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The Ministry of Industry has announced a new package of grace periods and incentives aimed at supporting distressed industrial projects that have exceeded their approved implementation timelines, as part of the government’s efforts to accelerate production, protect manufacturers, and maximize the use of industrial land.

The measures, to be implemented by the Industrial Development Authority (IDA), will remain in effect until 30 April 2026.

Under the new package, grace periods will be granted based on each project’s level of construction completion. Projects that have completed more than 75% of construction works will receive a six-month grace period to finalize implementation, install machinery, and obtain operating licenses and the industrial register, with a full exemption from delay penalties during this period.

Projects that have completed between 50% and less than 75% of construction works will be granted a 12-month grace period, with an exemption from delay penalties for the first six months only, while standard costs and penalties will apply to the remaining period.

Projects that have obtained a building license but have either not started construction or completed less than 50% of works will be eligible for a grace period of up to 18 months, with penalties waived for the first six months only.

The ministry stressed that failure to comply with the granted deadlines will result in the withdrawal of allocated land, with standard costs and penalties applied in accordance with IDA regulations.

In cases where industrial land has already been subject to a withdrawal decision but remains vacant and has not been reallocated to another investor, the ministry will allow re-engagement with the same investor at the currently approved price, in line with Prime Ministerial Decree No. 50 of 2025. This will enable investors to benefit from previously prepared designs and feasibility studies, provided a formal application is submitted and applicable penalties are settled.

To qualify for the incentives, investors must submit an application to the General Authority for Industrial Development (GAID), accompanied by a real estate, technical, financial, and legal status report issued by the competent authority within the past 40 days.

Applications will be reviewed within 15 days, with grace periods calculated from the date of official approval. Projects that fail to demonstrate seriousness during the granted timelines will face land withdrawal and legal action.

The ministerial decision also introduces new controls on the transfer and leasing of industrial land. The transfer or leasing of industrial land within industrial zones or developer-managed areas will be prohibited until seriousness is established, three years of operation have elapsed, and the full land price has been paid. Lease contracts will not be accepted as proof of possession unless these conditions are met, with exceptions limited to approved financial leasing arrangements and contracts issued by competent authorities.

In addition, requests to change industrial activity will not be approved until at least 12 months of actual operation have passed and seriousness has been established, except for products falling under the same sub-activity. Environmental approvals for adding new activities will also require proof of seriousness in the original activity and the completion of technical inspections.

The ministry said the new measures aim to support industrial investment, remove obstacles facing serious investors, accelerate the operation of stalled projects, and ensure the optimal use of industrial land, while safeguarding state rights and advancing sustainable industrial development.

Source: Daily News Egypt