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August 15, 2023

Egypt introduces further tax incentives to stimulate foreign direct investments

  • The Egyptian Parliament has published Law No. 160 of 2023 in the Official Gazette, introducing certain amendments to Investment Law No. 72 of 2017.
  • Law No. 160 of 2023 aims to create an attractive business environment to boost investor confidence in the Egyptian economy and stimulate private sector activities by enhancing the special incentives program introduced in the 2017 Investment Law.
  • Foreign investors should evaluate the provisions of Law No. 160 of 2023 and consider the available tax relief options.

Executive summary

On 25 July 2023, the Egyptian Parliament published Law No. 160 of 2023 (Law 160) in the Official Gazette. Law 160 makes significant amendments to Investment Law No. 72 of 2017 (Investment Law) focused on boosting the special incentives granted to foreign investors, developing the distribution of investments across the country, and expanding the range of eligible companies to establish, operate and manage projects in Egypt.

The amendments are in line with the Government's aim to promote a comprehensive and sustainable investment environment by facilitating the process for foreign investors to operate in Egypt. The amendments are effective from 26 July 2023.

Detailed discussion


In May 2017, the Egyptian Parliament published the Investment Law, which introduced a host of new incentives, mainly applicable to foreign investments made in Egypt. Its Executive Regulations came into effect on 29 October 2017, further elaborating on the provisions of the Investment Law.

On 25 July 2023, the Egyptian Parliament published Law 160, which expands the special incentives stipulated in the Investment Law for investment projects and develops the distribution of investments across the country.

Key elements of the amendments

Special incentives

1. Cash incentive program

Law 160 introduces a new cash investment incentive for investment projects and expansion of projects that carry out one of the industrial activities falling under the existing special incentives program. Under this new incentive, the investor is entitled to a refund of between 35% and 55% of the tax paid in the corporate tax return on the income generated from the business operations.

To take advantage of the cash investment incentive program, project owners must meet the following conditions:

  • At least 50% of the project funds must depend on foreign currency from abroad.
  • The activity must begin within six years following the enforcement date of Law 160.

Note that the Egyptian Cabinet may extend the six-year period up to a maximum of an additional six years.

The Egyptian Ministry of Finance must grant the refund to the investor within 45 days from the cut-off date of the tax return filing, failing which, a late payment fee should be paid to the investor. The upcoming executive regulations are expected to provide more clarity in this regard.

The cash investment incentive will not be considered to be taxable income.

2. Special incentives extension period

Law 160 allows for an extension of the period during which the special incentives apply, if the company is established within three years following the enforcement date of the Executive Regulations of the Investment Law, and the Egyptian Cabinet issues a decision that it is permissible to extend the applicability for periods not exceeding nine years in aggregate.

Additional incentives

Law 160 also introduces the following exemptions as additional incentives:

  • Exemption from usufruct charges for lands allocated to project establishment for a maximum period of 10 years from the start of operations, based on a proposal by the competent minister.
  • Exemption from contributing to the costs of establishing infrastructure, public services and utilities at a percentage not exceeding 50%, as granted by a decision of the Prime Minister, based on the parameters determined by a decision of the Supreme Council.
  • Exemption from payment not exceeding 50% of the project's consumption of basic utilities for a maximum period of 10 years, based on the parameters determined by a decision of the Supreme Council.

The upcoming Executive Regulations shall provide the conditions for granting the abovementioned additional incentives.

Freezone validation — license permissibility

Under Law 160, it is now permissible, with the approval of the Supreme Council of Energy, to license the establishment of projects under the free zones system in the field of petroleum manufacturing, fertilizer industries, iron and steel manufacturing, liquefaction and transportation of natural gas and energy-intensive industries.


Foreign investors should evaluate the revised incentive program under Law 160 and assess the applicability of the tax reliefs available.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Egypt, Cairo

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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