Special Economic Zones (Policy of «Opening the (SEZ) Door”)

Home , 10th of Ramadan (city), 15th of May (city), Abu Zenima, Kerdasa, Qena, Shibin El Kom

World Free Zones OrganiZation Index cards by country

Egypt Free zones, QIZ and SEZ

Index cards realized by the University of Reims, France Conception: F. Bost Data collected by D. Messaoudi Map and layout: S. Piantoni WFZO Index cards - Egypt

Official Terms for Free Year of promulgation Zones of the first text of law concerning the Free -Free zones Zones -Qualifying Industrial Zones (QIZ) 1975 -Special Economic Zones (Policy of «Opening the (SEZ) Door”)

Exact number of Free Zones

-10 public free zones (since 1997) -15 Qualifying Industrial Zones (since 2004) -2 Special Economic Zones (since 2002)

Table of contents

Free Zones �� 4 General information ��4 Contacts ��4 List of Free Zones ��5 Free Zones Web sites selection ��6

Qualifying Industrial Zones (QIZ) �� 7 QIZ Advantages (Ministry of Trade and Industry) ��7 Protocol Between Egypt and Israel ��8 QIZ Web sites selection ��8

Special Economic Zones (SEZ) �� 8 Economic Zone Northwest Gulf of Suez (SEZONE) ��8 Suez Economic and Trade Cooperation (SETC) ��9 Other information about SEZ ��9

Bibliography �� 10

Appendices �� 11

2 WFZO Index cards - Egypt Syria Syria Jordan Jordan 1000 500 200 0 Saudi Saudi Arabia Arabia elevations (meters) West Bank West Bank Lebanon Lebanon Israel Israel Strip Strip Gaza Gaza Al Ghurdaqah El Tur El Tur Aswan Aswan Qena Qena Abu Abu Suez Suez Ismailia Port Said Port Said Zenima Zenima Greater Cairo Beni Suief Al-Minya Main cities Main roads Sohag GYPT Cairo Cairo Wadi Halfa Wadi Wadi Halfa Wadi Dumyat Dumyat Asyut Asyut E Al Jizah Al Jizah IN El-Kharga El-Kharga

Sudan Sudan Alexandria Alexandria Egypt Marsa Matruh Matruh Alexandria Central Delta Suez Canal ZONES

200 km Public Free Zones Special Economic Zones (SEZ) International borders Main rivers REE Qualifying Industrial Zones (QIZ) F i i y a y a b b L L © Sébastien Piantoni Conception: François Bost 2076 Habiter EA University of Reims - 2015 Map Projection: WGS 1984 Abu Zenima Abu Zenima Qeft Public Free Zone Free Zone Suez Suez Economic Zone Northwest Gulf of Suez Economic Zone Northwest Gulf of Suez Suez Public Free Zone Suez Public Free Zone Qena Qena Port Said East Public Free Zone Port Said East Public Free Zone Ismailia Port Said Port Said Free Zone Free Zone Port Said Public Port Said Public Sohag Sohag Dumyat Dumyat Free Zone Free Zone Ismailia Public Ismailia Public Nasr City Public Free Zone Nasr City Public Free Zone Cairo Cairo Trade Cooperation Trade Trade Cooperation Trade Free Zone Free Zone Asyut Asyut Suez Economic and Suez Economic and Damietta Public Damietta Public Al Jizah Al Jizah El Faiyum El Faiyum Free Zone Free Zone Media Public Media Public Shibin el Kom Shibin el Kom Public Free Zone Public Free Zone Alexandria Free Zone Free Zone Alexandria Public Alexandria Public 50 km

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FREE ZONES

General information

Number of active com- -Free Zones : no information panies in Free Zones -QIZ : 680 companies in 2010 -Special Economic Zones : no information

Main sectors of activity Food processing alimentary industries and food products, chemicals & petrochemicals industries, fertilizers, petroleum services, and natural gas industrialization and liquefaction, engineering and electronics industries, manufacturing of medical equipment, pharmaceutical industries and medical equipment, spinning and weaving, fabrics, readymade garments, ready-made clothes, leather and leather products, petroleum services and petroleum equipment leasing, Ships, yachts and fishing boats industry, navigation services, ship supplying and provisioning.

Total job numbers -Free Zones : no information -280 000 in 2014 in QIZ -Special Economic Zones : no information

Distribution of investors Europe economic zones : an Union, United States, Middle East countries

Exports and sales In 2013, the Egyptian free zones accounted for 10 billion dollars in annual exports, representing a quarter of the industrial exports of Egypt

Free zones contribution 5% of total FDI in the country to the national economy

Corporate Tax Companies operating in free zones are exempted from customs duties, sales taxes or taxes and fees on capital assets and intermediate goods

Free Zone law http://www.gafi.gov.eg/content/EN/macro/investmentlawno8en.pdf

Contacts General Authority General Authority For Investment and Free Zones 3 Salah Salem st, Nasr City, Cairo, P.o. Box 11562, Egypt. Tel.: + 202 24055464 Fax: +202 24055429

Free Zones Sector El Sefarat District, Nasr City, Cairo, P.o. Box 8044, Egypt. Tel.: + 202 22748493 Fax: + 202 22748465 [email protected] www.investment.gov.eg

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List of Free Zones Name Location surface area Observations / Contact Alexandria Situated at 220 km from Cairo, 5 700 000 m² Ameriyah- Alexandria/ Cairo desert road Public Free 20 km from Nozha Internatio- P.O.Box:2351 Alexandria Zone nal Airport, Borg El-Arab Airpo- Telephone: (+203) 4500002 / 4500011 rt, Alexandria port and located Fax: (+203) 4500010 / 4500012 at the center of a network of E-mail: [email protected] roads. Alexandria Public free zone is at 7 km from Dekheila Port. Nasr City Located within Cairo gover- 705 000 m² Industrial activity represents 90% of the zone’s Public Free norate in the vicinity of Cairo projects. Zone Airport. Connected through a network of roads and railroads Nasr City Public Free Zone: in the vicinity of Cairo airport Nasr city- El-Safarat district behind El-Wafaa (15 km). Wal Amal P.O.Box:8044 Cairo Telephone: (+202) 22748129 Fax: (+202) 22748467 E-mail: [email protected] Port Said Located near Port Said Port. 729 000 m² Port-Said Public Free Zone Public Free 160 km from Cairo Port-Said City Zone P.O.Box:242 Port-Said Telephone: (+2066) 3729752 Fax : (+2066) 3728724 E-mail: [email protected]

Suez Public Established in 1975 on two 75 660 m² + 247 Port-Said Public Free Zone Free Zone locations: Port Tewfik location 208 m² Port-Said City (an area of 75660 m²), adjacent P.O.Box:242 Port-Said to Suez port's fence. Adabeya Telephone: (+2066) 3729752 location (an area of 247208 m²) Fax : (+2066) 3728724 overlooking Suez bay coast at E-mail: [email protected] 5 km distance from Adabeya Port. 120 km from Cairo Ismailia Situated at Cairo/Port Said De- 325 000 m² Ismailia Public Free Zone Public Free sert Road. It's 30 km away from Ismailia/Port-Said desert road, Ezz-El-Din Zone Mubarak's El-Salam Bridge Ismailia crosses over Suez Canal to the P.O. Box: 121, Ismailia continent of Asia, it is located Telephone: (+2064) 3482870 near the ports (85km from Fax : (+2064) 3482869 Port Said port, and Suez Port, E-mail: [email protected] 120 km from Cairo Airport and 125 km from Damietta Port. The Free Zone is located near the first and second industrial parks, and near the Technology Valley. Damietta 220 km from Cairo. 55km West 798 000 m² Damietta Public Free Zone Public Free of Port Said's port Damietta, East of Damietta Port Zone P.O. Box: 191 Telephone: (+2057) 290140 Fax : (+2057) 292222 E-mail: [email protected]

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Media Public 40 km from Cairo 3 000 000 m² Free Zone

Shebin El- 70 km far from Cairo 84 000 m² + 200 Shibin El-Kom Public Free Zone Kom Public 000 m² (situated Inside Misr / Shebin spinning and weaving Free Zone on 20 feddans Company area as a first Telephone: (+2048) 2236946 phase (84 thou- Fax : (+2048) 2236986 sand m²), to be Email: [email protected] extended to 48 feddans on its second phase) Qeft Public 45 km from Luxor city, 180 km 905 000 m² Qeft Public Free Zone Free Zone from El- Quseir Port, 250 km Industrial Park – Kallahein – Qeft – Qena Go- from Safaga Port, 650 km far vernorate from Cairo Administrative headquarters: Tahrir Street- Extension of Elmohafza Street- In front of the Courts of the State Council. Telephone: (+2096) 5347482 Fax : (+2096) 5347483 E-mail: [email protected]

Port Said East 35 400 000 m² Established in 1995, focused on containers and Port Public transit activities, its borders were adjusted in Free Zone 2003 to be parallel to the borders of the pivotal Port Said East port. An intermediate location between the international trade lines makes it an important distribution and logistic business center, serving the entire Mediterranean area and neighbo- ring regions. A good potential of industrial integration and commodities exchange with the adjacent industrial zones and its projects. Port Said authority port is the one entitled to implement basic infrastructure facilities. It accomplished the implementation of new entry canal streaming directly from the sea, in addition to the establishment of a containers (dock). The Suez Canal for Containers Company, has built a container station according to the B.O.T system, with a capacity of 600 thousand containers yearly, estimated to leach 1.2 million containers in the next few years.

Free Zones Web sites selection • http://www.tpegypt.gov.eg/Eng/FreeZone.aspx • http:www.gafinet.org • http://www.tpegypt.gov.eg/Eng/FreeZone.aspx • https://www.kpmg.com/EG/en/issuesandinsights/Documents/Issues-Insights%20PDFs/Doing%20Bu- siness%20in%20Egypt.pdf 6 WFZO Index cards - Egypt

QUALIFYING INDUSTRIAL ZONES (QIZ)

Qualifying Industrial Zones (QIZ) are designated geographic areas, within Egypt, that enjoy a duty free status with the United States. Companies located within such zones are granted duty free access to the US markets, provided that they satisfy the agreed upon Israeli component, as per the pre-defined rules of origin. Forteen currently designated industrial zones, with nearly 700 qualified companies, and more qualifying each quarter, amounting to more than $1 billion annual revenues.

Main sectors of activity Textiles & garments, animal products, articles of stone, Base metals, Chemical products, Electrical equipment, Footwear and headgear, Leather products, Ma- chinery equipment, Paper products, Plastic products, Prepared food stuff, Vege- table products. Number of active companies 700 companies entitled to QIZ Duty-Free Treatment in 2013 QIZ Total job numbers 280 000 in 2014 Exports and sales In 2013, the Egyptian free zones accounted for 10 billion dollars in annual exports, representing a quarter of the industrial exports of Egypt Qualifying Industrial Zone program spurred $823.6 million in Egyptian exports to US in 2013

The Qualifying Industrial Zones (QIZ) are spread out on four large geographical regions.

Name Include Alexandria Greater Cairo Area Nasr City, Shoubra El Kheima, South Giza, 15th of May, 10th of Ramadan , 6th of Oc- tober, El Obour, Badr City, Giza, Kalioub, Gesr Al Suez, Other areas in Cairo Middle Delta Governorates Ismailia, Port Said, Suze Suez Canal Area Beni Suif Al Minya

QIZ Advantages (Ministry of Trade and Industry) Duty Free Market Access: Egypt is one of a few countries which can promise duty free access to the US, the world’s largest consumer market, for all products manufactured in its Qualifying Industrial Zones (QIZ) provided that they comply with the rules of origin requirements as specified in the Protocol. The tariff exemption applies to all products, regardless of the industry or whether they are produced by the public or private sector, and irrespective of the size and volume of the enterprise. Egypt also provides competitive duty free access to several other substantial markets such as the European Union (EU), other Arab Countries, the Common Market of Eastern and Southern Africa (COMESA) countries, and Turkey. As a result, companies operating have competitive access to virtually all major commercial markets.

Simple and Flexible Requirements: As per the rules of origin, manufacturers must ensure that 35% of the product’s value be manufactured in an Egyptian QIZ, of which a minimum of 10.5% must be Israeli inputs. The Protocol provides flexibility by monitoring the commitment of manufacturers to the agreed upon ratio of their manufactured products on a quarterly basis, not on a single shipment basis, hence giving them a wider time frame.

No Export Quotas: Exports are neither limited by minimum/maximum quotas on quantities, nor by seasonal requirements.

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Open-ended Validity of the Protocol: The Protocol is not time-limited, nor does it have a preset end date. http://www.qizegypt.gov.eg/About_QizAdvantages.aspx

Protocol Between Egypt and Israel Protocol between the government of the arab republic of Egypt and between the government of the state of Israel on qualifying industrial zones : http://www.mfti.gov.eg/english/Agreements/qiz.htm

QIZ Web sites selection • http://www.qizegypt.gov.eg/ • http://196.205.98.231/About_QualifiedLocations.aspx • http://www.moit.gov.il/NR/exeres/2124E799-4876-40EF-831C-6410830D8F02.htm • http://www.mfti.gov.eg/english/Agreements/qiz.htm • http://itrade.gov.il/us-dc/2013/04/19/qizs-boost-egyptian-exports-to-the-u-s-124-growth-since-2004/

SPECIAL ECONOMIC ZONES (SEZ)

There are two Special Economic zones (SEZ) in Egypt: • Economic Zone Northwest Gulf of Suez (SEZONE) • Suez Economic and Trade Cooperation (SETC)

Economic Zone Northwest Gulf of Suez (SEZONE) The first Special Economic Zone (SEZ) established in Egypt by law 83 of 2002 for Economic zone of special nature, is located in Ein El Sokhna - Egypt, infront of Ein El Sokhna Port, near the southern entrance to the Suez Canal. The land area earmarked for the SEZONE 1st phase is approximately 20.4 km2. It is an experimental Zone for opening up and carrying out reform, establishing and improving the structure of the market economy in Egypt. The development of SEZONE is intended to provide an attractive environment for medium and light industries as well as logistics services, thus enhancing economic activity in the region and creating new employment opportunities.

Development Objectives: 1. Establish and develop the North West Gulf of Suez Economic Zone according to the highest International stan- dards. 2. Attract foreign direct investments to the Zone for the purpose of establishing industrial and service projects capable of competing with their counterparts regionally and internationally. 3. Direct employment creation, labor skills upgrade, and income generation. 4. Increase Egypt’s share in the international trade. 5. Increase exports, not only in terms of accelerating export growth, but export diversification as well.

Incentives and Benefits: SEZONE presents unrivaled incentives & guarantees comparing to the other economic zones in the region: 1. 10% unified income tax in the SEZONE (versus 20% outside of SEZONE) applicable on the profit of the capital companies and on income of natural persons and on revenues derived from land and non residential buildings. 2. 5% income tax. (versus 10% - 20% outside the SEZONE ) 3. A one-stop shop through legislation that provides the body with single-point authority over other government agencies in core areas. 4. The Authority has a supreme committee that supervises the taxation system in SEZONE. 5. The Authority has a special customs service under the supervision of a Supreme customs committee. 6. Lowest cost production center in the Middle East-North Africa in many sectors. 7. Allowing enterprises access to the domestic market, duties on sales to domestic market will be assessed on the 8 WFZO Index cards - Egypt

value of imported inputs only. 8. Access to productive skilled Egyptian labor in a number of manufacturing sectors at competitive costs. 9. Except for those submissions laying within the jurisdiction of the Summary courts and requests to revoke administrative decisions accompanied by submissions to suspend their enforcement, the dispute shall only be referred to court after having been submitted to the Dispute Settlement Center and that the panel has rende- red its decision or after 60 days from the date a motion was filed to appeal the decision and the panel did not decide the appeal. Targeted Cluster’s: SEZONE Authority aims to develop proposed industries on a «Cluster Based Policy». This will enable specified industries to achieve more productivity, efficiency in terms of time management and operating costs, inno- vation through establishing R&D centers, and new business formation by filling in niches and expanding the boun- daries of the cluster map. It will also improve access of local SME’s to the international market and increasing their productivity. • Automotive Assembly and Components. • Chemicals and Petrochemicals. • Construction and Building Materials. • Textile and Readymade Garments. • Agribusiness and Food Processing. • Home Appliances and Electronics. • Logistics and Warehousing. • Pharmaceuticals.

Contact: K.M. 114, Kattameya old road, Ain Sokhna, Suez - Egypt Tel. : +2 062 3590004/7 Fax : +2 062 3590003 E-mail: [email protected] Website: www.SEZONE.gov.eg

Suez Economic and Trade Cooperation (SETC) Since 2008, on the model of Tianjin SEZ (China). 10 km². 58 entreprises & 2 000 employees Location: 3rd sector, North-west Gulf of Suez Economic Zone, Ain Sokhna, Suez, Egypt. Nearby cities: Badr City, Kerdasa, Katia Coordinates: 29°40’11»N 32°18’51»E

Contacts: Yangzhiqiang 022-66286168 [email protected]

Maxia 022-66286041 [email protected]

Other information about SEZ Special Economic Zone law: http://www1.umn.edu/humanrts/research/Egypt/Special Economic Zones Law No_ 83 of 2002.pd

SEZ Web sites selection: • http://www.sezone-egypt.com/ http://www.gafi.gov.eg/English/StartaBusiness/InvestmentZones/Pages/Spe- cial-Economic-Zones.aspx • https://www.kpmg.com/EG/en/issuesandinsights/Documents/Issues-Insights%20PDFs/Doing%20Bu- siness%20in%20Egypt.pdf • http://www.ccs.org.za/wp-content/uploads/2013/08/CCS_DP_China_Goes_Global_Emma_Scott_2013_Final1. pdf

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BIBLIOGRAPHY

AWNI Ali, SHAFEI Karim, (2012) « Beyond duty free access: export readiness assessment for Qualifying Indus- trial Zones (QIZ) apparel companies, Measuring Business » Excellence, Vol. 16 Iss: 3, pp.3-16 AZMEH Shamel. Labour in global production networks: workers in the qualifying industrial zones (QIZs) of Egypt and Jordan. Global Networks, Volume 14, Issue 4, October 2014, pp. 495-513. BOOZ Allen Hamilton (2008), The Rise of Economic Zones in the MENA Region: A Telecommunications Pers- pective. BRUYAS Frédérique (2000). « Port Saïd (Egypte), lieu d’articulation du local au mondial. Zone et ville franche : questions d’échelles ». Annales de géographie, n° 612, p. 152-171. HANDOUSSA Heba, (1990), Egypt’s Investment Strategy, Policies and Performance Since the Infitah, in : Said El-Naggar (éd.), Investment Policies in the Arab Countries, papers presented at a seminar held in Kuwait, December 11-13, 1989 (International Monetary Fund), Washington, D.C, p. 143 et s. Foreign Investment Advisory Service (2008), «Special Economic Zones: Performance, Lessons Learned, and Implications for Zone Development». 7 SCOTT Emma. China goes global in Egypt: Special Economic Sone in Suez. Discussion Paper. Stellenbosch, August 2013, 36 p. - http://www.ccs.org.za/wp-content/uploads/2013/08/CCS_DP_China_Goes_Global_ Emma_Scott_2013_Final1.pdf YADAV Vikash (march 2007). « The Political Economy of the Egyptian-Israeli QIZ trade Agreement ». Middle East Review of International Affairs, vol. 11, n°. 1, p. 74-96.

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APPENDICES

Table 1: Distribution of Firms Registered in QIZ in 2008

Sector Number of Firms Animal products 2 Articles of Stone 12 Base metals 14 Chemical products 13 Electrical equipment 8 Footwear and headgear 14 Furniture 9 Leather products 7 Machinery equipment 8 Paper products 1 Plastic products 14 Prepared food stuff 26 Stationery 2 Vegetable products 18 Ready-made-garments and textiles 585 Total 733 Source: QIZ Unit, Ministry of Trade and Industry

Table 2: Qualifying Industrial Zone: Exports and Imports Value From 22/2/2005 until 31/12/2013 (Value in Million US$) Textile & RMG Food Value Exports Exports Value Pro- Total Exports Value Total Imports Value Products ducts 2005 288,3 0,207 288,6 36,0 2006 636,2 1,259 637,5 73,7 2007 688,3 0,553 688,8 80,4 2008 743,7 0,954 744,7 78,6 2009 761,5 2,266 763,5 80,5 2010 855,7 2,508 858,2 90,4 2011 924,1 7,511 931,6 97,5 2012 880,6 4,1 884,7 93,0 2013 820 3,2 823,6 77,7 Total 6 597 22,6 6 620,5 707,6 http://www.qizegypt.gov.eg/QIZ_Data.aspx

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Graphic 1: Egyptian exports to the United States

http://itrade.gov.il/us-dc/2013/04/19/qizs-boost-egyptian-exports-to-the-u-s-124-growth-since-2004/ *GSP: Generalized System of Preferences