Investment Climate Statements for 2016 - Egypt

Executive Summary

Despite ongoing government efforts to court international investors, Egypt’s investment climate remains challenging, with hard currency controls and shortages impeding the repatriation of profits and the importation of inputs necessary for domestic manufacturing and production. Some established companies that have been able to navigate Egypt’s currency challenges and complex regulatory structure have been rewarded, however, by significant returns on investment, in part due to limited competition. The government continues to move ahead on the economic reform agenda announced at the March 2015 Egypt Economic Development Conference (EEDC), though progress has been delayed on energy subsidy reform and the replacement of the sales tax with a value-added tax. The government remains committed to attracting international investment, including launching a large-scale industrial zone around the Suez Canal designed to attract multinational manufacturing and logistics businesses along the major intercontinental shipping route.

The government has concluded the political roadmap adopted in July 2013. It ratified a new constitution in January 2014 and held presidential elections in May 2014. Egypt’s first parliamentary elections under the new constitution took place in October 2015. The House of Representatives (Parliament) held its first session on January 10 2016 and has numerous economic and business-related items on its legislative agenda.

Egypt honors its laws, treaties, and trade agreements. It is party to 100 bilateral investment treaties, including a 1992 treaty with the United States, and is a member of the World Trade Organization (WTO), the Common Market for Eastern and Southern Africa (COMESA), 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 particular sectors, such as upstream oil and gas development, where joint ventures are required, as well as real estate.

Investors report there can be delays of several months for transfers of foreign exchange to be executed. Labor rules prevent companies from hiring more than 10 percent non-Egyptians (25 percent in Free Zones), and foreigners are not allowed to operate sole proprietorships or simple partnerships. A foreign company wishing to import for trading purposes must do so through a wholly Egyptian-owned importer. Inadequate protection of intellectual property rights (IPR) is a significant hurdle in certain sectors to direct investment in Egypt. Egypt remains on the U.S. Trade Representative’s Special 301 Watch List.

Egypt is a signatory to international arbitration agreements, although Egyptian courts do not always recognize foreign judgments. Dispute resolution is slow, with the time to adjudicate a case to completion averaging three to five years. Other obstacles to investment include excessive bureaucracy, regulatory complexity, a mismatch between job skills and labor market demand, slow and cumbersome customs procedures, and non-tariff trade barriers.

Table 1



Index or Rank

Website Address

TI Corruption Perceptions index


88 of 175

World Bank’s Doing Business Report “Ease of Doing Business”


131 of 189

Global Innovation Index


100 of 143

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


$2.1 Billion

Egyptian Ministry of Finance

World Bank GNI per capita

2011 - 2015


Millennium Challenge Corporation Country Scorecard

The Millennium Challenge Corporation, a U.S. Government entity charged with delivering development grants to countries that have demonstrated a commitment to reform, produced scorecards for countries with a per capita gross national income (GNI) of $4,125 or less. A list of countries/economies with MCC scorecards and links to those scorecards is available here: Details on each of the MCC’s indicators and a guide to reading the scorecards are available here:

1. Openness To, and Restrictions Upon, Foreign Investment

Attitude toward Foreign Direct Investment

Encouragement of investment, including foreign investment, is a top priority of the Government of Egypt. The government has supported this policy through a series of pro-business reforms, including a third-party contract appeal law prohibiting third party interference in state-investor contracts; a competition law; and a presidential decree reforming Egypt's 1997 Investment Law by trimming customs duties, expanding corporate veil protection, establishing additional forums for investor-state disputes, and setting the foundation for a true one-stop business registration shop. The government is launching a Suez Canal Development Zone ( with simplified regulation and licensing aimed at attracting investors to develop manufacturing, logistics, and export industry along the Suez Canal.

Other Investment Policy Reviews

Neither the Organization for Economic Cooperation and Development nor the World Trade Organization nor the United Nations Conference on Trade Development has conducted an investment policy review of Egypt in the past three years.

Laws/Regulations on Foreign Direct Investment

In 2015, Egypt issued Presidential Decree 17/2015, reforming many of Egypt's investment-related laws, including the companies law, general sales tax law, investment guarantees and incentives law, and income tax law. The decree refined Egypt’s one-stop shop system, establishing the Ministry of Investment’s General Authority for Investment and Free Zones (GAFI) as a liaison between investors and government agencies when applying for business licenses. The one-stop shop remains to be implemented as of April 2016. The decree also offered new mechanisms for investor dispute settlement and improved corporate veil protection shielding senior executives from prosecution. Finally, the decree limits the expansion of free zones and gives the cabinet the exclusive right to choose fields of investment in free zones contingent on the state’s economic strategy.

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. Despite this guarantee, companies have experienced difficulty remitting earned income due to currency controls. Other key provisions include: guarantees against confiscation, sequestration, and nationalization; the right to own land; the right to maintain foreign-currency bank accounts; freedom from administrative attachment; the right to repatriate capital and profits; and equal treatment regardless of nationality.

The Investment Incentives Law as amended governs incorporation requirements and grants companies established under either the Companies Law or the Commercial Law certain incentives, including protection from nationalization, imposition of obligatory pricing, and cancellation or suspension of licenses to use immovable property. It also provides companies the right to own real estate required for their activities and the right to import raw materials, machinery, spare parts, and transportation methods without being required to register at the Importers Register. Companies eligible to benefit from incentives provided under the Investment Incentives Law must operate in certain targeted sectors, including: infrastructure; manufacturing and mining; transport; software development; medical services; certain financial services; oil field services; agriculture; reclamation of desert land; hotels; and tourism.

The Companies Law (law 159 of 1981) regulates domestic and foreign investment in sectors not covered by the Investment Incentives Law, whether shareholder, joint stock, or limited liability companies, representative offices, or branch offices. The law permits automatic company registration upon presentation of an application to GAFI, with some exceptions. The law allows 100 percent foreign representation on the board of directors, and strengthens accounting standards.

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 Capital Markets Law (law 95 of 1992) and its amendments and regulations govern Egypt’s capital markets. Foreign investors can buy shares on the Egyptian Stock Exchange on the same basis as local investors. Brokerage firms have capital requirements of LE 5 million (US$656,200), and same-day trading on the Egyptian stock market is allowed. As of April 2016, 94 brokerage firms had licenses for same-day or intra-day trading. The Capital Markets Law allows local and foreign institutions to issue bonds at a par value of LE 0.10 (US$0.0131).

Decree No. 719 for 2007 by the Ministry of Industry and Foreign Trade and Ministry of Finance provides incentives for industrial projects in the governorates of Upper Egypt (Upper Egypt refers to governorates in southern Egypt). The decree provides an incentive of LE 15,000 (US$1,968) for each job opportunity created by the project, on the condition that the investment costs of the project exceed LE 15 million (US$1.97 million). The decree can be implemented on both new and on-going projects.

Maritime Law 1 of 1998 permits private companies, including foreign investors, to conduct most maritime transport activities, including loading, supplying, and ship repair.

Commercial Law 17 of 1999 has more than 700 articles covering general commerce, commercial contracts, banking transactions, commercial paper, and bankruptcy.

Central Depository Law 93 of 2000 reduces risks associated with trading securities, enhances market liquidity, and tries to streamline the securities exchange process by standardizing registration, clearance, and settlement procedures.

Business Registration

The World Bank ranks Egypt among the easiest countries in the Middle East and North Africa in which to establish a business, although there are often significant delays obtaining required licenses after a business is established. According to the World Bank, a business can be started in 8 days, compared to a regional average of 19 and a global average of 42. Business registration is unavailable online and must be done in person at the General Authority for Investment (GAFI), located in Nasr City, Cairo, with satellite offices in Ismailia, Assuit, and Alexandria. In addition to GAFI, new business founders must open a company file and register employees at the National Authority of Social Insurance and obtain a bank certificate from an authorized bank in order to open a bank account. Businesses have reported registration times anywhere from one to ten weeks. In addition to registering, businesses must obtain licenses authorizing business activity. Businesses have reported the time required to obtain business licenses ranges from 3 to 12 months.

In addition to processing business registrations, GAFI is responsible for assisting foreign investors wishing to invest in Egypt (

The government supports local organizations as well as government initiatives aimed at increasing entrepreneurship rates in Egypt. In an effort to direct lending to small and medium-sized enterprises, the Central Bank of Egypt has directed banks present in Egypt to lend 20 percent of their loan portfolio to SME’s by the year 2020. In addition, microfinance institutions are now licensed and regulated by Egypt’s non-bank financial regulator, the Egyptian Financial Services Authority (EFSA), in accordance with a new law to support lending to Egypt’s smallest firms. The government defines small and medium-sized enterprises as follows: Enterprises with paid-up capital of less than 50,000 EGP and fewer than 10 employees are classified as micro enterprises. Enterprises with paid-up capital between 50,000 and 5 million EGP (for industrial establishments) or 50,000 and 3 million EGP (for non-industrial establishments) and fewer than 200 employees are classified as small enterprises. Enterprises with paid-up capital between 5 million and 10 million EGP (for industrial establishments) or 3 million and 5 million EGP (for non-industrial establishments) and fewer than 200 employees are classified as medium-size enterprises.

Industrial Promotion

Energy & Mining: The petroleum industry is one of the most commercially significant in Egypt, and hydrocarbon production is by far the largest single industrial activity. Although petroleum, natural gas, and petrochemicals have traditionally been Egypt’s top exports, acute energy shortages in recent years have turned Egypt into a net importer of oil, gas and refined petroleum products. Feedstock shortages have hit the petrochemical sector. Other energy-intensive sectors, such as cement, steel and fertilizer production, have also suffered from natural gas and power shortages. The Egyptian government encourages investment by international oil and gas companies, and currently dozens of international producers are operating in Egypt. The hydrocarbon industry is managed by the Ministry of Petroleum and Natural Resources, under which four state-owned companies function as government agencies. One of these is the Egyptian General Petroleum Corporation (EGPC), which concludes concession agreements with foreign and domestic oil and gas producers in the form of production-sharing agreements (PSAs). The Egyptian Natural Gas Holding Company (EGAS) performs a similar function for investments in Egypt’s offshore natural gas fields. Egypt grants concessions in specified geographical areas through the promulgation of a special law for each concession, which forms the legal basis for the PSA between the investor and the state-owned partner company. Basing each concession agreement in law gives the agreements supremacy in application over contrary legislation or regulation. After concluding the agreement, any contractual changes are remedied through amicable adaptation of its provisions or through arbitration. These safeguards were specifically devised by the Government of Egypt to help forge trust with foreign investors and improve investment in the hydrocarbon sector. In some cases, the Egyptian military needs to grant permission for firms to access and operate in restricted-access concession areas.

A lack of competition among internet service and fixed landline providers, such as TE Data, has led to high prices, low internet speeds (2-8 Mbit/s in downtown Cairo), unreliable service quality, and high numbers of customer complaints. Only 3G mobile data services are currently available in Egypt. The Ministry of Communications and Information Technology has stated that 4G and broadband services will be permitted once the unified license is announced.

Travel: Prior to January 2011, tourism was Egypt’s third-largest source of foreign currency and a significant source of employment. Tourism has fallen significantly since the 2011 revolution, particularly higher-end cultural tourism. Beach resorts have fared better. As of fiscal year 2014/2015, according to the Ministry of Tourism, tourist visits have rebounded to 10.2 million, up from 7.9 million in 2013 but still below the 11.9 million tourist arrivals Egypt saw in fiscal year 2010/2011. Tourism income in 2014/15 was down 31 percent from the pre-2011 period, reaching $7.3 billion, according to the Ministry of Tourism. Tourism has fallen to sixth place as a source of foreign currency in Egypt.

In 2005, Egypt removed restrictions on foreign property ownership in a number of tourist areas, including resorts on the Red Sea and along the Mediterranean coast west of Alexandria. However, land ownership policies remain complex and unclear in many cases. Requirements to build on land to maintain tenure encourage rapid, large-scale development over conservation and more sustainable projects.

Limits on Foreign Control and Right to Private Ownership and Establishment

Agribusiness: Land/Real Estate Law 15 of 1963 explicitly prohibits foreign individual or corporate ownership of agricultural land (defined as traditional agricultural land in the Nile Valley, Delta and Oases).

Energy & Mining: Electricity Law 18 of 1998 allowed the government to sell minority shares of electricity distribution companies to private shareholders, both domestic and foreign. A new electricity law enacted in 2015 will further open electricity generation and distribution to the private sector once it is implemented.

The Egyptian Companies Law does not set any limitation on foreigners, neither as shareholders nor as managers/board members, except for Limited Liability Companies where the only restriction is that one of the managers should be an Egyptian national. In general, this is not considered a limitation on foreign contribution in management as the Egyptian manager may be appointed with very limited authority and other authorities may be granted to other foreign managers. In addition, companies are required to acquire a commercial and tax license, and pass a security clearance process. Although companies are able to operate while undergoing this security screening, if it is rejected they must cease operations and undergo a lengthy appeals process. Businesses have cited instances where Egyptian clients were hesitant to engage in protracted business contracts with foreign businesses that have not yet received security clearance, and have expressed concern about seemingly arbitrary refusals, opaque explanations when a security clearance is not issued, and a lengthy appeals process. Although the Government of Egypt has made progress streamlining the business registration process at the General Authority for Investment, lack of familiarity or experience working with foreigners has sometimes led to inconsistent and questionable treatment by banks and government officials, delaying registration.

Sector-specific limitations to investment include restrictions on foreign shareholding of companies owning lands in Sinai. Likewise, the Import-Export Law requires companies wishing to register in the Import Registry to be 100 percent owned and managed by Egyptians. In 2016, the Ministry of Trade prepared an amendment to the law allowing the registration of importing companies owned by foreign shareholders; as of April 2016, the law had not yet been submitted to Parliament.

Privatization Program

Egypt has not concluded significant privatizations of state-owned enterprises since 2008. Efforts to continue privatization since then have stalled. In March 2016, Prime Minister Sherif Ismail declared that the government would cease efforts to privatize the public sector, saying state-owned enterprises needed to be reformed instead. This statement followed the reestablishment of a Ministry of Public Enterprises in the same month.

Egypt's privatization program was based on Public Enterprise Law 203 of 1991, which permitted the sale of state enterprises to foreign entities. In 1991, Egypt began a privatization program for the sale of several hundred wholly or partially state-owned enterprises and all public shares of at least 660 joint venture companies (joint venture is defined as mixed state and private ownership, whether foreign or domestic). Bidding criteria for privatizations are generally clear and transparent.

In 2014, the President signed a law limiting appeal rights on state-concluded contracts to reduce third-party challenges to prior government privatization deals. 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. Ongoing court cases 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.

Screening of FDI

Egypt maintains de facto oversight of certain categories of FDI based on geography and sector. While there are no formal geographical restrictions on investments in Egypt, the government generally denies approval for investment in manufacturing facilities in Cairo due to congestion. Approval by the security services is also usually required for investments in the Sinai Peninsula. In addition, certain regulatory approvals are required in the financial sector. The government does not issue new licenses for banks or insurance companies. Foreign firms can only enter the Egyptian market by having their purchase of a stake in an existing bank or insurance company approved by the Central Bank of Egypt.

Competition Law

The Egyptian Competition Authority is the body tasked with ensuring free competition in the market and preventing anticompetitive practices. The Authority operates under the Egyptian Competition Law, which was enacted in 2005 and covers three categories of violations: 1) cartels; 2) abuse of dominance; and 3) vertical restraints. In 2008, laws number 190/2008 and 193/2008 introduced amendments to the Competition Law aiming at protecting competition, prohibiting monopolistic practices, and assuring free competition and free entry and exit from the market based on economic efficiency. The main challenges to implementing the Competition Law include the lack of competition policy at the country level, a significant informal sector, and the lack of availability of information and data.

2. Conversion and Transfer Policies

Foreign Exchange

Businesses operating in Egypt currently suffer from difficulty accessing hard currency for business purposes, difficulty repatriating profits, and a lack of long-term clarity about the rules governing currency transfers. In early 2016, the Central Bank lifted dollar deposit limits on households and firms who are importing priority goods which had been in place since early 2015. Businesses, including foreign-owned businesses, that are not operating in priority sectors have continued to encounter significant and shifting restrictions on dollar access, as have importers.

Following the January 2011 revolution, in order to conserve foreign exchange reserves, the Central Bank imposed restrictions on conversion and transfers of funds out of Egypt. Individuals were only permitted transfers up to a total maximum of $100,000. In January 2014, however, the Central Bank permitted individuals who had already reached that limit to transfer an additional $100,000. No specific guidelines from the Central Bank regarding fund transfer were issued in 2015. While businesses do not face these restrictions for transfers for legitimate business purposes, extensive documentation can be required. Foreign investors say that lack of availability of foreign exchange has resulted in delays of up to several months acquiring currency.

The OECD Arrangement on Officially Supported Export Credits rates country transfer and convertibility risk on a scale of 0 to 7, with 7 being the most risky. For many years Egypt’s rating had been at 4, but dropped to 5 in January 2012 and then to 6 in June 2013, where it remains (

A parallel foreign exchange market exists in Egypt outside of the official banking system in which US dollars trade at a premium to the official rate of $1= LE 8.88 as of March 2016.

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. In practice, large corporations have been unable to repatriate local earnings for months at a time.

The Investment Incentives Law 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 Incentives Law.

Banking Law 88 of 2003 regulates the repatriation of profits and capital. The government has repeatedly emphasized its commitment to maintaining the profit repatriation system to encourage foreign investment in Egypt. 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 ongoing currency controls.

3. Expropriation and Compensation

The Investment Incentives Law provides guarantees against nationalization or confiscation of investment projects under the law's domain (Law 8 Article 8). The law also provides guarantees against seizure, requisition, blocking, and placing of assets under custody or sequestration (Law 8 Article 9). It offers guarantees against full or partial expropriation of real estate and investment project property (Law 8 Articles 11 and 12). The U.S.-Egypt Bilateral Investment Treaty also provides protection against expropriation. Private firms are able to take cases of expropriation to court, but the judicial system can take several years to resolve a case.

4. Dispute Settlement

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

Egypt's legal system is a civil codified law system. The judiciary is an independent branch of the government.

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 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.

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.


Egypt does not have a bankruptcy law per se, although Commercial Law 17 of 1999 includes a chapter on bankruptcy. The terms of the bankruptcy chapter are silent or ambiguous on several key issues that are crucial to the reduction of settlement risks. The Egyptian government has identified the lack of a functioning bankruptcy code as a significant weakness for investment. In 2015, in an attempt to help accelerate the bankruptcy process, the government amended Egypt’s 1997 Investment Law, stipulating that if a company under liquidation has not received a statement of liquidation from the relevant administrative authorities within 120 days of the liquidator submitting the application, the company will be discharged from its liabilities. While this has accelerated bankruptcy proceedings to some extent, the government continues to indicate in public statements that efforts are underway to initiate new bankruptcy legislation to more permanently address continuing concerns over the cost and paperwork involved in bankruptcy. Those efforts remain ongoing.

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

Investment Disputes

U.S.-Egypt Bilateral Investment Treaty 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, on a number of occasions, confirmed the validity of arbitration clauses included in contracts between Egyptian and foreign parties.

Presidential Decree law No. 17 of 2015 added a new mechanism for simplified settlement of investment disputes aimed at avoiding the court system altogether. In particular, the law established a Ministerial Committee on Investment Contract Disputes, responsible for the settlement of disputes arising from investment contracts to which the State, or a public or private body affiliated therewith, is a party. The decree also established a Complaint Committee to consider challenges connected to the implementation of Egypt's amended 1997 Investment Law. Finally, the decree established a Committee for Resolution of Investment Disputes that will review complaints or disputes between investors and the government related to the implementation of the Investment Law. In practice, Egypt’s dispute resolution mechanisms are broadly effective, but businesses have reported difficulty obtaining payment from the government in the event of a monetary settlement.

International Arbitration

There has been at least one reported instance of corruption within Egypt’s arbitration system leading to a sham “award” against a U.S. company. Delays in the judicial handling of the case have impeded swift resolution of the case. The U.S. Embassy recommends that U.S. companies employ contractual clauses specifying binding international, not local, arbitration of disputes in their commercial agreements.

ICSID Convention and New York Convention

Egypt acceded to the International Convention for the Settlement of Investment Disputes in 1971 and is a member of the International Center for the Settlement of Investment Disputes (ICSID), which provides a framework for arbitration of investment disputes between the government and foreign investors from another member state, provided that the parties agree to such arbitration. Without prejudice to Egyptian courts, the Investment Incentives Law 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 it 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.

Duration of Dispute Resolution – Local Courts

The Egyptian judicial system functions slowly, and cases can remain in the system for several years. Arbitral awards are made in the original currency of the transaction, via the competent court in Egypt, usually the Cairo Court of Appeals. A special order is required to challenge an arbitration award in an Egyptian court.

5. Performance Requirements and Investment Incentives


Egypt is a member of the World Trade Organization (WTO). The most recent Trade Policy Review for Egypt prepared by the WTO was issued in 2005:

Investment Incentives

Due to congestion in Cairo, the government offers incentives to move existing manufacturing facilities out of Cairo. Upon request, government officials assist investors in locating a site for a project, often in one of the new industrial sites located outside Cairo, and sometimes provides necessary infrastructure. The new amendments to the Investment Incentives Law (Article 20) stipulate that it is permissible, based on a Cabinet decree, to provide special non-tax incentives to projects that meet any of the following criteria: a) are labor intensive; b) maximize local content; c) invest in logistics, internal trade, energy, or transport; or, d) invest in remote or disadvantaged areas.

In addition to the new industrial sites outside Cairo, the government has targeted Upper Egypt for development by private investors. Land in industrial zones in Upper Egypt is offered free of charge. The government also provides hookups to infrastructure (water, sewer, electricity, and gas) and transfers land title to the developer three years after project startup. As noted above, approval by the security services is generally required for investments in the Sinai Peninsula.

In July 2007, MOI finalized procedures for granting usufruct rights (use by an investor of a plot of land for a certain period of time to establish a project and profit from it, after which both project and land are returned to public ownership) in the Sinai, with the aim of boosting investment levels in the region. The procedures include facilitation of real estate registration; enabling use of usufruct rights as a guarantee for loans; and enabling banks to register pledges on real estate and foreclose in cases of non-payment.

Research and Development

Research and Development (R&D): The 2014 constitution includes article 23 which explicitly states that the country can spend “no less than 1 percent of Gross National Product on scientific research.” If fully implemented, this would double the government’s current R&D budget. Large-scale R&D activities, however, are relatively modest. The majority of government-funded R&D programs are in agriculture, health, and, to a lesser extent, manufacturing. There are no reports of discrimination against U.S. or other foreign firms wishing to participate in R&D programs in Egypt. Most Egyptian R&D programs are established by government initiative.

Performance Requirements

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

Article 6 of Decree 184/2013 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. In certain cases, a Minister can grant tariff reductions of up to 40 percent in advance to certain companies without waiting to reach a corresponding percentage of local content. In 2010, Egypt revised its export rebate system to provide exporters with additional subsidies if they used a greater portion of local raw materials. See the section "Import and Export Policies" for more details on the export rebate system.

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

Data Storage

Egypt does not impose localization barriers on IT firms. Egypt does not make local production a requirement for market access, does not have local content requirements, and does not impose forced technology or IP transfers as a condition of market access.


6. Protection of Property Rights

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. According to the World Bank’s 2016 Doing Business Report, Egypt ranks 111 out of 189 for ease of registering property. (

A National Title Registration Program introduced by the Ministry of State for Administrative Development is 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 2000 EGP (US$227), irrespective of the property value. In November 2012, the government postponed implementation of an enacted overhaul to the real estate tax system until 2014; but as of early 2016 no action has been taken.

There is an extensive rent control system for older residential and commercial real estate property resulting in some apartment rents as low as US$10 per month. However, these rent controls do not apply to real estate put into service in recent years. 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 in practice most purchases are still conducted in cash. Real Estate Finance 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 amendments passed in 2004 allow for the issuance of mortgage-backed securities. According to the regulations, banks can offer financing in foreign currency of up to 80 percent of the value of a property.

Presidential Decree 17/2015 permitted the government to provide land, free of charge and in certain regions only, to investors meeting certain technical and financial requirements. This provision expires on April 1, 2020 and the company must provide cash collateral for five years following commencement of either production (for industrial projects) or operation (for all other projects).

Intellectual Property Rights

Egypt’s IPR legislation generally meets international standards, but is weakly enforced. Egypt was included on the Special 301 Watch List in 2015 (Note: The Special 301 Report is published in early April). Shortcomings in the IPR environment include infringements to copyrights and patents, particularly in the pharmaceuticals sector.

Book, music, and entertainment software piracy is prevalent in Egypt, and a significant portion of the piracy takes place online. American film studios represented by the Motion Pictures Association of America are concerned about the illegal distribution of American movies on regional satellite channels. Market access impediments, including ad valorem duties on imported CD-based goods, a tax on imported goods, censorship certificate fees for foreign films, and a 20 percent entertainment tax on foreign films (versus five percent for Arabic-language films) remain challenges for U.S. firms selling in Egypt.

Multinational pharmaceutical companies complain that local generic drug manufactures infringe on their patents. Delays and inefficiencies in processing patent applications by the Egyptian Patent Office compound the difficulties pharmaceutical companies face in introducing new drugs to the local market. The Egyptian government’s convoluted bureaucratic structure represents a another obstacle that must be overcome by pharmaceutical companies seeking to do business in Egypt. For example, the Ministry of Health has the power to issue permits for the sale of drugs, but generally issues these permits without cross-checking patent filings. The result is that a company, which has does not hold patent rights to a certain drug, can be given the right to sell that drug in Egypt.

Law 82/2002 reflects the provisions of the TRIPS Agreement. Article 69 of Egypt’s 2014 constitution mandates that a “specialized body” be established to ensure IPR protection, however, at present such an agency is not in operation. 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. Moreover, Egypt’s Economic Courts often take years to reach a decision on IPR infringement cases.

In January 2016, the Egyptian government began a media campaign to protect trademarks from counterfeit goods, however, the campaign has focused only on protecting Egyptian goods. ECA’s customs enforcement also tends to focus on protecting Egyptian goods. 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.

Resources for Rights Holders

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at

IPR Contact at Embassy Cairo:

Local attorneys list:

7. Transparency of the Regulatory System

The Egyptian government has made efforts to improve the transparency of government policy. However improving government transparency has proven difficult and has faced strong resistance from entrenched bureaucratic interests. Significant obstacles continue to hinder private investment, including the often arbitrary imposition of bureaucratic impediments and the length of time needed to resolve them.

Under the Constitution, new laws are drafted by the cabinet and sent to the Parliament for amendment and debate. Upon parliamentary approval, the draft legislation is then referred to the President for approval. Although the notice of and full drafts of legislation in Egypt are typically printed in the Official Gazette (similar to the Federal Register in the United States), in practice consultation with the public is limited. In recent years, the Ministry of Trade and other government bodies have circulated draft legislation among concerned parties, including business associations and labor unions. This is a welcome change from previous practice.

Egypt’s current Parliament was seated on January 10, 2016. Historically parliamentary committees have held ‘social dialogue’ sessions with concerned parties and organizations to discuss proposed legislation. However, responsiveness on the part of legislators to feedback received from concerned parties was limited. It remains to be seen if Egypt’s new parliament will adopt a more inclusive approach to social dialogue.

Regulatory Reform: Over the past decade, the Egyptian Government, led by the Ministry of Finance and the Ministry of Investment, made progress enhancing the country’s regulatory framework, particularly for businesses, for the purpose of promoting investment and creating job opportunities. Starting in 2014 the Government undertook to reform Egypt’s economy in a plan that was to include broad energy subsidy reform; a new value-added tax; simplified business registration and licensing; and a series of large megaprojects, including the expansion of the Suez Canal, extensive construction of new highways, and a “one-million feddans” (acre) project to reclaim desert land for agricultural and residential use. Despite some initial success on reducing energy subsidies for fuel and electricity, as of 2016, reforms appear to have run into headwinds.

Law 89 of 1998 amended the Tenders and Bidding Law 9 of 1983 to improve equality and transparency in government procurement. The criteria for awarding government contracts and licenses are made available when bid rounds are announced and the process actually used to award contracts is broadly consistent with the procedural requirements set forth by law.

8. Efficient Capital Markets and Portfolio Investment

The Egyptian Exchange (EGX) is Egypt’s registered securities exchange. In April 2016, 261 companies were listed on the EGX, with a market capitalization of about LE 500 billion. Stock ownership is open to foreign and domestic individuals and entities. The government of Egypt issues dollar-denominated and Egyptian pound-denominated debt instruments. Ownership is open to foreign and domestic individuals and entities.

The Capital Market Law 95 of 1992, along with the Banking Law of 2003, constitutes the primary regulatory frameworks 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 No. 10/2009 created the Egyptian Financial Supervisory Authority (EFSA) and brought the regulation of all non-banking financial services under its authority.

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.

In 2002, the then Minister of Foreign Trade added an additional chapter to the executive regulations of the Capital Market Law to allow margin trading to increase liquidity and trading in the market through brokerage firms and financially-solvent licensed companies. In April 2003, the U.S. Securities and Exchange Commission included the Egyptian Exchange in its list of accredited stock exchanges, allowing U.S. financial institutions to invest in the Egyptian stock market without undertaking the cumbersome procedures previously required. In May 2006, the Capital Market Authority (CMA) issued Decree No. 50 for 2006, organizing online trading. The decree allows brokerage companies to receive requests for buying/selling of shares by clients via the Internet. The decree also mandates infrastructure requirements, mainly web security provisions, which brokerage firms must meet in order to provide online services. To date, 114 companies have obtained online trading licenses.

Leasing Law 95 of 1995 allows for the leasing of capital assets and real estate and was designed to reduce the high start-up costs faced by new investors. Notably, the law specifically allowed for the purchase of real estate assets through leasing mechanisms. The Leasing Law was amended in 2001 to make leasing more attractive for investors by exempting financial leasing activities from sales taxes and fees; specifying financial standards to which leasing companies must adhere to; increasing the control, organization and efficiency of the leasing activities; and incorporating clear guarantees for the parties involved.

In August, 2015, President al-Sisi reversed a new10 percent capital gains tax that had been implemented in May 2015 after being announced July 2014 following industry protest. The decree also stated that the government would reimburse investors for taxes paid since the May implementation.

Finance: Egypt’s insurance regulator, the Egyptian Financial Supervisory Authority (EFSA), is undertaking reform of its legislative framework for insurance. As of April 2015, the EFSA Board was considering a draft proposal which was developed with significant input from the private sector and other relevant stakeholders.

The government does not issue licenses for new insurance companies. As in the banking sector, foreign firms can only enter the Egyptian insurance market through a purchase of a stake in an existing insurance company. Certain regulatory approvals are required for foreign and local investments in insurance companies (as with Egyptian banks) exceeding 10 percent of the issued shares. In 2006, the government announced that it would restructure public insurance companies in preparation for their privatization. While some steps were taken in 2007, the firms still have not been privatized.

Money and Banking System, Hostile Takeovers

Egypt’s banking sector is generally regarded as healthy and well-capitalized, due in part to its deposit-based funding structure and ample liquidity. Analysts estimate that approximately 8 percent of the banking sector’s loans are non-performing. However, since 2011, a high level of exposure to government debt, accounting for over 40 percent of banking system assets, at the expense of private sector lending, has reduced the diversity of bank balance sheets and crowded out domestic investment. In July 2015, Moody’s upgraded the outlook of Egypt’s banking system to stable from negative to reflect improving macroeconomic conditions and ongoing commitment to reform.

Forty banks operate in Egypt, and the Central Bank of Egypt has not issued a new commercial banking license since 1979. The only way for a new commercial bank, whether foreign or domestic, to enter the market (except as a representative office) is to purchase an existing bank. To this end, in 2013, QNB Group acquired National Société Générale Bank Egypt (NSGB). That same year, Emirates NBD, Dubai's largest bank, bought the Egypt unit of BNP Paribas. In 2015, Citibank sold its retail banking division to CIB Bank. In 2015, Egypt indicated a desire to privatize a number of state-owned banks and other firms through listings on the Egypt Stock Exchange, though no action has been taken as of early 2016.

The total assets held in Egypt’s banking sector were approximately $250 billion in 2015. Egypt’s three state-owned banks (Banque Misr, Banque du Caire, and National Bank of Egypt) control nearly 40 percent of banking sector assets.

9. Competition from State-Owned Enterprises

State-owned enterprises compete directly with private companies in several sectors of the Egyptian economy. According to Public Sector Law 203 of 1991, state-owned enterprises should not receive preferential treatment from the government, nor should they be accorded any exemption from legal requirements applicable to private companies. In addition to the state-owned enterprises groups above, 40 percent of the banking sector’s assets are controlled by three state-owned banks (Banque Misr, Banque du Caire, and National Bank of Egypt). In March 2014 the government announced that nine public holding companies will be placed under an independent sovereign fund. As of April 2015, this has not yet occurred.

In an attempt to encourage growth of the private sector, privatization of state-owned enterprises and state-owned banks accelerated under an economic reform program that took place from 1991 to 2008. Following the 2011 revolution, third parties have brought cases in court to reverse privatization deals, and in a number of these cases, Egyptian courts have ruled to reverse the privatization of several former public companies. Most of these cases are still under appeal.

The state-owned telephone company, Telecom Egypt, lost its legal monopoly on the local, long-distance and international telecommunication sectors in 2005. Nevertheless, Telecom Egypt continues to hold a de facto monopoly, primarily because the National Telecommunications Regulatory Authority (NTRA) has not issued additional licenses to compete in these sectors. NTRA has been working on a unified license regime that would allow a company to offer both fixed line and mobile networks, but a deal has not been finalized. Adoption of a unified license regime would allow Telecom Egypt, currently operating in the fixed line market, to enter the mobile market and the three existing mobile companies to enter the fixed line market.

Egypt is not a party to the World Trade Organization’s Government Procurement Agreement.

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 Spinning & Weaving; Metallurgical Industries; Chemical Industries; Pharmaceuticals; Food Industries; Building & Construction; Tourism, Hotels & Cinema; Maritime & 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.

Sovereign Wealth Funds

Egypt does not have a sovereign wealth fund.

10. Responsible Business Conduct

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 take the form of funding and sponsorship for initiatives supporting entrepreneurship and education. Environmental and technology programs are also garnering greater participation. The Ministry of Trade has engaged constructively with corporations promoting RBC program, 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 has an active corporate social responsibility committee, and Apache Corporation was named a finalist in 2013 for the Secretary’s Award for Corporate Excellence for its work building and maintaining village girls’ schools throughout the country. Microsoft was named a finalist in 2012. Several U.S. pharmaceutical companies are actively engaged in RBC programs related to 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 as well as improve the national capacity to design, apply, and monitor sustainable responsible business conduct policies. In March 2010, Egypt launched an environmental, social, and governance (ESG) 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 industry remains limited in the government’s annual budget.

11. Political Violence

Late 2015 and early 2016 saw a decline in the number of small-scale terrorist attacks against security and civilian targets in Cairo and elsewhere in the country. Militant groups have been able to commit significant acts of terrorism, however, including the bombing of the Italian Consulate and a National Security Services building in Cairo in the summer of 2015. In the Sinai Peninsula, militants have conducted major terrorist attacks against military installations and personnel. The October 31 2015 crash of Metrojet flight 9268 was claimed by ISIL’s Sinai affiliate, casting a spotlight on airport security procedures. The United States designated ISIL’s Sinai affiliate as a Foreign Terrorist Organization in April 2014.

12. Corruption

Corruption occurs at all levels of Egyptian society. Giving and accepting bribes are criminal acts in Egypt, but corruption laws have not been consistently enforced. 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. The law provides criminal penalties for official corruption, but the government does not consistently enforce the law.

Transparency International’s Corruption Perceptions Index ranked Egypt 88 out of 175 in its 2014 survey ( an improvement from the difficult 2011-2014 period. Recent ratings from the World Economic Forum’s Global Competitiveness Report 2015-16 identified corruption as the twelfth most problematic factor to doing business in Egypt, behind Policy Instability (#1) and Inefficient Government Bureaucracy (#2) among other challenges more problematic than corruption. (

The government has been vocal about its desire to clamp down on corruption. In March 2016, in a presentation of Egypt’s economic plan to Parliament, the Prime Minister declared that Egypt would not tolerate corruption and that he would work with Parliament and supervisory bodies to combat corruption. The 2014 constitution provides for the establishment of an Anti-Corruption Commission to focus on dealing with conflicts of interests, standards of integrity, and government transparency. It also addresses whistleblower protection. That same year, Egypt launched a four year national Anti-Corruption Strategy empowering the new National Coordinating Committee for Combating Corruption to develop a holistic government strategic for addressing corruption. The long-term effectiveness of the government’s efforts remains to be seen.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

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

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, which has jurisdiction over state administrative bodies, state-owned enterprises, public associations and institutions, private companies undertaking public work, and organizations to which the state contributes in any form. Observers do not judge the ACA to be sufficiently resourced, and the agency does not actively collaborate with civil society.

In addition to the ACA, 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 likewise share responsibility for addressing corruption in public expenditures.

General Contact Information:

  • Ministry of Interior
  • General Directorate of Investigation of Public Funds
  • Telephone: 02-2792-1395/ 02-27921396
  • Fax: 02-2792-2389

13. Bilateral Investment Agreements

Egypt has signed a number of international agreements covering investment, including bilateral investment agreements with Belgium, China, Finland, France, Germany, Greece, Italy, Japan, Libya, Luxembourg, Morocco, the Netherlands, Romania, Singapore, Sudan, Sweden, Switzerland, Thailand, Tunisia, the United Kingdom, and the United States. The U.S-Egypt Bilateral Investment Treaty 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 specific investment agreements, Egypt is also a signatory to a wide variety of agreements covering trade issues. Egypt joined the Common Market for Eastern and Southern Africa (COMESA) in June 1998. In July 1999, Egypt and the United States signed a Trade and Investment Framework Agreement (TIFA), a step toward creating freer trade and increasing investment flows between the U.S. and Egypt. In June 2001, Egypt signed an Association Agreement with the European Union (EU) which entered into force on June 1, 2004. The agreement provides for immediate duty free access of Egyptian products into EU markets, while duty free access for EU products will be phased in over a 12 year period. In 2010, Egypt and the EU completed an agricultural annex to their FTA, 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 an FTA with Turkey, in force since March 2007, and an FTA with the Mercosur bloc of Latin American nations, which Egypt ratified in January 2013, but which is not yet in force. The Minister of Industry, Trade and SMEs announced during the Egypt Economic Development Conference (EEDC) that two new FTAs will be signed. The first will be in June with the three major African blocks: the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and the East African Community (EAC). The second will be with the Eurasian Economic Union, which includes Russia, Armenia, Belarus, and Kazakhstan.

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, as well as 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 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, and areas in the Suez Canal such as Suez, Ismailia, Port Said, and other specified areas in Upper Egypt. Egyptian exports to the U.S., and ready-made garments in particular, have risen rapidly since the QIZ program was introduced in December 2004. The value of the Egyptian QIZ exports to the U.S. amounted to approximately $900 million in 2014, approximately 64 percent of Egypt's total exports to the United States (Data Source: USITC).

Bilateral Taxation Treaties: Egypt has a bilateral tax treaty with the United States.

14. OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) has approved $500 million in financing to support lending to small businesses in Egypt and Jordan, including the following: 1) $150 million commitment in partnership with Abraaj Capital, a leading private equity group, to enable growth of smaller companies; 2) $150 million investment guaranty with Citibank for a loan to Citadel Capital, the leading private equity firm in the Middle East and Africa, aimed at expanding its subsidiaries working in critical sectors in the MENA region and including $125 million specifically for Egypt; and 3) $250 million 10 year partnership with Egyptian banks working directly with SMEs.

15. Labor

Egypt sees upwards of 700,000 new entrants into the labor market each year. Official statistics put the labor force at 27.6 million, with 4.3 million unemployed. Following the 2011 Revolution, Egypt’s unemployment rate has gradually increased. The 2014 unemployment rate stood at 14 percent, with unemployment significantly higher for women (26 percent).

Unemployment is at its highest among educated youth, particularly graduates of vocational secondary education. This issue was exacerbated by the 2011 Revolution and concomitant political and economic instability. Many consider the limited employment opportunities for youth as a serious challenge to Egypt’s social cohesion and democratic transition. Millions of Egyptians continue to seek employment abroad.

The government bureaucracy and public sector enterprises are substantially over-staffed compared to the private sector. 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 certain 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, as well as 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 April 2002). 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. The latter has rarely convened.

Under the Unified Labor Law, workers may join trade unions, but are not required to do so. A trade union or workers’ committee may be formed if 50 employees in an entity express a desire to organize. In March 2011, the Minister of Manpower and Migration (MOMM) issued a decree recognizing complete freedom of association. The Minister decided that aspects of the Trade Union Law (Law 35 of 1976) violated, and were trumped by, Egypt’s ILO and UNHRC commitments. Subsequent ministers continued to recognize the 2011 decree, and since March 2011, the Ministry of Manpower and Migration has registered well over 1,600 independent trade unions without interference, while hundreds more have formed, but have not yet registered. All trade unions are required by law to belong to the Egyptian Trade Union Federation, the only official representative of trade unions recognized by the state.

The 2014 Constitution stipulates 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 constitution maintained past practice in stipulating that “one syndicate is allowed per profession.” The Egyptian constitutional legislation differentiates between white-collar syndicates (for professional workers e.g. doctors, lawyers, journalists) and blue-collar workers (e.g. transportation, food, mining workers). The government has drafted a "right to be collectively organized” law, but as of April 2015 has not yet passed the legislation; the ILO's Committee of Experts recognized Egypt’s 2011 declaration on freedom of association as a positive step and emphasized that a law codifying these changes should be enacted as soon as possible. Employers complain that the incongruence between labor provisions in the 2014 Constitution, the 2011 Ministerial Decree, and the Trade Union Law of 1976 causes uncertainty when dealing with workers’ representatives.

Workers in Egypt have the right to strike peacefully, but strikers by law must notify the employer and concerned administrative officials of the reasons and time frame of the strike ten days in advance. The law prohibits strikes in strategic or vital establishments in which the interruption of work could disturb national security or basic services provided to citizens. In practice, however, workers strike often in all sectors without following these procedures. The number of strikes increased significantly after January 2011. In 2014, labor actions spiked during the first quarter, but gradually tapered off over the course of the year. The ILO Committee of Experts has criticized the 1976 Trade Union Law for mandating that only the formerly government-controlled Trade Union Federation may organize strikes and that workers must notify employers in advance of strike actions.

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 the Ministry of Manpower and Migration. Collective bargaining is technically not permitted in the public sector, though it exists in practice. The government often intervenes to limit or manage collective bargaining negotiations in all sectors.

The MOMM 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 for economic reasons. The government, however, has taken steps to halt downsizing in specific cases. The unemployment insurance law, also known as the Emergency Subsidy Fund Law No. 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.

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 start informal negotiations to settle the dispute. This right can be exercised only within seven days of the dispute. If within ten days from the time administrative authorities were requested to intervene a solution is not found, both the employer and the worker can resort to a judicial committee within forty-five days of the dispute. This committee is comprised of two judges, a representative of The Ministry of Manpower and Migration (MOMM) and representatives from the trade union, and one of the employers' associations. The decision of this committee is provided within sixty days. If the decision of the judicial committee concerns discharging a worker, the sentence is delivered within fifteen days. When the committee decides against an employer's decision to fire a worker, the employer must reintegrate the latter in his/her job and pay all due salaries. If the employer does not respect the sentence, the worker 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 Committee designated by the Prime Minister. In addition, the employer must 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 that have been dismissed have the right to appeal. Workers in the public sector enjoy life-long job security as contracts cannot be terminated in this fashion.

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.

In 2011, the MOMM enacted regulations designed to restrict access for foreigners to Egyptian worker visas, though application of these provisions has been inconsistent. Visas for unskilled workers will be phased out. 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 will remain open to foreign workers. In practice, it is not clear how diligently the government is enforcing these provisions.

16. Foreign Trade Zones/Free Ports/Trade Facilitation

Public and private free zones are authorized under the Investment Incentive Law and are established by a decree from GAFI. 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 zones and operate in foreign currency. Free zones are open to investment by foreign or domestic investors. Companies operating in free zones are exempted from sales taxes or taxes and fees on capital assets and intermediate goods. In 2015, the Legislative Package for the Stimulation of Investment stipulated a 1 percent duty paid on the value of commodities upon entry for storage projects and a 1 percent duty upon exit for manufacturing and assembly projects.

There are currently 10 public free zones in operation in the following locations: Alexandria, Damietta, East Port Said Port Zone, Ismalia, Koft, Media Production City, Nasr City, Port Said, Shebin el Kom, and Suez. Private free zones may also be established with a decree from 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.

In 2015, limits were introduced on energy-related free zone investments, and licenses will not be granted in free zones for projects in the following sectors: fertilizers; oil and steel; petroleum; natural gas production, liquefaction and transport; or other energy intensive industries.

The Special Economic Zones (SEZ) 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.

Law No. 19 of 2007 authorized creation of investment zones, which require Prime Ministerial approval for establishment. 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.

Progress is continuing on establishing the Suez Canal Economy Zone, originally announced by the Government of Egypt in 2014. The zone, a major industrial and logistics services hub built along the Suez Canal, is expected to include upgrades and renovations to ports located along the Suez Canal corridor, including West and East Port Said, Ismailia, Suez, Adabiya, and Ain Sokhna. The government has invited foreign investors to take part in the project, which is expected to be built in several stages, the first of which is scheduled to be completed by 2020. 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.

Website for the Suez Canal Development Project:

17. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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)


$331 billion


$286.5 billion

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)





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





Total inbound stock of FDI as % host GDP






Egyptian data source:

* Data from the Bureau of Economic Analysis indicates a significant decline in U.S. FDI in Egypt in 2015. Data from the Government of Egypt for Egyptian Fiscal Year 2014-15 includes the period from July 1 2014 to June 30 2015 and is broadly consistent with FDI figures from the Bureau of Economic Analysis for this same period, which indicate that U.S FDI in Egypt was $2.47 billion between July 1 2014 and June 2015.

Table 3: Sources and Destination of FDI

Measurements of foreign direct investment (FDI) in Egypt vary according to the source and the definitions employed to calculate the figure. The Central Bank records figures on quarterly and annual investment flows based on financial records for Egypt's balance of payments statistics. They are reported in the table below. The Ministry of Petroleum keeps statistics on investment in the oil and gas sector (which accounts for the bulk of FDI in Egypt), while GAFI keeps statistics on all other investments – including re-invested earnings and investment-in-kind. Statistics are not always current. GAFI's figures are calculated in Egyptian Pounds at the historical value and rate of exchange, with no allowance for depreciation, and are cumulative starting from 1971. The U.S. has historically ranked first in terms of FDI in Egypt.

U.S. firms are active in a wide range of manufacturing industries, producing goods for the domestic and export markets. Examples of U.S. investors include American Express, AIG, Ideal Standard, Apache Corporation, Bechtel, Bristol-Myers Squibb, Cargill, Citibank, Coca-Cola, Devon Energy, Dow Chemical, ExxonMobil, Eveready, General Motors, Guardian Industries, H.J. Heinz, Johnson & Johnson, Kellogg’s, Mondelez, Microsoft, Proctor and Gamble, Pfizer, PepsiCo, Pioneer, and Xerox. Leading investors from other countries include BG, ENI-AGIP, BP, and Shell (in the oil/gas sector), Unilever, the M.A. Kharafi Group (Kuwait), and the Kingdom Development Company (Saudi Arabia).

Note that the IMF’s Coordinated Direct Investment Survey (CDIS) is unavailable for Egypt.

Table 4: Sources of Portfolio Investment

Figures below are from June 2015. Data from the International Monetary Fund does not match information provided by the Government of Egypt due to differing methodologies.

Portfolio Investment Assets

Top Five Partners (Millions, US Dollars)


Equity Securities

Total Debt Securities

All Countries



All Countries



All Countries



Cayman Islands



Saudi Arabia



Cayman Islands



Saudi Arabia



International Organizations



United States



International Organizations



United Kingdom






United States















Saudi Arabia



18. Contact for More Information

  • Mark Erickson
  • Deputy Economic Counselor
  • Telephone: 20-2-2797-3300
  • E-Mail Address: