Dmitry Kurochkin: What Opportunities Does Russia’s Industrial Zone in Egypt Offer?

In the context of the recent Russia–Africa summit and international industrial cooperation, our companies have a strong interest in the experience of creating the Russian Industrial Zone (RIZ) in Egypt, which has recently received a “second wind.” The Ministry of Industry and Trade has designated the Growth Crystal Foundation as the RIZ’s comprehensive development institution. It will serve as a single point of contact for investors, developers, and residents. Its task is to create the most favorable conditions possible, with the support of the Russian government, for attracting capital, launching new production facilities, and building modern international cooperation chains to support the technological development of the economy. The relevant agreement was signed at the Eastern Economic Forum in Vladivostok in September of this year.

At the 4th International Forum of Special Economic Zones, held at Technopolis Moscow at the end of October this year, a program was presented to turn special economic zones—including the RIZ in Egypt—into anchor territories that provide the conditions for creating, implementing, and scaling domestic technologies. Today, free and special economic zones can serve both as drivers of technological sovereignty and as hubs for assembling international value chains.

Results have already begun to emerge: the Orgkhim biochemicals holding company and the Akron Holding industrial and metallurgical company have signed agreements with the Crystal Foundation to join the RIZ and establish a plant producing non-carcinogenic plasticizer oils and bio-based oils for the tire industry, as well as new facilities for manufacturing cable and copper-cable products and submersible oil pumps. More than 30 agreements with potential project participants are also in preparation.

The RIZ project is being implemented in the northeastern part of the Suez Canal Economic Zone, where more than 600 companies operate. It currently comprises a 50-hectare site with access to Ain Sokhna port. In May 2025, a long-term land-use agreement was signed, setting out the commercial terms for operating the site (a usufruct agreement). Among other provisions, it grants a three-year rent-free period for land plots within the RIZ. Over the next three years, project documentation will be developed and construction and installation work will be carried out. The RIZ is scheduled to begin operations in 2030.

The industries being considered for localization in the RIZ include mechanical engineering, metallurgy, construction materials, radio electronics, electrical equipment, pharmaceuticals and medical devices, chemicals and petrochemicals, and timber processing.

Any Russian company can now apply to locate a production facility and request a preliminary assessment of its investment project through the RIZ’s official website, which is available in four languages. It is important for our companies to have a clear understanding of the terms on which their production will be organized and the demand for their products in the markets of Egypt, Africa, and the Middle East—even before making an investment decision. These markets have 2 billion consumers! Participation in the RIZ also creates important opportunities for technological and financial cooperation.

RIZ residents are offered two options: build their own production facility on a prepared site, with the possibility of obtaining preferential financing, or rent a completed facility built by an industrial developer to meet the company’s requirements.

Products made in the RIZ are expected to receive “Made in Egypt” status if they meet the localization requirement of more than 30%. This exempts them from customs duties when exported to countries in Africa, the Middle East, Latin America, and other countries that have trade agreements with Egypt. At the same time, almost all products made in the RIZ can also be sold in the Egyptian market.

RIZ residents are exempt from duties on imported equipment and materials, property tax, and value-added tax on purchases of raw materials and components. They are also entitled to a corporate income tax refund over seven years equal to 50% of their investment in the project. Foreign residents may import production resources and finished products from their nonresident parent company without restriction.