Egyptian Customs Authority’s Chairman calls for limited expansion of private free zones

Updated 5/22/2024 11:13:00 AM

Arab Finance: The expansion of private free zones shall be limited in Egypt unless absolutely necessary due to their high tax losses, Chairman of the Egyptian Customs Authority El-Shahat Ghattori urged.

During a seminar organized by the Egyptian Center for Economic Studies (ECES), titled “Where do Free Zones in Egypt stand Compared to Competitive Models in Türkiye and the UAE?”, Ghattori stressed that the establishment of private free zones should only be approved for vital industries like mining.

He added that the authority is mulling over the establishment of the first free zone at the Cairo International Airport.

This zone would be used for handling and re-exporting goods, consequently enhancing Egypt’s position as a logistics hub, Ghattori highlighted.

Moreover, Ghattori clarified the distinction between public and private free zones, with public free zones being preferable due to their controllability.

Ghattori also disclosed that 67 companies were suspended by the authority for violating the regulations of the temporary approval system.

This system authorizes factories to import commodities, production requirements, and raw materials needed to finish the manufacturing process while being exempted from paying customs and taxes for a year and a half, he explained.

Committee to facilitate Investor Procedures

The General Authority for Investment and Free Zones (GAFI) currently heads a committee comprised the Egyptian Customs Authority, the Egyptian Tax Authority (ETA), and the Industrial Development Authority (IDA) to facilitate procedures for investors in free zones, Ghattori mentioned.

He noted that some companies operating within the free zones have surpassed the permitted local market export rate of 20%.

However, only MIDOR Petroleum and Alexandria National Refining and Petrochemicals (ANRPC) are authorized to exceed this threshold, Ghattori added.

For his part, GAFI’s Chairman Hossam Heiba stated that Egypt amasses a total of nine public free zones and 230 private free zones.

Heiba also revealed that six additional investment zones have been set up at the end of 2023, bringing the total number of investment zones to 17 now.

Additionally, he referred to other countries, besides Türkiye and the UAE, that compete with Egypt in terms of attracting investors by facilitating procedures. He named Morocco, in particular, as one of Egypt’s main competitors in this area.