August 27, 2018

New Law Regulating the Industrial Development Authority (IDA)


A new law was issued on 11 June 2018 to regulate the Industrial Development Authority (IDA). The Law provides that the IDA is an economic public body with an independent legal personality affiliated to the Ministry of Industry.

The IDA shall be responsible for managing the industrial sector in Egypt, being allowed to implement industrial policies and targeted development plans. The Law comes in line with the efforts of the government to support the industrial sector as a locomotive of economic development, which necessitated the re-organization of the IDA to play its main role in supporting the industrial development.

The IDA becomes the only body competent with granting industrial facilities, licenses and approvals necessary for the operation of industrial facilities. This makes it easier for investors in the industrial sector to access licenses and approvals at the IDA as a one-stop shop.

In addition, the Law regulates the work of the Industrial Development and Support Fund ("Fund"). The Fund shall support the establishment, construction and development of the industrial zones in Egypt.

Chapter 4 of the Law regulates the allocation of the industrial land needed for the establishment of industrial projects. The Law defined an ‘industrial project’ eligible to be allocated an industrial land to be: "Any facility, company or industrial place of any size, performing a physical or chemical transformation of the raw material, or making changes to any product, including assembly, classification, packaging, sorting, recycling, or other activities and processes, specified by a decision of the competent minister".

Allocation of industrial land could be in the form of sale, rent, hire-purchase or usufruct, and should be in accordance with the provisions of Chapter 4 of the Law.

The allocation of the industrial land shall be granted in accordance with the industrial plan of the state, the size of the industrial project, the nature of its activity and the value of the invested funds.

The IDA shall make available information on all industrial lands available for allocation and those that have been allocated already.

For the purposes of industrial development and in areas to be designated by a decision of the President after the approval of the Council of Ministers, free allocation of state owned land maybe granted for manufacturers who meet specific technical and financial requirements to be decided by the Council of Ministers. The investor in this case will be required to pay a cash guarantee not exceeding five percent (5%) of the investment cost of the project to be recovered after 3 years from the commencement of actual production of the project.

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