Doing business

Egypt

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
The Limited Liability company Minimum 50,000 EGP, fully paid up when formed.	Minimum 2 partners Their responsibility is limited to their contribution amount.
Joint Stock Company is a public limited company (Incorporated) 250,000 EGP of which half is fully paid up when formed. 500,000 EGP in case of initial public offering. (1/4 fully paid up)	Minimum 2 partners Their responsibility is limited to the contribution amount.
General Partnership Minimum 5,000 EGP	Unlimited number of partners General partner liability is unlimited
Limited Partnership Minimum 5,000 EGP	One general partner, unlimited number of limited partners Limited partner liability is limited to the extent of his share

Business setup procedures

Setting up a company	Egypt	Middle East & North Africa
Procedures (number)	6.0	8.1
Time (days)	7.0	20.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Egypt.
General Authority for Investment
The competent organization: GAFI has a role in guiding and promoting foreign and Egyptian investments. It helps the investors in their administrative steps. GAFI has created a one-stop shop counter and the formalities for setting up a company are done in this counter. The One-stop Shop counter thus provides useful documents on law no. 8 of 1997 for encouraging investments, guarantees, exemptions, company creation procedure, the different zones with special statutes to the investors. For speeding up the setting up process, GAFI is authorized to grant temporary licenses for starting the project. The ITIDA (Information Technology Industry Development Agency) was established by law no. 15 of 2004. It is attached to the Ministry of Information Technology and Communication. ITIDA guides investors for executing their projects with a single counter which helps them with various relevant administrative authorities. The IDA (Industrial Development Authority) which comes under the Ministry of Commerce and Industry has been given charge since 2006 to develop and facilitate industrial establishments. In connection with the governing bodies the IDA recovers, prepares and puts up for sale lands for developing industrial zones by foreign and Egyptian promoters. The State develops the road network and other networks for these lands. The IDA also offers a one-stop shop for industrial investors to give them information on the available lands and help them get the permits for industrial operations.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	9,495	6,712	6,386
FDI stock (millions USD)	59,997.7	66,709.3	73,094.9
Performance Index*, ranking on 141 economies	51	52	-
Potential Index**, ranking on 141 economies	93	-	-
Number of Greenfield investments***	83	103	-
FDI inwards (in % of GFCF****)	31.2	33.6	-
FDI stock (in % of GDP)	36.2	34.8	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field 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. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Egypt

Strong points: The country is in a geographically strategic location. Moreover, it offers a cheap and relatively qualified labor force. Its growing population constitutes a non-negligeable market in the region. Its energy resources are attractive and in addition, the country has in recent years, launched a public works policy (construction of the third metro line, expansion of the port of Sokhna and improvement and renovation of the rail network), which offers many investment opportunities to foreign companies. Finally, the government policy for large scale liberalization and improving the appeal to foreign investors are encouraging signs for foreign investment.
Weak points: Despite privatizations, the inefficient and loss-making public sector remains ubiquitous in some sectors. In addition, the rapid population growth continues to curtail the improvement of the standard of living for Egyptians. In fact, the country registers a delay in its infrastructures in which current investments are not able to make up for.
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 duty and tariff simplification. Though all the economic sectors are open to domestic and foreign investors, there are some that are especially targeted by the Law, which expressly provides the possibility to execute projects under the BOT (Build, Operate, Transfer) form, in the agricultural, industry, mining, tourism and hospitality, air travel, off-shore shipping transport, goods transport services, oil prospection and drilling, infrastructures more specifically for drinking water conveyance, roads, housing and used water recycling sectors. Other sectors are added to this list depending on needs (leasing, venture capital, creation of computer programs and software, etc.). Privatization programs are also open to foreign investors. Some sectors are considered strategic and hence subject to specific legislations: aerospatial, defence, newspaper publishing.
Bilateral investment conventions signed by Egypt: Egypt signed bilateral agreements with more that a hundred countries, including most of the European Union countries, the United States and several African countries, the Middle-East and Asia. On the Mediteranean Basin, Egypt has signed bilateral conventions with Algeria, Spain, France, Greece, Italy, Libya, Lebanon, Malta, Morocco, Portugal, Tunisia and Turkey. These conventions can be referred to on the UNCTAD website.

Procedures relative to foreign investment

Freedom of establishment: In theory, it is guaranteed (except for setting up in Sinai or the military domain). In practice, foreign companies can face some discriminations compared to their competitors from the Egyptian public sector. Their main difficulty is to obtain local bank credit which is still highly state-controlled.
Acquisition of holdings: The acquisition of the majority interest in a domestic company is allowed in Egypt. In fact, holding more than 49% of the capital of a local bank is authorized since law 97/1996.
Obligation to declare: The investor has to provide the following information: the name of the contracting parties, the company's legal form, the name of the company, the type of activity, the length of existance of the company and its capital, the Egyptian and non-Egyptian contribution percentage, the means of subscription and each partner's liabilities. For more information, you can consult the GAFI investment guide.
Competent organization for the declaration: GAFI
Requests for specific authorizations: The founders of joint stock and limited liability companies must furnish a bank certificate showing that 10% of the issued capital has been paid up.

Finding assistance for further information

Investment aid agency: General Authority for Investment and Free Zones in Egypt(GAFI)
Other useful resources: Egyptian government information website
Economic Developments and Prospects in Egypt - African Economic Outlook