The Russian Ministry of Industry and Trade has announced that companies operating in the planned Russian Industrial Zone (RIZ) in Egypt will receive extensive tax and customs exemptions for 49 years under a new bilateral agreement, Al Arabiya Business reports.

The RIZ will be located in Ain Sokhna, within Egypt’s Suez Canal Economic Zone – alongside the vital maritime artery that links the Mediterranean and Red seas and provides the fastest sea passage between Europe and Asia.

The announcement was made during a visit by a high-level Russian delegation, led by Deputy Prime Minister Alexey Overchuk, to the project site on the Gulf of Suez.

The Russian delegation, which included officials from 14 agencies and ministries, held talks with Egypt’s Minister of Trade and Industry and government entities. Its members also participated in a business forum at the Federation of Egyptian Industries to explore joint ventures.

The talks resulted in renewed commitments to launch the zone, which Egypt projects will boost local manufacturing, increase exports, and strengthen bilateral trade, which reached $16bn in 2024.

Russian officials describe the RIZ as a gateway to African and Middle Eastern markets, while Egyptian authorities emphasise jobs, technology transfer and investment. Cairo’s strategy extends beyond Moscow: China has channelled Belt and Road funds into SCZone sites, while UAE and Saudi investors have expanded port and logistics stakes.

Russian Deputy Industry and Trade Minister Roman Chekushov said the RIZ tax and customs regime is “guaranteed under an international governmental agreement and will not change throughout the duration of the lease.” Companies in the zone will benefit from full customs exemptions on imported components used for production, provided final goods are destined for export, according to Novosti.

In May, Russian Industry and Trade Minister Anton Alikhanov said that the preferential terms under the RIZ agreement will apply for three years. During this period, the land will be provided free of charge to allow construction work to begin.

What is the RIZ?

In mid-May 2025, Russia and Egypt signed a long-term land use agreement to establish a Russian Industrial Zone within the Suez Canal Economic Area (SCZone). The two sides set the commercial framework under a usufruct arrangement. The deal was signed between the General Authority for the SCZone and a newly created Russian company that will act as the project developer.

The zone, which spans around 50 hectares, is scheduled to begin operations in 2030 and is designed to serve as a gateway for Russian exports to Africa and beyond. The RIZ is expected to create opportunities in sectors such as construction materials, automotive structures, railways, and petrochemicals, while enhancing Egypt’s integration with BRICS markets.

Priority industries that the government will focus on include mechanical engineering, chemicals and petrochemicals, pharmaceuticals, and medical equipment.

Egypt has completed major infrastructure upgrades and is now focusing on attracting quality foreign investment, with Russia considered a key political and economic partner. 

Why are Egypt and Russia interested in RIZ?

The site offers strategic logistical advantages, located at the crossroads of the Suez–Hurghada highway and a rail network. All infrastructure, including roads, utilities, and communications, is reportedly complete.

Kamal El-Dessouky, a board member of the Federation of Egyptian Industries, told Al Arabiya that reviving the project is a highly strategic move amid global geopolitical challenges, inflation, and economic pressures.

One major objective for the Egyptian government is to diversify trade settlement away from the US dollar. Around 40–50% of trade is already conducted in local currencies. Russian and Egyptian central banks have discussed ways to expand the use of their national currencies in cross-border trade settlements, Alikhanov said on May 14.

For Russia, the industrial zone is of similar importance. RIZ is part of Russia’s national “International Cooperation and Export” programme, aimed at building industrial infrastructure abroad, boosting trade in advanced technologies with Egypt, and providing a platform for re-exports to third-country markets.

The zone offers Russian firms access to over 70 markets through Egypt’s network of free trade agreements, positioning it as a hub for exports to Africa and the Middle East.

Russian pharmaceutical firms have already expressed interest, with potential contracts under discussion for the Egyptian market. Other sectors likely to join include chemicals, mechanical engineering, and building materials, particularly relevant as Egypt accelerates the construction of new cities. In addition, over 30 Russian companies are already exploring opportunities in Egypt, spanning fertilisers, polymers, medical equipment, and transport.

Alexey Tevanyan, Russia’s Trade Representative in Egypt, told Asharq Al Awsat that Russian companies are carefully studying opportunities to localise production in Egypt to serve both the domestic market and export to third countries. More corporate missions are expected to follow to assess procedures and prepare for project implementation, he said.

In an interview with Akhbar Al Youm on September 21, Chekushov described Egypt as a “strong ally and a trusted partner.” He added that the RIZ will mark a major turning point in bilateral economic cooperation.

Chekushov said the unique customs and tax regime granted to Russian companies under the intergovernmental agreement will ensure exemptions on imported production components, provided final goods are exported. He also pointed to emerging fields such as drones, smart systems, and radio-electronics, adding that Moscow is considering establishing a dedicated R&D hub within the industrial zone to promote advanced technology cooperation.

Significance of Egypt-Russia economic cooperation

The RIZ is more than an investment project—it is a 49-year partnership that could reshape industrial and trade relations between Cairo and Moscow.

Egypt is strengthening its role as a key Russian partner as Moscow seeks new markets and investment opportunities under Western pressure. The transition from political discussions and cooperation to concrete projects is crucial for the multi-party strategy Egypt is considering. 

There will be massive benefits from the Russian-Egyptian projects. RIZ is expected to draw $7bn in investment and create thousands of jobs. The Russian-operated El-Dabaa nuclear plant will boost Egypt’s electricity capacity by nearly 10%. Together, the projects anchor long-term industrial and energy cooperation between the two countries.

The real value from the RIZ goes beyond the domestic market. With Egypt holding more than 70 free trade agreements, companies operating inside the RIZ will gain privileged access to Africa and the Middle East, turning the zone into a powerful export gateway.

The RIZ will contribute to the rising trade between Egypt and Russia. Trade between the two countries has grown significantly, rising 32% year-on-year (y/y) in 2024 to $9bn, and a further 22% in H1 2025, Al Mal reported, citing government data. The trade value last year was 150% higher than it was five years ago. Russian exports climbed 21.4%, while Egyptian imports grew 30%. Key Russian goods include wheat, steel structures, metals, wood, and industrial products.

Moreover, Egypt’s hosting of the Russia–Africa forum in November 2025 will support Cairo’s position as a mediator between Moscow and African countries for further economic cooperation and investments.