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Below we will provide a glimpse into Egypt’s key sectors, as well as the main rules governing employment and labour, commercial litigation, banking and finance, and the Egyptian taxation system. The website also includes useful information about foreign investments, the various ways in which dispute resolution can occur and the visa requirements for entering the country.

If you would like more information on the investment opportunities which the country has to offer, the Egyptian taxation system, or employment law in Egypt then please refer to our publications page and download the relevant guides.

About Egypt

Egypt enjoys a remarkable geographic location at the Afro-Asian point of convergence of the world, which has enabled it to be one of the major economic players in the Middle East for decades.

  • Egypt’s north coast is on the Mediterranean Sea, while the eastern coast is bounded by the Red Sea.
  • On its lands runs the Suez Canal, one of the most important international waterways which was recently expanded and re-opened.  The new canal now provides the shortest shipping route between Europe and Asia, as well as allowing ships to sail in both directions at the same time over much of the canal’s length. This has decreased waiting hours from 11 to 3 hours for most ships and has doubled the capacity of the Suez Canal from 49 to 97 ships a day. The Suez Canal also links the Red Sea to the Mediterranean.
  • Egypt is also home to the Nile, the world’s longest river, measuring 6,853 km. The Nile’s water resources are shared by eleven countries, namely, Tanzania, Uganda, Rwanda, Burundi, Congo-Kinshasa, Kenya, Ethiopia, Eritrea, South Sudan, Sudan and Egypt. The river acts as the main source of water in Egypt and Sudan.
  • There are over 120,000 ancient Egyptian monuments on display in the Egyptian museum alone, with the rest being shown in over 60 museums across the world.
  • The capital of Egypt is Cairo. Cairo, Alexandria, Giza, Port Said, Suez, Hurghada, Luxor and Sharm El Sheikh are the main cities in Egypt. Main Sea Ports and Terminals are Alexandria, Damietta, El Dekheila, Port Said, Suez, El Ain El Sukhna.
  • Population is 89,786,283. Labor force: 48% of the population and are highly qualified and professional.
  • Arabic is the official language. English and French are widely spoken and understood especially in business fields.
  • Currency: Egyptian Pound.
  • Universities: 41 Universities (23 Public, and 18 Private)
  • Road Network: 108,784 Kilometers
  • Railway Network: 9,570  Kilometers
  • Time Zone: GMT+2
  • Climate: Moderate climate throughout the Year (Temperature degrees: Summer 25°-35°, Winter 15°-25° C)
  • Phone Dial Code: +20
  • Power Voltage: 220 kw
  • Coastline: 2,450 km
  • Internet Users: 40.31 Million
  • Mobile Users: 100 Million
  • Fixed Lines Users: 8.47 Million
  • Egyptian economy is the most diversified in Africa and the Middle East, allowing long-term development in all sectors.

Investment Sectors

Tourism

Egypt’s tourism industry is among the most diverse and vibrant in the world. Beyond the pristine beaches and year-round sunshine, Egypt’s long and varied history, rich cultural heritage and unique geographic features make it a popular destination for adventure, eco, sailing, diving, health and cultural tourism — and for religious tourism to sites of importance for Christians and Muslims alike.

The sector employs approximately 12% of Egypt’s workforce serving an average of 14.7 million visitors, and providing revenues of nearly $12.5 billion as well as contributing more than 11% of GDP and 14.4% of foreign currency revenue.

Textiles

Egypt is home to the only fully vertically integrated textiles industry in the Middle East, with the entire production process — from the cultivation of cotton to the production of yarns, fabrics and ready-made garments — being carried out domestically.

The industry accounted for approximately 30% of local employment, and 13.7% of non-petroleum exports in August 2014, according to General Organization of Export and Import Control (GOEIC). The textile production market (making up approximately 25% of the textile industry as a whole) is comprised of the following elements: 12% home textiles and 8% cotton yarn, while the remaining 5% is attributed to other cotton fabrics and textiles. The majority of spinning (50%), weaving (60%) and hemming (60%) capacity are owned by the medium to large scale public sector companies, whereas 90% of garmenting capacity is privately owned.

Communications and Information Technology

Egypt sits comfortably amongst its neighboring countries as a provider of quality communication and information technology, ranking 1st in the MENA region and 4th internationally as a global outsourcing destination, with the UAE ranking 15th. Due to the obvious potential the country has in the field of ICT, many tier-one vendors and distributors have started focusing their attention on the Egyptian market.  Teamed with a huge population, rising economy and relatively low PC penetration, the country will undoubtedly continue to be an important market in the foreseeable future.

Financial Services

Egypt’s financial service sector — one of the oldest and most-established in the Middle East — is also one of the best-developed in the region, thanks to an industrious private sector and key regulatory reforms. Today, the national banks, brokerages, investment banks and private equity houses are among the most vibrant in the MENA region, attracting heavy foreign investment from major local and international names while launching their own ambitious regional expansion plans.

Education

Egypt’s education sector is both varied and highly influential within the country, the Middle East, and North Africa as a whole. Using a model which balances private and public schooling, Egypt has successfully created and served the largest work force within the Middle East, one which is ripe with investment opportunities.

There are currently 2.5 million university students served by 39 universities (20 public and 19 private), with the total number of students enrolled in private institutes reaching 413931 in June 2016. Furthermore, government investments in university and higher education were approximately EGP 4.1 billion in 2015/2016 and the number of public schools increased from 36 thousand schools in the year 2006/2007, to more than 40 thousand schools in the year 2015/2016 (of which 5662 school were private schools). In total, the government has invested about EGP 4.5 billion for a pre-university education plan in 2015/2016. As a result of these changes, the illiteracy rate has also dropped from 85.7% in 1927 to 25.1% in 2016, and is continuing to decline.

Healthcare

Egyptians have had an influential place in medicine since the dawn of their ancient ancestors, making the country rich with medical experience and practices. Over the years, the medical system has consistently improved, attracting people from neighboring countries due to its comparatively cheaper price and good quality service.

The health care system in Egypt is comprised of a hybrid of public and private sectors, as well as public and private sectors of the health insurance market. These sectors work harmoniously with one another although the government is considered the primary health care provider in terms of expenditure and service provision.

Logistics and Transportation

Essential to every country’s economy is a successful transport and logistics sector, one which will allow commercial activity to flow unhindered from production to consumption. A successful transportation system also facilitates access to raw materials, services and operating, all of which are essential for the success of any viable business venture.

Egypt’s unique geographic location combined with an expanding infrastructure base is enhancing the country’s position as a key global logistics hub for companies looking to do business in, or trade between, Europe, Asia and Africa.

Petrochemicals

The petrochemicals sector represents about 12% of Egypt’s total industrial production and is worth around US$7 billion annually. While this figure is equivalent to just 3% of Egypt’s total GDP, international industry experts and national industrial strategists alike believe that the country is set to become one of the region’s leading players, especially with the implementation of the National Plan for Petrochemicals (2002-2022).

Renewable Energy

With the expected depletion of natural gas reserves within the next 57 years, Egypt is an investor’s dream when it comes to sustainable energy resources. Egypt possesses an abundance of land, sunny weather and high wind speeds, making it a prime resource for three renewable energy sources: wind, solar and biomass.

Egypt’s present energy strategy (adopted by resolution of the SCE in February 2008) aims at increasing the share of renewable energy to 20 % of Egypt’s energy mix by 2020. This target is expected to be met largely by scaling-up of wind power projects, with the share of wind power in total electricity generation being expected to reach 12 %.

Retail

The ever increasing population of Egypt has been a major driving force for retail over the last decade, particularly due to the large percentage of 20-39 year olds. As a result of these traits, Egypt is now home to some of the Middle East’s largest shopping malls which cater to the people’s desire for international brands, as well as a number of smaller shops which can be found in every neighborhood in Egypt.

Real Estate

With a growing population and an already well-established market, the opportunities for investing in Egyptian real estate are prominent. There is a great demand for residential construction in Egypt where there is a high population growth rate and a high urbanization rate. Such demand is mainly driven by the desire for low and middle income housing; a gap that is yet to be satisfied. It is also important to note that 29% of the population is under 40 years old and almost half of the Egyptian population is under 19 years old, as this suggests a continuation in the demand for various forms of real estate within the country. This sector already contributes significantly to the Egyptian economy by impacting around 90 industries relating to construction and 8% of the overall labour force.

Pharmaceuticals

The pharmaceutical sector in Egypt is one of the oldest strategic sectors in the country; founded in 1939. The Egyptian pharmaceuticals and cosmetics sector is considered the most prominent in the region.Today, Egypt has the largest drug-manufacturing base in the Middle East and North Africa (MENA), accounting for 30% of the regional market, and this number is expected to grow in the coming years.

Agriculture

Egypt is renowned for being one of the oldest agricultural civilizations thanks to the River Nile which has allowed a sedentary agricultural society to develop for thousands of years, one which is accountable for approximately 13% of Egypt’s GDP today.

The government has made development of the agricultural sector a priority, ensuring continued levels of investment, the country’s food production industry is better developed than that in many neighboring states, creating strong export opportunities.

Business Presence

Business Presence

  • Egyptian law permits a variety of corporate entities, depending on the nature of the business, the objective of the investor(s) and the size of the investment.
  • The most common types of business for profit structures in Egypt are: limited liability company, partnership, limited partnership, limited liability partnership and joint stock companies.
  • Other possible options for doing business in Egypt are available, such as: setting up a branch, representative office, agency agreement, distribution agreement and franchise agreement.
  • Registering a business is quick and simple and can be tailored to meet the requirements of the type of the company being established through the newly established “One Stop Shop”. Companies have to be registered in the Commercial Registry and are subject to the supervision and inspection of GAFI (General Authority for Investment).

Foreign Investment Restrictions and Conditions

Foreign Investment Restrictions and Conditions

  • There are no specific laws that restrict foreign investment. Foreigners and foreign owned companies are treated exactly the same as Egyptian owned companies.
  • Few areas which are government owned such as defense sector.
  • Direct investment in Egypt (except for Free Zone investment) is subject to the general corporate and commercial system of the country; and in certain cases, the entity in question may benefit from additional investment guarantees and incentives pursuant to the Investment Law No. 8 for 1997 and the new Unified Investment Law.
  • Foreigners and foreign investors have the right to invest in Egypt without any restrictions after obtaining security clearances from the national security agencies. Specific government approval may be required for foreign ownership of an economically significant Egyptian entity.
  • Investment Law No. 8 for 1997 also allows for complete foreign ownership of certain types of companies.

Taxation

Taxation

  • Egyptian Tax Authority (ETA) is generally responsible for administrating taxes in Egypt.
  • The main taxes applied in Egypt are income taxes applicable on individuals and tax on company’s profit applicable on all juristic persons (companies and partnership).
  • Corporation tax is imposed on the totality of a company’s profit.
  • Resident employees will be taxed on their total compensation derived as a result of an employment relationship, whether paid from Egypt or from other sources.
  • Egypt has entered into double taxation treaties with more than 45 countries.   

     

Corporate Income Tax

  • The Corporate Tax Rate in Egypt was reduced and unified to 22.5% on August 12th 2015. This excludes profits realized from the exploration and production of oil and gas which still stands at 40.55%.

Income Tax

For all amounts earned below EGP 6500 no taxation is deducted. For all other amounts, the following rates apply:

Amount                                                 Tax Rate

EGP 6,500 – EGP 30,000                       10%

EGP 30,000 – EGP 45,000                     15%

EGP 45,000 – EGP 200,000                   20%

EGP 200,000 +                                        22.5%

 

VAT

On September 7th 2016 the Egyptian government implemented a fully-fledged VAT scheme which will take over the general sales tax regime which was previously in place. The law which sets this out is Law no. 67 of 2016, which will be replacing General Sales Tax Law no 11 of 1991. Standard tax rate of 13% applies to most goods and services, however this will be increased to 14% on the 1st July 2017.

Investment Incentives

Investment Guarantees and Incentives Law

Law no: 72 of 2017

This law puts a number of new amendments into effect with the aim of facilitating investment significantly within the country.

Special incentives:

50% discount on costs of the investment projects in the areas indicated below, if established in the developing geographical areas (Sector A). 30% discount on the costs of investment projects in the same fields if established in developed geographical areas (Sector 2). The Executive Regulations shall define ‘investment costs’, the geographical scope of the two sectors and the terms and conditions to which the special incentives shall be applied.

Investment projects entitled to these incentives

  • Employment-intensive projects.
  • Medium and small enterprises.
  • Projects that depend on or produce new and renewable energy.
  • Tourism projects, which are determined by a decision of the Supreme Council for Investment.
  • Electricity production and distribution projects.
  • Projects whose production is outside the region.
  • Automotive industry and feeder industries.
  • Wood, furniture, printing, packaging and chemical industries.
  • Manufacture of biocides, tumor treating drugs and cosmetics.
  • Food industries and agricultural crops.
  • Engineering, metal, textile and leather industries.

General incentives

1) The right of the investor to establish and initiating investment projects and to expand with foreign funding, without restrictions and in foreign currency.

2) The right of the investor to transfer his profits abroad, as well as liquidate the project and transfer the output of this liquidation, in whole or in part, abroad.

3) Accessibility of unrestricted money transfer related to foreign investment.

4) The right of investment projects to import raw materials and production requirements needed for the establishment, expansion, operation of their projects by themselves or through others. These projects are entitled to export their products without the need to be registered on the exporters register.

5) The right to employ up to 20% of the total number of employees in the project from abroad.

6) All investment projects, except for projects established under the Free Zones system shall be exempt from stamp duty, documentation and publication fees of the articles of associations, establishment, credit facilities and mortgage contracts associated with their business for a period of 5 years from the date of their registration in the Commercial Register. Additionally the register title deeds of lands required for the establishment of companies and establishments would be exempted from the tax and fees referred to herein.

7) A customs tax of 2% of the value shall be levied on all imported machinery, equipment and devices necessary for its establishment and usage.

Investment Guarantees in Law No. 72 of 2017

1) The treatment of a foreign investor is similar to that accorded to the national investor.

2) Grant non-Egyptian investors residence throughout the duration of the project.

3) The State’s obligation to respect and execute concluded contracts.

4) Investment projects may not be nationalized, confiscated or executed without a final judicial decision except for tax debts.

5) Prohibition from cancelling or stopping licenses issued for the investment project, as well as from withdrawing the properties that were allocated to the project until after the investor is warned of the violations attributed to him and has a chance to defend himself.

Regional Developments and Zones

Free Economic Zones

Free Zones are located within national territory but are considered offshore areas. Investors operating inside the free zones are required to export more than 50% of their total production. To facilitate import/export procedures, free zones are usually located adjacent to sea ports and airports.

There are two different kinds of free zones; public and private. Egypt currently has nine free zones located in: Nasr City, Alexandria, Port Said, Suez, Ismailia, Damietta, Shebein El Kom, Media Production City and Keft. Two additional free zones are under development in Badr and East Port Said.

Among the free zone incentives and guarantees are a lifetime exemption from all taxes and customs, exemption from all import/export regulations, the option to sell a certain percentage of production domestically if custom duties are paid and limited exemptions from labor provisions.

Exemption under Economic Zones:

  1. The projects established in the free zones and their profits shall not be subject to the provisions of Egyptian taxation laws and the duties within them.
  2. Goods exported abroad or imported by the free zone projects to exercise their activities shall not be subject to imports or exports rules, or customs procedures related to exports and imports. They will also be exempted from customs taxes, sales tax or any other taxes or duties.
  3. Except for the passenger cars, all the equipment, supplies, machines and transportation vehicles necessary for exercising the project’s activities in the free zones shall not subject to customs taxes, sales tax or any other taxes or duties.
  4. The articles of incorporation of the companies and establishments as well as the loan and mortgage contracts related to their works shall be exempted from stamp duty and the notarization & registration fees for 5 years from the date of registration.  Contracts for the registration of the necessary land, shall also be exempted from the aforementioned tax and fees

Guarantees & Incentives:

  1. The companies and establishments shall not be nationalized or confiscated.
  2. Sequestration shall not be imposed on the companies and establishments nor shall their property and funds be detained, seized, retained in protective custody, frozen or confiscated.
  3. No administrative body shall interfere in pricing the companies and establishments’ products, or in determining their profits.
  4. No administrative body shall cancel or stop the license granted for using the realties of which the usufruct right is licensed to the company or the establishment wholly or partially, unless the establishment or company has infringed its license.
  5. Contracts of incorporation of companies and establishments and loan and mortgage contracts related to their business shall be exempt from the stamp tax as well as notarization and publication fees for a period of 5 years. Contracts of registration of lands necessary for the establishment of companies and establishments shall also be exempted from the above mentioned tax fees.
  6. The companies and establishments shall have the rights to possess and own building land and properties as necessary for exercising their activities and expanding them, whatever the nationality or place of residence of the partners, or the percentage of their partnership
  7. The companies and establishments shall have the right to import by themselves or via third parties whatever they need for their establishment, expansion or operation, comprising production inputs and requisites, materials, machines, equipment, replacement and spare parts, and means of transport suitable to the nature of their activities, without the need to be registered in the Importers Register.
  8. The companies and establishments shall have the right to export their products by themselves or through middlemen without being licensed and without the need be registered on the Exporters Register.

Special Economic Zones:   In 2002, the Government of Egypt enacted Law No. 83 for the year 2002 for establishing Economic Zones of a Special Nature which covers the North-West Gulf of Suez Special Economic Zone (SEZone), located in the Suez Governorate in the Sokhna area.   SEZone is the first economic zone of this kind to be established in Egypt under this law.

The development of SEZone is intended to provide an attractive environment for medium and small enterprises as well as logistics services, thus enhancing economic activity in the region and creating new employment opportunities.

Incentives:

  • 10% corporate tax
  • 5% personal income tax
  • All imports are 100% exempted from duties and sales taxes
  • Market access using Egypt trade agreements
  • Upon export to the local market, duties and sales tax are paid on imported items only
  • One-stop shop through legislation that provides the body with single-point authority over other government agencies in core areas.
  • Dispute settlement center
  • Competitive production center in the Middle East-North Africa for a variety of sectors
  • The authority has a supreme committee that supervises the taxation system in SEZONE.
  • The authority has a special customs service under the supervision of a Supreme Customs Committee.

Employment Law

  • The Egyptian labor market is regulated by the Labor Law No. 12 of 2003.
  • Employment contracts are required to be in writing, in triplicate and in Arabic language. The employer, employee and social insurance office each keep one copy of the employment contract.
  • An employment contract may be drawn up for a fixed-term or indefinite period of time.
  • Employees should not work more than eight hours a day or 48 hours over a six days working week. Most private sector employees work 5 days a week, usually Sunday to Thursday. The number of working hours may be increased to 9 hours a day in certain circumstances. The employees could opt out under time regulations if there is consensual agreement.
  • Employees are entitled to one whole working day off each week. Certain exceptions apply when work is intended to prevent a serious accident or to cope with a heavy workload. In such situations, the employee must be paid overtime.
  • An employee is entitled to a minimum annual paid leave of 21 days every one full year of service. This annual leave is increased to one month after the employee has worked for 10 consecutive years or is over 50 years old. In addition, every employee is entitled to full pay for official holidays designated by the Ministry of Manpower and Immigration, not to exceed 13 days a year.
  • Employers must pay social insurance contributions to the Ministry of Social Insurance and Social Affairs with respect to their Egyptian employees.
  • The labor department of the court of first instance is the competent forum of jurisdiction with respect to employment-related complaints and disputes.
  • An attempt for conciliation/amicable settlement, before filing a claim before the court, is mandatory.
  • The labor office is the administrative institution before which all labor-related disputes begin.

Intellectual Property

  • The Patents and Industrial Designs Law No. 132 of 1949 allows inventors to obtain patent protection for 20 years from the date of application.
  • Egypt is a member of the World Intellectual Property Organization (WIPO) and is signatory to the Paris Convention, Madrid Convention and the Berne Convention.
  • Egypt’s IP laws conform to international standards and provide sufficient protection to both local and foreign investors.
  • Registered patents, trademarks, individual designs and lay-out designs enjoy monopoly rights/protection for specific period of time.
  • Author rights protection covers literary, software, musical or artistic works, sound recordings, broadcasts and films.
  • Civil and penal remedies are available for cases involving infringements.

Dispute Resolution

  • The Egyptian legal system was founded on the Napoleonic Codes, Roman law, and Islamic Shari’a.
  • The judicial branch monitors and supervises the implementation and enforcement of laws.

The Egyptian court system consists of the following:

  • The Courts of the First Degree are responsible for adjudicating misdemeanors and civil disputes, commercial, contractual, insurance, intellectual, and real property disputes
  • The Court of Appeal’s purpose is to review decisions related to misdemeanors and civil matters issued by Courts of the First Degree across the country.
  • The Court of Cassation is considered the highest judicial body in the Egyptian court system and is specialized in monitoring the awards where a breach of law has occurred, and making unified principals for applying the law.
  • In addition, the Egyptian judicial branch consists of different types of courts with specialized jurisdiction, including the Supreme Constitutional Court (El Mahkmah El Dostouriah El Aolyah), Family Courts (Mahkmat El Ausrah), Economic Courts (El Mahkmat El Eqtsadyah), Environmental Courts (El Mahkamt El Beaeyah), and Council of State (Administrative Judicial Court) (Mahkmah Al Qda’a El Edari).
  • The Supreme Constitutional Court has the authority to determine the constitutionality of the laws passed by the People’s Assembly (the parliament), identify the jurisdiction of courts, and interpret laws and presidential decrees.
  • The Economic court consists of a first degree court or appellate court which deals with financial crimes. Within civil jurisdiction there are also cases concerning consumer protection law, commercial and banking transactions. This court was made for the speedy settlement of such cases for the protection of investment and encouraging it.
  • The Council of State is specialized in nullifying and repealing administrative decrees violating the law, and in commercial disputes arising from contracts between individuals and the government.
  • The labor office  deals with employment-related complains and disputes
  • Arbitration is governed by law no. 27/1994, and there are many international arbitration centers in Cairo.

Passport and Visa Requirement

  • Most nationalities, including the USA, Canada, and the UK do not need a prearranged visa to enter Egypt for tourism and can purchase temporary visas upon landing at the various Egyptian airports.
  • Foreigners interested in employment in Egypt have to obtain work permits from the Ministry of Manpower and Migration after entering Egypt.

Exchange Control

Any natural or juristic person has the right to retain and transact with foreign currency generated from operations in Egypt, however the transfer operations may be delayed as a result of dollar shortage due to economic problems which the current government are working on eliminating.