Country GuideEgypt

From Global Connections

Egypt is expected to attract foreign direct investment (FDI) inflows of USD7 billion by the end of fiscal year 2015/2016. In accordance with UNCTAD's 2015 World Investment Report, Egypt is in the top five host economies in Africa for FDI inflows.

Egypt ranked 131st in the World Bank's 2016 Doing Business rankings, falling five places from 126th in the year prior. Despite the fall in ranking, the World Bank Group recognised that the Arab Republic of Egypt had strengthened minority investor protections by barring subsidiaries from acquiring shares issued by their parent company.

Key facts about starting a business in Egypt:

  • It takes seven procedures and approximately eight days to start a new business in Egypt; this process is detailed in the Doing Business in chapter
  • Foreigners must obtain work permits from the Ministry of Manpower and Migration before they are able to commence employment in Egypt; employment regulations are discussed in detail in the Labour chapter
  • Requesting and obtaining a building permit takes approximately 30 days and costs EGP2,561
  • All companies must use the Egyptian Accounting Standards which are in line with the International Accounting Standards; further details can be found in the Audit chapter
  • Companies that wish to list securities on the Egyptian Exchange (EGX) must, amongst other conditions, have a minimum of 300 shareholders; capital markets are outlined in the Finance chapter

Egypt's attractiveness as an investment location can be attributed to a number of factors, including its strategic location and young, growing population. Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Egypt may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the region and the industry in which a company operates.

Egypt's official language is Arabic but the national lingua franca is Egyptian Arabic. English and French are also widely spoken. Business in Egypt is formal and hierarchy is important. Business attire is conservative and foreigners are expected to abide by local standards of modesty. A handshake is the typical business greeting and will be used at the beginning and end of a meeting; the right hand should be used. Business cards will usually be presented after initial introductions.

Those looking to establish a business in Egypt may look across Africa or Asia for alternative options. However, Egypt can be differentiated on the following factors:

  • Egypt is the third largest economy in Africa
  • 60 per cent of the Egyptian population is under the age of 30
  • Egypt is strategically located in close proximity to Asian, African and European markets
  • The quality of Egypt's judicial processes is ranked 6.5 out of 18, in line with the average for the Middle East and North Africa; the political and legal system is detailed in the Legal overview
  • The income tax rate applicable to the annual taxable profit of legal entities was reduced from 25 per cent to 22.5 per cent in 2015; this is further detailed in the Tax chapter
  • Egypt opened a major expansion of the Suez Canal in 2015 which increased capacity and shortened the time needed to sail the link between the Red Sea and the Mediterranean; further details can be found in the Infrastructure chapter
  • The government provides guarantees against nationalisation and allows the free repatriation of capital and profits; discussed further in the Trade chapter

While there are numerous opportunities for investment in Egypt, a number of challenges remain. Despite significant improvements, the country is still suffering from political and economic uncertainty. Poverty and unemployment remain a problem across Egypt. Furthermore, excessive bureaucracy and corruption are also still commonplace which could provide challenges for foreign investors.

This guide has been developed to provide businesses with an overview of Egypt, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Egypt. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 General Authority for Investment
2 Ministry of Foreign Affairs
3 Ministry of Finance
4 Customs Office
5 Egyptian Patent Office
6 Ministry of Investment
7 Ministry of Manpower and Immigration

 

Sources

1 FDI Statistics
2 Doing Business Rankings
3 Egypt population
4 Quality of judicial processes

 

Download Country Guide - Egypt (1.57MB, PDF)

Disclaimer

This document is issued by HSBC Bank Egypt S.A.E (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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HSBC retains all responsibility for the translation of the content of this guide. In the event of any discrepancy or inconsistency between the English and translated versions of this Guide, the English version shall apply and prevail.

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