THE NEW INVESTMENTS FRAMEWORK
All investments projects (other than free zone projects) benefit from General Incentives under the New Investment Law. These incentives include a fixed 2% customs fee on all imported machinery and equipment, an exemption from stamp tax and registration fees on all incorporation contracts as well as finance and mortgage contracts for 5 years from registration in the Commercial Register.
1.2 Special Incentives
- Sector A Projects: Investments projects executed in the underdeveloped geographical areas specified in the Investments Map benefit from a deduction from the taxable net profits, at the rate of 50% calculated on the investment costs of the project.
- Sector B Projects: Certain types of investments projects benefit from a deduction from the taxable net profits, at the rate of 30% calculated on the investment costs.
To enjoy the Special Incentives the conditions include incorporating a new project company for the investment project within 3 years from the effective date of the Executive Regulations of the Law 72 of 2017, extendable for one year only, and holding of regular and proper books of account.
The foregoing tax incentives shall not in any case exceed 80% of the paid-up capital of the company. However, it is not applied for more than 7 years from the date of commencement of the activity of the project.
1.3 Additional Incentives
Upon a Cabinet’s decree, investment projects may be provided the following incentives:
- Allowing the project to establish special custom ports for its own imports and exports.
- The state may, after the commencement of the project, refund the investor with all or part of the expenses borne by him to extend the infrastructure facilities to the project.
- The state may partially finance the costs of the employee’s technical training.
- Refunding half the value of the land designated to industrial projects, in case of commencement of the production within 2 years from the date of handing over such land.
- Allocating free lands for strategic industries.
2. Investor Services Center (ISC)
As an exception to all other laws, the representatives of all licensing authorities in the ISC are subject to GAFI supervision and have all the powers to address all administrative and legal matters, allocate lands and issue all licenses to the project company for the life of the investment project.
Fixing time limits for the ISC to issue licenses: decisions must be taken within a maximum of 60 days from submission of application. In case of no reply within such period, this will be deemed an approval, to be issued by the CEO of GAFI.
3. Accreditation Offices
Such offices will be licensed by GAFI to review documents required for obtaining licenses for the project, its operations and expansion, to confirm compliance with technical, financial and other requirements under the relevant laws.
The Accreditation Office certificate is an official certificate valid for 1 year and is recognized by ISC and GAFI. Such certificate is deemed final if no justified objection is made within 10 business days from the date of submission. Hence, the investors may obtain their licenses and approvals immediately thereafter.
4. The One-Approval Businesses
Upon the Cabinet’s Decree, corporates established to carry out national or strategic projects contributing to the development process or “Public-Private Partnerships” (PPPs) in specific fields may be provided one approval. Such approval is sufficient to establish, run and manage the project and it is self-enforceable without requiring any other procedures.
5. Amicable Dispute Resolution Means
Law 72 provides for ADR mechanisms that ensure efficient and fair resolution of disputes, in addition to protecting the investors. Final decisions taken are binding to the Administration, while the investor retains the right to appeal such decisions before the competent courts. The ADR mechanisms include:
- The Grievance Committee.
- The Ministerial Committee for Resolution of Investment Disputes.
- The Ministerial Committee for Settlement of Investment Contracts Disputes.
- Arbitration and Mediation Center.