Advanced Legislative Environment
Financial Laws
The financial laws are considered one of the most important legislative tools supporting investment, as they play a key role in achieving financial stability, regulating tax policy, and managing public resources. These laws contribute to creating an attractive economic environment by ensuring transparency and fairness, providing financial incentives, and protecting investors’ rights, thereby enhancing confidence in the financial system and supporting the state’s efforts to attract investments and achieve economic development.
1)Public Procurement Law:
Law No. 182 of 2018 on Public Procurement Regulation was issued, repealing Law No. 89 of 1998 on Tenders and Auctions. Compared with the previous law, the new law introduced updated systems for purchasing, selling, and leasing. For instance, it allows government entities to lease movables such as cars or buses for transporting employees, from specialized companies that provide maintenance, spare parts, and drivers—unlike the previous law, under which the contracting entity was responsible for providing maintenance, spare parts, and drivers, and could only lease real estate. This law applies to all entities covered by the state’s general budget, as well as units of the administrative state apparatus. Law No. 188 of 2020 amended certain provisions of Law No. 182 of 2018, permitting contractors to waive (assign) their receivables in favor of banks or financial corporations. An exception was also added permitting administrative entities to enter into contracts without applying the provisions of the law under specific circumstances.
2) Income Tax Law:
Law No. 91 of 2005 aims to distribute the tax burden fairly across all groups, provide sufficient financial resources for the State to fund its projects, combat tax evasion, and simplify the tax regime. Among the most important incentives provided by the law are tax exemptions on certain types of income such as dividends, pension income, and social insurance income. It also offers tax deductions on education expenses, medical expenses, and donations, in addition to granting tax incentives to investment projects in certain sectors such as industry, agriculture, and tourism. Furthermore, Law No. 7 of 2024 was issued to amend the tax brackets, setting them in the range of 0% to 27%.
Income Tax Law No. 175 of 2023
3)Value Added Tax (VAT) Law:
Egypt began implementing the Value Added Tax (VAT) Law in 2016. VAT is imposed on the incremental value of services or products at all stages of production and distribution, with the tax amount determined by the State as a percentage of the final market price. The VAT was introduced to replace the sales tax with the aim of simplifying the tax regime and reducing tax evasion. VAT essentially operates as a “self-monitoring” mechanism, whereby the House of Representatives established a framework requiring companies to submit documentation of their transactions with suppliers and clients before being eligible to claim tax refunds. The law also provides incentives for small informal businesses to integrate into the formal economy. Following the enactment of Law No. 3 of 2022, certain provisions of the VAT Law were amended in line with the State’s commitment to modernizing the tax regime, advancing economic development, stimulating investment, enhancing tax compliance, and improving collection efficiency—without imposing additional burdens on citizens.
4) Capital Market Law and its Amendments:
Law No. 95 of 1992 is the principal legislation governing the Egyptian capital market. It was enacted to regulate the operation of the Egyptian Exchange and transactions in securities. Over the years, the law has undergone several amendments concerning the establishment and management of listed companies, expanding the scope of oversight, and enhancing mechanisms for investors’ protection in investment activities. The key objectives and amendments of this law include regulating the operations of the Egyptian Exchange, overseeing securities transactions, safeguarding investors’ rights, developing the Egyptian capital market, and encouraging investment in Egypt. This law has successfully achieved some of these objectives, as it has contributed to increasing trading volumes on the Egyptian Exchange and attracting direct investments to Egypt.
5) Real Estate Tax Law:
Law No. 196 of 2008 regarding the Real Estate Tax does not impose a new tax; it is a tax already imposed under Law No. 56 of 1954, commonly known in society as “Al-Awaed.” However, its provisions were reorganized under Law No. 196 of 2008. The taxpayer is the natural or legal person who has the right to own the property, benefit from it, or exploit it. As for the tenant, he is not considered a taxpayer but is deemed jointly liable with the taxpayer for paying the tax within the limits of the rent due from them. This tax applies to all constructed real estate located on Egyptian land, except for those exempted from the tax. This means that all existing buildings are subject to the tax, whether villas, apartment buildings, houseboats, or chalets, regardless of their geographical location.
Real Estate Tax Law No. 117 of 2014
6) Mortgage Finance Law :
Law No. 148 of 2001 on Mortgage Finance marked an important step in the development of Egypt’s real estate financing market. It established a structured legal framework for granting mortgage loans through both banking and non-banking institutions, with a particular focus on encouraging the securitization of mortgages as a means to stimulate the securities market and attract investment. The law aims to facilitate homeownership, especially for middle-income families, by allowing an initial down payment of no less than 20% of the property’s value, with the remaining balance to be paid in installments over an extended period ranging from 20 to 30 years. This mechanism reduces the financial burden on citizens and increases their opportunities to acquire suitable housing. This law is regarded as one of the key legislative tools supporting urban and economic development in the country.