
Higher education and scientific research |
Qalyubiya |
11 |
Fayyoum University |
Higher education and scientific research |
Fayyoum |
12 |
Ministry of Communication Investment Zone, Maadi |
Information technology |
Cairo |
13 |
Cairo Airport Investment Zone |
Commercial and service |
Cairo |
GAFI Intention to Establish and Develop Investment Zones
As a part of a plan to develop investment zones, GAFI started to establish a range of investment zones. Taking into account all environmental requirements, GAFI will develop and manage such zones in various governorates in accordance with the competitive advantages they enjoy.
GAFI's Objectives:
- Creating new job opportunities, and training and qualifying labor,
- Developing the local investment by focusing on SMEs,
- Achieving comprehensive development for surrounding communities,
- Stimulating internal trade,
- Establishing industrial clusters meeting all environmental requirements,
- Promoting and developing the private investment.
GAFI has collaborated with a number of industrial developer as ( CPC , Polaris , The Industrial Development Group , Al-Tajamouat Industrial Park ) as it facilitated the administrative system of the Investment Zones through the Board of Directors, as well as procedures for Issuing all license for projects’ construction and operation through the Executive Office of the Investment Zones.
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