Will shorter pre-lease periods help revive inactive production lines? The Industry Ministry shortened the mandatory pre-lease operating period for factories to just one year — down from three — calculated from the start of operations, it said in a statement. The reduction is contingent upon 100% completion of the building, a demonstrated track record of project seriousness, and the full settlement of the land price.

The decision addresses a mounting crisis, with the Sixth October Investors Association estimating that at least 10% of factories in the area are shuttered, the group’s President Mohamed Khamis Shaaban tells EnterpriseAM. Reasons range from owner insolvency to the lack of interest from heirs.

Why this matters: In theory, this decision paves the way for these assets to re-enter the production cycle via new tenants, providing a safe exit for distressed assets while offering a low-cost advantage for SMEs — those that cannot afford the overheads of new construction, Shaaban says.

Some industrial developers argue that the real bottleneck isn’t the duration, but the operating license requirement itself. An investor who can't get their plant running won’t benefit from a shorter timeline if they lack an operating license to begin with, Polaris Parks General Manager Bassel Shoirah tells us. This precondition has cost Egypt hundreds of projects, driving Turkish and Chinese investors toward other markets offering turnkey factories, Shoirah says.

Shaaban also argues that challenges lie in the discretionary power of local authorities, whose flexible interpretations of what constitutes an operating factory could stall progress.

Companies looking to sell their factories outright will still have to wait three years. The Industry Ministry remains wary of the risk of disguised sales — a practice where companies acquire industrial land at subsidized rates with the goal of flipping the land for a bigger return rather than manufacturing.

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