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Arab Finance: Prime Minister Mostafa Madbouly issued Decree No. 503 of 2026, expanding the range of industrial activities eligible for investment incentives and linking them to the geographical areas classified under sectors A and B, as per a statement.
Minister of Investment and Foreign Trade Mohamed Farid Saleh said the decree marks a key step in the broader implementation of Article 11 of the Investment Law, extending special incentives to support industrial localization and deepen domestic supply chains.
He noted that the decision consolidates industrial activities that have benefited from incentives under successive decrees since 2022, while also adding new activities in response to investor demand and the state’s industrial priorities.
Farid said the move reflects a practical approach to strengthening local manufacturing and increasing added value, in line with the directives of the president and the prime minister. He added that the decree supports the state’s strategy to increase the local component in strategic industries, particularly the automotive sector, including both conventional and electric vehicles, with the aim of building an integrated industrial base that includes feeder industries and production inputs.
The decree also adds new activities across the engineering and metallurgical industries, food industries, and chemical industries, a step expected to enhance industrial integration, improve supply chain efficiency, reduce reliance on imports, and boost the competitiveness of domestic products.
According to the minister, the decision is the result of coordinated efforts between the ministries of investment and foreign trade, finance, and industry, ensuring alignment across economic policies and incentive mechanisms while maximizing the comparative advantages of the geographical areas covered under sectors A and B.
Under the decree, eligible activities will benefit from a tax credit equal to 50% of net taxable profits in geographical sector A and 30% in sector B, up to a maximum of 80% of paid-up capital, applied over a period of seven years.
Farid said the decree adds several priority industrial activities to sector A, including the manufacture of all types of automobiles and vehicles, electric motors and engines, refrigerator evaporators and compressors, sheet metal used in electrical and electronic appliances, pipes and tubes, the production of fresh fruit and vegetable concentrates or pastes, and the production of concentrated sulfuric acid.
Sector B will also include the manufacture of all types of automobiles and vehicles, refrigerator evaporators, the production of fresh fruit and vegetable concentrates or pastes, and the production of concentrated sulfuric acid, in line with the state’s focus on value-added industries and strengthening local supply chains.
The minister said linking incentives to geographical zones reflects the government’s commitment to balanced regional development.
Sector A includes the most in-need areas, Upper Egypt governorates, the New Administrative Capital, and the economic zone, offering stronger incentives to attract industrial investment and create jobs.
Sector B covers the rest of the country, ensuring incentives are available nationwide and supporting industrial growth across all governorates.
Farid said the decision underscores the government’s commitment to expanding the application of investment incentives under the Investment Law, contributing to attracting new investments, deepening local manufacturing, increasing exports, and supporting economic growth.
He added that studies are ongoing to include additional industrial activities targeted for localization in future decisions.
