TEDA Cooperation Zone QIZ: Helping Enterprises Develop the U.S. Market

TEDA Cooperation Zone QIZ: Helping Enterprises Develop the U.S. Market
On January 20, 2021, at the invitation of TEDA Cooperation Zone, Dr. Ashraf El-Rabiey, Chairman of Egypt's Qualified Industrial Zone (Qualified Industrial Zone, hereinafter referred to as QIZ), visited TEDA Cooperation Zone to give a special lecture to explain QIZ preferential policies in detail for enterprises entering and intending to enter the zone.

The lecture was carried out in the form of a combination of online and offline. Lei Chu, Midea, Caidie, Kairun, Deyu and other enterprises participating in the lecture believed that they had gained a lot. Participants said that through the lectures, they had an in-depth and comprehensive understanding of the relevant policy details of the QIZ agreement, especially a new understanding of "obtaining 10.5 percent of Israeli components.

The major outcome of this lecture was the agreement reached between the TEDA Cooperation Zone and QIZ: Dr. Asraf Laberi promised to hold regular online or offline meetings every quarter thereafter to help TEDA Cooperation Zone enterprises make full use of the QIZ agreement and better explore the US market.

What is Qiz?

In 1996, the U.S. Congress passed the plan to establish a "qualified industrial zone", which aims to encourage Israel to establish economic cooperation with U.S. partners in the Middle East and achieve peaceful coexistence. In 2004, Egypt, Israel and the United States signed an agreement on qualified industrial zones in Cairo. The agreement provides for duty-free access to the U.S. market for Egyptian products containing Israeli ingredients. When the QIZ agreement was issued in 2005, the proportion of Israeli ingredients was about 11.5 per cent of the final product, then dropped to 10.5 per cent in 2007, I .e. containing at least 10.5 per cent of Israeli industrial materials or service ingredients and 24.5 per cent of Egyptian industrial materials or service ingredients, all of which are exempt from customs duties when entering the US market. At present, the Egyptian government is seeking to reduce the proportion of Israeli components to 8% through negotiations.

The competitive advantage of QIZ

With increased global competition, Egypt's qualified industrial zones offer investors a significant long-term advantage over other preferential trade agreements, as their commitments have no expiration date and no tariff reduction plans.

In addition to easy access to the U.S. market, unlimited quotas, and duty-free and tariff-free barriers, low factor costs and a huge labor supply add to the attractiveness of Egypt's qualified industrial zones. Since the establishment of the Qualified Industrial Zone, exports from Egypt have increased significantly, most of which are exported to the US market. In addition, exporting companies in qualified industrial areas earn higher profits due to their unrestricted duty-free access.

What is the current situation of QIZ in Egypt

At present, the number of qualified industrial zones in Egypt has reached 15. The China-Egypt TEDA Suez Economic and Trade Qualified Zone is just within the qualified industrial zone and enjoys the preferential policies of the QIZ agreement. About 1000 companies in the 15 qualified industrial zones have been certified, mostly in the textile, agricultural processing, chemical, leather products, plastic products, furniture, electrical appliances and other industries.

Which industries are suitable for investment in QIZ

Textiles and garments

Chemical Products and Leather Products

Food processing industry, cleaning products manufacturing and food packaging

screening grading agricultural crops

Household electrical equipment

Service activities (oil and marine services, repair and scrapping of ship re-export equipment)

Storage and re-export of goods, etc.

How to get a QIZ certificate

First, check whether the company is located in a qualified industrial zone.

Second, fill in and submit the online registration form

Third, send supporting documents to qualified industrial area units, including:

1. Business registration certificate or statement from the General Administration of Investment and Free Zones (GAFI) or the General Administration of the Special Zone;

2, industrial registration certificate and tax card.

Fourth, the information will be delivered to qualified industrial area units, including:

1. Delivery by hand: Qualified Industrial Zone Department Address: No.2 Latin American Street, Gaden City, Cairo

2. Fax: Recipient: QIZ Department 202 2794 8025 and called to confirm receipt of documents.

3. Scan and email to: info@qizegypt.gov.eg

Fifth, wait for approval.

How to get raw materials or ingredients from Israel

The materials and raw materials from Israel to Egypt are exactly the same as those imported from any other country, without any changes or differences. If the company wishes to import raw materials with zero tariff, it needs to obtain a certificate issued by a qualified industrial area unit.

QIZ goods produced in the United States, need to pay attention to what

First, ensure that the company is located in a designated qualified industrial area.

Note: Registration forms and supporting documents must be submitted to verify the address of each company.

Second, QIZ goods exported from Egypt to the United States need to be shipped directly, that is, directly from the West Bank, the Gaza Strip, QIZ or Israel into the United States, without passing through the territory of any intermediary country. If the goods pass through the territory of an intermediate country, the goods in the shipment do not enter the commerce of any intermediate country, as well as invoices, bills of lading and other transport documents, with the United States as the final destination.

If the goods are carried through an intermediate country and invoices and other documents do not indicate the United States as the final destination, the goods in the shipment are imported directly after arrival in the United States only if:

(A) remains under the control of the customs authorities of an intermediary country;(B) may not enter commerce in an intermediary country except for the purpose of sale, provided that the goods are imported as the result of an original commercial transaction between the importer and the manufacturer;(C) does not perform any operations necessary to keep the goods intact, except for loading and unloading operations.

    
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