Comprehensive Research Report for the BRICS+ Legal Index – Egypt Chapter Jurisdiction: Arab Republic of Egypt
1. In which sectors of the economy in your country is there currently the largest inflow of foreign investment? In which sectors of the economy is there the greatest presence of foreign business?
Construction/real estate is one of the most booming sectors in Egypt nowadays. The Egyptian government has invested billions of dollars in the New Capital, highways all over the country, and built more than 20 new cities to accommodate the growing population. Foreign investors have understood the government's trend towards encouraging construction, and they are strongly investing in this sector.
2. In which projects do foreign businessmen mainly invest at present?
Foreign investors mainly invest in oil and gas, renewable energies, and mining in Egypt, but since approximately 15 years ago and due to the construction boom in Egypt, foreign investors have also entered the construction sector.
3. Has there been an increase in the number of M&A transactions with foreign participation in 2022-2024?
There has been a significant increase in M&A transactions with foreign participation, as the Egyptian state is taking significant steps to reduce reliance on domestic investments by privatizing the public sector; this is creating a significant wave of M&A activity.
4. Which economic sectors in your opinion have the greatest potential for attracting foreign investment? What sectors will be increasingly attractive for foreign business in the future?
The construction sector is still top-rated as the Egyptian population is increasing; moreover, Egyptians trust real estate as a store of value due to high inflation rates.
5. What support measures for foreign business exist in your country?
The Egyptian state implements numerous measures to encourage FDI, like providing enhanced legal incentives for foreign investors, more exemptions from taxes and fees, as well as flexible ways of getting money in and out of the country. One of the most recent developments is the Golden License that allows investors to obtain all licenses by one decision from the Prime Minister; this Golden License system frees investors from bureaucracy and corruption.
6. Please give an assessment of how much the political situation in the country affects the economy/investments/foreign trade/development of projects with foreign participation?
Egypt's investment potential has been widely affected by the political situation since the 1952 Revolution when the government nationalized many private companies, also after the January 2011 revolution and the June 2013 revolution. Egypt faced a wave of terrorism that also affected the economy and foreign investment.
But recently, Egypt is very safe, welcoming foreign investments to come and invest freely in the country.
7. What actions of the state in your opinion can limit the activity of foreign business? And what, on the contrary, attracts and promotes the development of projects with foreign participation?
The more the state interferes in domestic investments either by investing by its own bodies or by supporting some companies over others, this significantly contributes in getting FDI to flee out of the country. Building a welcoming culture for FDI is crucial in encouraging foreign investors to come and invest. In addition to this, easing visas, residencies, and welcoming foreign workers helps a lot.
8. How much do state authorities stimulate / support foreign investors?
State authorities highly welcome foreign investors, but the problem lies in a very old system of bureaucracy that cannot be easily dismantled. Also, a long history of resistance to foreign colonialism plays a role in perceiving some investments in special sectors around the country.