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Foreign Direct Investment

Egypt saw foreign direct investment inflows fall 12.5% in 2021 (USD 5.1) but remained the second-largest recipient of FDI in Africa after South Africa, according to UNCTAD's 2022 World Investment Report. In the same year, FDI stocks reached USD 137.5 billion, around 34.1% of GDP. The value of greenfield projects more than tripled to USD 5.6 billion, but remained far below the USD 13.7 billion recorded before the pandemic. A 2022 report by the General Authority for Investment and Free Zones (GAFI) highlights that during fiscal year 2021-2022, FDI inflows rose by 71.4% year-on-year to hit about USD 8.9 billion. Efforts to boost FDI diversification include the agreement to reactivate the USD 16 billion Saudi-Egyptian investment fund, which lists tourism, healthcare, pharmaceuticals, infrastructure, digital technologies, financial services, education and food as priority sectors. The Sovereign Fund of Egypt (TSFE) is seeking to attract FDI into a range of economic and social development projects through public-private-partnerships. Among the areas covered are solar-powered desalination plants, digitalization of the education system, transport (electric trains), finance, as well as the restructuration of state assets in the petroleum and water sector (SWF). Nevertheless, FDI in the country is still largely directed to natural resources. This pattern has been reinforced by the discovery of the Zohr offshore gas field in the Eastern Mediterranean region (in 2022, 42 oil wells and 11 gas wells discoveries were announced). The UK is by far the largest investor in Egypt, followed by Belgium, the USA and the UAE. FDI is concentrated in the oil and gas industry (around three-quarters of total investments), followed by financial services, manufacturing, real estate and construction.

The dynamic growth of the Egyptian economy, its strategic geographical position, low labour costs, skilled workforce, unique tourist potential, substantial energy reserves, large domestic market and the success of the reforms undertaken by the authorities (including many privatisations) contributed to drive up FDIs. Egypt recently adopted an Investment Law that includes performance requirements for certain investment incentives, including labour-intensive projects and geographical location. The government has also set up special economic zones with business-friendly regulations: more liberal, more efficient administration, tax incentives, facilitation of registration and customs procedures, better infrastructure, etc. However, outside these areas, it is difficult to register a new company, and instability in the country is hindering business developments in Egypt. The country ranks 89th out of 132 economies in the 2022 Global Innovation Index.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 5,8525,12211,400
FDI Stock (million USD) 132,477137,543148,888
Number of Greenfield Investments* 5365161
Value of Greenfield Investments (million USD) 2,28414,969107,490

Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Country Comparison For the Protection of Investors Egypt Middle East & North Africa United States Germany
Index of Transaction Transparency* 8.0 6.4 7.0 5.0
Index of Manager’s Responsibility** 3.0 4.8 9.0 5.0
Index of Shareholders’ Power*** 3.0 4.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.


What to consider if you invest in Egypt

Strong Points

Advantages for FDI in Egypt:

  • Strategic geographic location
  • Low-cost and relatively qualified labour force
  • Growing population (more than 100 million inhabitants) that makes Egypt a strategic market in the region
  • High tourism potential
  • Important energy resources, notably natural gas
  • Public works policy, which offers many investment opportunities to foreign companies
  • A sufficiently diversified economy (energy, tourism, Suez Canal revenues, industrial base, etc.)
  • Government policy that aims at improving the business climate
Weak Points

Disadvantages for FDI in Egypt:

  • Political situation that remains tense and arouses uncertainty for foreign investors
  • Degraded regional security situation
  • Fragile banking sector
  • High poverty rate and persistent unemployment 
  • Infrastructure that remains insufficient
  • Omnipresent public sector and excessive bureaucracy 
  • Shortage of skilled labour
  • Cumbersome customs procedures and non-tariff trade barriers
Government Measures to Motivate or Restrict FDI

Since September 2004, the General Authority for Investment and Free Zones (GAFI) has established an economic program to attract foreign investors, together with an average reduction of 35% customs duties and tariff simplification. Furthermore, Egypt enjoys the support of the FMI to put into place economic reforms (new VAT rate, reduction of subsidies on fuel and electricity, etc.). It shows the government's willingness to improve the business climate, which remains complex. Thus, after the Revolution, Egypt put into place restrictions on capital transfer. Investors are claiming that the approval of transfers may take several weeks.  

Several "megaprojects" may attract foreign investors in the coming years. Siemens already developed the largest gas power generation plant in the world, Egypt also plans to develop a large logistic and industrial platform around the Suez Canal, a new administrative capital city and large agrarian and mining projects.

In most sectors, foreigners benefit from the same treatment as nationals. A joint venture is needed to operate in certain sectors, namely hydrocarbons and real estate. The Law on Imports and Exports was amended to allow enterprises to be 51% Egyptian-owned to import (before, the enterprises had to be 100% Egyptian owned).
The country implemented a number of regulatory reforms, namely a new investment law in 2017; a new companies law and a bankruptcy law in 2018; and a new customs law in 2020 (if the establishment is under the provisions of the new investment law, it will benefit from a 2% unified custom tax over all imported machinery, equipment, and devices required for the set-up of the company).
More information on governmental measures to attract FDI in Egypt is available on the website of the
General Authority for Investment, which developed a special desk for investors. 


Investment Opportunities

The Key Sectors of the National Economy
Agriculture and food-processing industry, tourism, gas industry, telecommunications and media. 
High Potential Sectors
Education (more than 50 million students, at all level of education), franchises, health industry, renewable energy, security services.
Privatization Programmes
Nearly 150 companies are yet to be privatised, among which approximately fifty are in the textile sector as well as ten airports. The latest privatisation program was announced in 2018, involving 23 enterprises (including up to 30% of the shares of Banque du Caire). However, the program has suffered delays due to adverse market conditions, the Covid-19 pandemic and increased global volatility. In January 2022, the government announced the acceleration of the program, aiming at provatising one company every month or every two months.
Tenders, Projects and Public Procurement
Globaltenders, Tenders & Projects from Egypt
Tenders Info, Tenders in Egypt
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
The government retains a monopoly in many service industries as well as in banking (although a program for the privatization of 30% of the shares of Banque du Caire had been announced), insurance, tobacco and entertainment,. It also remains dominant in the textile, steel and aluminium industries.

Finding Assistance For Further Information

Investment Aid Agency
General Authority for Investment and Free Zones in Egypt (GAFI)
Invest in Egypt (government platform)
Other Useful Resources
State Information Service (Egyptian government website)
Doing Business Guides
Doing Business - Egypt