The Egyptian economy was particularly hard hit by the Russian further invasion of Ukraine in February 2022, which caused many foreign investors to flee emerging markets, including Egypt, and stressed the country’s budget as it struggled to confront rising global wheat and energy prices while defending the value of the Egyptian pound.  On December 17, 2022, the International Monetary Fund (IMF) approved- a 46-month arrangement for Egypt under the Extended Fund Facility worth $3 billion. The IMF loan was conditioned on the Government of Egypt (GoE) undertaking a number of structural reforms, including the adoption of a flexible exchange rate, implementation of the State Ownership Policy to encourage privatization in the Egyptian economy, and the lifting of import restrictions that were imposed in the spring of 2022. The IMF loan was also conditioned on $14 billion in co-financing–$8.7 billion of which is expected to come from the sale of state-owned assets and the remaining $5.4 billion of which is expected to come from loans from other sources. Egypt previously undertook a set of difficult macroeconomic reforms as part of a three-year, $12 billion IMF program in November 2016.

The GoE increasingly understands that attracting foreign direct investment (FDI) is key to addressing many of its economic challenges and has stated its intention to create a more conducive environment for FDI.  However, investors continue to face obstacles, including excessive bureaucracy, lack of transparency, uneven enforcement of laws and regulations, difficulties accessing foreign currency to repatriate profits or import goods, a shortage of skilled labor, cumbersome customs procedures, corruption, and intellectual property issues. FDI inflows for 2021 were $5.1 billion, down from $5.5 billion in 2020 amid sharp global declines in FDI due to the pandemic, according to data from the United Nations Commission on Trade and Development (UNCTAD). UNCTAD ranked Egypt as the second-largest FDI destination in Africa in 2021, and Egypt was the third-largest FDI recipient in the Arab region in 2021, according to the Egyptian Cabinet’s Information and Decision Support Center (IDSC).

Egypt has introduced several regulatory reform laws, including the Investment Law (Law 72 of 2017); a “New Company” law and a Bankruptcy law in 2018; and a new Customs Law in 2020.  These laws aim to improve Egypt’s investment and business climate and help the economy realize its full potential.  The GoE issued implementing regulations for the Customs Law (Law 207 of 2020) in May 2022, which aims to streamline aspects of import and export procedures, including through a single-window system, electronic payments, and expedited clearances for authorized companies. In December 2022, Law 175 of 2022 was published in the Official Gazette, making significant amendments to the Egyptian Competition Law 3 of 2005 related to the approval process for mergers and acquisitions.

Egypt hosted the United Nations Climate Change Conference (COP 27) in November 2022 and will retain the COP presidency, including its influence over climate negotiations, until the United Arab Emirates (UAE) takes up the role in November 2023. Egypt continues to adapt to climate change, ranking 128th out of 181 countries in terms of its readiness for climate change. It faces severe water scarcity and misuse and related impacts on agricultural production. Egypt has significant potential in renewable energy generation, particularly in wind and solar energy, and is investing heavily in green hydrogen, both for domestic use and eventual export. It will add over 4 GW of renewable capacity over the next five years. The GoE is aiming to raise renewable contributions 20 percent in 2023, with most of the growth coming from wind and solar capacity. At the same time, the GoE is expected to begin decommissioning 5 GW of gas-fired power plants this year as part of the $15 billion NWFE (Nexus on Water, Food, and Energy) program supported by the U.S. government, the European Bank for Reconstruction and Development, and a number of European countries.

The government continues to seek investment–to finance several mega projects, including the construction of a new administrative capital and smart cities; and to promote mineral extraction opportunities.  Egypt intends to capitalize on its location bridging the Middle East, Africa, and Europe to become a regional trade and investment gateway and energy hub. It also hopes to attract information and communications technology (ICT) sector investments for its digital transformation program; however. investors continue to face legal and regulatory challenges in the ICT sector.

Egypt is a party to more than 100 bilateral investment treaties, including with the United States.  It is a member of the World Trade Organization (WTO), the African Continental Free Trade Agreement (AfCFTA), and the Greater Arab Free Trade Area (GAFTA).  In many sectors, there is no legal difference between foreign and domestic investors. Special requirements exist for foreign investment in certain sectors, such as upstream oil and gas and real estate, where joint ventures are required.

Table 1: Key Metrics and Rankings




Website Address

TI Corruption Perceptions Index


130 of 180


Global Innovation Index


96 of 132


U.S. FDI in partner country ($M USD, on a
historical-cost basis





World Bank GNI per capita





Policies Towards Foreign Direct Investment

The IMF’s December 2022 approval of a 46-month $3 billion arrangement for Egypt under the Extended Fund Facility, along with the associated conditions for the loan, are the first step toward restoring confidence in the Egyptian economy, which has greatly deteriorated over the past year.  A series of devaluations in March 2022, October 2022, and January 2023 were also critical to bolstering investor confidence. These devaluations immediately led to increased portfolio investment and are expected to lead to increased FDI over the long term, provided the Egyptian government follows through on implementing the associated economic reform package and a flexible exchange rate.

In 2021, Egypt’s government announced plans to launch a set of economic reforms aimed at increasing the role of the private sector in the economy, addressing long-standing customs and trade policy challenges, and modernizing its industrial base and increasing exports. However, many of these reforms did not come to fruition due in part to the economic fallout from Russia’s further invasion of Ukraine. Instead, the Egyptian government introduced several import restrictions which created additional obstacles for many U.S. exporters and investors. These import restrictions were lifted as a condition of Egypt’s December 2022 IMF agreement.

As a result of the government’s continued focus on infrastructure development, Egypt’s $259 billion project finance pipeline is the third largest in the Middle East and the largest in Africa as of March 2022, according to ratings agency Fitch. Recognizing the immense challenges the country faces from the impacts of climate change, government officials announced in 2021 that by 2030 all new public sector investment spending would be green. The GoE accelerated plans to generate 42 percent of its electricity from renewable sources by 2035. Egypt hosted COP 27 in November 2022, and the government has continued to develop a package of investment incentives aimed at attracting foreign investment and project finance in areas such as solar and wind power, green hydrogen, water desalination, sustainable transportation, electric vehicles, smart cities and grids, and sustainable construction materials.

With few exceptions, Egypt does not legally discriminate between Egyptian nationals and foreigners in the formation and operation of private companies. The 1997 Investment Incentives Law was designed to encourage domestic and foreign investment in targeted economic sectors and to promote decentralization of industry away from the Nile Valley. The law allows 100 percent foreign ownership of investment projects and guarantees the right to remit income earned in Egypt and to repatriate capital.
The Tenders Law (Law 89 of 1998) required the government to consider both price and best value in awarding contracts and to issue an explanation for refusal of a bid. However, the law contained preferences for Egyptian domestic contractors, who are accorded priority if their bids do not exceed the lowest foreign bid by more than 15 percent. The Public Contracts Law (Law 182 of 2018) replaced the Tenders and Auctions Law (Law 89 of 1998).

The Capital Markets Law (Law 95 of 1992) and its amendments, including the most recent in February 2018, and relevant regulations govern Egypt’s capital markets.  Foreign investors are able to buy shares on the Egyptian Stock Exchange on the same basis as local investors.

The General Authority for Investment and Free Zones (GAFI, http://gafi.gov.eg) is the principal government body that regulates and facilitates foreign investment in Egypt and reports directly to the Prime Minister.

The Investor Service Center (ISC) is an administrative unit within GAFI that provides “one-stop-shop” services, easing the way for global investors looking for opportunities presented by Egypt’s domestic economy and the nation’s competitive advantages as an export hub for Europe, the Middle East, and Africa. This is in addition to promoting Egypt’s investment opportunities in various sectors.

The ISC provides a start-to-end service to the investor, including assistance related to company incorporation, establishment of company branches, approval of minutes of Boards of Directors and General Assemblies, increases of capital, changes of activity, liquidation procedures, and other corporate-related matters. The Center also aims to issue licenses, approvals, and permits required for investment activities within 60 days from the date of request. Other services GAFI provides include:

  • Assistance related to company incorporation;
  • Advice and support to help in the evaluation of Egypt as a potential investment location;
  • Identification of suitable locations and site selection options within Egypt;
  • Assistance in identifying suitable Egyptian partners;
  • Liquidation procedures; and
  • Dispute settlement services. ​

The ISC established a total of 14 branches in 14 of Egypt’s 28 Governorates as of the end of 2022.  Egypt maintains ongoing communication with investors through formal business roundtables, investment promotion events (conferences and seminars), road shows, and one-on-one investment meetings.

The Investment Law (Law 72 of 2017) gave GAFI the authority to issue “golden licenses” to create a streamlined process to set up new industrial and infrastructure projects that meet a certain set of requirements and criteria. The single approval of a “golden license” covers the full lifecycle of processes from establishing a project, including land allocation and building licensing, to the operation and management of the project. As of April 2023, GAFI has approved thirteen total golden licenses. Nine were approved in 2022, and four were approved in early 2023.

The Sovereign Fund of Egypt (TSFE, https://tsfe.com ) was established in 2018. It is a private investment fund that works closely with the GoE to manage investment deals related to certain state-owned assets. It is chaired by the Minister of Planning and Economic Development.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Egyptian Companies Law does not set any limitation on the number of foreigners, either as shareholders or as managers/board members, except for limited liability companies, where the only restriction is that one of the managers must be an Egyptian national. Companies are also required to obtain a commercial and tax license and pass a security clearance process.  Companies are able to operate while undergoing the often-lengthy security screening process; however, if the firm is rejected, it must cease operations and may undergo a lengthy appeals process.  Businesses have cited instances where Egyptian clients were hesitant to conclude long-term business contracts with foreign businesses that have yet to receive a security clearance. They have also expressed concern about seemingly arbitrary refusals, a lack of explanation when a security clearance is not issued, and the lengthy appeals process. Although the GoE has made progress streamlining the business registration process at GAFI, inconsistent treatment by banks and other government officials has in some cases led to registration delays.

Sector-specific limitations to investment include restrictions on foreign shareholding of companies owning lands in the Sinai Peninsula. The Import-Export Law requires companies wishing to register in the Import Registry to be 51 percent owned and managed by Egyptians. The Investment Law permits wholly foreign companies investing in Egypt to import goods and materials through a licensed importer. In January 2021, the Egyptian government removed the 20 percent foreign ownership cap for international and private schools in Egypt.

The ownership of land by foreigners is complicated in that it is governed by three laws: Law 15 of 1963, Law 143 of 1981, and Law 230 of 1996.  Land/Real Estate Law 15 of 1963 explicitly prohibits foreign individual or corporation ownership of agricultural land (defined as traditional agricultural land in the Nile Valley, Delta, and Oases). Law 15 of 1963 stipulates that no foreigners, whether natural or juristic persons, may acquire agricultural land.  Law 143 of 1981 governs the acquisition and ownership of desert land. Certain limits are placed on the number of feddans (one feddan is approximately equal to one acre) that may be owned by individuals, families, cooperatives, partnerships, and corporations regardless of nationality. Partnerships are permitted to own 10,000 feddans. Joint stock companies are permitted to own 50,000 feddans.

Under Law 230 of 1996, non-Egyptians are allowed to own real estate (vacant or built) only under the following conditions:

  • Ownership is limited to two real estate properties in Egypt that serve as accommodation for the owner and their family (spouses and minors) in addition to the right to own real estate needed for activities licensed by the Egyptian government;
  • The area of each real estate property does not exceed 4,000 m²; and
  • The real estate is not considered a historical site.

Exemption from the first and second conditions is subject to the approval of the Prime Minister. Ownership in tourist areas and new communities is subject to conditions established by the Cabinet of Ministers. Non-Egyptians owning vacant real estate in Egypt must build within a period of five years from the date their ownership is registered by a notary public. Non-Egyptians cannot sell their real estate for five years after registration of ownership unless the Prime Minister consents to an exemption.

Other Investment Policy Reviews

In December 2020, the International Finance Corporation published a Country Private Sector Diagnostic report for Egypt which analyzed key structural economic reforms that the Egyptian government should adopt to encourage private-sector-led economic growth. The report also included recommendations for the agribusiness, manufacturing, information technology, education, and healthcare sectors.


On July 8, 2020, the Organization for Economic Cooperation and Development (OECD) released an Investment Policy Review for Egypt that highlighted the government’s progress implementing a proactive reform agenda to improve the business climate, attract more foreign and domestic investment, and reap the benefits of openness to FDI and participation in global value chains.


In January 2018, the WTO published a comprehensive review of the Egyptian government’s trade policies, including details of the Investment Law’s (Law 72 of 2017) main provisions.


UNCTAD published an ICT Policy Review for Egypt in 2017 that highlighted the potential for investments in the ICT sector to help drive economic growth and recommended specific reforms aimed at strengthening Egypt’s performance in key ICT policy areas.


In January 2020, members of the D-8 Organization for Economic Cooperation (Bangladesh, Egypt, Nigeria, Indonesia, Iran, Malaysia, Pakistan, and Turkey) agreed on a set of Guiding Principles for Investment Policymaking jointly developed with UNCTAD. The principles were developed in line with the recommendations of the UNCTAD-D-8 Expert Meeting on “International Investment Policy Reform for Sustainable Development” held in Istanbul, Turkey in September 2019, which “called on UNCTAD and the D-8 organization to develop non-binding development-oriented guiding principles for investment policymaking for D-8 countries.”


Business Facilitation

GAFI’s ISC ( https://gafi.gov.eg/English/Howcanwehelp/OneStopShop/Pages/default.aspx ) was launched in February 2018 and provides start-to-end service to the investor.  The Investment Law (Law 72 of 2017) also introduces “Ratification Offices” to facilitate obtaining necessary approvals, permits, and licenses within 10 days of issuing a Ratification Certificate.

Investors may fulfill the technical requirements of obtaining the required licenses through these Ratification Offices, directly through the concerned authority, or through its representatives at the Investment Window at GAFI.  The ISC is required to issue licenses within 60 days from submission. Companies can also register online.  GAFI has also launched e-establishment, e-signature, and e-payment services to facilitate establishing companies.

Outward Investment

Egypt promotes and incentivizes outward investment. According to the FDI Markets database for the period from January 2003 to February 2023, outward investment featured the following:

  • Egyptian companies implemented 335 Egyptian FDI projects. The estimated total value of the projects, which employed about 49,477 workers, was $24.45 billion;
  • The following countries respectively received the largest amount of Egyptian outward investment in terms of total project value: The UAE, Saudi Arabia, Kenya, Algeria, and Germany;
  • The UAE, Saudi Arabia, and Algeria accounted for about $261.1 billion worth of investment;
  • Elsewedy Electric was the largest Egyptian company investing abroad, implementing 21 projects with a total investment estimated to be $2.1 billion.

Egypt does not restrict domestic investors from investing abroad.

Egypt has signed 115 Bilateral Investment Treaties (BITs), of which 70 have entered into force. The full list can be found at  http://investmentpolicyhub.unctad.org/IIA  .

The U.S.-Egypt Bilateral Investment Treaty of 1986 provides for fair, equitable, and nondiscriminatory treatment for investors of both nations. The treaty includes provisions for international legal standards on expropriation and compensation, free financial transfers, and procedures for the settlement of investment disputes, including international arbitration.
In addition to BITs, Egypt is also a signatory to a wide variety of other agreements covering trade issues. Egypt joined the Common Market for Eastern and Southern Africa (COMESA) in June 1998, and in 2019, ratified the 2018 African Continental Free Trade Agreement (AfCFTA).  In July 1999, Egypt and the United States signed a Trade and Investment Framework Agreement (TIFA). Egypt’s Association Agreement with the European Union (EU) entered into force on June 1, 2004. The agreement provided immediate duty-free access of Egyptian products into EU markets, while duty-free access for EU products into the Egyptian market was phased in over a 12-year period ending in 2016.  In 2010, Egypt and the EU completed an agricultural annex to their agreement, liberalizing trade in over 90 percent of agricultural goods.
Egypt is also a member of the Greater Arab Free Trade Agreement (GAFTA) and a member of the Agadir Agreement with Jordan, Morocco, and Tunisia, which relaxes rules of origin requirements on products jointly manufactured by the countries for export to Europe. Egypt also has a Free Trade Agreement (FTA) with Turkey in force since March 2007 and a FTA with the Mercosur bloc of Latin American nations.

In 2004, Egypt and Israel signed an agreement to take advantage of the U.S. Government’s Qualifying Industrial Zone (QIZ) program. The purpose of the QIZ program is to promote stronger ties between the region’s peace partners and to generate employment and higher incomes, by granting duty-free access to goods produced in QIZs in Egypt using a specified percentage of Israeli and local input. Under Egypt’s QIZ agreement, Egypt’s exports to the United States produced in certain industrial areas are eligible for duty-free treatment if they contain a minimum 10.5 percent Israeli content.

The industrial areas currently included in the QIZ program are Alexandria; areas in Greater Cairo such as Sixth of October, Tenth of Ramadan, Fifteenth of May, South of Giza, Shobra El-Khema, Nasr City, and Obour; areas in the Delta governorates such as Dakahleya, Damietta, Monofeya, and Gharbeya; areas on the Suez Canal such as Suez, Ismailia, and Port Said; and other specified areas in Upper Egypt. Egyptian exports to the United States through the QIZ program have mostly been ready-made garments and processed foods. There are 1,140 Egyptian exporters registered under the QIZ protocol. The value of the Egyptian QIZ exports to the United States grew 48 percent from 2021 to 2022, reaching an all-time high of $1.4 billion in 2022. QIZ exports accounted for 48 percent of Egypt’s total exports to the United States.

Egypt has a bilateral tax treaty with the United States. Egypt also has tax agreements with 59 other countries, including the UAE, Kuwait, Saudi Arabia, Mauritius, Bahrain, and Morocco.

The Egyptian Parliament passed and the government implemented a value added tax (VAT) in late 2016, which replaced the General Sales Tax, as part of that year’s IMF loan and economic reform program.

Transparency of the Regulatory System

Egypt’s 2022 IMF agreement was conditioned on the government undertaking a set of economic reforms to spur private sector growth, improve transparency, and level the playing field for private sector companies, particularly when they are in direct competition with state-owned entities. Improving government transparency and consistency within Egypt was difficult in the past, and reformers have faced strong resistance from entrenched bureaucratic and private interests.  Significant obstacles continue to hinder private investment, including the reportedly arbitrary imposition of bureaucratic impediments and the length of time needed to resolve them.  Additionally, many private sector companies complain about the lack of consistent enforcement regarding tax laws and other regulations for state- and military-owned entities.

Enactment of laws is the purview of the Parliament, while executive regulations are the domain of line ministries.  Under the Constitution, the president, the cabinet, and any member of parliament can present draft legislation.  After submission, parliamentary committees review and approve draft legislation, including any amendments.  Upon parliamentary approval, a judicial body reviews the constitutionality of any legislation before referring it to the president for his approval.

Although notice and full drafts of legislation are typically printed in the Official Gazette (similar to the Federal Register in the United States), there is no centralized online location where the government publishes comprehensive details about regulatory decisions or their summaries. Consultation with the public about regulatory decisions is limited.  In recent years, the Ministry of Trade and Industry and other government bodies have circulated draft legislation among concerned parties, including business associations and labor unions. This has been a welcome change from previous practice but is not yet institutionalized across the government.

While Egyptian parliaments have historically held “social dialogue” sessions with concerned parties and private or civic organizations to discuss proposed legislation, it is unclear to what degree the current Parliament will adopt a more inclusive approach to social dialogue.  President Sisi called for a national dialogue to address political, social, and economic challenges in April 2022. A Board of Trustees began work to establish committees and set the agenda for the dialogue, which is expected to begin after Ramadan ends in April 2023. The agenda for economic subcommittees includes addressing challenges in the investment climate and ways to incentivize private foreign investment. The government conducted a series of consultations with the private sector and other key stakeholders during the development of the State Ownership Policy, one of the key conditions of the 2022 IMF program which was approved by President Sisi in December 2022.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms.  The Financial Regulatory Authority (FRA) supervises and regulates all non-banking financial markets and instruments, including capital markets, futures exchanges, insurance activities, mortgage finance, financial leasing, factoring, securitization, and microfinance.  It issues rules that facilitate market efficiency and transparency. FRA has issued legislation and regulatory decisions on non-banking financial laws, which govern FRA’s work and the entities under its supervision. ( http://www.fra.gov.eg/jtags/efsa_en/index_en.jsp  ) In 2022, FRA launched its 2022 to 2026 strategy, approved new amendments to facilitate rules of listing and delisting to create a more business-friendly regulatory environment, issued the first microfinance license in accordance with the Islamic banking system, and introduced mandatory quotas to increase women’s representation on the boards of six federations comprised of companies working in the insurance and non-bank financing sectors.

The criteria for awarding government contracts and licenses are made available when bid rounds are announced.  The process used to award contracts is broadly consistent with the procedural requirements set forth by law.  Further, set-aside requirements for small and medium-sized enterprise (SME) participation in GoE procurement are increasingly highlighted. The FRA publishes key laws and regulations to the following website:


The parliament and the independent “Administrative Control Authority” both ensure the government’s commitment to follow administrative processes at all levels of government.

The cabinet develops and submits proposed regulations to the president following discussion and consultation with the relevant ministry and informal consultation with other interest groups. Based on the recommendations provided in the proposal, including recommendations by the presidential advisors, the president issues “Presidential Decrees” that function as implementing regulations.  Presidential decrees are published in the Official Gazette for enforcement.

The degree to which ministries and government agencies responsible for drafting, implementing, or enforcing a given regulation coordinate with other stakeholders varies widely.  Although some government entities may attempt to analyze and debate proposed legislation or rules, there are no laws requiring scientific studies or quantitative regulatory impact analyses prior to finalizing or implementing new laws or regulations. Not all issued regulations are announced online, and not all public comments received by regulators are made public.

The government made its budget documents widely and easily accessible to the general public, including online.  (Note: Egypt’s fiscal year starts on July 1 and ends on June 30. End note.) Budget documents did not include allocations to military state-owned enterprises, or allocations to and earnings from state-owned enterprises.  The Ministry of Finance published a report for the performance of state-owned enterprises (SOEs) for Fiscal Year Ending 2020. The report included aggregate profits and losses for state-owned holding companies and other affiliated entities, total revenues and expenditures without a breakdown by company, and the share of SOE-generated profits that return to the government. Updates to that report for more recent fiscal years have not been published.

Information on government debt obligations was publicly available online, but up-to-date and clear information on SOE debt guaranteed by the government was not available.  According to information the Central Bank of Egypt (CBE) has provided to the World Bank, the lack of information available about publicly guaranteed private-sector debt meant that this debt was generally recorded as private-sector non-guaranteed debt, thus potentially obscuring some contingent debt liabilities.

International Regulatory Considerations

International standards are the main reference for Egyptian standards.  According to the Egyptian Organization for Standardization and Quality Control, approximately 7,000 national standards are aligned with international standards in various sectors.  In the absence of international standards, Egypt uses other references referred to in Ministerial Decrees No. 180/1996 and No. 291/2003, which stipulate that in the absence of Egyptian standards, the producers and importers may use European standards (EN), U.S. standards (ANSI), or Japanese standards (JIS).

Egypt is a member of the WTO, participates actively in various committees, and generally notifies technical regulations to the WTO Committee on Technical Barriers to Trade.  Egypt ratified the Trade Facilitation Agreement (TFA) in June 2017 (Presidential decree No. 149/2017) and deposited its formal notification to the WTO on June 24, 2019.  Egypt notified indicative and definitive dates for implementing Category B and C commitments on June 20, 2019, but to date has not notified dates for implementing Category A commitments.  In August 2020, the Egyptian Parliament passed a Customs Law, Law 207 of 2020, that included provisions for key TFA reforms, including advance rulings, separation of release, a single-window system, expedited customs procedures for authorized economic operators, post-clearance audits, and e-payments. The GoE issued implementing regulations for the Customs Law (Law 207 of 2020) in May 2022.

Legal System and Judicial Independence

Egypt’s legal system is a civil codified law system based on the French model.  If contractual disputes arise, claimants can sue for remedies through the court system or seek resolution through arbitration.  Egypt has written commercial and contractual laws. The country has a system of economic courts, specializing in private-sector disputes, which have jurisdiction over cases related to economic and commercial matters, including intellectual property disputes, and some criminal matters.  The judiciary is set up as an independent branch of the government. Critics of the government argue that judicial independence is undercut by the influence of the security services and the executive branch in judicial proceedings. Rights groups dispute government assertions about the level of judicial independence.

Regulations and enforcement actions can be appealed through Egypt’s courts, though appellants often complain about the lengthy judicial process, which can take years.  To enforce judgments of foreign courts in Egypt, the party seeking to enforce the judgment must obtain an exequatur (a legal document issued by governments allowing judgements to be enforced).  To apply for an exequatur, the normal procedures for initiating a lawsuit in Egypt must be satisfied. Moreover, several other conditions must be satisfied, including ensuring reciprocity between the Egyptian and foreign country’s courts and verifying the competence of the court rendering the judgment.

Historically, judges in Egypt enjoy a high degree of public trust, according to Egyptian lawyers.  The judiciary is proud of its independence and can point to a number of cases where a judge has made surprising decisions that run counter to the desires of the regime, particularly during the Mubarak era.  The judge’s ability to interpret the law can sometimes lead to an uneven application of justice.

Laws and Regulations on Foreign Direct Investment

No specialized court exists for foreign investments.

The 2017 Investment Law (Law 72 of 2017) and other FDI-related laws and regulations are published on GAFI’s website,  https://gafi.gov.eg/English/StartaBusiness/Laws-and-Regulations/Pages/default.aspx .

In 2017, the Parliament passed the Industrial Permits Act, which reduced the time it takes to license a new factory by mandating that the Industrial Development Authority (IDA) respond to a request for a license within 30 days of the request being filed.  As of February 2020, new regulations allow IDA regional branch directors or their designees to grant conditional licenses to industrial investors until other registration requirements are complete.

In 2016, the Import-Export Law was revised to allow companies wishing to register in the Import Registry to be 51 percent owned and managed by Egyptians; formerly the law required 100 percent Egyptian ownership and management.  Later in 2016, the interministerial Supreme Investment Council also announced seventeen presidential decrees designed to spur investment or resolve longstanding issues. These include:

  • Forming a “National Payments Council” that will work to restrict the handling of foreign exchange outside the banking sector;
  • Granting tax exemptions to producers of agricultural crops that Egypt imports or exports;
  • Granting five-year tax exemptions for manufacturers of “strategic” goods that Egypt imports or exports;
  • Granting five-year tax exemptions for agricultural and industrial investments in Upper Egypt; and
  • Tendering land with utilities for industry in Upper Egypt for free as outlined by the IDA.

Competition and Anti-Trust Laws

The Egyptian Competition Law (ECL), Law 3 of 2005, provides the framework for the government’s competition rules and anti-trust policies. The ECL prohibits the abuse of dominant market positions, which it defines as a situation in which a company’s market share exceeds 25 percent and in which the company can influence market prices or volumes regardless of competitors’ actions. The ECL prohibits vertical agreements or contracts between purchasers and suppliers that are intended to restrict competition and also forbids agreements among competitors such as price collusion, production-restriction agreements, market sharing, and anti-competitive arrangements in the tendering process. The ECL applies to all types of persons or enterprises carrying out economic activities but includes exemptions for some government-controlled public utilities. In early 2019, the Egyptian Parliament endorsed a number of amendments to the ECL, including controls on price hikes and prices of essential products and higher penalties for violations.

On December 29, 2022, Law 175 of 2022 was published in the Official Gazette, making significant amendments to the ECL (Law 3 of 2005). These amendments introduce a pre-merger control system that gives the Egyptian Competition Authority (the “ECA”) the power to review and approve proposed mergers and acquisitions before they can be completed. The stated purpose of this system is to ensure that the resulting company does not have too much market power or negatively impact competition in the industry.

In addition to the ECL, other laws cover various aspects of competition policy. The Companies Law (Law 159 of 1981) contains provisions on mergers and acquisitions; the Law of Supplies and Commerce (Law 17 of 1999) forbids competition-reducing activities such as collusion and hoarding; and the Telecommunications Law (Law 10 of 2003), the Intellectual Property Law (Law 82 of 2002), and the Insurance Supervision and Control Law (Law 10 of 1981) include provisions on competition.

The ECA is responsible for protecting competition and prohibiting the monopolistic practices defined within the ECL. The ECA has the authority to receive and investigate complaints, initiate its own investigations, and take decisions and necessary steps to stop anti-competitive practices. The ECA’s enforcement powers include conducting raids; using search warrants; requesting data and documentation; and imposing “cease and desist orders” on violators of the ECL. The ECA’s enforcement activities against government entities are limited to requesting data and documentation, as well as advocacy.

Expropriation and Compensation

Egypt’s Investment Law (Law 72 of 2017) provides guarantees against nationalization or confiscation of investment projects under the law’s domain.  The law also provides guarantees against seizure, requisition, blocking, and placing of assets under custody or sequestration.  It offers guarantees against full or partial expropriation of real estate and investment project property.  The U.S.-Egypt BIT also provides protection against expropriation.  Private firms can take cases of alleged expropriation to court, but the judicial system can take several years to resolve a case.

Dispute Settlement

ICSID Convention and New York Convention

Egypt acceded to the International Convention for the Settlement of Investment Disputes (ICSID) in 1971 and is a member of the International Center for the Settlement of Investment Disputes, which provides a framework for the arbitration of investment disputes between the government and foreign investors from another member state, provided the parties agree to such arbitration. Without prejudice to Egyptian courts, the Investment Law (Law 72 of 2017) recognizes the right of investors to settle disputes within the framework of bilateral agreements, the ICSID, or through arbitration before the Regional Center for International Commercial Arbitration in Cairo, which applies the rules of the United Nations Commissions on International Trade Law.

Egypt adheres to the 1958 New York Convention on the Enforcement of Arbitral Awards; the 1965 Washington Convention on the Settlement of Investment Disputes between States and the Nationals of Other States; and the 1974 Convention on the Settlement of Investment Disputes between the Arab States and Nationals of Other States.  An award issued pursuant to arbitration that took place outside Egypt may be enforced in Egypt if it is either covered by one of the international conventions to which Egypt is party or satisfies the conditions set out in Egypt’s Dispute Settlement Law 27 of 1994, which provides for the arbitration of domestic and international commercial disputes and limited challenges of arbitration awards in the Egyptian judicial system.  The Dispute Settlement Law was amended in 1997 to include disputes between public enterprises and the private sector.

To enforce judgments of foreign courts in Egypt, the party seeking to enforce the judgment must obtain an exequatur.  To apply for an exequatur, the normal procedures for initiating a lawsuit in Egypt and several other conditions must be satisfied, including ensuring reciprocity between the Egyptian and foreign country’s courts and verifying the competence of the court rendering the judgment.
Egypt has a system of economic courts specializing in private sector disputes that have jurisdiction over cases related to economic and commercial matters, including intellectual property disputes.

Investor-State Dispute Settlement

The 1992 U.S.-Egypt BIT allows an investor to take a dispute directly to binding third-party arbitration.  The Egyptian courts generally endorse international arbitration clauses in commercial contracts.  For example, the Court of Cassation has often confirmed the validity of arbitration clauses included in contracts between Egyptian and foreign parties.
The GoE’s mechanism for settling investment disputes aims to avoid the court system altogether.  In particular, the Ministerial Committee on Investment Contract Disputes is responsible for settling disputes arising from investment contracts to which the GoE, or a public or private body affiliated it, is a party.  Furthermore, a Complaint Committee can consider challenges to the implementation of Egypt’s Investment Law. In practice, Egypt’s dispute resolution mechanisms are time-consuming but considered to be broadly effective.  Businesses have, however, reported difficulty collecting payment from the government when awarded a monetary settlement.

Over the past 10 years, there have been several investment disputes involving both U.S. persons and foreign investors.  Most of the cases have been settled, though no definitive number is available. Local courts in Egypt recognize and enforce foreign arbitral awards issued against the government.  There are no known extrajudicial actions against foreign investors in Egypt during the period of this report.

International Commercial Arbitration and Foreign Courts

Egypt allows mediation as a mechanism for alternative dispute resolution (ADR), a structured negotiation process in which an independent person known as a mediator assists the parties to identify and assess options and negotiate an agreement to resolve their dispute.  GAFI has an Investment Disputes Settlement Center, which uses mediation as an ADR.

The Economic Court recognizes and enforces arbitral awards. Judgments of foreign courts may be recognized and enforceable under local courts under limited conditions.

In most cases, domestic courts have found in favor of SOEs involved in investment disputes.  In such disputes, non-government parties have often complained about the delays and discrimination in court processes.

In January 2023, the Customs Authority established a specialized unit to work with the Ministerial Committee for the Settlement of Investment Disputes.

Many foreign investors employ clauses that specify that U.S. companies employ contractual clauses that specify binding international (not local) arbitration of disputes in their commercial agreements.

Bankruptcy Regulations

Egypt passed a Bankruptcy Law (Law 11 of 2018) in January 2018, which was designed to speed up the restructuring of troubled companies and settlement of their accounts.  It also replaced the threat of imprisonment with fines in cases of bankruptcy.  In April 2021, President Sisi ratified amendments to the 2018 law that would allow debtors to file for bankruptcy protection and would give creditors the ability to determine whether debtors could continue operating, be placed under administrative control, or be forced to liquidate their assets. The amendments also permit other financial institutions besides banks to provide finance or credit facilities to troubled projects.

The paperwork involved in liquidating a business remains convoluted and protracted; starting a business is much easier than shutting one down. Bankruptcy is frowned upon in Egyptian culture, and many businesspeople still believe they may be found criminally liable if they declare bankruptcy.

Investment Incentives

Green economy and climate change incentives:

In March 2022, the GoE announced a series of incentives for companies undertaking green projects and investments, including:

  • The ability to deduct between 30 and 50 percent of investment costs from taxes for green hydrogen and green ammonia production, storage, and export; and for manufacturing plastics-alternatives;
  • Tax breaks for projects in the Suez Canal Economic Zone, the New Administrative Capital, and Upper Egypt;
  • Non-tax incentives for companies involved in other green and renewable energy projects; and
  • Fast-tracked approvals and permitting (within 20 days) for new investment and project proposals in green hydrogen, green ammonia, electric vehicle manufacturing and charging, plastics alternatives, and waste management.

The 2017 Investment Law

The Investment Law (Law 72 of 2017) gives multiple incentives to investors as described below.  In August 2019, President Sisi ratified amendments to the Investment Law that allow its incentive programs to apply to expansions of existing investment projects in addition to new investments.

General Incentives:

  • All investment projects subject to the provisions of the new law enjoy the general incentives provided by it.
  • Investors are exempted from the stamp tax, notary fees, registration of the Memorandum of Incorporation of the companies, credit facilities, and mortgage contracts associated with their business for five years from the date of registration in the Commercial Registry in addition to the registration contracts of the lands required for a company’s establishment.
  • If the establishment is under the provisions of the new Investment Law, it will benefit from a two percent unified custom tax over all imported machinery, equipment, and devices required for the set-up of such a company.

Special Incentive Programs:

  • Investment projects established within three years of the date of the issuance of the Investment Law (Law 72 of 2017) enjoy a perpetual deduction from their net profit subject to the income tax;
  • Fifty percent deduction of depreciated investment costs from taxes, infrastructure fees, and cost of lands for projects in regions the government has identified as most in need of development, as well as designated projects in the Suez Canal Special Economic Zone and the “Golden Triangle” along the Red Sea between Safaga, Qena, and El Quseer; or
  • Thirty percent deduction of depreciated investment costs from taxes, infrastructure fees, and land costs for projects elsewhere in Egypt; and
  • Provided that such deduction shall not exceed 80 percent of the paid-up capital of the company, the incentive could be utilized over a maximum of seven years.

Additional Incentive Program:

The Cabinet of Ministers may decide to grant additional incentives for investment projects in accordance with specific rules and regulations as follows:

  • The establishment of special customs ports for exports and imports of the investment projects.
  • The state may incur part of the costs of the technical training for workers.
  • Free allocation of land for a few strategic activities may apply.
  • The government may bear in full or in part the costs incurred by the investor to invest in utility connections for the investment project.
  • The government may refund half the price of the land allocated to industrial projects in the event of starting production within two years from receiving the land.

Other Incentives related to Free Zones according to Investment Law 72 of 2017:

  • Exemption from all taxes and customs duties.
  • Exemption from all import and export regulations.
  • The option to sell a certain percentage of production domestically if customs duties are paid.
  • Limited exemptions from labor provisions.
  • All equipment, machinery, and essential means of transport (excluding sedan cars) necessary for business operations are exempted from all customs, import duties, and sales taxes.
  • All licensing procedures are handled by GAFI. To remain eligible for benefits, investors operating inside the free zones must export more than 50 percent of their total production.
  • Manufacturing or assembly projects pay an annual charge of one percent of the total value of their products excluding all raw materials. Storage facilities are to pay one percent of the value of goods entering the free zones, while service projects pay one percent of total annual revenue.
  • Goods in transit to specific destinations are exempt from any charges.

Other Incentives related to the Suez Canal Economic Zone (SCZone):

  • 100 percent foreign ownership of companies allowed.
  • 100 percent foreign control of import and export activities allowed.
  • Imports are exempted from customs duties and sales tax.
  • Customs duties on exports to Egypt imposed on imported components only, not the final product.
  • Fast-track visa services.
  • A full service one-stop shop for registration and licensing.
  • Allowing enterprises access to the domestic market; duties on sales to domestic market will be assessed on the value of imported inputs only.

The Tenders Law (Law 89 of 1998) requires the government to consider both price and best value in awarding contracts and to issue an explanation for refusal of a bid. However, the law contains preferences for Egyptian domestic contractors, who are accorded priority if their bids do not exceed the lowest foreign bid by more than 15 percent.

The Ministry of Trade and Industry and the Ministry of Finance’s Decree 719 of 2007 provides incentives for industrial projects in the governorates of Upper Egypt. The decree provides an incentive of 15,000 EGP (approx. $485) for each job opportunity created by the project on the condition that the investment costs of the project exceed 15 million EGP (approx. $484,650). The decree can be implemented on both new and ongoing projects.

Foreign Trade Zones/Free Ports/Trade Facilitation

Public and private free trade zones are authorized under GAFI’s Investment Incentive Law 72 of 2017. Free zones are located within the national territory but are considered to be outside Egypt’s customs boundaries, granting firms doing business within them more freedom on transactions and exchanges. Companies producing largely for export (normally 80 percent or more of total production) may be established in free trade zones and operate using foreign currency. Free trade zones are open to investment by foreign or domestic investors. Companies operating in free trade zones are exempted from sales taxes or taxes and fees on capital assets and intermediate goods. The Legislative Package for the Stimulation of Investment, issued in 2015, stipulated a one percent duty paid on the value of commodities upon entry for storage projects and a one percent duty upon exit for manufacturing and assembly projects.

There are currently nine public free trade zones in operation in the following locations: Alexandria, Damietta, Ismailia, Qeft, Media Production City, Nasr City, Port Said, Shebin el Kom, and Suez. Private free trade zones may also be established with a decree by GAFI but are usually limited to a single project. Export-oriented industrial projects are given priority.  There is no restriction on foreign ownership of capital in private free zones.

The Special Economic Zones (SEZ) Law (Law 83 of 2002) allows establishment of special zones for industrial, agricultural, or service activities designed specifically with the export market in mind.  The law allows firms operating in these zones to import capital equipment, raw materials, and intermediate goods duty free. Companies established in the SEZs are also exempt from sales and indirect taxes and can operate under more flexible labor regulations. The first SEZ was established in the northwest Gulf of Suez.

The Investment Law (Law 72 of 2017) authorized creation of investment zones with Prime Ministerial approval. The government regulates these zones through a Board of Directors, but the zones are established, built, and operated by the private sector. The government does not provide any infrastructure or utilities in these zones. Investment zones enjoy the same benefits as free zones in terms of facilitation of license issuance, ease of dealing with other agencies, etc., but are not granted the incentives and tax/custom exemptions enjoyed in free zones. Projects in investment zones pay the same tax/customs duties applied throughout Egypt. The aim of the law is to assist the private sector in diversifying its economic activities. There are currently five investment zones located in Cairo, Giza, and Ismailia, and in 2019, GAFI approved the development of an additional 12 investment zones in the Alexandria, Dakhalia, Damietta, Fayoum, Giza, Qalyubia, and Sharkia governorates.

The Suez Canal Economic Zone ( http://www.sczone.com.eg/English/Pages/default.aspx) , a major industrial and logistics services hub announced in 2014, includes upgrades and renovations to ports located along the Suez Canal corridor, including West and East Port Said, Ismailia, Suez, Adabiya, and Ain Sokhna. Reported areas for investment include maritime services like ship repair services, bunkering, vessel scrapping and recycling; industrial projects, including pharmaceuticals, food processing, automotive production, consumer electronics, textiles, and petrochemicals; IT services such as research and development and software development; renewable energy; and mixed use, residential, logistics, and commercial developments.

Performance and Data Localization Requirements

Egypt has rules on national percentages of employment and difficult visa and work permit procedures. The government plans to phase out visas for unskilled workers, but as yet has not done so. For most other jobs, employers may hire foreign workers on a temporary six-month basis but must also hire two Egyptians to be trained to do the job during that period. Only jobs where it is not possible for Egyptians to acquire the requisite skills are open to foreign workers. The application of these regulations is inconsistent. The Labor Law allows ministers to set the maximum percentage of foreign workers that may work in companies in a given sector. There are no such sector-wide maximums for the oil and gas industry, but individual concession agreements may contain language establishing limits or procedures regarding the proportion of foreign and local employees.

No performance requirements are specified in the Investment Law (Law 72 of 2017), and the ability to fulfill local content requirements is not a prerequisite for approval to set up assembly projects. In many cases, assembly industries still must meet a minimum local content requirement in order to benefit from customs tariff reductions on imported industrial inputs.

Decree 184 of 2013 allows for the reduction of customs tariffs on intermediate goods if the final product has a certain percentage of input from local manufacturers, beginning at 30 percent local content. As the percentage of local content rises, so does the tariff reduction, reaching up to 90 percent if the amount of local input is 60 percent or above. Exporters receive additional subsidies if they use a greater portion of local raw materials. In certain cases, a minister can grant tariff reductions of up to 40 percent in advance.

The Prime Minister issued Decision 3053 of 2019 regarding the formation of joint committees in the inspection yards at each customs port. These committees include representatives of the customs authority and the concerned authorities and bodies according to type of goods. The committees are responsible for completing inspection and control procedures for imported or exported goods within a period not exceeding three working days from the date the customs declaration was registered.

Manufacturers wishing to export under trade agreements between Egypt and other countries must complete certificates of origin and satisfy the local content requirements contained therein. Oil and gas exploration concessions, which do not fall under the Investment Incentives Law, have performance standards specified in each individual agreement, which generally include the drilling of a specific number of wells in each phase of the exploration period stipulated in the agreement.

Egypt does not impose localization barriers on ICT firms. Egypt’s Personal Data Protection Act (Law 151 of 2020), signed into law in July 2020, will require licenses for cross-border data transfers and permit data transfers only to jurisdictions with an equivalent or higher level of protection under the Egyptian law. The Ministry of Communications and Information Technology has drafted the executive regulations necessary for implementation, but the regulations have not yet been published or made publicly available. Similarly, Egypt does not make local production a requirement for market access, does not have local content requirements, and does not impose forced technology or intellectual property transfers as a condition of market access.

Real Property

The Egyptian legal system provides protection for real and personal property. Laws on real estate ownership are complex and titles to real property may be difficult to establish and trace.

The National Title Registration Program introduced by the Ministry of State for Administrative Development has been implemented in nine areas within Cairo. This program is intended to simplify property registration and facilitate easier mortgage financing. Real estate registration fees, long considered a major impediment to development of the real estate sector, are capped at no more than 2,000 EGP (approximately $65), irrespective of the property value.

Foreigners are limited to ownership of two residences in Egypt, and specific procedures are required for purchasing real estate in certain geographical areas.

The mortgage market is still undeveloped in Egypt, and most purchases are still conducted in cash. Real Estate Finance Law 148 of 2001, as well as its amendments by Law 10 of 2009 and Law 55 of 2014, regulates the mortgage market in Egypt. Law 148 of 2001 authorized both banks and non-bank mortgage companies to issue mortgages. The law provides procedures for foreclosure on property of defaulting debtors and allows for the issuance of mortgage-backed securities.

Presidential Decree 17 of 2015 permitted the government to provide land free of charge, in certain regions only, to investors meeting certain technical and financial requirements. In order to take advantage of this provision, companies must provide cash collateral for five years following commencement of either production (for industrial projects) or operation (for all other projects).

The ownership of land by foreigners is governed by three laws: Law 15 of 1963, Law 143 of 1981, and Law 230 of 1996. Law 15 of 1963 stipulates that no foreigners, whether natural or juristic persons, may acquire agricultural land. Law 143 of 1981 governs the acquisition and ownership of desert land. Certain limits are placed on the number of feddans (one feddan is approximately equal to one acre) that may be owned by individuals, families, cooperatives, partnerships, and corporations. Partnerships are permitted to own up to 10,000 feddans. Joint stock companies are permitted to own up to 50,000 feddans.

Partnerships and joint stock companies may own desert land within these limits, even if foreign partners or shareholders are involved, provided that at least 51 percent of the capital is owned by Egyptians. Upon liquidation of the company, however, the land must revert to Egyptian ownership. Law 143 of 1981 defines desert land as the land lying two kilometers outside city borders. Furthermore, non-Egyptians owning non-improved real estate in Egypt must build within a period of five years from the date their ownership is registered by a notary public. Non-Egyptians may only sell their real estate five years after registration of ownership unless the Prime Minister consents to an exemption.

Intellectual Property Rights

Egypt remains on the Special 301 Watch List in 2023. Egypt’s intellectual property rights (IPR) legislation generally meets international standards, and the government has made progress toward strengthening intellectual property (IP) protection and enforcement, including a new system that facilitates sharing of information regarding counterfeit goods among customs offices at different ports and a new national IP strategy. The Egyptian Patent Office published patent examination guidelines for biotechnology in May 2022, and the Ministry of Interior increased its enforcement against unlicensed satellite channels offering pirated broadcasts. Stakeholders note continued challenges with widespread counterfeiting, opaque patent and trademark examination criteria, the lack of an effective mechanism for the early resolution of potential patent disputes, and the mandatory requirement to record trademark licenses.

Multinational pharmaceutical companies in the past have complained that local generic drug-producing companies infringe on their patents. The government has not yet established a system linking pharmaceutical marketing applications with patent licenses, and as a result permits for the sale of pharmaceuticals are generally issued without first cross-checking patent filings.

Decree 251 of 2020, issued in January 2020, established a ministerial committee to review petitions for compulsory patent licenses. As of March 2023, the committee has not received any compulsory patent petitions, and the committee has not met or taken any actions. According to Egypt’s 2002 IPR Law (Law 82 of 2002), which allows for compulsory patent licenses in some cases, the committee has the power to issue compulsory patent licenses according to a number of criteria set forth in the law; to determine financial remuneration for the original patent owners; and to approve the expropriation of the patents.

Book, music, and entertainment software piracy is prevalent in Egypt, and a significant portion of the piracy takes place online. U.S. film studios are concerned about the illegal distribution of U.S. movies on regional satellite channels.

Some of the GoE ministries with responsibility for overseeing IPR concerns are: Supply and Internal Trade for trademarks; Higher Education and Research for patents; Culture for copyrights; Agriculture and Land Reclamation for plants; Communications and Information Technology for copyright of computer programs; Interior for combating IPR violations; Customs for border enforcement; and Trade and Industry for standards and technical regulations. Article 69 of Egypt’s 2014 Constitution mandates the establishment of a “specialized agency to uphold [IPR] rights and their legal protection.” A National Committee on IPR was established to address IPR matters until a permanent body is established. All IPR stakeholders are represented in the committee, and members meet every two months to discuss issues. The National Committee on IPR is chaired by the Minister of Foreign Affairs and reports directly to the Prime Minister.

Prime Minister Madbouly launched Egypt’s new National IP Strategy on September 21, 2022 at an event attended by World Intellectual Property Organization’s (WIPO) Director General.  The document outlines a roadmap for implementing institutional and policy reform to improve intellectual property protections and enforcement, including consolidating the number of government entities involved in the process.  Thirty-five GoE entities, including 17 ministries and 18 authorities, were involved in drafting the strategy, which has a five-year implementation timeline. The Egyptian Council of Ministers endorsed a draft law to establish a dedicated IP Authority on November 23, 2018.  The draft law is under review by the Egyptian Council of State.

The Egyptian Customs Authority (ECA) handles IPR enforcement at the national border and the Ministry of Interior’s Department of Investigation handles domestic cases of illegal production. The ECA cannot act unless the trademark owner files a complaint. ECA’s customs enforcement also tends to focus on protecting Egyptian goods and trademarks. The ECA is taking steps to adopt the World Customs Organization’s (WCO) Interface Public-Members platform, which allows customs officers to detect counterfeit goods by scanning a product’s barcode and checking the WCO trademark database system.

Egypt is not a signatory to the WIPO Performances and Phonograms Treaty and the WIPO Copyright Treaty, collectively known as the WIPO Internet Treaties.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/. 

IPR Contact at Embassy Cairo:  Elisabeth Stratton
Trade & Investment Officer

Aisha Salem-Howey
Patent Attorney
Intellectual Property Attaché for the Middle East & North Africa
U.S. Department of Commerce U.S. Patent & Trademark Office
U.S. Embassy Abu Dhabi

Capital Markets and Portfolio Investment

Consistently positive and relatively high real interest rates have been used to attract large foreign capital inflows, most of which had been volatile portfolio capital.  However, portfolio investors started noticing imbalances in Egypt’s current account in the fall of 2021 and started moving money out of the country. A large exodus of hard currency from Egypt accelerated significantly around the time of Russia’s further invasion of Ukraine in February 2022. Rising interest rates globally have caused portfolio investors to view emerging markets like Egypt as less lucrative and higher risk. Uncertainty regarding the Egyptian pound – and to what extent it was freely floating – significantly limited investor interest in 2022 and the first quarter of 2023.

The Egyptian Stock Exchange (EGX) is Egypt’s registered securities exchange. In February 2022, 242 companies were listed on the EGX. There were more than 526,000 investors registered to trade on the exchange in 2022.  Stock ownership is open to foreign and domestic individuals and entities.  The Government of Egypt issues debt instruments denominated in Egyptian Pounds, U.S. Dollars, Euros, and Japanese Yen, for which ownership is open to foreign and domestic individuals and entities.  In September 2020, the GoE issued the region’s first sovereign green bonds with a value of $750 million. The GoE issued Eurobonds worth $11.75 billion in 2020 and 2021 and issued its first $500 million Japanese Yen-dominated bond in March 2022. On February 21, Egypt raised $1.5 billion through its first issuance of sharia-compliant bonds, known as sukuk.  The three-year offerings were about 3.5 times oversubscribed and investors will have 50 years of usufruct (property rights) of state-owned real estate.
The Capital Market Law 95 of 1992 and its amendments, the Depository and Central Registry for Securities Law 93 of 2000, along with Banking Law 94 of 2020 constitute the primary regulatory framework for the financial sector.  The law grants foreigners full access to capital markets, and authorizes establishment of Egyptian and foreign companies to provide underwriting of subscriptions, brokerage services, securities and mutual funds management, clearance and settlement of security transactions, and venture capital activities.  The law specifies mechanisms for arbitration and legal dispute resolution and prohibits unfair market practices.  Law 10 of 2009 created the Egyptian Financial Supervisory Authority (EFSA) and brought the regulation of all non-banking financial services under its authority.  In 2017, EFSA became the Financial Regulatory Authority (FRA).
Settlement of transactions takes one day for treasury bonds and two days for stocks.  Although Egyptian law and regulations allow companies to adopt bylaws limiting or prohibiting foreign ownership of shares, virtually no listed stocks have such restrictions.  A significant number of the companies listed on the exchange are family-owned or -dominated conglomerates, and free trading of shares in many of these ventures, while increasing, remains limited.  Companies are de-listed from the exchange if not traded for six months.

Prior to November 2020, foreign companies listing on the EGX had to possess minimum capital of $100 million. With the FRA’s passage of new rules, foreign companies joining the EGX must now meet lesser requirements matching those for Egyptian companies: $6.4 million (198.1 million EGP) for large companies and between $63,000 and $6.4 million (1.9-198.1 million EGP) for smaller companies, depending on their size. Foreign businesses are only eligible for these lower minimum capital requirements if the EGX is their first exchange, and if they attribute more than 50 percent of their shareholders’ equites, revenues, and assets to Egyptian subsidiary companies.

Currently, unlisted shares for both tax residents and non-tax residents are subject to capital gains tax of 22.5 percent. A capital gains tax of ten percent on Egyptian tax residents came into force in January 2022 after more than six years of suspension, then it was decreased in March 2022 to five percent for two years. The rate will rise to 7.5 percent once this period ends. Capital increases and share-swaps between listed and unlisted companies will not be taxed. Non-tax residents and foreigners are permanently tax-exempt. The government also set the stamp tax on stock market transactions by non-tax residents at 0.125 percent and at 0.05 percent for tax residents on unlisted securities. Tax residents are exempted from stamp tax on listed securities.

Foreign investors can access Egypt’s banking system by opening accounts with local banks and buying and selling all marketable securities with brokerages.  The current system for profit repatriation by foreign firms requires sub-custodian banks to open foreign and local currency accounts for foreign investors (global custodians), which are exclusively maintained for stock exchange transactions.  The two accounts serve as a channel through which foreign investors process their sales, purchases, dividend collections, and profit repatriation transactions using the bank’s posted daily exchange rates.  The system is designed to allow for settlement of transactions in fewer than two days, though in practice some firms have reported significant delays in repatriating profits due to problems with foreign currency availability.  Foreign firms and individuals routinely report delays in repatriating funds and problems accessing hard currency for the purpose of repatriating profits. These problems worsened considerably in 2022 and the first quarter of 2023, affecting many large and small firms across various sectors.

The Egyptian credit market is open to foreigners. Foreign exchange trading is considered straightforward, given the re-establishment of the interbank foreign currency trading system.

Money and Banking System

Egypt experienced a massive currency crisis in 2022 with the Egyptian pound losing about half of its value between March 2022 and March 2023 through a series of sharp devaluations. The pound had previously been pegged at around 15.7 pounds to one U.S. dollar. In addition to exacerbating inflation, the devaluation has led to a foreign currency crunch, which has affected several sectors of the economy, including the banking sector. Credit rating agencies recently downgraded the outlook on Egypt’s sovereign rating to reflect the increasing financial pressures. As a result, the outlook on several Egyptian banks also slid due to their significant exposure to Egyptian sovereign debt.

On February 7, 2023, Moody’s downgraded Egypt’s credit rating from B2 to B3 while changing its outlook from stable to negative, citing the decline of liquid foreign exchange reserves. Moody’s also downgraded the long-term bank deposit ratings of five Egyptian banks, including the three biggest state-owned banks and the biggest private bank, from B2 to B3. These levels are the lowest in ten years. Moody’s attributed the bank downgrades to its downward adjustment of the GoE’s credit rating since all five banks have high exposure to GoE debt, ranging between 25 to 43 percent of their total assets.

On January 28, 2023, Standard and Poor’s maintained Egypt’s B rating with a stable outlook. Fitch Ratings maintained Egypt’s B+ credit rating and lowered its outlook to negative from stable during its most recent ratings report in November 2022.

According to the Central Bank of Egypt (CBE), banks operating in Egypt held nearly $365.7 billion (11.4 trillion EGP) in total assets as of December 2022 with the five largest banks holding more than 70 percent, or $260.8 billion, of holdings by the end of 2022. Thirty-six banks operate in Egypt, including several foreign banks. There is no legal barrier prohibiting foreign banks from establishing branches in Egypt. However, in practice the CBE has not issued new commercial banking licenses to foreign banks since 1979. London-based Standard Chartered Bank was given preliminary approval for a license to establish a foreign branch in Egypt in January 2022, in accordance with the Central Bank and Banking Act (Law 194/2020); final approval is still pending. As of December 2021, three state-owned banks (Banque Misr, Banque du Caire, and the National Bank of Egypt) control 58.5 percent of the banking sector’s total assets. In February 2022, Egypt announced its intent to sell or partially divest from three state-owned banks – Banque Du Caire, United Bank, and Arab African International Bank – as part of the GoE’s State Ownership Policy implementation.

Egypt still has a largely untapped retail segment and a challenging, but potentially rewarding, small and medium-sized enterprise (SME) segment. With only about a quarter of Egypt’s adult population owning or sharing an account at a formal financial institution, the banking sector has potential for growth and higher inclusion. Egypt’s low median income plays a part in modest banking penetration. Alternative financial services in Egypt are extensive, given the large informal economy, which is estimated to account for between 30 and 50 percent of GDP. Informal lending is prevalent, but the total capitalization, number of loans, and types of terms in private finance is less well known.

Egypt’s cash-based culture is also a barrier to banking service providers, although this is gradually changing. The Egyptian payment startup Fawry is one of the main electronic platforms used by Egyptians, and it handled $700 million in cashless transactions in 2021. The government is also trying to foster its goal of financial inclusion through Meza debit cards, which it introduced in 2019. The CBE has taken steps to work with banks and technology companies to expand financial inclusion.  Employees of the government, one of the largest employers, must now have bank accounts because salary payment is through direct deposit. The CBE approved procedures in October 2020 to allow deposits and the opening of new bank accounts with only a government-issued identification, rather than requiring additional documents. The maximum limits for withdrawals and account balances also increased. In July 2020, President Sisi ratified a new Micro, Small and Medium Enterprises (MSMEs) Development Law (Law 152 of 2020) that provided incentives, tax breaks, and discounts for small, informal businesses willing to register their businesses and begin paying taxes.

As an attempt to keep pace with best practices and international norms, President Sisi ratified a new Banking Law, Law 94 of 2020, in September 2020. The law establishes a National Payment Council headed by the President to move Egypt away from cash and toward electronic payments; establishes a committee headed by the Prime Minister to resolve disputes between the CBE and the Ministry of Finance; establishes a CBE unit to handle complaints of monopolistic behaviors; requires banks to increase their cash holdings to $320 million (9.9 billion EGP), up from the prior minimum of $32 million (990 million EGP); and requires banks to report deficiencies in their own audits to the CBE.

The chairman of the EGX stated that Egypt is exploring the use of blockchain technologies across the banking community. The FRA will regulate how the banking system adopts the fast-developing blockchain systems into banks’ back-end and customer-facing processing and transactions. The Central Bank developed a national fintech and innovation strategy in March 2019, and the government has issued regulations to incentivize mobile and electronic payments. The Central Bank launched in March 2022 a new mobile application, InstaPay, which allows Egyptian banking customers to perform instant bank and payments transactions. In the first half of 2022, Egyptian fintech and fintech-enabled investments reached an all-time high of $167 million, a twelve-fold increase compared to 2017 investment levels, according to FinTech Egypt. Fifty-three percent of investors in Egyptian fintech startups were located in Egypt, and 19 percent were located in the United States, according to FinTech Egypt.

Since 2020, the Central Bank has prohibited all dealings with cryptocurrencies: the issuance of them, trading in them, promoting them, and establishing or operating platforms for their trading. Enforcement is unclear, though some reports indicate that the government has arrested citizens for promoting the circulation of digital currencies.

Foreign Exchange and Remittances

Foreign Exchange

Egypt’s 2022 IMF loan was conditioned upon its agreement to implement a durably flexible exchange rate. The IMF noted the Central Bank’s interventions to support the Egyptian Pound. The Egyptian Pound underwent a series of devaluations in March 2022, October 2022, and January 2023 and has lost about half of its value since March 2022. The CBE significantly restricted access to hard currency in 2022 to stem the outflow of dollars. The CBE’s foreign exchange reserves dropped by several billion dollars in 2022, as many portfolio investors pulled out of the country. The resulting foreign currency crunch has severely affected several sectors of the economy, and even major international firms have been affected. Some of these companies have been unable to repatriate their earnings in hard currency. Some manufacturers have been unable to secure the necessary hard currency to import raw materials and components.

The CBE raised interest rates on March 30, 2023 to curb high rates of inflation.  The overnight deposit, lending, and main operation rates each rose by 200 basis points to 18.25 percent, 19.25 percent, and 18.75 percent, respectively, recording their highest levels since July 2017.

As of February 2023, Egypt’s net foreign reserves were $34.35 billion, down from net foreign reserves of $40.99 billion in February 2022.

Remittance Policies

The 1992 U.S.-Egypt Bilateral Investment Treaty provides for free transfer of dividends, royalties, compensation for expropriation, payments arising out of an investment dispute, contract payments, and proceeds from sales.
The Investment Incentives Law (Law 72 of 2017) stipulates that non-Egyptian employees hired by projects established under the law are entitled to transfer their earnings abroad. Conversion and transfer of royalty payments are permitted when a patent, trademark, or other licensing agreement has been approved under the Investment Law.
Banking Law 94 of 2020 regulates the repatriation of profits and capital. The current system for profit repatriation by foreign firms requires sub-custodian banks to open foreign and local currency accounts for foreign investors (global custodians), which are exclusively maintained for stock-exchange transactions. The two accounts serve as a channel through which foreign investors process their sales, purchases, dividend collections, and profit-repatriation transactions using the bank’s posted daily exchange rates. The system is designed to allow for settlement of transactions in less than two days, although in practice some firms have reported short delays in repatriating profits due to the steps involved in processing.

Sovereign Wealth Funds

The Sovereign Fund of Egypt (TSFE), approved by the Cabinet and launched in late 2018, holds 400 billion EGP ($12.94 billion) in authorized capital as of July 2022.  TSFE aims to invest state funds locally and abroad across asset classes and manage underutilized government assets. TSFE focuses on sectors considered vital to the Egyptian economy, particularly industry, renewable energy, desalination, and tourism, and has established four sub-funds covering healthcare, financial services, real estate, and infrastructure. TSFE plans to establish another two sub-funds for education and technology. It participates in the International Forum of Sovereign Wealth Funds.

State and military-owned companies compete directly with private companies in many sectors of the Egyptian economy. Although Public Sector Law 203 of 1991 states that state-owned enterprises (SOEs) should not receive preferential treatment from the government or be accorded exemptions from legal requirements applicable to private companies, in practice SOEs and military-owned companies enjoy significant advantages, including relief from regulatory requirements and tax exemptions. IMF reports show that Egyptian SOEs have an average return on assets of just two percent and are only one-fourth as productive as private companies. Some 40 percent of SOEs are loss-making, despite access to subsidized capital and owning assets worth more than 50 percent of the GDP. Profitable SOEs tend to exploit a natural monopoly or hold exclusive rights to public assets. Few of Egypt’s 300 state-owned companies, 645 joint ventures, and 53 economic authorities release regular financial statements.

On December 29, 2022, President Sisi ratified the State Ownership Policy document, providing a roadmap for reducing the government’s role in the economy and increasing private sector participation from 30 percent to 65 percent within three to five years and attracting $40 billion in private investment by 2026. The final version of the State Ownership Policy document outlines the government’s plan to withdraw from 62 business activities or to reduce involvement in 56 business activities over the next three to five years. The policy document also outlines the GoE’s plan to increase its participation in 76 business activities.

OECD Guidelines on Corporate Governance of SOEs 

SOEs in Egypt are structured as individual companies controlled by Boards of Directors and grouped under government holding companies that are arranged by industry, including Petroleum Products and Gas, Spinning and Weaving; Metallurgical Industries; Chemical Industries; Pharmaceuticals; Food Industries; Building and Construction; Tourism, Hotels, and Cinema; Maritime and Inland Transport; Aviation; and Insurance. The holding companies are headed by Boards of Directors appointed by the Prime Minister with input from the relevant minister.

Privatization Program

Privatization is a key pillar of the IMF agreement approved in December 2022. According to the IMF agreement, co-financing worth $8.7 billion is expected from the sale of state-owned assets. On February 8, 2023, the Prime Minister announced the GoE’s intention to sell stakes in 32 state-owned companies, including two military-owned companies, by the first quarter of 2024. Many of the SOEs on the list were identified in a 2018 privatization effort that was delayed.

The Egyptian government has announced plans to privatize shares of SOEs several times since 2018 but has only carried out a small number of sales. It sold a minority stake in the Eastern Tobacco Company in March 2018, a 26 percent share of state-owned e-payment firm E-Finance in October 2021, and a 10 percent share of Abu Qir Fertilizers in December 2021. In December 2020, the government announced plans to sell stakes in two military-owned companies and in February 2022 added a handful of other SOEs to the list. The GoE scaled back those plans following Russia’s war against Ukraine. Egypt’s privatization program is based on Public Enterprise Law 203 of 1991, which permits the sale of SOEs to foreign entities.
Law 32 of 2014 limits the ability of third parties to challenge privatization contracts between the Egyptian government and investors. The law was intended to reassure investors concerned by legal challenges brought against privatization deals and land sales dating back to the pre-2008 period. Court cases at the time Parliament passed the law had put many of these now-private firms, many of which are foreign-owned, in legal limbo over concerns that they may be returned to state ownership.

Responsible Business Conduct (RBC) programs have grown in popularity in Egypt over the last ten years.  Most programs are limited to multinational and larger domestic companies and the banking sector and take the form of funding and sponsorship for initiatives supporting entrepreneurship, education, and other social activities.  Environmental and technology programs are also garnering greater participation.  The Ministry of Trade and Industry has engaged constructively with corporations promoting RBC programs, supporting corporate social responsibility conferences, and providing Cabinet-level representation as a sign of support to businesses promoting RBC programming.

A number of organizations and corporations work to foster the development of RBC in Egypt.  The American Chamber of Commerce in Egypt has an active corporate social responsibility committee.  Several U.S. pharmaceutical companies are actively engaged in RBC programs related to addressing antimicrobial resistance, COVID-19, and Egypt’s hepatitis-C epidemic.  The Egyptian Corporate Responsibility Center, which is the UN Global Compact local network focal point in Egypt, aims to empower businesses to develop sustainable business models and improve the national capacity to design, apply, and monitor sustainable responsible business conduct policies.  In March 2010, Egypt launched an environmental, social, and governance index, the second of its kind in the world after India’s, with training and technical assistance from Standard and Poor’s.  Egypt does not participate in the Extractive Industries Transparency Initiative. Public information about Egypt’s extractive industries remains limited to the government’s annual budget.

Additional Resources 

Department of State

Department of the Treasury

Department of Labor

Climate Issues

Ahead of COP 27, Egypt launched its National Strategy for Climate Change 2050. This strategy includes adaptation and mitigation programs in all sectors until 2050, the most important of which are energy, transportation, agriculture and water resources. The total cost of mitigation programs was estimated at $211 billion, while adaptation programs will cost $113 billion. The strategy includes increasing new financial tools such as green bonds and environmental and social requirements in new project finance, including the assessment of climate risk; environmental impact; and sustainability feasibility studies in conjunction with the Ministry of Planning. The strategy also includes objectives on raising the awareness of climate change and environmental resources for policy-makers and citizens. Egypt also has policies in place to protect its marine biodiversity, including five species of endangered turtles, and the Department of Fisheries is updating regulations to strengthen protections of fisheries and other threatened marine species. The government increased efforts to account for the costs of environmental degradation in economic development with World Bank support and continued to implement policies with donor support to better manage solid waste, wastewater, and pollutants. Finally, the strategy includes proposals to design and implement incentive programs and “facilitation” efforts (to potentially include tax incentives) for the private sector to expand the use of electric and natural gas vehicles; to establish high-efficiency and renewable energy power plants; and to promote the use of biofuels in the transport sector.

Egypt updated its Nationally Determined Contributions (NDC) to the UN Framework Convention on Climate Change in July 2022. The NDC did not include a net-zero target. The NDC focused on addressing emissions in Egypt’s power sector, including increasing Egypt’s share of renewables to 42 percent of domestic energy consumption by 2035; the timeline was moved up to 2030 following donor support at COP27. Egypt also launched in 2022 its Nexus of Water, Food, and Energy (NWFE) group of megaprojects aligned to its broader sustainable development goals, climate, and economic development goals to implement projects to achieve these goals.

Egypt’s Minister of International Cooperation led the NWFE initiative and included a working group of private sector partners under the Global Financial Alliance for Net Zero to help identify barriers to private investment and to identify approaches to promote private finance in coordination with the European Bank for Reconstruction and Development. NWFE stresses the role of the private sector and sets a target to mobilize one billion dollars in private renewable finance.

Egypt has no natural forest. Egypt maintains around 70,000 hectares of forest lands, comprising only 0.1 percent of Egypt’s total land area. Because of the prevailing arid climate, almost all the trees that are estimated to exist in Egypt are on irrigated lands and/or within semi-urban areas. The government manages most of the forest plantations in coordination with local governorates using treated wastewater irrigation and announced plans to expand plantations in 2020. Ahead of COP27, Egypt launched an initiative to plant 100 million trees to combat climate change with at least 7.2 million trees planted in FY 2022. Wood, wood articles, and wood charcoal exports from Egypt comprised just $22 million in 2021.

The GoE has issued policies to promote green public procurement. In 2016, Egypt’s Ministry of the Environment launched the “Promoting Sustainable and Green Public Procurement” project aimed at setting policies to create demand for green products and clean technologies in public and government institutions, but the project results have not been issued. In November 2022, during COP 27, the government announced a set of guidelines for companies that will favor low-carbon products for government purchases, dubbed Green Star. The program will offer incentives to businesses compliant with the new environmental standards, more details on these new incentives should be announced soon.

Egypt has a set of laws to combat corruption by public officials, including an Anti-Bribery Law (articles 103 through 111 of Egypt’s Penal Code), an Illicit Gains Law (Law 62 of 1975 and subsequent amendments in Law 97 of 2015), and a Governmental Accounting Law (Law 27 of 1981), among others.  Countering corruption remains a long-term focus, but corruption laws have not been consistently enforced.  Transparency International’s Corruption Perceptions Index ranked Egypt 130 out of 180 countries in its 2022 survey, down three spots from the prior year’s ranking.  Past surveys from Transparency International reported that nearly half of Egyptians said they had paid a bribe to obtain a public service.

Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials. There is no government requirement for private companies to establish internal codes of conduct to prohibit bribery.

Egypt ratified the United Nations Convention against Corruption in 2005.  It has not acceded to the OECD Convention on Combating Bribery or any other regional anti-corruption conventions.

While some non-governmental organizations (NGOs) are active in encouraging anti-corruption activities, dialogue between the government and civil society on this issue is almost non-existent. In a 2009 study demonstrating a trend that continues to this day, the OECD found that while government officials publicly asserted they shared civil society organizations’ goals, they rarely cooperated with NGOs.  Media was also limited in its ability to report on corruption with Article 188 of the Penal Code mandating heavy fines and penalties for unsubstantiated corruption allegations. In September 2022, independent media platform Mada Masr faced criminal and liable charges after publishing an article alleging a state watchdog was investigating members of the government-aligned Nation’s Future Party for “gross financial misconduct.”

U.S. firms have identified corruption as an obstacle to FDI in Egypt. Companies might encounter corruption in the public sector in the form of requests for bribes, using bribes to facilitate required government approvals or licenses, embezzlement, and tampering with official documents.  Corruption and bribery are reported in dealing with public services, customs (import license and import duties), public utilities (water and electrical connection), construction permits, and procurement, as well as in the private sector.  Businesses have described a dual system of payment for services with one formal payment and a secondary, unofficial payment required for services to be rendered.

Resources to Report Corruption

Several agencies within the Egyptian government share responsibility for addressing corruption.  Egypt’s primary anticorruption body is the Administrative Control Authority (ACA), which has jurisdiction over state administrative bodies, SOEs, public associations and institutions, private companies undertaking public work, and organizations to which the state contributes in any form.  Amendments made to the ACA law in 2017 grant the organization full technical, financial, and administrative authority to investigate corruption within the public sector with the exception of military personnel/entities, which are subject to military justice.  The ACA appears well funded and well trained when compared with other Egyptian law enforcement organizations.  Strong funding and the current ACA leadership’s close relationship with President Sisi reflect the importance of this organization and its mission.  However, it is small (roughly 300 agents) and is often tasked with work that would not normally be conducted by a law enforcement agency.

The ACA periodically engages with civil society.  For example, it has met with the American Chamber of Commerce in Egypt and other organizations to encourage them to seek it out when corruption issues arise.

In addition to the ACA, the Central Auditing Authority (CAA) acts as an anti-corruption body, stationing monitors at state-owned companies to report corrupt practices. The Ministry of Justice’s Illicit Gains Authority is charged with referring cases in which public officials have used their office for private gain.  The Public Prosecution Office’s Public Funds Prosecution Department and the Ministry of Interior’s Public Funds Investigations Office share responsibility for addressing corruption in public expenditures.

Resources to Report Corruption
Minister of Interior
General Directorate of Investigation of Public Funds
Telephone: 02-2792-1395 / 02-2792 1396
Fax: 02-2792-2389

Stability and economic development remain Egypt’s priorities. Egypt’s presidential elections in March 2018 and senatorial elections in August 2020 proceeded without incident. In recent years, the Egyptian government has prevented terrorist attacks against infrastructure or religious or touristic sites, containing most of the terrorist attacks to the Sinai Peninsula. At the same time, the government limited peaceful protests and political expression. The government’s comprehensive approach to counterterrorism in the Sinai, degrading ISIS-affiliated militant groups alongside social and economic investments, resulted in a significant decrease in terrorist activity.

Official statistics put Egypt’s labor force at approximately 30.344 million with an official unemployment rate of 7.2 percent at the end of 2022. Women make up 19.3 percent of the Egyptian labor force as of December 2022. The size of informal economy amounts to roughly 55 percent of the size of Egypt’s official economy, and it is not licensed or registered for taxation, according to the Minister of Finance in October 2022. In other estimates, the size of the informal economy is as high as 60 percent of the official economy, a high percentage compared to other developing countries.

The government bureaucracy and public sector enterprises are substantially over-staffed compared to the private sector and international norms. According to the World Bank, Egypt has the highest number of government workers per capita in the world, although state statistics agency CAPMAS announced in March 2022 that public sector employment dropped 8.6 percent in 2021 from 2020, or 15 percent from 2017. Businesses highlight a mismatch between labor skills and market demand, despite high numbers of university graduates in a variety of fields. Foreign companies frequently pay internationally competitive salaries to attract workers with valuable skills.

The Unified Labor Law (Law 12 of 2003) provides comprehensive guidelines on labor relations, including hiring, working hours, termination of employees, training, health, and safety. The law grants a qualified right for employees to strike and stipulates rules and guidelines governing mediation, arbitration, and collective bargaining between employees and employers. Non-discrimination clauses are included, and the law complies with labor-related International Labor Organization (ILO) conventions regulating the employment and training of women and eligible children. Egypt ratified ILO Convention 182 on combating the Worst Forms of Child Labor in 2002. In 2018, Egypt launched the first National Action Plan on combating the Worst Forms of Child Labor. The law also created a national committee to formulate general labor policies and the National Council of Wages, whose mandate is to discuss wage-related issues and national minimum-wage policy.

Parliament adopted a new Trade Unions Law (Law 213 of 2017) in late 2017, replacing a 1976 law, which experts said was out of compliance with Egypt’s commitments to ILO conventions. After a 2016 Ministry of Manpower (MoM) directive not to recognize documentation from any trade union without a stamp from the government-affiliated Egyptian Trade Union Federation, the new law established procedures for registering independent trade unions, but some of the unions noted that the directorates of the MoM did not implement the law and placed restrictions on freedoms of association and organizing for trade union elections. Executive regulations for trade union elections stipulate a very tight deadline of three months for trade union organizations to legalize their status, and one month to hold elections, which, critics said, restricted the ability of unions to legalize their status or to campaign. As of 2022, the government has officially recognized two independent trade unions.

In July 2019, the Egyptian Parliament passed a series of amendments (Law 142 of 2019) to the 2017 Trade Unions Law that reduced the minimum membership required to form a trade union and abolished prison sentences for violations of the law. The amendments reduced the minimum number of workers required to form a trade union committee from 150 to 50, the number of trade union committees to form a general union from 15 to 10 committees, and the number of workers in a general union from 20,000 to 15,000. The amendments also decreased the number of unions necessary to establish a trade union federation from ten to seven and the number of workers in a trade union from 200,000 to 150,000. Under the new law, a trade union or workers’ committee may be formed if 150 employees in an entity express a desire to organize.

Based on the amendments to the Trade Unions Law and a request from the Egyptian government for assistance implementing them and meeting international labor standards, the ILO and International Finance Corporation’s joint Better Work Program launched in Egypt in March 2020.

The Trade Unions law explicitly bans compulsory membership or the collection of union dues without written consent of the worker and allows members to quit unions. Each union, general union, or federation is registered as an independent legal entity, thereby enabling any such entity to exit any higher-level entity.

The 2014 Constitution stipulated in Article 76 that “establishing unions and federations is a right that is guaranteed by the law.” Only courts are allowed to dissolve unions. The 2014 Constitution maintained past practice in stipulating that “one syndicate is allowed per profession.” The Egyptian constitutional legislation differentiates between white-collar syndicates (e.g., doctors, lawyers, journalists) and blue-collar workers (e.g., transportation, food, mining workers). Workers in Egypt have the right to strike peacefully, but strikers are legally obliged to notify the employer and concerned administrative officials of the reasons and time frame of the strike 10 days in advance. In addition, strike actions are not permitted to take place outside the property of businesses. The law prohibits strikes in strategic or vital establishments in which the interruption of work could result in disturbing national security or basic services provided to citizens. In practice, workers strike in all sectors without following these procedures, but they are at risk of prosecution by the government.

Collective negotiation is allowed between trade union organizations and private sector employers or their organizations. Agreements reached through negotiations are recorded in collective agreements regulated by the Unified Labor law and usually registered at MoM. Collective bargaining is technically not permitted in the public sector, although it exists in practice. The government often intervenes to limit or manage collective bargaining negotiations in all sectors.

MoM sets worker health and safety standards, which also apply in public and private free zones and the Special Economic Zones (see below). Enforcement and inspection, however, are uneven. The Unified Labor Law prohibits employers from maintaining hazardous working conditions, and workers have the right to remove themselves from hazardous conditions without risking loss of employment.

Egyptian labor laws allow employers to close or downsize operations for economic reasons, although the government has taken steps to halt downsizing in specific cases. The Unemployment Insurance Law, also known as the Emergency Subsidy Fund Law 156 of 2002, sets a fund to compensate employees whose wages are suspended due to partial or complete closure of their firm or due to its downsizing. The Fund allocates financial resources that will come from a one percent deduction from the base salaries of public and private sector employees. According to foreign investors, certain aspects of Egypt’s labor laws and policies are significant business impediments, particularly the difficulty of dismissing employees. To overcome these difficulties, companies often hire workers on temporary contracts; some employees remain on a series of one-year contracts for more than 10 years. Employers sometimes also require applicants to sign a “Form 6,” an undated voluntary resignation form, which the employer can use at any time, as a condition of their employment. Negotiations on drafting a new Labor Law, which has been under consideration in the Parliament for two years, have included discussion of requiring employers to offer permanent employee status after a certain number of years with the company and declaring Form 6 or any letter of resignation null and void if signed prior to the date of termination.

Egypt has a dispute resolution mechanism for workers. If a dispute concerning work conditions, terms, or employment provisions arises, both the employer and the worker have the right to ask the competent administrative authorities to initiate informal negotiations to settle the dispute. This right can be exercised only within seven days of the beginning of the dispute. If a solution is not found within 10 days from the time administrative authorities were requested, both the employer and the worker can resort to a judicial committee within 45 days of the dispute. This committee comprises two judges, a representative of MoM, and representatives from the trade union and one of the employers’ associations. The decision of this committee is provided within 60 days. If the decision of the judicial committee concerns discharging a permanent employee, the sentence is delivered within 15 days. When the committee decides against an employer’s decision to fire, the employer must reintegrate the latter in his/her job and pay all due salaries. If the employer does not respect the sentence, the employee is entitled to receive compensation for unlawful dismissal.

Labor Law 12 of 2003 sought to make it easier to terminate an employment contract in the event of “difficult economic conditions.” The Law allows an employer to close his establishment totally or partially or to reduce its size of activity for economic reasons, following approval from a committee designated by the Prime Minister. The employer must also pay former employees a sum equal to one month of the employee’s total salary for each of his first five years of service and one and a half months of salary for each year of service over and above the first five years. Workers who have been dismissed have the right to appeal. Workers in the public sector enjoy lifelong job security as contracts cannot be terminated in this fashion; however, government salaries have eroded as inflation has outpaced increases.

Egypt has regulations restricting access for foreigners to Egyptian worker visas, although application of these provisions has been inconsistent. The government plans to phase out visas for unskilled workers, but has not done so. For most other jobs, employers may hire foreign workers on a temporary six-month basis and must also hire two Egyptians to be trained to do the job during that period. Only jobs where it is not possible for Egyptians to acquire the requisite skills will remain open to foreign workers. Application of these regulations is inconsistent.

In March 2023, the Prime Minister issued Decree Number 876, amending the 2019 Prime Minister’s Decree number 3099, making it easier for foreign investors to acquire a path to Egyptian citizenship. The new rules permit foreigners to become permanent residents if they purchase state-owned or private assets worth a minimum of $300,000, using U.S. dollars obtained abroad. The new decree also permits foreigners to obtain permanent residency by establishing a solo or joint investment project worth a minimum of $350,000, in addition to depositing $100,000 in the Central Bank. Foreigners may also obtain permanent residency by depositing $500,000 in a zero-interest account at an Egyptian bank, which would be refunded after three years in Egyptian pounds at the exchange rate when it is returned. Alternatively, foreigners may make a non-refundable deposit of $250,000 into the Central Bank to obtain permanent residency.

The DFC is operating in Egypt to provide the capital and risk mitigation tools that investors need to overcome the barriers faced in this region. In 2012, DFC’s predecessor, the Overseas Private Investment Corporation (OPIC), launched the $250 million Egypt Loan Guaranty Facility (ELGF) in partnership with USAID to support bank lending and stimulate job creation. In 2022, DFC launched the $100 million Egypt Loan Guaranty Facility II (ELGF II) in partnership with USAID to support access to finance and stimulate job creation. The ELGF II’s main objective is to help small- and medium-sized enterprises (SMEs) access finance for growth and development, by providing creditors the needed guarantees to help them mitigate loan risks. In addition to the commercial banks that participated in ELGF, ELGF II expands lending support to local partner financial institutions, including microfinance institutions, as they lend to target sectors (renewable energy and agriculture) and target market segments (SMEs, women-owned businesses, and businesses located in Upper Egypt).

As of March 2022, the DFC had a portfolio of nine active projects worth $1 billion in renewable energy, healthcare, hydrocarbons, and SME lending. The DFC’s $83.9 million loan to the Lekela Egypt Wind Energy Project will add 250 megawatts of renewable energy to Egypt’s electricity grid. In December 2018, the OPIC Board approved a project to provide $430 million in political risk insurance to Noble Energy, Inc. to support the restoration, operation, and maintenance of a natural gas pipeline in Egypt and the supply of natural gas through a pipeline from Israel. Apache Corporation, the largest U.S. investor in Egypt and Egypt’s largest oil producer, has supported its natural gas investment with OPIC and DFC risk insurance since 2004.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical source*

USG or international statistical source

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data





Host Country Gross Domestic Product (GDP) ($M USD)







Foreign Direct Investment

Host Country Statistical source*

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)





BEA data available at

Host country’s FDI in the United States ($M USD, stock positions)





BEA data available at

Total inbound stock of FDI as % host GDP





UNCTAD data available at

* Sources for Host Country Data: Central Bank of Egypt; GAFI (FDI Markets Report)

Table 3: Sources and Destination of FDI
Data not available.

Elisabeth Stratton
Economic Officer
U.S. Embassy Cairo

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Anti-Trust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. OECD Guidelines on Corporate Governance of SOEs 
    2. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources 
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information 
2023 Investment Climate Statements: Egypt
Build a Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future