Egypt Free Zone Company Setup | GAFI Investment Guide 2025

Set up Business in Egypt’s Free Zones: Your Path to Safe and Unrestricted Investment

In light of the Egyptian government’s ongoing efforts to attract domestic and foreign capital, free zones have become one of the most important legal and investment pillars, offering investors a flexible and secure business environment free from administrative complexities, customs, and tax restrictions.

Through the free zone system established under Investment Law 72 of 2017 and its Executive Regulations, investors are offered a unique opportunity to establish their businesses within a regulated legal framework that provides freedom of capital movement, ease of import and export, and extensive exemptions from taxes and fees.

Starting a business in a free zone is an ideal option for anyone looking to expand their commercial or industrial operations in Egypt within a legal framework that ensures protection and stability, while maintaining the advantages of global competitiveness.

With our professional legal support, investors will complete all incorporation and licensing procedures quickly and professionally, in accordance with the highest legal standards, to ensure a successful and secure start to their investment in the Egyptian market.

A free zone is a part of a country’s territory that lies within its borders. It is subject to the country’s administrative authorities and is governed by special customs and tax regulations.

Free zones are supervised by the General Authority for Investment and Free Zones (GAFI), which grants investment licenses and monitors the implementation of activities within these zones to ensure transparency and compliance with the law.

Free zones are established for the establishment of projects and the conduct of all investment activities, particularly projects aimed at exporting abroad, regardless of the project’s legal form. The location and boundaries of the free zone must be specified, except for certain activities prohibited within free zones. These activities are subject to supervision by the competent authorities and are not considered investment projects.

The activities prohibited within free zones are as follows:

1. Petroleum refining and the fertilizer industry.

2. Iron and steel industry, smelting, and the production and transportation of natural gas.

3. Weapons, ammunition, explosives, and matters related to national security.

4. Wine and alcoholic beverages.

5. Energy-intensive industries.

Types of Free Zones:

Free zones in which projects may be established are divided into general free zones and special free zones, each with its own distinct characteristics and specific criteria and regulations. These zones are as follows:

• General free zones are integrated investment zones established in strategic locations near ports and airports, such as the General Free Zone in Nasr City, Port Said, or Alexandria. These zones are designated for industrial, service, and storage investment projects and are equipped with the basic facilities and services necessary for project operations, in addition to an integrated customs unit. Activities within these zones are conducted in accordance with the license issued by the competent General Free Zone Board of Directors.
• Private free zones are standalone entities that represent a single independent project or multiple projects engaged in similar activities, as dictated by their nature. They are often located near production sites or ports and are well-suited for large-scale projects that require a dedicated space or a specialized operating system.

Basic Requirements for Setting Up A Business in Egypt’s Free Zones

Once the basic requirements for establishing a project within the free zones are met, the Cabinet issues a decision approving its establishment, based on a proposal from the competent minister. The GAFI’s Board of Directors then issues a decision outlining the procedures for obtaining, renewing, and amending project operating licenses. The Chairman of the Board of Directors of the relevant free zone issues a decision of license to operate the project, approving its location, and specifying the project’s purpose, duration, and scope, as well as the amount of the financial guarantee provided to secure the project’s obligations, and determines the conditions for renewing or amending the license.

Requirements for establishing a Business within the General Free Zones in Egypt:

1. Obtaining preliminary approval:

To obtain preliminary approval for establishing a project within general free zones, a Project Establishment Notification Form (from the zone/sector) must be submitted along with a copy of the national ID card or passport of the partners and a power of attorney from the project partners or the parent company.

For industrial projects, the application must be accompanied by a detailed description of the machinery and equipment to be used, the production lines, a timeline for the completion of construction and installation work, and the commencement of operations, and a detailed description of the stages of the industrial process.

For projects within the General Media Free Zone, preliminary approval must be obtained from the zone’s infrastructure companies—which are accredited by the competent authority—for the lease of a studio, administrative office, or airtime.

Once these requirements are met, the Standing Technical Committee for Free Zone Affairs will issue preliminary approval for the project.

2. Obtaining final approval:

The investor must submit a check for 10% of the land use fee, with a minimum of $1,000 for the requested area, as proof of serious intent within one month of the date of issuance of the preliminary approval for the project. This amount will be deducted from the land use fee upon receipt of the land and will not be refunded if the project is not implemented for reasons attributable to the project.

Security clearance forms for foreign partners must be completed and accompanied by copies of passports.

If a security clearance check yields unfavorable results, the final approval will be issued, requiring the partner to be replaced or removed within a maximum of one month from the date of notification via registered letter with return receipt; failure to do so will be deemed a withdrawal from the project.

For branches of foreign companies or sole proprietorships, final approval is issued after the results of the security check are received.

The investor will be notified of the final approval to take possession of the site after paying the annual usage fee in advance.

3. Granting License to Operate Business in the General Free Zone:

After the investor receives the final approval notice for the project, they must submit the company’s articles of association using the standard form provided by the Investor Services Center.

The applicant must then proceed to the Investment Services Sector to complete the incorporation process, register with the Commercial Registry, obtain a tax ID card, and publish a notice in the Investment Gazette. The applicant must also submit copies of these documents, a copy of the incorporation approval decision, specify the name and title of the legal representative, and provide a financial guarantee letter in favor of the GAFI, in accordance with the type of activity and investment costs.

A proof of payment in advance of the remaining balance due for the use of the space allocated to the project for the first year.

Once these documents have been submitted, the investor will receive three certified copies of the decision issued by the head of the free zone responsible for the activity in question.

Requirements for Establishing Business in Private Free Zones in Egypt:

1. Obtaining preliminary approval:

To obtain preliminary approval for a project in a private free zone, an application must be submitted using the designated form to GAFI’s Central Administration for Private Free Zones, accompanied by powers of attorney issued by the founders to founders’ representative and a copy of the national ID card.

A statement shall be provided specifying the proposed location, accompanied by the competent GAFI’s approval of the location, along with a timeline for commencing operations, security clearance forms for foreign partners, and a certificate of non-conflict of names in the case of joint-stock companies.

Once these requirements are met, preliminary approval of the project is issued. The approval is submitted to the Cabinet for approval to establish a private free zone for one or more projects.

2. Obtaining final approval:

The application is submitted to the board of directors of the relevant general authority for its final approval of the establishment of a special free zone.

3. Establishing Business within Private Free Zone:

A sub-file is prepared by the Investor Services Center’s Incorporation Unit to carry out the incorporation procedures and issue the GAFI’s CEO’s decision on incorporation. The following documents must be attached to the file:

- A copy of the approval for the project site and the technical committee’s recommendation granting preliminary approval of the project.

 - A copy of the Cabinet’s decision to establish a private free zone for one or more projects; a copy of the Free Zone’s Board of Directors’ decision granting final approval for the establishment of a private free zone for one or more projects; and a memorandum of presentation to the Free Zone’s Board of Directors.

- A copy of a valid certificate of non-confusion, a copy of the security clearance results for foreign partners, and copies of the powers of attorney issued to the founders’ agent and the national ID card.

4. Application for Business License for Private Free Zone Project:

The investor must submit the company’s commercial registration, a financial guarantee letter for an amount not exceeding 2% of the investment costs, based on the nature of the business activity. A letter must also be provided, stating the name of the company’s legal representative and the person acting on their behalf in case of absence.

The proposed site is surveyed before the issuance of the license to ensure that all requirements are met. The company is then granted a license to operate under the private free zone system.

The essential requirements for approval to establish projects within private free zones, as opposed to public free zones, as stipulated in Investment Law  72 of 2017:

1. No suitable location for the project’s activities exists within the general free zone. The location required for the special free zone is a key factor affecting the project’s economic viability.

2. No license may be issued for the establishment of private free-zone projects within residential areas or in locations licensed under the customs system, such as duty-free shops and customs warehouses.

3. The project must be organized as a JSC or an LLC.

4. The project’s issued capital must not be less than $10 million. The investment costs must not be less than $20 million or the equivalent in foreign currency.

5. The permanent workforce in industrial projects shall not be less than five hundred workers. In certain strategic projects of special importance where the nature of their activities does not require a large workforce, an exception to this requirement may be granted.

6. The project area must be at least 20,000 m².

7. The percentage of local content must not be less than 30%.

8. The proportion of exports to foreign countries shall not be less than 80%; exceptions to this requirement may be granted in the case of strategic projects of special importance.

9. Projects in the private free zone must comply with industrial safety, civil defense, and fire safety requirements as stipulated in Egyptian codes and regulations governing industrial facilities. Furthermore, all facilities must be insured at the project’s expense.

10. The GAFI shall monitor the activities of private free zone projects to ensure that they are operating properly and that the procedures followed in conducting their business are sound. The relevant zone administration shall submit periodic reports to the Board of Directors to determine whether it is feasible for the project to continue operating under the free zone system.

Benefits, Guarantees, and Exemptions Granted to Projects Within Public and Private Free Zones in Egypt:

Projects established within free zones (public or private) in Egypt are entitled to the benefits, guarantees, and exemptions provided for under Law 72 of 2017 and Executive Regulation thereof. These benefits, guarantees, and exemptions are as follows:

• Benefits granted to Projects within Public and Private Free Zones in Egypt:

1. Repatriation of invested capital and project profits.
2. Choosing the field of investment and the legal form of projects.
3. Identifying product prices and profit margins.
4. There are no minimum or maximum limits on the amount of capital invested (for general free zone projects only).
5. There are no restrictions on the nationality of capital, and foreign investors may hold sole ownership or participate in an investment at any percentage (except for projects established in Sinai).
6. Operation on behalf of a third party to utilize the project’s capacity (in accordance with the rules approved by the GAFI in this regard).
7. Granting foreign investors residency benefits and issuing residency permits to foreign workers based on the project’s requirements.

• Guarantees provided for Projects within Public and Private Free Zones in Egypt:

1. No legal action may be brought against projects operating under the free zone system without first consulting the GAFI.
2. It is not permissible to nationalize or confiscate projects and facilities.
3. No administrative measure may be taken to place projects under guardianship, attach funds, seize, withhold, freeze, or confiscate them without a court order.

• Tax Exemptions Granted to Projects Within Public and Private Free Zones in Egypt:

1. Exemption of all capital assets and production inputs necessary for carrying out the project’s activities (except for passenger vehicles) from any customs duties, sales taxes, or other taxes throughout the duration of the project, even if the nature of the activity requires their temporary presence outside the free zone.
2. Exemption of the project’s exports and imports to and from abroad from any customs duties or taxes, whether sales taxes or other taxes or fees in effect within the country.
3. The project and profits are not subject to the tax or customs laws or regulations in force within the country for the duration of the project’s operations.
4. The project’s imports and exports to and from abroad are not subject to any customs procedures or standard import regulations in effect within the country.
5. The project imports are exempt from the domestic market from value-added tax.
6. Transit goods with a specified destination are exempt from any duties levied on imported and exported goods, subject to the following conditions:

• The project must be located within the customs district.
• The final destination must be specified on the bill of lading and the invoice.

7. All local components of goods produced by free zone projects shall be exempt from customs duties when sold to the domestic market (in the country).

In conclusion, establishing a business within Egypt’s public and private free zones is no longer merely an investment option; rather, it has become a smart strategic move that provides investors with a stable legal environment and unprecedented incentives, including tax exemptions, guarantees, and the free movement of capital.

While the government offers incentives to investors, true success ultimately depends on specialized legal support that ensures all procedures are completed in accordance with the proper legal frameworks.

With this in mind, Sadany & Partners Law Firm is dedicated to being your trusted legal partner at all stages of establishing a project within free zones. Our services range from preparing documents and drafting contracts to obtaining licenses and approvals, and ensuring the safe and stable operation of your project.

With our broad experience and legal team specializing in investment law, we offer comprehensive solutions that ensure investors can establish their businesses securely and quickly and achieve successful investments in the Egyptian market.