The Executive Regulations of Investment Law enacted by Prime Minister Decree No. 2310 of 2017 (“Executive Regulations”) has been recently amended by virtue of a Prime Minister’s Decree No. 2140 of 2023 (“Amendments”) to facilitate and create a more investment friendly options to the investors in Egypt.

The conditions for the establishment of Private Free Zones projects have become more feasible by loosening the minimum share capital requirement and provided that other conditions are met, including inter alia,:

• Company legal form shall be either a joint stock company or a limited liability company;
• The percentage of local components is not less than thirty percent (30%) within a maximum period of three years from the commencement of operation; and
• Save for strategic projects of special importance, the percentage of exportation abroad is not less than eighty percent (80%).

With the board of directors of the Public Free Zones which the Service Private Free Zone lies within its geographical scope being competent to approve the establishment and/or the cancellation of private free zones, the amendments also introduced a new provision to the Executive Regulations (i.e., Article 76 bis) which provides as an exception to the conditions and controls stipulated herein above, the approval of the establishment of a Service Private Free Zone consisting of a main service project that establishes, develops, manages, and provides space for some service sub-projects that engage in similar activities, which fall under any of the sectors mentioned in Article (1) of the Executive Regulations under the Private Free Zones Framework, provided that:

• The company shall be either a joint stock company or a limited liability company;
• The main project in the Service Private Free Zone shall observe the conditions of civil defense and fire, in accordance with the Egyptian code governing this respect; and
• The issuance of a resolution on the procedures and requirements for establishing sub-service projects within the Private Free Zone, which shall be approved by the Cabinet.

GLA & Co is committed to providing legal services and support to businesses operating in Egypt, and with the recent amendments of the Executive Regulations, our team of experienced lawyers is well-versed to assist investors who wish to establish service private free zones and can provide legal advice and assistance to clients in matters related to the structuring, establishment, licensing of companies.

Authors: Hegui Taha, Partner and Maha El Meihy, Legal Director

For further information, please contact Alex Saleh (alex.saleh@glaco.com) and Hegui Taha,(hegui.taha@glaco.com).