About Suez Public Free Zone
Suez Public Free Zone Is The First Second - Generation Egyptian Free Zones Established By The State Since 1993 At Three Locations: Port Tawfiq Area Which Is Adjacent To Suez Port And The Two Areas Of Aladabiah And Ataka At The Highway Of Suez / Sokhna Next To The Power Station And In Front Of The Industrial Zone Of Ataka To Provide Integrassted Business Environment Which Enables Your Project To Practice Its Activity With Taking Advantage Of A Diverse Network Of Projects Which Provides Import, Export, Re-Export Services, Logistics And Related Services.
Overview
- Existing ecosystem and access to markets supported with accessibility to 6 SEAPORTS & 2 AIRPORTS.
- Strong cost competitiveness for manufacturing.
- Attractive financial incentives.
- Robust regulatory support for investors.
- World-class service levels.
- Providing infrastructure within the entire SCZONE land.
A Unique Location, AT THE HEART OF THE GLOBAL TRADE ROUTE
Located around the main international maritime route “Suez Canal passageway”, which connects Europe, East and North Africa via the Suez Canal with Asia passing through Arabian Gulf serving the majority of global trade, where:
- 20% of the international container trade
- 10% of seaborne trade
- 18,000 ships passing through each year.
SCZONE aims to be one of the main logistics hubs in the region, supported by a number of mega infrastructure projects, especially logistics projects, such as doubling the pathways of the Suez Canal to minimize passing time, cost of operation and attract more vessels and cargos.
Financial Incentives
Direct Incentives
- 0% Customs Tax
All project required material and tools (Construction – Operation) are imported from abroad.
Re-exports.
In the case of exporting to the local market: Customs tax will be paid only on foreign components.
- 0% VAT
It is applied within the economic zone, when importing from the local market or abroad into the Economic Zone, including all procurement needs for manufacturing, production and operation (Raw Materials, Components, Spare Parts, etc.)
- 14% VAT
It is applied to export products from the economic zone to the domestic market.
- Investment Incentives on INCOME TAX
Investment projects are granted an investment incentive as a deduction from the net taxable profits at a rate of 50% of the total investment costs, so that the investment incentive does not exceed 80% of the paid capital and the discount period does not exceed seven years from the date of practicing the activity.
Indirect Incentives
- Direct incentives can be granted to investors by a decision of the Council of Ministers, based on the proposal from the Board of Directors, to grant some projects that are in line with the zone’s development strategy and as stipulated in the law:
- Reduced prices or facilitations in paying for energy used.
- Reimbursing the value of connecting utilities to the land plot allocated for the project or part of it, if the investor bears it.
- The Authority can bear a part of the technical training costs for Egyptian workers.
- Allocating a proper land plot to carry out its activities in return for a symbolic usufruct fee.
- It is also permissible, by a decision of the Council of Ministers, and upon the proposal of the Board of Directors, to grant companies established in the zone the right to establish projects that contribute to the activities of public facilities, infrastructure, energy, roads or ports.
Competitive Exemptions
- 100% Exemption of customs with QIZ
- 100% Exemption of customs with GAFTA
- 100% Exemption of customs with EUTA
- 80% Maximum discount shall be attributed from the paid up capital
- 100% Exemption of customs with COMESA & AFCTA
- 50% Taxes exemptions from the initial investment*
FEATURES
- Ease of Connectivity
Connectivity Domestically and Continentally
The Egyptian government has established a huge network of roads estimated 9000 KM of roads connecting Delta, upper Egypt and Sinai Peninsula with the economic zone.
The new road network extends regionally to Africa
- North to South (Cairo – Cape town)
- West to East (Dakar – Nairobi)
It integrates regional projects in the neighboring countries and raise transport efficiency and responds to safety measures.
2. Market Accessibility
Egypt’s Free Trade Agreements ensure rapid access to 2 Billion consumers Complemented by world class ports.
High quality logistics services, African Highways and Preferential Trade Agreements, such trade agreements allow investors to efficiently, and competitively, access regional and global markets in Europe, Africa, Middle East and Asia.
Access to a promising domestic market; Egypt has a large and growing domestic market of some 100 million people of whom 65% are of working age. With rising standards of living, the purchasing power of the domestic market will drive growth in many sectors.
3. Flexible Business
Autonomous legal framework:
- SCZone’s Board of Directors is empowered by the law to instate streamlined procedures, and to grant more incentives for the promising projects.
- Decision in a single place to support and facilitate a fast business start-up, and operation in the Zone.
Competitive operation cost:
- SCZone is clearly in a standalone position in terms of utilities shared, manpower, and training costs.
- Competitive wages of low and high skilled labor.
- Facilitated payments of the usufruct fees.
4. Investment Benefits
In accordance to the newly issued Investment Law 72/ 2017, and the Law of Special Economic Zones No. 83/2002 and its amendments by the virtue of law No. 27/2015, SCZone is entitled to grant investors a competitive incentive package as follows:
Financial Incentives
Customs:
(Tax exemptions for all imports required to carry out the activity/business
Customs are due on the foreign components imported only when the final product is exported to the local market Egypt.
VAT (Value Added Tax):
0 % VAT; on all imports including imported commodity from the Domestic market to the Zone.
14% VAT; only applicable on products exported to the local market.
Income Tax:
Investment projects in the zone are eligible to a deduction from the net taxable profits equivalent to 50% of the total investment costs. The deduction shall not exceed 80% of the paid capital and for a period of time that does not exceed 7 years from the date of operation.
Investors at SCZone are eligible to the benefits of the Free Trade Agreements Egypt is signatory of, including (GAFTA, COMESA, Agadir, European Partnership Agreement, MERCOSUR, FTAA, African Free Trade Agreement)
“SCZone offers a unique value proposition for investors to maximize earnings”
5. Skilled Labor
The availability of skilled labor in many industrial sectors at competitive costs compared to other regions.
The Authority may bear part of the technical training cost for Egyptian workers as a financial incentive for company either during the initial phase of the project or after establishment.
Foreign labor conditions:
According to the law no. 83/2002, SCZone has the capacity to, and upon the approval of SCZone’s Board of Directors, increase the proportion of foreign workers to meet different projects’ needs.
Source: www.sczone.eg
For more information about investment conditions in Egypt's free zones, please contact Soha Asia Follow Up Services consultants.