The 2024 Guide to Import Used Cars from China to Egypt

Egypt is a major market for importing used cars, especially from Asia. To make this process easier, here is a well-researched guide that covers everything you need to know as an international trader.

General Policies:

-Egypt only allows the importation of left-hand drive vehicles, and entities importing used cars must obtain commercial registration (for importers) or a professional license (for individuals).

- Regarding vehicle imports, passenger cars are limited to the importation of hybrid used cars, electric used cars, and used passenger cars equipped with medical equipment for persons with disabilities produced within the last three years.

- For commercial vehicles, large transport vehicles may be older than 10 years, while other commercial vehicles must be less than 10 years old.

- As of July 1, 2021, used cars exported to Egypt must complete CargoX registration; otherwise, the used cars will be returned and fined.

- Additionally, Egypt launched the tax-free car import program for overseas expatriates from October 2022 to May 2023 and from October 2023 to January 2024: Expatriates older than 16 years old importing personal vehicles from 2019 or newer to Egypt are exempt from customs duties, value-added tax, and other taxes, aiming to raise dollars to cope with the country’s ongoing foreign exchange shortage.

Taxation:

Understanding the taxation system is crucial when you import a petrol used car into Egypt, it is also important to consider Egypt growing market of electric vehicles. The recent adjustments in tax rates, and other regulatory cost will all be discussed in detail.

- For Used electric passenger vehicles, the Duty Rate is 0%, the development fees rate is 0%, the planning Tax rate is 0%, and the Value Added Tax rate is 14%.

- For used Hybrid passenger vehicles, tax are different based on engine displacement:

- 1000-1600ml: 40% customs duty, 3% development fee, 14% VAT, 1% planning tax.

- 1600-2000ml: 135% customs duty, 5% development fee, 14% VAT, 15% planning tax.

- Over 2000ml: 135% customs duty, 8.5% development fee, 14% VAT, 30% planning tax.

- Commercial Vehicles: Commercial vehicles are subject to variable customs duties ranging from 3% to 60%, depending on the type and age of the vehicle, as well as other taxes like VAT.

- Vehicles for Persons with Disabilities: Vehicles equipped for persons with disabilities are exempt from VAT and customs duties and are only subject to a 3% development fee.

Documents:

To clear a used car at customs in Egypt, importers typically need to provide the following documents:

- Commercial Invoice: Shows the value and details of the transaction.

- Certificate of Origin: Indicates where the car was manufactured.

- Bill of Lading: Lists all the cargo carried on the ship, including the vehicle.

- Proforma Invoice: May be requested to determine the vehicle’s market price.

- Foreign Exchange Control Form: Required by the bank to process the payment for the vehicle.

- Customs Declaration Form: This is the official declaration made to the customs authorities for the importation of goods.

- Proof of Insurance: Valid insurance policy for the car.

- Proof of Ownership or Car Title: The original car title showing current and previous ownership.

These are standard documentary requirements that may change depending on current regulations and policies. Importers should verify if there have been recent changes or additional requirements. It's advisable to consult with local clearing agencies and Egyptian customs authorities or a professional customs broker for the most current and accurate information.

Market Trends:

Since 2022, the worsening inflation in Egypt and the depreciation of the Egyptian pound have led to a decrease in consumer purchasing power. Data from the Egyptian Automobile Dealers Association indicates that since 2022, the prices of new cars have increased by 15% compared to last year, and the price increase reached 20% in 2023.

The continuous rise in new car prices is causing a shift in demand from new cars to the used car market in Egypt, resulting in increased activity in the used car market, with substantial customer demand for younger and more valuable brand used vehicles.

Meanwhile, the demand for EVs in Egypt has risen by 10.5% in 2023, propelled by increasing consumer interest in zero-emission transportation.

Egypt is making progress in its electric mobility landscape. One of the major pushes is the Ministerial Resolution 255/2018, which exempted EVs from customs duties and permitted the import of electric vehicles no older than three years. This legislative is crucial in reducing the upfront costs for EVs and promoting the zero-emission transition.

In short, it is predictable that China, the dominant EV player will be able to help Egypt during the transition to an affordable and competitive EV future.

Final Thoughts:

Get to know about the Egypt's import policies is a must for any successful trade. This guide encourages Egyptian traders to harness these insights and to participate the used car import from China confidently, thus propelling their business success.

Please note that used car import tax rates and policies may change over time or be adjusted according to the latest regulations from the government. Therefore, it is advisable to confirm the most current tax information with relevant tax and customs authorities before importing.