FDI in figures

Due to the global economic crisis, the flow of Foreign Direct Investment in Egypt has slowed sharply in 2008/2009. FDI flows are expected to reach between 6 and 8 billion for this period against 13.2 billion USD for 2007/2008 and 11.1 billion USD in 2006/2007. This slowdown linked to the current economic situation does not call into question the attractiveness of Egypt, which remains one of the first destinations of this region in terms of FDI. Indeed, the economic reforms initiated by the State in the direction of greater libéralisation have helped to restore confidence in business. Moreover, Egypt has many advantages including a strategic location, low-cost qualified labor, unique touristic potential, and sizeable energy reserves. Investments mostly flow from United States and Europe as well as Gulf countries. They are mainly made in the tourism, construction, telecommunications, financial services, energy and health sectors.

Why you should choose to invest in Egypt

Strong points

The country is in a geographically strategic location. Moreover, it offers cheap and relatively qualified labor. Its growing population constitutes quite a considerable market in the region. It has very good energy resources. Moreover, the country has launched in recent years a policy of public works (construction of the third metro line, expansion of the port of Sokhna, improvement and renewal of Network Rail) offering many investment opportunities to foreign companies. Finally, the policies undertaken by the government towards a large scale liberalization and improved attractiveness for foreign investors are encouraging signs for foreign investment.

Weak points

In spite of privatizations, the inefficient and loss-making public sector remains ubiquitous in some sectors. In addition, the rapid population growth continues to curtail the improvement of the standard of living of Egyptians. In fact, the country registers a delay in its infrastructures that the current investments are not able to make up for.

Government measures to motivate or restrict FDI

Since September 2004, the General Authority for Investment and Free Zones (GAFI) has established an economic program to attract foreign investors, together with a reduction in customs duty by an average of 35% and a simplified pricing. If all the economic sectors are open to domestic and foreign investors, some are more particularly cited by the Law which expressly provides the possibility to execute projects in the form of BOT (Build, Operate, Transfer) in the sectors of agriculture, manufacturing industry, mines, tourism and hotel industry, air transport, off-shore shipping transport, goods transport services, petroleum exploration and exploitation, infrastructures more specifically for drinking water conveyance, highways, accommodation and used water recycling. Other sectors are added to this list depending on requirements (leasing, venture capital, creation of computer programs and software, etc.). Privatization programs are also open to foreign investors. Some sectors are considered strategic and hence subject to specific legislations: aerospatial, defence, newspaper publishing.

Procedures relative to foreign investment

Freedom of establishment

In theory, it is guaranteed (except for setting up in Sinai or the military domain). In practice, foreign companies can face some discriminations compared to their competitors from the Egyptian public sector. Their main difficulty is to obtain local bank credit which is still highly state-controlled.

Acquisition of holdings

The acquisition of the majority interest in a domestic company is allowed in Egypt. In fact, holding more than 49% of the capital of a local bank is authorized since law 97/1996.

Obligation to declare

The General Authority for Investment and Free Zones (GAFI) in the country is useful to get information on the permissions necessary for setting up a company.

Competent organization for the declaration

GAFI

Requests for specific authorizations

The founders of joint stock and limited liability companies must furnish a bank certificate showing that 10% of the issued capital has been paid up.

Finding assistance for further information

Investment aid agency

General Authority for Investment and Free Zones in Egypt(GAFI)

Other useful resources

Portal for Investment in Egypt.
Egyptian government information website