New points-based system granting medium-term residence permits to foreign investors in renewables, utilities, and infrastructure projects, among others

GAFI residency system

The board of directors of the General Authority for Investment and Free Zones (GAFI) has just approved a new points-based system to facilitate the issuance of residence permits for foreign investors in Egypt. According to the new rules, the investor may be granted 5-year continued residence permits, which may be renewed for similar periods during the lifetime of its investment project.

The criteria used and their weights for the issuance of permits are: the project’s scope of activities (20%), the amount of paid-in capital (30%), the number of employees (30%), and the location of the project (20%). Specific activities are targeted, as follows:

  1. New and renewable energy activities
  2. Heavy industries determined by the Industrial Development Authority (IDA), technology industries excluding assembly and programming, pharmaceuticals, and feeding industries
  3. Educational activities below graduate level/university level
  4. Integrated development activities in the tourism, manufacturing, real estate, and agricultural sectors
  5. Land reclamation and cultivation activities for not less than 500 feddans with continued possession
  6. Hospitals establishment
  7. Tourism activities, such as the establishment and operation of hotels and tourist resorts of a minimum capacity of 500 rooms, with a 50% exception to frontier zones, new urban areas and remote areas
  8. Utility projects, such as water and wastewater, electricity, roads, telecommunications, and metro lines projects
  9. Oil projects
  10. Integrated water desalination projects (including the establishment, operation, and management of the desalination plants)
  11. Free zone projects with an export capacity exceeding 80%

The minimum paid-in capital considered is EGP 250,000 for joint stock companies, EGP 50,000 for limited liability companies and EGP 100,000 for single-person companies, or the equivalent of such amounts in foreign currency.

Eligibility starts at a score between 30% and 50%, which grants the right to obtain up to 2 residence permits, while a score of 50% to 75% grants the right to obtain up to 4 residence permits; a score of more than 75% up to 90% grants the right to obtain up to 6 residence permits; and a score of over 90% grants the right to obtain up to 8 residence permits by the company in question.

The residence permit is granted for the first time for a period of 1 year, extendable for another 1-year period after establishing the seriousness of the company’s activities in Egypt, after which the residence permit is granted or renewed for a 5-year period or for the tenure of the company’s board of directors, or the term of the title to or deed of the company’s land property, whichever is lesser, following the date of commencement of activities/manufacturing has been officially determined.

The beneficiaries eligible to obtain the residence permits based on this new system are the individual shareholders or representatives of corporate shareholders and directors in joint stock companies; partners and managers in limited liability companies; and owners or owner representatives in single-person companies.