Law 8 of 1997

In the name of the people President of the Republic

The People’s Assembly has decided the following law, and we have issued it :

Resolution:

(Article One)

The provisions of the accompanying law regarding investment guarantees and incentives shall be enforced.

(Article Two)

Subject to the provision of Article (18) of the accompanying law, its provisions do not prejudice the benefits, tax exemptions, and other guarantees and incentives granted to companies and establishments existing at the time of its work, and these companies and establishments shall retain these benefits, exemptions, guarantees, and incentives until the expiry of their respective periods, and that In accordance with the legislation and agreements derived from it.

(Article Three)

The administrative authority competent to implement the provisions of the accompanying law shall replace the General Authority for Investment, its board of directors, and the head of its executive body. The identification of that authority, its functions, the organization of its work, and the setting of regulations related to its personnel systems without being bound by government regulations shall be issued by a decision of the President of the Republic and until this decision is issued, the General Investment Authority shall be considered as The competent administrative authority is governed by the accompanying law, and the rules regulating the affairs of the personnel of this authority shall continue to be enforced.

(Article Four)

Without prejudice to the provisions of the previous article, the Investment Law promulgated by Law No. 230 of 1989 shall be repealed, with the exception of the third paragraph of Article (20) of the aforementioned law (1). Articles (5 and 5 bis) of Law No. 1 of 1973 in the matter of hotel and tourist establishments, and Articles (21, 24 and 25) of Law No. 59 of 1979 in the matter of new urban communities, and Article (30) of Law No. 95 of 1995 in the matter of financial leasing, and every other provision that contravenes the provisions of the accompanying law shall be repealed.

(Article Five)

The Prime Minister issues the executive regulations of the attached law within three months from the date of its enforcement.

(Article Six)

This law shall be published in the Official Gazette, and shall come into force on the day following the date of its publication. This law shall be stamped with the seal of the state, and enforced as one of its laws. Issued at the Presidency of the Republic on Muharram 4, 1418 AH. (Corresponding to May 11, 1997 AD).

Chapter One: General Provisions

Article 1

The provisions of this law shall apply to all companies and establishments, regardless of the legal system they are subject to, that are established after the date of its enforcement to carry out their activities in any of the following fields:

    – Reclamation and cultivation of waste and desert lands or one of them.

    – Animal, poultry and fish production.

    – Industry and mining.

    – Hotels, motels, hotel apartments, tourist villages, and tourist transportation.

   – Refrigerated transport of goods, refrigerators for preserving agricultural crops, industrial products, foodstuffs, container stations and silos.

    – Air transport and related services directly.

    – Maritime transport on the high seas.

    – Petroleum services that support drilling, exploration and gas transportation and delivery.

    – Housing whose units are fully rented vacant for non-administrative housing purposes.

    – Infrastructure including drinking water, sewage, electricity, roads and communications.

    – Hospitals and medical and treatment centers that provide 10% of their capacity for free.

    – Financial leasing.

    – Ensuring the subscription of securities.

    – Venture capital.

    – Production of computer programs and systems.

    – Projects financed by the Social Fund for Development.

    – The Council of Ministers may add other areas required by the country’s needs.

    – The executive regulations of this law determine the conditions and limits of the aforementioned fields.

Article 2

The enjoyment by companies and establishments with various purposes and activities of investment guarantees and incentives, including tax exemptions, is limited to their activity in the areas specified in the previous article and those added by the Council of Ministers.

Article 3

The provisions of this law do not prejudice any advantages, tax exemptions, or other better guarantees and incentives established by other legislation or agreements.

Article 4

The competent administrative authority is responsible for reviewing companies’ articles of incorporation and their articles of association. In the statements of articles of incorporation and regulations, the names of the contracting parties, the legal form of the company, its name, the subject of its activity, duration, capital, participation rates of Egyptian and non-Egyptian parties, means of subscription, and the rights and obligations of partners are mentioned. Preliminary contracts and articles of association for joint stock companies, partnerships limited by shares, or limited liability companies are prepared in accordance with the forms issued by a decision of the Prime Minister. The signatures of partners on corporate contracts, whatever their legal form, must be certified in return for a certification fee of a quarter of a percent of the value of the paid-up capital, with a maximum of five hundred pounds or its equivalent in foreign exchange, as the case may be, whether the ratification took place in Egypt or with the Egyptian authorities abroad. Licensing the establishment of companies established in accordance with the provisions of this law and enjoying its advantages shall be issued by a decision of the competent administrative authority. These companies shall have legal personality as of the date of their registration in the commercial registry. The foregoing provisions shall apply to every amendment in the company’s bylaws.

Article 5

The administrative authority determined by the executive regulations of this law shall allocate the lands owned by the state or public legal persons necessary for companies and establishments and conclude their contracts on behalf of the concerned authorities, and these authorities shall provide that entity with all maps and data of the lands available to them for this purpose and the terms and rules of contracting in this regard. This authority shall also obtain from the concerned authorities, on behalf of the owners of companies and establishments, all the necessary licenses for their establishment, management and operation. Article 6 The request to file a criminal case in the crimes stipulated in Articles 124 of the Customs Law promulgated by Law No. 66 of 1963 and 191 of the Income Tax Law promulgated by Law No. 157 of 1981 and 45 of the General Sales Tax Law promulgated by Law No. 11 of 1991 and 9 From Law No. 38 of 1994 regulating dealing in foreign exchange, after taking the opinion of the competent administrative authority if the person accused of committing the crime is affiliated with one of the companies or establishments subject to the provisions of this law. The competent administrative authority shall express its opinion in this regard within fifteen days from the date of receiving the opinion survey letter, otherwise a request may be filed.

Article 7

Investment disputes related to the implementation of the provisions of this law may be settled in the manner agreed upon with the investor, and it is also permissible to agree between the concerned parties to settle these disputes within the framework of the agreements in force between the Arab Republic of Egypt and the investor’s country or within the framework of the agreement on settling disputes arising from investments between countries and between Nationals of other countries to which the Arab Republic of Egypt joined by Law No. 90 of 1971, according to the terms and conditions and in the cases in which those agreements apply, or in accordance with the provisions of the Law on Arbitration in Civil and Commercial Matters promulgated by Law No. 27 of 1994. It is also permissible to agree on settling the aforementioned disputes. Through arbitration before the Cairo Regional Center for International Commercial Arbitration.

Chapter Two: Investment Guarantees

Article 8

Companies and establishments may not be nationalized or confiscated.

Article 9

It is not permissible by administrative means to impose guarding on companies and establishments, or to seize their funds, or to seize, seize, freeze or confiscate them.

Article 10

It is not permissible for any administrative body to interfere in the pricing of the products of companies and establishments, or determine their profits.

Article 11

No administrative body may cancel or suspend the license to use real estate that the company or facility has been licensed to use, in whole or in part, except in the event of a violation of the terms of the license. The decision to cancel or suspend is issued by the Prime Minister based on the presentation of the competent administrative authority, and the person concerned may appeal this decision before the Administrative Court within thirty days from the date of its announcement or knowledge of it.

Article 12

Companies and establishments shall have the right to own construction lands and built real estate necessary to carry out and expand their activity, regardless of the partners’ nationality, place of residence or percentage of their participation.

Article 13

Without prejudice to the provisions of laws, regulations, and decisions regulating import, companies and establishments may import, by themselves or through third parties, what they need in their establishment, expansion or operation of production requirements, materials, machines, equipment, spare parts and means of transportation appropriate to the nature of their activity, without the need to be registered in the importers register. Also, companies and establishments may export their products by themselves or through an intermediary, without a license and without the need to register them in the Exporters Register.

Article 14

Joint stock companies, partnerships limited by shares, or limited liability companies, whose activities are limited to the areas referred to in Article 1 of this law, are not subject to the provisions of Articles (17, 18, 19 and 41), the first and fourth paragraphs of Article (77) and Articles (83, 92, and 93). of the Law of Joint Stock Companies, Partnerships Limited by Shares, and Limited Liability Companies, promulgated by Law No. 159 of 1981. The founding shares and shares may be traded during the company’s first two fiscal years with the approval of the Prime Minister or his authorized representative. The competent administrative authority shall replace the companies’ interest in applying the provisions of Law No. 159 of 1981 referred to and its executive regulations, for the aforementioned companies.

Shareholding companies are not subject to the provisions of Law No. 73 of 1973 regarding determining the conditions and procedures for electing workers’ representatives on the boards of directors of public sector units, joint stock companies, associations and private institutions.

Article 15

Joint stock companies are excluded from the application of the provisions of Law No. 113 of 1958 regarding appointment to jobs in joint stock companies and public institutions, and Article 24 of the Labor Law promulgated by Law No. 137 of 1981.

Chapter Three: Investment Incentives Chapter One:

Tax Exemptions Article 16 Exempted from the tax on the revenues of commercial and industrial activity or the tax on the profits of capital companies, as the case may be, the profits of companies and establishments and the shares of their partners, for a period of five years starting from the first fiscal year following the start of production or practicing the activity. The exemption is for a period of ten years for companies and establishments that are established within the new industrial zones, new urban communities and remote areas to be determined by a decision of the Prime Minister, as well as new projects financed by the Social Fund for Development. Article 17 Exempted from the tax on the revenues of commercial and industrial activity, or the tax on the profits of capital companies, as the case may be, the profits of companies and establishments that practice their activities outside the Old Valley, as well as the shares of the partners therein, equal if they are established outside this valley or transferred from it, for a period of twenty years starting From the first fiscal year following the start of production or practicing the activity.

A decision of the Council of Ministers shall specify the areas to which this text applies.

Article 18

The companies, establishments, and projects financed by the Social Fund for Development existing on the date of enforcement of this law and which practice their activities in the areas referred to in Article 1 of this law, shall complete the exemption periods stipulated in the two previous articles if the exemption periods approved for them did not expire on that date.

Article 19

In applying the provisions of the previous articles, the first year of the exemption includes the period from the date of starting production or practicing the activity, as the case may be, until the end of the fiscal year following that, and the company or facility must notify the competent administrative authority of the date of starting production or practicing the activity within a month from that date.

Article 20

Exemption from stamp duty, documentation fees, notarization, establishment contracts of companies and establishments, and loan and mortgage contracts related to their business, for a period of three years from the date of registration in the commercial registry. Also exempt from the aforementioned tax and fees are the land registration contracts necessary for establishing companies and establishments.

Article 21

An amount equivalent to a percentage of the paid-up capital, determined at the Central Bank of Egypt’s lending and discount rate for the accounting year, is exempted from tax on corporate profits, provided that the company is a joint stock company and that its shares are listed in one of the stock exchanges.

Article 22

The proceeds of bonds, financing instruments and other similar securities issued by joint stock companies are exempted from tax on movable capital income, provided that they are offered in general lots and that they are listed in one of the stock exchanges.

Article 23

Companies and establishments are subject to the provisions of Article 4 of the Law Regulating Customs Exemptions promulgated by Law No. 186 of 1986 regarding the collection of a customs tax of a uniform category of 5% of the value, on all imported machinery, equipment and devices necessary for its establishment.

Article 24

Profits resulting from the merger or division of companies or changing their legal form are exempted from taxes and fees due due to merger, division or change of legal form.

Article 25

Merging and merging companies and establishments, and companies and establishments that are divided or whose legal form is changed, enjoy the exemptions prescribed for them prior to the merger, division or change of the legal form until their exemption periods expire, and the merger, division or change of legal form does not entail any new tax exemptions.

Article 26

Exempted from the tax on the revenues of commercial and industrial activity, or the tax on the profits of capital companies, as the case may be, is the result of evaluating the in-kind shares that are included in the establishment of joint-stock companies, or recommending shares or companies with limited liability, or in increasing their capital. Article 27

The executive regulation of this law defines the conditions, rules and procedures for enjoying tax exemptions automatically without interruption to administrative approval, provided that the exemption is canceled in case of violation of these conditions and rules. The cancellation of the exemption is issued by a decision of the Prime Minister based on the presentation of the competent administrative authority, and the person concerned may appeal this decision before the Administrative Court within thirty days from the date of its announcement or knowledge of it.

Chapter Two: Land Allocation

Article 28

It is permissible by a decision of the Council of Ministers, based on the proposal of the competent minister, to allocate lands owned by the state or to public legal persons for companies and establishments that are established in certain areas in the areas specified in Article 1 of this law, free of charge and in accordance with the procedures stipulated in the executive regulations of this law. the law.

Chapter Three: Free Zones

Article 29

A free zone that includes an entire city shall be established by law. Public free zones shall be established by a decision of the Council of Ministers based on a proposal by the competent administrative authority, in order to establish projects that are licensed, whatever their legal form. By a decision from the competent administrative authority, special free zones may be established, each of which is limited to one project if its nature so requires. The competent administrative authority may also approve the transformation of a project established inside the country into a private free zone in light of the controls specified by the executive regulations of this law. The decision issued to establish the free zone shall include a statement of its location and boundaries. The public free zone shall be managed by a board of directors to be formed and appointed by a decision of the competent administrative authority. The board of directors is responsible for implementing the provisions of this law, its executive regulations, and the decisions issued by the aforementioned authority.

Article 30

The competent administrative authority shall set the policy for the free zones, and it may take whatever decisions it deems necessary to achieve the purpose for which these zones are established, in particular: (a) Laying down the bylaws and regulations necessary for the management of free zones. (B) Setting conditions for granting licenses, occupancy of lands and real estate, rules of entry and exit of goods, provisions for their registration, fees for occupying places in which they are deposited, examination of documents and review, and the system for monitoring and guarding these areas, and collection of fees owed to the state.

Article 31

The board of directors of the public free zone is concerned with licensing the establishment of projects, and a decision is issued to license the project to practice the activity of the zone’s board of directors. The license must include a statement of the purposes for which it was granted, its validity period and the amount of the financial guarantee to be paid by the licensee. It is not permissible to relinquish the license in whole or in part except with the approval of the authority that issued it. The refusal to grant the license or the non-approval to relinquish it shall be by a reasoned decision, and the person concerned may to file a grievance against him to the competent administrative authority in accordance with the rules and procedures set forth in the executive regulations of this law. The licensee shall not enjoy the exemptions or privileges stipulated in this law except within the limits of the purposes stated in the license.

Article 32

Subject to the provisions decided by laws and regulations regarding the prevention of circulation of some goods or materials, goods exported by free zone projects outside the country or imported to carry out their activities are not subject to the rules related to import and export or to customs procedures for exports and imports, nor are they subject to customs taxes and general sales tax. and other taxes and fees. All tools, equipment, machines and necessary means of transportation necessary to carry out the licensed activity of the projects within the free zones, except for passenger cars, shall be exempted from customs taxes, general sales tax and other taxes and fees. The executive regulation of this law determines the procedures for transporting and securing goods from the start of unloading them until their arrival at the free zones and vice versa.

The competent administrative authority may allow the entry of local and foreign goods, materials, parts and raw materials – owned by the project or others – from inside the country to the free zone on a temporary basis for repair or to carry out industrial operations on them and return them to the country without being subject to the applicable import rules, in the manner indicated by the executive regulations of this law. The customs tax shall be collected on the value of the repair in accordance with the provisions of the customs laws. The provision of Article 33 of this law shall be applied in the matter of industrial operations.

Article 33

Importing from free zones into the country shall be in accordance with the general rules for importing from abroad. Customs duties on goods imported from the free zone shall be paid to the local market as if they were imported from abroad. As for products imported from free zone projects that include local and foreign components, the customs tax base for them is the value of the foreign components at the prevailing price at the time of their exit from the free zone into the country, provided that the customs tax due on foreign components does not exceed the tax due on the product. Final import from abroad. The foreign components are the imported foreign parts and materials according to their condition upon entering the free zone, without calculating the operating costs of that zone. With regard to freight calculation, the free zone is considered the country of origin for the products manufactured there.

Article 34

The director of the free zone’s customs informs the zone chief of cases of unjustified decrease or increase in the number of parcels or their contents, or preserved or loose goods (bulk), if they are included in the free zone’s shipping list. A decision shall be issued by the competent administrative authority regulating responsibility for the cases stipulated in the previous paragraph and the percentages of tolerance in them.

Article 35

The projects established in the free zones and the profits distributed by them are not subject to the provisions of the laws of taxes and fees in force in Egypt.

However, these projects are subject to an annual fee of 1% (one percent) of the value of goods upon entry for storage projects and of the value of goods upon exit for manufacturing and assembly projects, and the transit trade of goods with a specified destination is exempted from this fee. Projects whose main activity does not require the entry or exit of goods are subject to an annual fee of 1% (one percent) of the total revenue they achieve, based on the accounts approved by one of the certified public accountants. In all cases, projects are obligated to pay the fees for services specified in the executive regulations of this law.

Article 36

Companies that operate in public free zones are not subject to the provisions stipulated in Laws No. 73 of 1973 and 159 of 1981. Article 37 Maritime transport projects that are established in free zones are exempted from the conditions related to the nationality of the ship owner and workers stipulated in the Maritime Trade Law and in Law No. 84 of 1949 regarding the registration of commercial ships. Ships owned by these projects are also excluded from the provisions of Law No. 12 of 1964 establishing the Egyptian General Organization for Maritime Transport.

Article 38

The licensee is obligated to insure the buildings, machinery and equipment against all accidents, and is obligated to remove them at his own expense within the period determined by the region’s board of directors in accordance with the rules set by the competent administrative authority.

Article 39

Entering or residing in free zones shall be in accordance with the terms and conditions specified in the executive regulations of this law.

Article 40

The provisions of Laws No. 173 of 1958 with the requirement to obtain permission before working in foreign bodies, and 231 of 1996 with some provisions regulating Egyptians’ work with foreign bodies, do not apply to Egyptian workers in existing projects in free zones.

Article 41

It is not permissible for any person to practice a profession or trade in the public free zone permanently for his own account unless after obtaining a permit to that effect from the chairman of its board of directors in accordance with the terms and conditions determined by the executive regulations of this law and after paying the fee specified by the regulations, not exceeding five hundred pounds annually.

Article 42

The work contract concluded with workers in the free zones shall be made in four copies, in the hands of each of the two parties, one copy, and one copy shall be deposited with the administration of the free zone and another with the labor office in the zone.

Article 43

Projects in public free zones are not subject to the provisions of Law No. 113 of 1958, Article 24 and Chapter Five of Chapter Three of the Labor Law. The board of directors of the competent administrative authority shall set the rules regulating the affairs of workers in these projects.

Article 44

The provisions of the Social Insurance Law promulgated by Law No. 79 of 1975 apply to Egyptian workers in projects that operate in free zones.

Article 45

Anyone who violates the provisions of Article 41 of this law shall be punished with a fine of no less than two thousand pounds and not more than five thousand pounds. A criminal case for these crimes shall not be filed except upon a written request from the competent administrative authority. The aforementioned authority may conduct a reconciliation with the violator during the consideration of the case in return for paying an amount equal to the minimum value of the fine, and the reconciliation results in the expiration of the criminal case.

Article 46

The provisions of Articles (8, 9, 10, 11, 20) of this law shall apply to investment in the free zones. The report of the joint committee from the Economic Affairs Committee, and the offices of the committees for constitutional and legislative affairs, and the plan and budget, housing, public utilities and reconstruction, on a draft law on the issuance of the investment guarantees and incentives law.