Free zones in all their aspects are governed by Investment Law No. 72 of 2017 and its Executive Regulations, as well as the amendments introduced under Law No. 160 of 2023. The amendments permit the establishment of petroleum manufacturing projects, fertilizer industries, iron and steel industries, and natural gas processing and liquefaction projects under the free zone system, subject to the approval of the Supreme Energy Council. At the same time, the law prohibits the licensing of projects involving alcoholic beverages, alcohol-related products, weapons, ammunition, explosives, and other activities related to Egyptian national security.

Public free zones differ from private free zones in that public free zones consist of fenced areas located across the country, currently numbering seven zones nationwide. Industrial, service, and storage projects may be established within these zones and benefit from the incentives and advantages granted to free zone projects. In contrast, a private free zone is dedicated to a single project whose nature requires it to be located at a specific geographical site.

Projects operating within free zones are exempt from corporate income tax as well as value-added tax (VAT) on licensed activities. They are also exempt from customs duties and other taxes and fees.

Companies operating in public free zones are required to pay a fee of 1% for assembly and manufacturing projects, calculated on the value of goods upon their exit from the free zone, or on the value of the industrial and complementary operations performed on goods in cases of contract manufacturing for third parties. This fee increases to 2% for storage projects.

In addition, fees for services provided by the General Authority for Investment and Free Zones (GAFI) are set at 0.5 per thousand of the company’s issued capital for industrial and assembly projects, and 1 per thousand for storage and service projects, subject to a maximum of EGP 100,000. Payment must be made in freely convertible foreign currency in accordance with the decision of the competent minister.