Egypt’s Public Free Zones Explained: Tax Breaks, Exports, and Investor Benefits

Explore Egypt’s new public free zones with incentives, customs exemptions, and export-only production rules to reach US$140 billion in exports by 2030. Let us understand these public free zones and incentives they offer for an export-led business.

Egypt’s public free zones have become a central part of its industrial and trade policy. They offer investors business-friendly environment through tax exemptions and simplified customs. The system is regulated by the Investment Law No. 72 of 2017 and supervised by the General Authority for Investment and Free Zones (GAFI).

Types of free zones in Egypt

Egypt operates under a dual free zone system: public free zones and private free zones. Both fall under the framework of Law No. 72 of 2017 on Investment Guarantees and Incentives. The law provides tax exemptions and guarantees for foreign and domestic investors. It is aided by the 2023 amendment called Law No.160.

What private free zones are

Private free zones are established for individual projects where location is an important factor of production. For example, a cement company, a maritime transport hub, or an industrial project that must be near raw materials may operate as a private free zone. These projects enjoy the same exemptions as public free zones but are supervised by the nearest public free zone authority.

Egypt currently hosts 164 projects under the private free zone system. But new incorporations of private free zones were cancelled under Law No. 17 of 2015. So only existing projects or conversions are permitted now, provided at least 50 percent of output is exported.

What public free zones are

Public free zones, in contrast, are collective hubs that host multiple investment projects. These zones are generally located near Egypt’s major sea ports, airports, or land borders to streamline logistics. It operates under special rules on customs and administration. These areas are primarily for export-oriented industries and act as platforms to attract foreign capital and encourage production for international markets.

The system is entirely managed by GAFI as it serves as the sole administrative body for investors operating inside the zones.

The amendment in 2023, called Law No. 160, has expanded the scope of permissible activities in free zones. It now allows energy-intensive projects in fields like petroleum, fertilizers, iron and steel, and natural gas (though they still need approval by the Supreme Council of Energy).

Activities that remain prohibited are:

• Wine and spirituous drinks industries; and
• Weapons, munitions, explosives, and related products tied to national security.

Incentives for investors in public free zone

Projects operating in public free zones enjoy broad exemptions, guarantees, and privileges. These incentives offer a lucrative environment to set-up, operate and trade with minimal regulatory interference.

Exemptions

• Capital assets and production inputs (except passenger cars) are exempt from customs duties, value added tax (VAT), and other domestic taxes;
• Imports and exports to and from foreign markets are free from all duties and taxes;
• Project profits are not subject to domestic tax when the operations are ongoing;
• Goods produced in free zones that enter the domestic market are exempt from customs duties on their local components; and
• Transit goods with a determined final destination and proper documentats are exempt from entry and exit duties.

Businesses in the public free zone are also offered these guarantees:

• Projects cannot be nationalized or confiscated;
• Assets may not be seized, placed under protective custody, or subjected to expropriation without due legal process; and
• Legal proceedings against projects require consultation with GAFI first.

Privileges

Investors benefit from simplified procedures under a single administrative body:

• Licensing to practice activity in the zone is sufficient to deal with all government agencies without industrial registration;
• Land reservation, delivery, and building permits are issued directly by the zone administration;
• Entry and exit of goods are facilitated through import and export statements managed by the zone administration;
• Procedures for liquidation of projects are streamlined according to the investor’s decision;

• Goods entering or leaving a free zone are exempt from customs duties and sales taxes;
• Free zone projects are not subject to normal corporate income tax. Instead, companies pay an annual fee of 1 percent of the value of goods entering or exiting the zone. For service projects, this fee is 3 percent of the value added generated; and
• Investors may freely transfer profits and repatriate capital without restrictions.

Read more: Egypt Amended VAT Law: What Businesses Need to Know

Public free zones and their distribution

At present, nine public free zones with 95 percent occupancy rate are in operation across Egypt. They are located in:

• Alexandria (Amerya)
• Cairo (Nasr City)
• Port Said
• Suez (three sites: Port Tawfiq, El Adabeya, Attaqa)
• Ismailia
• Damietta
• Shebin El Kom
• Qeft in Qena Governorate
• Egyptian Media Production City in 6th of October City

Each zone is set up with full infrastructure- roads, electricity supply, water networks, sewage systems, and telecom services. Customs units and security offices are also set up inside these zones. Their locations near major ports and cities help in ensuring access to raw materials and labor markets at competitive cost.

As the occupancy rate of existing zones already exceeds 95 percent, the government has approved four new zones in:

• 10th of Ramadan;
• New October;
• New Borg El-Arab; and
• New Alamein.

According to GAFI, these zones will begin operations by the end of 2026. Discussions are underway within the government for three further zones, which would raise the total number to 16. All new public free zones will operate on an export-only basis.

Establishment process and governance

Setting up a project in a public free zone requires prior approval from the General Authority for Investment and Free Zones (GAFI). The process needs pre-incorporation approval from the respective zone’s Board of Directors, followed by submission of incorporation documents.

To help with its implementation, GAFI has formed a working group of investors drawn from all major industrial sectors. The committee is tasked with recommending mechanisms for operating free zones and advising on steps needed to achieve national export targets. The body will act as a channel for dialogue between investors and regulators to ensure that the zones’ design and policies reflect practical business needs.

Sectors represented in public free zones

Public free zones are not specialized by sector, with the exception of the Egyptian Media Production City, which primarily hosts audiovisual and creative industry projects. In other zones, investors will find a diverse mix of activities, like:

• Industrial manufacturing;
• Warehousing and logistics;
• Services and back-office operations; and
• Financing and trade support activities.

Thus, Egypt is attracting a broad spectrum of investment, from light industry to advanced services.

Role in national economic goals

Egypt has set a goal to reach US$140 billion in exports by 2030, direct investment toward global markets rather than domestic consumption, protect local industries from competition, and become a regional export hub. It also wants to improve its foreign currency earnings and ensure that companies adopt eco-friendly practices that support their transition to greener production.

Ministry of Investment and Foreign Trade views free zones as a push for its “Investment for Export” strategy. The strategy positions public free zones as a driver of international trade and a tool for expanding Egypt’s role in global value chains.

In brief

Egypt’s public free zones provide customs relief and simpler procedures that reduce administrative delays. Their integration with trade agreements and logistics links can help improve Egypt’s global position. But its success will hinge on stable policy and timely execution.

Read more: Egypt’s New Labor Law: Modern Employment Framework, Alignment with Global Standards

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