Egypt Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in egypt, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Investment Climate Statement
Last published date:

The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies.  They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment.  Topics include:

  • Openness to, and Restrictions upon, Foreign Investment,

  • Investment and Taxation Treaties,

  • Legal Regime,

  • Industrial Policies,

  • Protection of Property Rights,

  • Financial Sector,

  • State-owned Enterprises,

  • Corruption,

  • Labor Policies and Practices,

  • Political and Security Environment, and

  • U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs

Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad. These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors. 

To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website.
 

Executive Summary - Egypt

The Egyptian economy was particularly hard hit by the Russian 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 GoE undertaking several 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 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 several 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

 

Political and Economic Environment

For background information on the political and economic environment of the country, please click on the link to the U.S. Department of State Countries & Areas website.

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Global Business Navigator Chatbot Beta

Welcome to the Global Business Navigator, an artificial intelligence (AI) Chatbot from the International Trade Administration (ITA). This tool, currently in beta version testing, is designed to provide general information on the exporting process and the resources available to assist new and experienced U.S. exporters. The Chatbot, developed using Microsoft’s Azure AI services, is trained on ITA’s export-related content and aims to quickly get users the information they need. The Chatbot is intended to make the benefits of exporting more accessible by understanding non-expert language, idiomatic expressions, and foreign languages.

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