Doing Business in Egypt

1
for a Brighter Future

General Authority for
Investment & Free Zones
Sector
Snapshots
&
Investment
for
a
gypt
1
Population:
85.9 million (Jan 2014).
Capital:
Cairo.
Ofcial Language:
Arabic.
Common Languages used:
English, French.
Currency:
Egyptian Pound (EGP).
GDP Growth Rate:
2.1% (2012/2013).
GDP per Capita (USD):
USD 3,426 (Oct-Dec 2012).
GDP in Current Prices:
USD 260 billion (2012/2013).
S&P raises Egypt sovereign credit rating to B- from CCC+
Egypt
Net International Reserves (NIR)
USD 15.5 billion (June 2012).
USD 14.9 billion (June 2013).
USD 17.1 billion (Jan 2014).
Foreign Direct Investment
USD 3 billion (2012/2013).
Unemployment
12.7% (2012)
Exports
USD 26 billion (2012/2013).
Imports
USD 57.5 billion (2012/2013).
Exchange Rate (2012/2013)
USD = 6.45 EGP
EUR = 1.29 USD
.E. = 1.56 USD
2
GAFI
Contents
1 Why Egypt?
1-1 A large, Trained, Competitively Priced Labor Force
1-2 Large Consumer Market
1-3 Developed Infrastructure
1-4 Competitive Tax and Custom Rates
1-5 Population
1-6 Political System
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2 Economic Development
2-1 Economic Road Map
2-2 Proposed Plan to Encourage Investment
2-3 Investment Map
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9
10
11
3 Investment Regime
3-1 Inland Investment
3-2 Egyptian Free Zones
3-3 Investment Zones
3-4 Special Economic Zones
3-5 One Stop Shop
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13
14
17
19
20
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4 Key Investment Regulations
4-1 Investment Laws Incentives and Exemptions
4-2 Mechanisms of Reconciliation and Arbitration with Investors
4-3 Key Investment-Supportive Laws
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26
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5 Sector Snapshots
5-1 Agribusiness
5-2 Tourism
5-3 Textiles
5-4 Petrochemicals
5-5 Real Estate
5-6 Building Materials
5-7 Logistics and Transportation
5-8 Communication and Information Technology
5-9 Retail
5-10 Automotive
5-11 Healthcare
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35
40
45
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55
60
66
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79
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1
1-1 A Large, Trained, Compettvely Priced Labor
Force
- At about 27 million, Egypts labor pool is the largest in
the region. For decades, Egypt has had a reputation as
a net regional exporter of educated, skilled labor. How-
ever, as domestic demand for skilled labor rises, young
people are increasingly choosing to pursue opportuni-
ties at home. Complementing world-class universities
and technical schools, a new national industrial training
program is training workers to fll some 500,000 new
jobs in manufacturing.
- Each year, around 300,000 Egyptians obtain university
degrees, of whom 20,000 are trained engineers and
15,000 have degrees in science and technology. In ad-
dition, about 22,500 graduate with foreign language
skills.
- Skills-intensive and service-based sectors such as ICT,
fnancial services and tourism are among Egypts eco-
nomic leaders. Wages in these sectors are very com-
petitive and more stable than wage levels in other
countries.
Why Egypt?
6
GAFI
1-2 Large consumer market
- Egypt has emerged as a consumer market of signifcant
importance in the region, as witnessed by the arrival of
dozens of global brands and the sharp expansion of re-
tail sales in the past few years. This is partly due to the
sheer size of Egypts population that puts it as the most
populated country in Africa and the Middle East, as well
as the fact that 50% of Egyptians are between the age
15 and 44 has also impacted spending and investment
trends.
- Egypt has access to large key markets through vari-
ous multilateral and bilateral trade agreements with the
USA, European, Middle Eastern and African countries;
which secure benefts to Egyptian-based producers
supplying these markets.
- Key global markets in Europe, the Middle East, Africa
and the Indian Subcontinent are all readily accessible
from Egypt. Closer to the European and North Ameri-
can markets than other major exporters including India,
China and the Philippines, Egypt is also located on key
international logistics routes.
- Egypt enjoys the existence of the Suez Canal, which
is considered to be the shortest link between the east
and the west due to its unique geographic location. Ap-
proximately 8% of the worlds maritime shipping passes
through the Suez Canal each year.
1-3 Developed Infrastructure
Egypt boasts a world class infrastructure base. Three in-
dependent mobile (cellular) phone networks cover nearly
100% of the countrys inhabited land. Wire line broad-
band is readily available in urban areas. The countrys 15
commercial ports serve the nations exporters and import-
ers alike, while an expanding, upgrading airport network
caters to both passengers and cargo traffc, Egypts Air
Cargo Airport currently has three cargo terminals, deal-
ing with textiles, vegetables and many industrial prod-
ucts. The country has also a well-established network of
railways and roads.
Egypt also provides competitively price and reliable sup-
plies of power, water and gas. Egypt possesses an abun-
dance in natural resources that can easily meet the needs
of agricultural, industrial and mining activities.
1-4 Compettve Tax and Custom Rates
Tax Systems
As part of the government`s ongoing efforts to improve
Egypt to become the most attractive investment destina-
tion in the MENA region, it modifed the Tax Law, which
reduced corporate tax rates from 42% to 25%; personal
tax from 32% to 25%; and sales tax/value added tax
10%; and 40.55% tax on companies operating in the ex-
ploration and production of oil and gas.
Customs Systems
Within its efforts to improve Egypts position as a global
manufacturing hub, tariffs range from 0 to 30% according
to the degree of processing and 0 to 10% on machinery
and equipment used in manufacturing.
1-5 Populaton
Since ancient times, Egypt has been carrying census for
its population. The frst census was carried out in 1882.
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1
The population was estimated at 6.7 million citizens.
The government carries out a census every decade. The
last one was held in 2006 by the Central Agency for Public
Mobilization and Statistics (CAPMAS) and concluded that
the population in Egypt had reached 76,500,000.
Egypt is one of the highest population densities and
ranked 15 internationally and third in Africa.
At 1
st
October 2013, Egypts population reached 85 mil-
lion according to the daily population counter as an-
nounced by the Central Agency for Public Mobilization and
Statistics (CAPMAS).
Meanwhile the estimated number of Egyptian exports is
8 million according to fgures released by the Ministry of
Foreign Affairs.
The capital Cairo has the highest population density
where 10.7% of the population resides followed by Giza
where 8.6% of the total population resides.
1-6 Politcal System
The Arab Republic of Egypt is an independent united
sovereign country and does not accept division. It adopts
a democratic system. Sovereignty is for the people; they
practice and protect it and safeguard their national unity.
The people are the source of authority.
Egypt adopts a republican presidential system where the
Egyptian president is the actual head of state and head
of executive authority. He rules by virtue of the constitu-
tion and law in the presence of the legislative and judicial
authorities.
The political regime is based on principles of democracy
and citizenship which renders all citizens equal in terms
of rights and duties. The regime is also based on a multi-
party system, peaceful rotation of authority, separation of
authorities and balance among them, the rule of law and
respect of human rights and freedoms.
It is not permissible for a political party to be established
on the basis of discrimination between citizens because of
gender, ethnicity or religion. The political systems works
to safeguard the national security, defense of the home-
land and protection of Egypts land and views it as an
honor and sacred duty.
50%
13%
6%
10%
21%
From 15 to 44
From 45 to 59
Above 60
From 1 to 4
From 5 to 14
Source: CAPMAS
Egyptian Population by Age Group
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2
Successive Egyptian governments have been convinced
that they should be committed to achieving economic
development through reform and economic liberalization.
Therefore, the Egyptian governments adopted a series
of reforms covering a range of sectors, such as fnan-
cial, stock market, trade, exchange rate, and economic
growth, as well as the business environment and invest-
ment climate in general.
2-1 Economic Road Map
The most important features of the Economic Road
Map are:
- Established time frame work for both urgent and long-
term projects in order take advantage of them now and
in the future (with coming governments).
- Providing stimulus investment package in order to hit a
3.5% development rate by the end of 2013/2014.
Economic
Development
10
GAFI
- Raising investment rates at this phase, depending on
the government investments, especially in labor-inten-
sive projects, and the completion of projects that were
launched earlier and then stopped.
- Enacting legislation contributing to attracting foreign
investment; resuming reconciliation with businessmen;
introducing amendments to rules, regulations and in-
vestment environment; and encouraging fnancial insti-
tutions to take risk and fnance.
- Achieving social justice through a variety of service
projects in the feld of housing, such as the construc-
tion of 50,000 housing units for low-income categories.
- Completing the infrastructure of the industrial zones in
order to contribute effectively in boosting production
and creating more job opportunities.
- The government is also considering injecting about EGP
5 billion as a second stimulus package to stimulate local
economy in the short term. The decision to inject the
new package came after the government had envisaged
the cost needed to complete the above-mentioned proj-
ects, which it had set up about 80 % of them.
- Developing the Golden Triangle in Upper Egypt, which
refects the States interest in maximizing the advantage
of Egypts natural resources and mineral wealth in Up-
per Egyptian governorates.
- The national project for the development of level cross-
ings on the railway network aims at raising safety rates
and securing railways.
2-2 Proposed plan to encourage investment
- An integrated plan to support, encourage and attract
Arab and foreign investments is underway based on the
removal of barriers and obstacles to foreign investors
and opening up new areas for investment in nation-
wide, especially in infrastructure projects.
- Offering more investment opportunities and projects in
various economic sectors.
- Organizing promotional visits for foreign delegations to
update them on the advantages of investment in Egypt.
- Cooperation and coordination with international invest-
ment institutions to brief them about the benefts of
investment in Egypt and the measures that have been
taken to improve the investment and business atmo-
sphere.
- Launching a project for streamlining the procedures
of licensing businesses and land from one place within
four months.
- Encouraging investment in infrastructure projects,
which provide more jobs and inject liquidity in the local
market. Energy in general, whether oil or electricity, is
an important sector which the current government is
giving due care through maintenance projects and the
creation of gas stations. In addition, development of
the textile sector is underway.
- The State is planning to establish a range of new free
zones, aiming at boosting Egyptian exports, providing
more job opportunities, transferring technology, and
strengthening ties with the companies operating in the
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2
local market. There are nine free zones in various gov-
ernorates, and the government is keen to establish new
ones.
- Coordination with banks and business organizations to
assist the stuck and closed factories in the new indus-
trial cities through rescheduling their debts in order to
re-operate.
- Security is most important. Achieving political and
security stability is a main point in the Egyptian gov-
ernments strategy. The ministries of Investment and
Interior implemented security measures to secure the
projects in the free and investment zones. This has led
to noticeable stability and remarkable improvement in
the security situation in Egypt.
2-3 Investment Map
As the government is keen to make investment opportu-
nities available and establish national projects to ensure
sustainable development, the Ministry of Investment sur-
veyed the whole investment opportunities available at all
ministries and their agencies and governorates. This is
aimed at making a master investment plan available for
investors.
The projects listed in the map should be compatible with
the following standards:
1. Complying with the established local development
plans.
2. Outlining the land available for investment, its geo-
graphical location and the type of activity proposed to
be established on it.
3. Naming the government body entitled for land alloca-
tion, making sure that there are no problems related to
the establishment of the proposed activity.
4. The availability of the necessary utilities to these lands
in order to establish the project confrming that the
concerned ministry should back serious investors to
obtain the licenses required for the establishment of
projects.
5. Defning the method of launching investment opportu-
nity for investors (direct bidding, public-private partner-
ships [PPP program] according to the law of bids and
tenders) as well as the scheduled programs relating to
bidding.
6. The frst stage of the investment map currently in-
cludes 293 projects which have met the above men-
tioned standards (262 projects in the Governorates,
9 projects are PPP, 6 national projects, 4 projects
launched by the Ministry of Petroleum, and 12 projects
launched by the Ministry of Transport).
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3-1 Inland Investment
Investment Law No. 8 of 1997
Covers the following activities and felds:
- Reclamation and cultivation of barren and desert land.
- Animal, poultry and fsh production.
- Manufacturing and mining.
- Tourism: hotels, hotel fats, motels, resorts and tourist
transportation.
- Transportation of cooled goods and freezers of keep-
ing agricultural produce, processed goods, foodstuffs,
container terminals, and grain silos.
- Air transport and related services.
- Sea transport.
- Oil services relating to digging and exploration, as well
the installation of natural gas facilities and natural gas
transport.
- Housing projects for non-administrative purposes.
- Infrastructure projects for drinking water, sewage, elec-
tricity, roads and communications.
- Medical facilities.
Investment
Regime
14
GAFI
- Financial leasing.
- Securities underwriting.
- Venture capital.
- Computer software and high-tech products.
- Projects funded by the Social Fund for Development.
Section Two of the law covers the investment guarantees,
while Section Three reviews the investment incentives
(tax incentives in accordance with the Tax Law No. 91 of
2005, land allocation, free zones). Section Four has been
added under Law No. 13 of 2004 and includes articles
related to facilitating investment procedures in Egypt.
Corporate Law No. 159 of 1981.
This law regulates joint stock companies, companies lim-
ited by shares, and limited liability companies and their
respective provisions. It also provides for the provisions
relating to merger, liquidation and changing the entity of
the company.
Public Private Partnership
In 2006, the Egyptian government developed a new long-
term policy for activating partnership with the private
sector in order to boost the private sectors contribution
to investment in infrastructure projects. Therefore, the
Egyptian government activated the partnership policy and
program with the private sector through the establish-
ment of the Central Unit for Partnership with the Private
Sector at the Ministry of Finance. Egypt is implementing
many systems of partnership contracts between the pub-
lic and private sectors, including the PPP (Public-Private
Partnerships) and BOT (Build, Operate and Transfer), in
addition to other mechanisms.
Partnership between the public and private sectors in
Egypt is governed by Law No. 67 of 2010 that regulates
the private sectors participation in infrastructure proj-
ects, services and public utilities. This law also provides
guarantees to partnership contracts, as it does not allow
sequestration or taking any action against facilities, ma-
chinery and equipment allocated to the execution of the
participation contract and operation of the project.
The law also defnes the institutional framework for the
partnership between the public and private sectors, rep-
resented in the Supreme Committee for Partnership Af-
fairs and the Central Unit for Partnership.
3-2 Egyptan Free Zones
Egypt started the establishment of free zones more than
forty years ago in order to support the national econo-
my through the creation new jobs, increasing sources of
foreign exchange, attracting foreign investments, intro-
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ducing advanced technology, developing labor skills and
managerial capabilities, and bringing about integration
between the companies operating in free zones and those
working inside the country.
What is a Free Zone?
Free zones refer to designated areas within a States terri-
tory. Despite the fact that they fall within the States politi-
cal borders and are subject to its administrative authority,
they have a special status in terms of customs, imports,
monetary and other issues related to imported/exported
goods. The countrys normal economic procedures are not
applicable generally to free zones.
Objectives of Free Zones
1 Providing job opportunities and making a qualitative
leap in skills.
2 Boosting Egyptian exports to foreign countries.
3 Introducing advanced technology, especially in the in-
dustrial and service felds.
4 Attracting and accumulating capital.
5 The establishment of integration between free zone
companies and those operating in the domestic market.
Incentives and guarantees granted to free zone
projects:
Freedom of
- Choosing the feld of investment.
- Transferring profts and invested capital.
- Importing from domestic or foreign market.
- Pricing products.
- Importing and exporting without being restricted to the
Exporter and Importer Register.
Absence of:
- Restrictions on the nationality of capital.
- Capital Limits.
- Subjecting the projects imports and exports to the im-
port and tariff regulations applicable in the country.
Exemptions:
- Capital assets and production requirements of the proj-
ect are exempted from taxes and customs duties.
- Imports and exports of the free zone projects are ex-
empted from taxes and customs duties.
- All domestic components are exempted from customs
duties if the products are sold in the local market.
Guarantees:
- Free zone projects are guaranteed against nationaliza-
tion or expropriation.
- Public lawsuits may only be fled against the projects
after the General Authority for Investment (GAFI) ap-
proval.
Also
- Residence facilitation is granted to incoming foreign in-
vestors.
- Foreign workers are granted residence permits at the
request of the project.
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GAFI
Types of Free Zones
1- Public Free Zones
The public free zones refer to a plot of land fenced from
all sides where a range of industrial, service and storage
projects are set up. (The land is allocated to the projects
on an annual rent/m
2
basis). This runs in accordance with
the characteristics and requirements set forth by the In-
vestment Law No. 8 of 1997 and its amendments.
There are now nine public free zones scattered nation-
wide and which are provided with utilities and infrastruc-
ture necessary for operation (including roads, electricity,
drainage stations, water systems, telephones, etc.). In
addition, there are integrated customs, police, and se-
curity units at every zone working around the clock. It
has been taken into account that the free zones in Egypt
should be distinguishably located in major cities where
labor and supportive potential are available, in addition to
being close to seaports and airports.
Public Free Zones are:
- Alexandria Public Free Zone
- Nasr City Public Free Zone
- Port Said Public Free Zone
- Suez Public Free Zone
- Ismailia Public Free Zone
- Damietta Public Free Zone
- Shebin El Kom Public Free Zone
- Keft Public Free Zone
- Media Production City in 6th October
2- Private Free Zones:
A project can be established outside the area of a public
free zone in case there is no enough space in the pub-
lic free zone or if the project site is a key factor for its
economics, such as being near to raw material sources
or a certain seaport or road for considerations related to
transportation of raw materials or products. In this case,
the project is called a private free zone that should be
confned to a single project. The investor selects the proj-
ect site which should be either owned or rented by him.
GAFI welcomes the establishment of the project as a pri-
vate free zone that is compatible with the following re-
quirements:
Key felds and activities permitted:
- Harbor development services and logistics-related ser-
vices.
- Specialized petroleum-related services and industries.
- Reinsurance.
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- Design, construction, management, operation and
maintenance of power plants of different sources.
- Some major (labor-intensive and high value-added) in-
dustries.
3-3 Investment Zones
Investment Zones were created under Law no. 19 of
2007, which introduced a new investment scheme never
included before in the Investment Guarantees and Incen-
tives Law, which is the Investment Zones regime . The
new law allowed the establishment of investment zones
as per a Prime Minister decree No. 1675 of 2007 issued
and specialized to regulate work at investment zones in
whatever investment domain stipulated.
Mission
Support Egypts economic growth through effective in-
vestment system characterized by the ease and conve-
nience in dealing with investors
Objectives
- Establishing integrated clusters in all felds.
- The investor (the developer) is the core element in the
establishment of the investment zone as it bears the
main burden of implementing the infrastructure and
also provide all the services to the zone, whether the
developer is a private company or governmental au-
thority.
- Widening the scope of economic and social development
across the country with the best employment of the
countrys competitive advantages.
- Investment development in Small and Medium Enter-
prises (SMEs).
Incentives
- Business homogeneousness in the single zone, offering
operating and marketing competitive costs thanks to
industrial integration.
- Companies which are established in the investment
zones are exempted from stamp and documentation
taxes for a period of fve years starting from the date
of registering the company at the commercial register,
as well as the contracts for land registration which are
necessary for companys establishment.
- Companies and establishments within the investment
zone shouldnt be nationalized or Confscated.
- It is not permitted by an administrative way to impose
receivership on companies and enterprises or seizure
or freeze its money and assets.
- Is not permissible for any administrative party to inter-
vene in the pricing of companies products or to deter-
mine its proft.
- Is not permissible for any administrative party to can-
cel or suspend the use of real estate licenses, which
permits the use of a company or the establishment in
whole or in part except in the case of violation of the
license terms
- The board of directors is responsible for approving the
projects that will be established in the investment zone
and entitle to issue all licenses required to facilitate the
procedures.
The Established Investment Zones:
There are (13) investment zones specialized in various
felds and distributed among (7) Egyptian governorates
as follows:
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GAFI
Zone Activity Governorate Location Area(Acre)
Industrial zones
1
CBC Egypt for Industrial Develop-
ment
Building materials Giza 6
th
of October 357
2 Polaris International Industrial Park Textile industries Giza 6
th
of October 463
3 The Industrial Development Group Auto-feeding industries Giza 6
th
of October 463
4 Pyramids Industrial Parks Engineering industries Sharqiya 10
th
of Ramadan 262
5 Al-Tajamouat Industrial Park Textiles and RMG Sharqiya 10
th
of Ramadan 261
Small and medium enterprises (SMEs)
6 Meet Ghamr SMEs Dakahlia Meet Ghamr 17.6
7 Al-Saf SMEs Giza Al-Saf 40.4
Higher Education and Scientifc Research
8
City of Scientifc Research and Tech-
nology Applications
Nanotechnology and biotechnology Alexandria Alexandria 135
9 Cairo University
Higher education and scientifc
research
Giza 6
th
of October 749
10 Ain Shams University
research
Qalyubiya Obour 163
11 Fayyoum University
research
Fayyoum New Fayyoum 150
Communication and Information Technology
12 City of Scientifc Research Information technology Cairo Maadi 75
Commercial and service activities
13 Cairo Airport Investment Zone Commercial and service Cairo Cairo Airport 2.289
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3-4 Special Economic Zones (North West Gulf of
Suez) SEZone
Brief
In 2002, the Government of Egypt enacted Law No. 83
for the year 2002 for establishing Economic Zones of a
Special Nature. North-West Gulf of Suez Special Economic
Zone (SEZone) which is located in the Suez Governorate
in the Sokhna area and adjacent to the Sokhna Port near
the southern entrance to the Suez Canal.
SEZone is considered the frst economic zone with a spe-
cial nature to be established in Egypt by Presidential De-
cree no. 35 for the year 2003.
SEZone enables customers to provide world-class value-
added supply chain activities. Fully self-sustaining, SE-
Zone is a key benchmark in the evolution of Egypt.
SEZone is a landmark area, with perfect infrastructure
facilities, complete functions, advanced technologies, ex-
cellent environment, rational industrial structure, highly
developed productivity and all round economic and social
progresses. The land area earmarked for the SEZone is
approximately 20.4 km
2
.
Vision
To be a premier international investment destination by
creating a superior business environment for attracting
investments to Egypt while ensuring maximum benefts to
the local community that upgrades the quality of life over
the coming 15 years.
Mission
Establishing a state-of-the-art special economic zone in
the heart of the Suez Gulf in Egypt. The SEZone has de-
velop an international recognition and reputation for be-
ing a competitive business location that provides Egyptian
and foreign investors with top-class infrastructure, market
access, and streamlined administrative procedures.
Development Objectives
Establish and develop the North West Gulf of Suez Eco-
nomic Zone according to the highest international stan-
dards.
Attract foreign direct investments to the Zone for the
purpose of establishing industrial and service projects
capable of competing with their counterparts regionally
and internationally.
Direct employment creation, labor skills upgrade, and
income generation.
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GAFI
Increase Egypts share in the international trade.
Increase exports, not only in terms of accelerating ex-
port growth, but export diversifcation as well.
Incentives and Benefts
10% unifed income tax in the SEZone (versus 25%
outside of SEZone) applicable on the proft of the capi-
tal companies and on income of natural persons and on
revenues derived from land and non residential build-
ings.
5% income tax. (versus 10% - 25% outside the SE-
Zone)
A one-stop shop through legislation that provides the
body with single-point authority over other government
agencies in core areas.
The Authority has a supreme committee that supervises
the taxation system in SEZone.
The Authority has a special customs service under the
supervision of a Supreme customs committee.
Lowest cost production center in the Middle East-North
Africa in many sectors.
Allowing enterprises access to the domestic market, du-
ties on sales to domestic market will be assessed on the
value of imported inputs only.
Access to productive skilled Egyptian labor in a number
of manufacturing sectors at competitive costs.
Except for those submissions laying within the jurisdic-
tion of the Summary courts and requests to revoke ad-
ministrative decisions accompanied by submissions to
suspend their enforcement, the dispute shall only be
referred to court after having been submitted to the
Dispute Settlement Center and that the panel has ren-
dered its decision or after 60 days from the date a mo-
tion was fled to appeal the decision and the panel did
not decide the appeal.
Contact
Email: info@sezone.gov.eg
Web site: www.sezone.gov.eg
3-5 One Stop Shop
Defnition
One Stop Shop is one of twelve departments assigned to
provide services to investors whether during the phase
of establishing companies or post establishment services
Objectives
Its principle objectives are as follows:
Aggregation of all government agencies with which in-
vestors interact in one location for the purpose of ob-
taining approvals, permits, and licenses needed for the
establishment and operation of companies.
Facilitate investors access to nearby and integrated ser-
vices with continuous developments.
Overcome obstacles which investors face through the
presence of governmental agencies with which they in-
teract in one location; development of its performance
for the satisfaction of investors, and an improvement
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3
of the investment climate through easier governmental
procedures.
In years 2006, 2007, and 2008, the One Stop Shop won
the second place in a competition for best Governmen-
tal Service Outlet for Citizens, organized by the Ministry
of State for Administrative Development.
In 2009, the One Stop Shop got The Development of
Performance of Governmental Services Outlets award,
in the Competition for the excellent Outlet, organized
by the Ministry of State for Administrative Development
for the ffth year.
Awarded a Certifcate of Appreciation from the Ministry
of Tourism in 2011 for an excellent performance in the
enrichment of the tourism industry.
Services provided by the One Stop Shop
1. Provides services related to the establishment of com-
panies according to the Investment Law No. 8 for the
year 1997, and Corporate Law No. 159 for the year
1981.
2. Provides post-establishment services, which include
the following:
A. Legal Services
a. Adoption of the minutes of meetings of extraordinary
assemblies.
b. Issuing legal decisions of the amendments to the
contract and statute. Change of the legal form (merg-
er, division and transition to the inland investment
system).
c. Change of legal form (merger, division and transition
to the domestic investment system).
d. Liquidation of companies.
e. Endorsement of minutes of meetings of Board of Di-
rectors.
f. Approval of Ordinary and Extraordinary General As-
semblies.
B. Technical Services
a. Endorsement of Import and Export Bills.
b. Recommendations for customs release (Implemen-
tation of unifed 5% Customs Tariff on machinery and
equipments necessary to start the business).
c. Recommendations for exemption of land contracts,
mortgages and loans from Stamp Tax and registra-
tion and documentation fees.
d. Recommendations for external parties.
C. Governmental Services
a. Recommendations for granting residence permits to
foreigners.
b. Recommendations for granting and renewal of work
permits for foreigners.
c. Recommendations for recruitment of labor subordi-
nates.
d. Approval of representative offces (registering,
amendment, cancellation).
22
GAFI
e. Approval of foreign companies branches (recording,
amendment, cancellation).
f. Other recommendations.
D. Announcements in The Investment Journal
a. Publishing of contracts and statutes of companies.
b. Publishing of amendments of decisions and statutes
of companies.
c. Publishing some special decisions.
E. Tax Exemptions Services
a. Formation and endorsement of committees to start
business and determine the executive position of
companies.
b. Automatic tax exemption for companies and issuance
of certifcates thereof.
F. International Assessment
a. In 2007 Egypt was named The Most Reformed
Country in the Doing Business report issued by the
World Bank. It remained among the ten most re-
formed country during 2009 and 2010.
b. The World Bank held two workshops in Abu Dhabi
and Cairo to study Egypts experience in the one-
stop shop service for the Investment Authority.
c. The World Bank praised Egypts leading experiment
in the One Stop Shop Following the example of
Egypts One Stop Shop, it will be examined in other
countries. It is designed in a manner that encourages
its emulation. Many countries asked for Egypts as-
sistance in the establishment of a similar One Stop
Shop.
Many countries sought Egypts assistance in the es-
tablishment of a similar Investment Services Com-
plex. GAFI contributed in transmitting its experiment
to the following countries:
- Arab Countries: Yemen, Syria, Sudan, Libya, Iraq,
and Comoros.
- African Countries: Nigeria, Botswana, Kenya, Mali,
and Seychelles.
23
4
4-1 Investment Laws Incentves and Exemptons
1- Investment Law No. 8 of 1997
Multiple tax exemptions
- Enjoy a life-time tax exemption for your project if it is
established under the free zone regime.
- Invest in Egypt and enjoy tax exemptions on the profts
of the following activities:
1. Land reclamation or land farming for a period of 10
years from the date of commencement of the activity.
2. Poultry production, beekeeping, livestock production,
fsheries and fshing boats for a period of 10 years from
the date of commencement of the activity.
3. Interest earned by individuals from their deposits and
savings accounts at banks and post offces as well as in-
vestment, saving and deposit certifcates issued by the
Central Bank of Egypt (CBE) or other banks registered
in Egypt.
4. Revenues of the individuals dealing in securities listed
on the Egyptian stock market.
Key Investment
Regulatons
24
GAFI
5. Revenues obtained by individuals from:
A. Yields of bonds and fnancial instruments of different
types listed on the Egyptian stock market.
B. Dividends on the shares of shareholding and limited
companies, shares of capital in limited liability com-
panies, partnerships, and shares of non-shareholders
in joint stock companies.
C. Projects funded by the Social Fund for Development
(SFD) within the limits of this funding (for fve years)
from the date of commencement of the activity.
Exemption of contracts
- The charters of establishment, the mortgage and loan
agreements related to the activities of the companies
are exempted from the fscal stamps and authentication
fees for fve years from the date on which such compa-
nies are registered in the Commercial Register .
- The title of deed of lands allocated to build such; com-
panies are exempted from fscal stamps and authenti-
cation fees
Other Exemptions for Inland Investment
- An amount equal to a percentage of the paid-up capital
of the joint stock company shall be exempted from the
corporate proft tax. This percentage is determined by
the Central Bank of Egypt lending and discount rates,
provided that the companys stocks are listed on the
stock exchange.
- Revenues of bonds, fnancial instruments and other se-
curities issued by joint stock companies are exempted
from the tax on foating capital.
- Revenues resulting from corporate merger or split or
from changing the corporate legal entity are exempted
from taxes and fees.
- Yield of re-rating in-kind portions, which are included
in capital of the associations of capital when they are
established or when their capital is increased, are ex-
empted from the tax on profts.
Customs exemptions
- Full customs exemptions for free zone projects.
- A unifed customs tax of 5% on machinery, equipment
and devices.
- All imports of free zones are exempted from customs
duties except for passenger cars.
- Transit goods destined to other ports across the Egyp-
tian territory are exempted from customs duties.
- A unifed customs duty of 5% and a sales tax are to
be paid for the machinery, equipment and devices im-
ported by the companies operating in the country.
- An importation card is not required.
2- Incentives for investment in Upper Egypt gov-
ernorates
Allocation of lands for free in Upper Egypt gover-
norates
Under Presidential Decree No. 58 of 2001, provisions of
25
4
Law No. 5 of 1996 concerning the rules of free dispos-
al of desert lands owned by the State or public juridical
persons, or renting them at a nominal rental value for
establishing investment projects on them or expanding
them are applicable to the lands on which industrial areas
are designated in the provinces of Minya, Assiut, Sohag,
Qena, Aswan and New Valley. The city of Beni Suef was
included to this decree, therefore investors can dispose of
the lands that include buildings for free, provided that the
ownership may not be transferred to the benefciary be-
fore the completion of the implementation of the project
and the actual start of production.
Employment incentives
Under Minister of Trade and Industrys and Minister of
Finances Decree No. 719 of 2007, projects that are set
up and get operation license and industrial register within
three years subsequent to the issuance of the decree shall
be granted additional incentives as follows:
1. An amount of EGP 15,000 for every actual job oppor-
tunity provided by the project at a maximum of 70% of
the total annual wages. This is applicable to the new
projects and expansions of existing projects whose in-
vestment costs exceed EGP 15 million, according to the
following requirements:
- The worker should get a certifcate approved by the
Board of Industrial Training stating that he passed a
training in his profession or job.
- Technical labor should not be less than 80% of the
total number of the factory workers.
- Workers should be primarily from the governorate
where the factory is established, not working in its
branches outside the governorate.
2. Application of incentives by 100% on all industrial
zones approved in the gover-
norates of Aswan, New Valley,
Minya, Assiut, Sohag, Qena and
Luxor city and by 50% on Beni
Suef.
3. These incentives are not ap-
plicable to the projects that are
granted tax exemption or any
other incentives.
This incentive is given through a
payment receipt for the consump-
tion of electricity, fuel, water, insurance, sales tax, and
any government expenditures. These incentives are paid
in batches during a period of 60 days from the date of
application through the Industrial Zones Development
and Support Fund at the Industrial Development Author-
ity (IDA).
3- Streamlined procedures issued by Ministry of
Trade and Industry
- Reducing the value of the letter of guarantees fees for
the industrial lands in the new cities and governorates,
with retroactive application to previous letters in force
in accordance with the applicable rules at the IDA.
- The investor has the right to recover liquefed letters of
guarantee if the reasons for liquefaction are proven.
26
GAFI
- A permanent industrial register can be issued and re-
viewed every fve years if the conditions are met.
- Inspections that were carried out by the Industrial De-
velopment Authority are cancelled, but they can be
made by IDA chairman if requested.
- Activating the role of the IDAs offces nationwide to
serve as the main headquarters in issuing full licenses
except for the allocation of land.
- Paying the subscription fees of the Chamber of Industry
and the Federation of Industries in the One Stop Shop.
- Increasing IDA branches in a number of governorates
to fnish all approvals and licenses for investment fa-
cilities without reference to the main headquarters in
Cairo.
- Launching an initiative to provide the necessary re-
sources to the Credit Risk Guarantee Program to devel-
op small and medium-sized enterprises and help them
to get fnancing.
4-2 Mechanisms of Reconciliaton and Arbitraton
with Investors
1. Investors Care Management: It was established to
support and guide investors to settle any dispute they
may face with various government agencies.
2. Dispute Settlement Center: It was established in
2009 to achieve reconciliation in disputes between busi-
ness partners.
3. Cabinet-based Investment Dispute Settlement
Commission: The General Authority for Investment
(GAFI) hosts its technical secretariat.
4. Contract Committee at GAFI: It resolves any dis-
pute that may arise between investors and various gov-
ernment agencies through the commercial contracts
that were previously signed.
5. Amended Investment Law No. 8 of 1997 accounts
for reconciliation between the investor and the govern-
ment in cases of proven fraud (value of total settled
disputes amounted to more than USD 10 million).
Criteria of reconciliation with investors
Of the most important criteria for the reconciliation nego-
tiations are the value of disputed land price and location,
percentage of constructed facilities on it, and the extent
to which the company is willingto inject additional invest-
ments at this critical stage. If the project reached an ad-
vanced phase of implementation, settlement will be given
a much higher priority.
4-3 Key investment-supportve laws
1- Labor Law in Egypt
The Egyptian labor market is regu-
lated by the unifed Labor Law No.
12 of 2003. The law comprises 257
articles that address all the legal
aspects regulating the Egyptian
labor market. The law aims at in-
creasing the private sector involve-
ment and at the same time striking
a balance between employees and
employers rights. Amongst the
most important issues that the law
addresses is the right of an em-
27
4
ployer to fre an employee and the conditions pertaining
to this as well as granting employees the right to carry
out a peaceful strike according to controls and procedures
prescribed in the law.
Conditions for foreign residents
Legal work permits and work licenses from the workforce
offce are required. A certifcate of experience is required
from each foreign worker to be approved by either the
Ministry of Foreign Affairs or the respective Egyptian em-
bassy abroad.
Conditions of entry & exit of foreigners (visas)
Tourists and visitors are generally permitted to enter the
country with a minimum of immigration formalities. Ex-
cept for nationals from certain countries who must obtain
visa from the Egyptian Consulate in the country where
they live, most visitors are required to get temporary visas
to enter Egypt. These are issued at ports.
A. Tourist Visas
Tourist visas are issued to foreign nationals visiting Egypt
for recreational purposes or to foreign nationals whose
stay in Egypt will not exceed three months. It is possible
to renew this visa for similar durations.
B. Temporary Visas
Temporary visas are issued to foreign nationals who are
entering Egypt for reasons other than recreational pur-
poses and whose stay will exceed three months but will
not exceed one year.
To work in Egypt, all foreigners must obtain a work permit
from the Ministry of Manpower and Immigration in the
relevant Governorate.
Legal Working Hours
- Employees should not work more than eight hours a day
or 48 hours over a six days working week.
- Most private sector employees work 5 days a week, usu-
ally Sunday to Thursday. The number of working hours
may be increased to 9 hours a day in certain circum-
stances.
- Employees are entitled to one whole working day-off
each week. Certain exceptions apply when work is in-
tended to prevent a serious accident or to cope with a
heavy workload. In such situations, the employee must
be paid overtime.
Foreigners Record
- The number of non-Egyptian employees in any institu-
tion must not exceed 10 percent of the total workforce
for unskilled or semiskilled workers; in contrast to a 25
percent foreign limit on skilled workers.
- The total compensation of foreign employees must not
exceed 30 percent of the total payroll of the establish-
ment.
- The minister concerned may designate certain activities
which cannot be exercised by foreigners in Egypt, as
well as the maximum number of foreigners to work in
establishments in Egypt.
- In an attempt to enforce control on employing foreign-
ers, the ministry obliges organizations employing for-
eigners to make a record including the following:
The foreigners name, surname, nationality and re-
ligion
28
GAFI
Birth date
Job title and exact job description
Qualifcations
Date and number of his employment permit
Repatriation of Salaries
Article 111 of the Law No. 88 of 2003 Promulgating the
Law of the Central Bank, the Banking Sector and Money,
amended by Law No. 162 of the Year 2004 and Law No.
93 of the Year 2005 states that every natural or legal
person may maintain all the foreign currencies transferred
thereto, or owned or possessed thereby. He shall have
the right to conduct any foreign currency transaction, in-
cluding inward and outward transfers, and local dealing,
providing these transactions shall be made via the banks
authorized for dealing in foreign currencies.
Labor (Trade Unions)
There are no legal restrictions on establishing private sec-
tor unions, although such unions are uncommon.
There are 23 trade unions, belonging to the Egyptian
Trade Union Federation (ETUF), which supervises the
nomination and election procedures for trade union of-
fcers and entitles public authorities to intervene in union
fnancial activities.
The wage (Article 13 of MD 136 of 2003)
2- Law on Protection of Intellectual Property
Rights
Law No. 82 entitled Law on the Protection of Intellectual
Property Rights was issued by the Egyptian government
in 2002, guided by obligations and rules under TRIPS.
The core objective of this law is to protect intellectual
property rights in Egypt.
The law covers patents, industrial designs, semiconduc-
tor chip layout design, trademarks, copyrights, and plant
varieties.
3- Law on Protection of Competition and Preven-
tion of Monopoly Practices
Law No. 3 of 2005 and its amendments in Law No. 193 of
2008 ensures practicing economic activity in a way that
does not lead to preventing, restricting or harming the
freedom of competition through a set of regulations.
29
5
Agribusiness
With a growing population of more than 80 million, Egypt represents one of the largest markets in the region, agricul-
ture contributed to around 14.5% of Egypts GDP in 2011/2012.
The government has made development of the agricultural sector a priority ensuring continued levels of investment,
the countrys food production industry is better developed than that in many neighboring states, creating strong export
opportunities.
Sector
Snapshots
30
GAFI
Core Areas for Investment: Agricultural product cultivation, infrastructure proj-
ects, mega farms, production and exports.
Diversity: A wide range of fruits and vegetables are already being grown in the
country and the foundation is being laid for expansion. With government support, the
Food Products Exporters Council is now targeting an export goal of USD 1.5 billion
annually by 2020.
Climate: Egypts climate - which allows for extended and extra growing seasons -
and signifcant groundwater resources make it particularly conducive to agribusiness
projects. Especially benefcial to the sector is the ability to cultivate winter crops from
November to May, when agricultural production becomes very limited in Europe and
northern Asia.
Preferental Access: Egyptian agriculture and food exports enjoy preferential ac-
cess to important markets including the European Union and the Arab world.
Locaton: Straddling Africa and Asia, situated on the Mediterranean, and midway
between East and West, Egypt is ideally located for exporting agricultural products to
all major consumer markets. The countrys geographic location makes exporting to
Europe and the Gulf fast and painless.
A Robust Infrastructure: Several years planning for mega-farm projects in North
Sinai and the Toshka region of Upper Egypt have resulted in extensive infrastructure
and the means to export rapidly to international markets.
Area-specifc investments will target dedicated corridors to reach the closest airport
which will greatly reduce the start-up time needed to prepare future projects. Egypt
is also looking to reduce the cost of logistics in supplying importing countries with
agricultural goods.
Compettve Strengths and Capabilites
Egypt represents one of the
largest markets in the re-
gion; agriculture contributed
to around 14.5% of Egypts
GDP in 2011/2012.
There are 6,130 companies
operating in the Agribusi-
ness space in Egypt with
total capital reaching EGP
50 billion and manpower of
5 million (4 million indirect
employment and 1 million
direct employment).
Total exports of agriculture
products during the pe-
riod (January-June) 2013
reached USD 1,44 billion
representing 12% of total
exports.
Land reclamation increased
during the FY 2011/12 to
reach 40504 acres from
16071 acres during the FY
2010/11.
Agribusiness
31
5
A Large and Growing Internatonal Consumer Base: With a total cultivated area of 2.86 million hectares, Egypt
is one-of-a-kind in the region. Gulf Cooperation Council countries have a strong desire for products they cannot produce
locally and that carry familiar brand names. In fact, the Gulf region is the main market for Egyptian processed food
exports, accounting for more than 50% of total exports, followed by the EU, North Africa and the USA.
A Large Local Workforce: Egypt has the largest agribusiness workforce in the region, with an estimated 6 million
employees, representing 30.2% of the countrys total labor force. Plans to further enhance productivity include con-
struction of labor communities in close proximity to areas of cultivation as well as educational centers teaching state-
of-the-art technologies related to the feld.
High Export Potental: Egypt is ranked among the top fve exporters of vegetable and fruit juices in the Mediterra-
nean region, and number eight among the top olive producers worldwide. Government plans to expand the harvested
area aim at positioning Egypt as the third most important olive producer in the world by the year 2010.
Critcal Mass: Egypt has emerged as a destination of choice for multinationals looking to establish cost-effective
production and export of agricultural products. Multinationals have experienced the advantage of working with local
farmers and the government to turn the Egyptian agribusiness sector into a worldwide producer and exporter.
Feeder Companies Abound: No one knows the local agribusiness sector like the Egyptian companies already oper-
ating in it. Partnerships would enjoy an established infrastructure and workforce, as well as knowledge of the ins and
outs of the local business climate. Makers of packaging supplies and marketing materials as well as service companies
catering to the industry are abundant.
32
GAFI
Policy Support for the
Agribusiness Sector
Policy Support for the
Agribusiness Sector
The Ministry of Agriculture, together with the Ministry of Trade and Industry, has made expanding agricultural exports
a top priority.
The Ministry of Agriculture is focusing on country-specifc marketing and re prioritizing the activities of promotion
agencies. Making the agenda clear and ensuring seamless coordination between different government agencies is
also key.
The government is committed to improving quality
standards in the agribusiness industry. In addition to
the industrys commitment to applying HACCP stan-
dards, the Ministries of Finance and Investment an-
nounced the establishment of a USD 146 million fund
in 2005 to help upgrade agri-food processing opera-
tions in Egypt and increase processed food exports.
Another advantage is Egypts membership in several
regional free trade agreements, including GAFTA and
COMESA. Through Egypts COMESA membership, for-
eign investors in Egypt can beneft from the customs
exemptions granted to COMESA member nations,
whereas Egypts trade pact with the European Union
gives Egyptian processed food items duty-free access
to the EU market.
33
5
Success Stories
Farm Frites
Established in Denmark in 1971,
Farm Frites is a worldwide enter-
prise and internationally recognized
brand producing a wide variety of processed food prod-
ucts.
In 1989, the company expanded its global operations by
establishing Farm Frites Egypt as a closed shareholding
company. The majority of Farm Frites Egypts products,
including frozen potatoes, tomatoes, peas, carrots and
strawberries are exported to Europe and GCC countries.
Farm Frites Egypt is a regional force in food production
and export.
Sekem
In 1977, Sekem was established on an area
of 125 acres of desert land 60 km north-
east of Cairo. Since 2004, Sekem Holding
has been overseeing 70,000 hectares of or-
ganic farms across Egypt and the Sudan, and it owns sev-
en different companies, including Isis for Organic Foods.
Halwani Bros
Established in Saudi Arabia in 1952,
Halwani Bros. Opened its Egyptian sub-
sidiary in 1970 which currently employs
more than 1,000 skilled workers in its
factory in Tenth of Ramadan City in the Greater Cairo
area.
Having established itself on the local market, Halwani
Bros. Now exports to the USA, Canada, Australia, Europe,
Africa, Japan and the Gulf. The company produces pro-
cessed meat products, jam, juice, rice and frozen straw-
berries, with a total annual sales volume of up to USD 50
million.
Wadi Food
Since its beginnings as a 30-hectare olive
grove in 1986, Wadi Food Industries now
has 930 hectares devoted to the produc-
tion of organic food products, including
olive products, sauces, vinegars and
fresh produce.
With more than 100 healthy and high-end products, the
company is the proud supplier of olive oil and table olives
34
GAFI
to Egyptian fve-star hotels and restaurants. The company
has become a leading exporter of olive products to Cana-
da, the USA, Europe and several MENA countries.
In 2005, the company received the HACCP International
Food Certifcate for its extra-virgin olive oil, and it received
the distinguished Organic Agriculture Certifcate, declar-
ing all Wadi Food farms to be fully organic and all Wadi
Food products 100% free of fertilizers and pesticides. It
has been ISO-certifed since 1999.
35
5
Tourism
Egypts tourism industry is among the most diverse and vibrant in the world. Beyond the pristine beaches and year-
round sunshine, Egypts long and varied history, rich cultural heritage and unique geographic features make it a popular
destination for adventure, eco, sailing, diving, health and cultural tourism - and for religious tourism to sites of impor-
tance to Christians and Muslims alike.
Although well-served by fve-star properties, there is considerable room for investment in the three- and four-star hos-
pitality segments. Other highly promising sectors include niche experiences as residential tourism, health and medical
tourism, therapeutic tours, providing nature and desert safaris, eco-tourism, and adventures travel.
The Ministry of Tourism has set ambitious goals for the next seven years. By 2020 the Ministry is aiming for 300,000
hotel rooms to accommodate 14 million visitors.
36
GAFI
Core Areas for Investment: Hotels, residential tourism, therapeutic tours,
nature/desert safari, eco-tourism adventures, medical/health tourism.
Natural Variety and Climate: The diverse nature of Egypts terrain, which
includes beaches, oases, world-famous deserts, mountains, both the Mediter-
ranean and Red seas (with a coastline that resembles that of Southern Italy
and Spain) and the Nile River Valley, creates a signifcant draw. The countrys
mild climate allows for tourism 12 months out of the year - and makes it a
particularly popular winter destination for tourists from cold-weather locales
including Russia and Northern Europe.
History, Culture and Religion: Egypt is home to countless well-preserved
historical, cultural and religious sites. These sites span all corners of the coun-
try. Popular stops include sites along the path that was followed by the Holy
Family, as well as ancient Pharaonic, Roman, Greek, Coptic and Muslim monu-
ments.
Infrastructure: The countrys well-developed physical infrastructure includes
major roadways, railways, river navigation, and ports, as well as a network of
world-class airports in all major urban centers. The airport network provides
ease of travel within country, and ready access to major European cities.
Labor Force: Egypt has a large and educated labor force. Annually, more than
22,000 students graduate from Egyptian universities with European language
skills, including English, French, German, Italian and Spanish. Many of these
students have studied their second language since primary school. Further, the
Egyptian accent is neutral and easy to understand.
Government Support: Signifcant government backing for a sector that
should expand to 25 million arrivals by 2020.
Hotels and restaurants sub sector
contributed USD 6.5 billion to the
economy directly or 3.1% of GDP
in 2011/2012.
Tourism sector employed one in
every seven Egyptians or 12% of
the labor force such that it offers
2.5 million direct and indirect jobs
10.9% of total employment.
Europe is the primary tourist-ex-
porting market for Egypt account-
ing for 74% of tourists visiting
Egypt, followed by Middle East
which accounts 16% of tourists
visiting Egypt.
In 2011/2012:
- Total no of tourist arrivals: 11
million tourists.
- Total no of tourist nights: 131.8
million nights.
- Average Stay:12 night.
As of July 2013, the tourism in-
dustry consisted of 6708 compa-
nies operating inland with total
investments of USD 26.4 billion,
and 1 company operating in free
zones areas with total investments
of USD 29 million.
Tourism
37
5
Tourism Destnatons Tourism Destnatons
Beaches and Resorts
Celebrated for its year-long sunny weather, Egypt also
boasts a vibrant undersea life, with the closest coral reefs
to Europe located off the Sinai Peninsula in the Red Sea.
The North Coast attracts both Arab and European tour-
ists with an environment resembling Southern Italy and
Spain. From the resort towns along the Red Sea coastline
to diving and snorkeling excursions off the shores of the
Gulf of Aqaba, Egypt provides tourists a unique selection
of vacation destinations.
Historical Sites
The remnants of Egypts long and varied past can still be
visited today along the banks of the Nile River, from Upper
Egypt at Abu Simbel near the Sudanese border, through
the Greater Cairo Area and on to Alexandria. Sites in Up-
per Egypt, including Abu Simbel, Aswan and Luxor, serve
as links to Egypts Pharaonic past. In Greater Cairo, tour-
ists may visit Egypts most iconic destination: the pyra-
mids of Giza and the Sphinx.
Religious Sites
Religious tourism has steadily increased over the past
several years. One of the most popular destinations is St.
Catherines Monastery in the Sinai, the site of the Biblical
burning bush. Tourists can also trace the route of the Holy
Family in Egypt. The capital city is also home to important
mosques dating to the earliest days of the Umayyid pe-
riod (661-750 CE).
Eco Sites
Egypt has striking natural sites in addition to sunny beach-
es, including desert landscapes, oases, canyons and falls.
Egypts unique Eastern and Western deserts offer some
of the most popular desert safari excursions in the world,
while treks through the sands and mountains of Sinai are
a chance to explore wildlife and unique eco sites.
Health and Rejuvenaton
Egypt provides the best medical tourism location with the
healthy and natural materials in Safaga and the luxury of
restorative oases at Siwa and Dakhla.
Just a few hours from the bustle of Cairo is the relaxing
atmosphere of Siwa, where rivers and quiet gardens mix
with traditional local culture.
38
GAFI
Success Stories
Golden Pyramids Plaza (City Stars)
Established in 1991, Golden Pyramids Plaza SAE is an
Egypt-based company engaged in the felds of entertain-
ment and hospitality facilities management.
The Company manages the CityStars Heliopolis Cairo en-
tertainment complex which is situated in Nasr City and
consists of three international hotels namely InterCon-
tinental Cairo Citystars, Holiday Inn Cairo Citystars and
Staybridge Hotel; shopping and entertainment centers;
offce buildings; residential towers, and a medical center.
Misr Travel
Established in 1934 by the great Egyptian economist Ta-
laat Harb, it is one of the oldest travel company in Egypt
and the Middle East.
Misr Travel is recognized, world-wide, as the most impor-
tant leading travel company in Egypt.
Offering a full service Destination Management Company
specialized in inbound to Egypt as well as outbound to
travel worldwide destinations as well as assisting with any
request, to ensure that both a comfortable and memo-
rable stay is secured for all guests.
Orascom Development Holding
Is a global town developer that
specializes in planning, building
and operating integrated leisure
and residential towns around the globe. The Red Sea port
town development of El Gouna was the companys fag-
ship enterprise. Established nearly 20 years ago, El Gou-
na is now a thriving residential and vacation spot, with
nearly 15,000 inhabitants and a continual stream of hotel
guests. The town offers frst-class amenities, including
15 hotels, with two 6-star hotels under development.
There is also an international school, private landing strip,
two marinas, and a European standard hospital.
Orascom HD has extended its business internationally and
is currently active in Oman, Jordan, the UAE, Switzerland,
Mauritius, and Morocco, with plans to expand further.
Orascom HD is one of four companies operating under
the banner of Orascom, one of the largest and most suc-
cessful groups of companies in the Middle East and Africa.
39
5
Emeco
Established in 1976, it is a premiere trav-
el agency and destination management
company operating travel services, cruis-
es, transportation and airlines divisions.
Emeco Travel is the general sales agent for leading airlines
including American Airlines, Air Malta, Korean Air, Malev
Hungarian Airlines, South African Airways and TAP Portu-
gal. Emeco also offers a diversifed transportation group
offering solutions ranging from 5-passenger vehicles to
50-person buses.
Egyptan General Company for Tourism and Hotels
(EGOTH)
Is the biggest state-owned hotel owner in
Egypt, with 20 hotels and 1 cruise - all
well known for their historical value (Mar-
riott and Mena House Oberoi in Cairo, Old
Winter Palace in Luxor, Old Cataract in As-
wan and Hotel Palestine in Alexandria).
Additionally EGOTH own a percentage of the equity in
20 joint ventures in the feld of tourism and hotels. Their
main activities include accommodations, restoration and
catering with the aim to develop tourism in the country
and training staff for its hotels.
EGOTH owns nine historic hotels and 20 contemporary
hotels in prominent locations across Egypt. They have
renovated 2,902 hotel rooms across Egypt in the last fve
years and plan to renovate around 1,227 existing rooms
and create 320 new rooms our the next three years.
40
GAFI
Textles
Egypt is home to the only fully vertically integrated textiles industry in the Middle East, with the entire production pro-
cess - from the cultivation of cotton to the production of yarns, fabrics and ready-made garments - carried out domesti-
cally. The sector plays an extremely central role in the Egyptian economy.
The governments strategy is to boost exports to the European garment market by moving up the quality ladder in gar-
ments, vertically integrating the garment production value chain (e.g., use local extra long staple (ELS) cotton, improve
design and pattern making offering) and defending leadership in low-end garmenting by establishing strong brands at
both country and supplier levels. Also on the agenda is restructuring the domestic textile industry by privatizing mills
and leveraging on low cost and provided labor in addition to a large domestic supply of high-quality cotton.
41
5
Core Areas for Investment: Cotton production, yarn making, spinning,
weaving, knitting, dyeing and ready-made garments.
High Quality Raw Materials: Egypts cotton is internationally prized
and valued for its quality.
Compettvely Priced Skilled Labor: The textile industry is labor-in-
tensive, and human resource costs can be a heavy burden on a large
company. Wages in Egypt are among the most competitive and stable
in the region. Additionally, training programs and government initiatives
continuously upgrade the skills of Egyptian laborers, improving their use-
fulness to textile manufacturers.
Strategic Locaton: The countrys geographic location facilitates export
to Asia, Africa and Europe; Egypt is also closer to the US than its com-
petitors such as India and Indonesia. Egypt has 15 commercial ports to
facilitate exports.
Free Trade Agreements: In addition to Free-Trade agreements with
the EU, COMESA, MERCOSUR Agreement and the Arab World, Egypts
QIZ agreement with Israel and the United States gives local manufactur-
ers both tariff and quota-free access to the US market on the condition
that 35% of the commodity is manufactured in a qualifying zone, and a
minimum of 10.5% of the product is from Israeli inputs.
Feeder Industries: Egypt has numerous feeder industries to serve the
textiles industry. The established and growing agricultural industry is ca-
pable of supplying high-quality raw materials needed for textiles produc-
tion. Numerous domestic manufacturers of such inputs as dyes, buttons,
zippers and packaging (not to mention the textiles themselves) facilitate
production in the RMG industry.
Textiles and RMG sector employ about
30% of local employment.
Total exports of textiles and RMG
reached USD 2.94 billion, representing
14% of non petroleum exports in 2012.
In 2012 textiles, about 37.9% of the
exports directed to EU Countries, 15%
to USA and 12% to Arab Countries.
The EU countries represented 46.8% of
Egypt exports of home textiles, 25% to
USA and 16.7% to Arab countries.
The United States represents 55.9%
of Egypt exports of ready-made gar-
ments, having the largest share of
Egypt exports, about 32.9% to EU
countries and 4% to Arab countries.
There are more than 7295 textile-relat-
ed companies registered with the In-
dustrial Development Authority , with
total investment EGP 44.68 billion.
As of July 2013, the textiles industry
consisted of 4136 companies, of which
3,937 companies operating inland and
199 companies operating in free zones
with total investments of USD 5.69 bil-
lion.
Textles
42
GAFI
Strong Government Support
for the Textles Industry
Strong Government Support
for the Textles Industry
The Egyptian government is actively looking to attract new private investments into the industrys upstream segments
in order to sharpen the nations competitive advantage in the global market.
The IMC provides services that include training, technical assistance and export support, consulting in management
and marketing, technical advice and training for individual companies.
The General Authority for Investment and Free Zones (GAFI) operates a One-Stop Shop that streamlines and expedites
investor services - most businesses can incorporate in 72 hours.
43
5
Success Stories
Al-Arafa Investment and Consultng
Arafa Holding is a leading global textiles
and apparel manufacturer and retailer
based in Egypt, with a network reaching
more than 70 countries worldwide. The group serves a di-
verse global audience, including top international brands
and global retailers. Joint ventures have seen the com-
pany gain ownership of prestigious leading brands and
partner with leading fashion houses.
The companys business activities are fully integrated,
covering the luxury wear, formal wear and casual wear
markets, as well as the full value chain from textiles to
apparel & tailoring to retail & distribution. This cross-ver-
tical-integration provides a key buffer against economic
downturns and political upheavals in key markets, while
at the same time positioning the company for organic
growth.
Alexandria Spinning & Weaving Co. (SPINALEX)
Was established in 1959 as one of the lead-
ing spinning companies in Egypt.
Annual production: about 1200 tons,
100% Egyptian cotton yarns for export all
over the world.
Export: About 20 million US Dollars per year to all Eu-
ropean countries, USA, Canada, Arab Countries, and Far
East.
Number of workers: about 2400 workers
Egyptan Spinning & Weaving Company (ESW)
Was established in 2005, and is located
in Sadat city. A private company owned
by one of the leading group in the tex-
tile sector in Egypt. ESW produces and exports a diverse
range of Egyptian cotton yarn.
ESW has a production capacity of 11 tons per day, and
exports its products to Italy, Portugal, Spain, Switzerland,
Germany, Brazil, Turkey, Bangladesh and the Middle East.
El-Nasr Clothes and Textles (KABO)
Established in 1940, El-Nasr Clothing and
Textiles Co. (KABO) is one of the pioneers
in the textiles and garments feld in Egypt.
KABO is a recognized manufacturer and exporter of high
quality knitted underwear, lounge-wear and intimate ap-
parel for men, women and children as well as sportswear.
A vertically-integrated manufacturer of apparel, with
operations encompassing weaving, dyeing, knitting and
ready-made garments. The companys fagship product is
the Jil brand, manufactured under license from Jil Inter-
national. An Egyptian household name; and it represents
roughly 90% of the companys products.
44
GAFI
Chourbagi Moderne for Clothing and Textles
S.A.E. (Charmaine)
Is an Egyptian company established
in 1977, producing cotton underwear
and sleepwear for men , woman and
children in addition to ladies hosiery.
Today they function as a vertically integrated company,
with the production line starting at knitting and going
through dyeing, fnishing, cutting, sewing and fnal pack-
aging and distribution.
Charmaine and Pink Powder Room brands continue to
fnd local market appetite and their international export
division maintains a robust sales portfolio of customers
such as Hema, Hugo Boss, and Calvin Klein. Their current
production ratio is 95% export and 5% local sales, with
the capacity of 1.5 million pieces a month.
45
5
Petrochemicals
The prime mover in petrochemicals in the country is Egyptian Petrochemicals Holding (ECHEM), a state owned enter-
prise under the supervision of the Ministry of Petroleum.
The company was created in 2002, during a period of economic reform and modernization, and has multiple mandates
as an investor and participant in the sector with minority stakes in some of the countrys main production facilities.
It is also in charge of marketing the sector abroad and long-term planning.
46
GAFI
Core Areas for Investment: Egypt ranks 12th in liquefed natural gas exports worldwide, which has helped boost the
petrochemicals industry. Natural gas proven reserves reached 2.2 trillion cubic meter, with cumulative gas production
61.3 billion cubic meter.
A wide variety of products: Plastics, fertilizers and acrylics are already being produced in the country. Egypts
exports of organic and inorganic chemicals, plastics and fertilizers reached USD 1.55 billion in 2013, according to the
Egyptian Chemical and Fertilizers Export Council.
Increase in Global Demand: Demand for urea fertilizer is expected to rise globally due to population increases.
Manufacturing and exporting fertilizer from Egypt allows producers to beneft from discounted feedstock prices. More-
over demand for ethylene is expected to grow at 4.7% over the next few years reaching about 153 million metric tons
by 2015.
Compettve Producton Costs: As natural gas prices continue to rise, the production of petrochemicals is migrating
towards countries with lower natural gas costs, such as Egypt.
Exports: Egypt supplies petrochemical products to about 50 countries worldwide, with Europe being the largest mar-
ket for Egyptian exports.
Oil and Gas contributed to around 15.48% of Egypts GDP in 2011/2012.
Natural gas proven reserves reached 2.2 trillion cubic meter, with cumulative gas
production 61.3 billion cubic meter, in 2011.
As of July 2013, the petrochemical industry consisted of 91 companies operating
inland with total investments of USD 4.65 billion, and 14 companies operating in
free zones areas with total investments of USD 182.64 million.
Total Exports of Chemicals and fertilizers products during January - June 2013
reached USD 2,089 million, representing 18% of total exports.
Petrochemicals
47
5
Strong Policy Support for
Petrochemicals Industry
Petrochemicals Industry
The Egyptian government continues to work with the pri-
vate sector to expand business opportunities in the petro-
chemical sector through public private partnerships (PPP).
Egypt outlined an aggressive expansion strategy for the
petrochemicals sector in 2002 with the creation of ECHEM
and the unveiling of a 20-year master plan to carry the
sector through 2022.
As a bonus facility offered to investors, 33 million square
meters of land in 7 governorates are reserved for pet-
rochemical projects. The proposed locations for petro-
chemical industries are: Alexandria, north Gulf of Suez,
Damietta, Post Said, Zaafarana and Rosetta.
48
GAFI
Success Stories
Middle East Oil Refnery (MIDOR)
MIDOR is an Egyptian joint stock company
established in 1994 under Investment Law
No. 230 of year 1989 and its amendments.
MIDOR Refnery is classifed as a deep con-
version refnery using the latest scientifc
and technological methods to suit the fuctuating market
needs, the refnery investment is almost USD 1.4 Billion.
MIDOR refnery occupies approximately 500 acres within
Amerya Free Zone, West Alexandria City constructed on
5 terraces utilizing the topographical nature of the site.
MIDOR is one of the frst refneries in the Middle East that
is designed to cope with the most demanding world en-
vironmental standards for effuent treatment and product
specifcations.
The Spanish Egyptan Gas Company (SEGAS)
The Spanish Egyptian Gas Company (SEGAS) liquefed
natural gas (LNG) complex in Damietta, Egypt, is situated
on the Mediterranean Coast 60 km west of Port Said.
The complex came on-stream during the fnal quarter of
2004 and exports LNG to the Spanish market via a receiv-
ing terminal at Sagunto in Spain.
The majority of the gas exported is used to supply the
new cleaner gas-fred power stations in Spain. This LNG
project was the frst facility of its type in Egypt and is one
of the worlds largest capacity single train facilities.
Construction of the facility began in September 2001. The
complex will initially produce 5.5 million t/yr (7.5 billion
m/year) of LNG by air-cooled refrigeration and fraction-
ation. The complex requires 270 personnel and produc-
tion is around 600 t/hr (24C ambient air temperature).
Estimated investment for the construction of the original
facility was USD 1.3 billion.
Sidi Kerir Petrochemicals Co (Sidpec)
Sidpec is an Egyptian joint stock com-
pany established on 16 November
1997.
Sidpec is considered the frst integral step towards the
petrochemicals future in Egypt.
Sidpec utilizes the latest available technology and designs
in order to satisfy the Egyptian environmental regulation
and requirement.
49
5
Oriental Weavers (OW)
Oriental Weavers (OW) is one of the most
recognized brands in the machine woven
rug and carpet industry today. Established
in 1980.
Alexandria Carbon Black
Established in 1994 with an initial capacity of 20,000
tones, Alexandria Carbon Black is located in Amreya near
Alexandria in Egypt, an Indo-Egyptian joint venture of the
Aditya Birla Group of India and is the only producer of
carbon black in the MENA region.
The trade name of SIDPEC polymers is named Egyptene
polymer portfolio includes linear low density polyethylene
(LLDPE) and high density polyethylene (HDPE).
50
GAFI
Egypt is home to the largest population and market in the Middle East, this implies a steady if not growing need for
residential and commercial property. Real estate is one of the most important sectors contributing to economic growth
and affecting more than 90 industries related to construction. It is considered a labor-intensive sector as it accommo-
dates at least 8% of the total labor force.
There is a great demand for residential construction in Egypt where there is a high population growth rate and a high
urbanization rate, such demand is mainly driven by the demand for low and middle income housing; a gap that is yet
to be satisfed. It is important to know that 29% of the population is under 40 years old and almost half the Egyptian
population is under 19 years old implying a growing demand. Additionally, the Egyptian Ministry of Housing and Devel-
opment has pledged to provide 1 million affordable housing units over the next fve years.
The construction sector growth rate is expected to reach 5.63% by the year 2014 with an important role of the private
sector.
Real Estate
51
5
Core Areas for Investment: Residential, compounds, commercial,
industrial, hospitality, administrative , cultural and educational build-
ings in addition to hospitals and other real estate.
Large consumer market: Egypts large population makes it an at-
tractive market for residential construction. It is important to know
that 29% of the population is under 40 years old and almost half
the Egyptian population is under 19 years old implying a growing
demand.
Investment haven: Egypt appears to be a safe-haven from the in-
ternational turmoil in the property market, thanks to restricted mort-
gage and lending practices. However, prices started stabilizing as the
price increase curve drops, even though demand continues to exceed
supply.
Government support: Government policies aiming to attract for-
eign investment by streamlining and easing property purchase for
overseas buyers.
As of August 2013, the real estate industry
consisted of 9,759 companies operating
inland with total investments of USD 26.58
billion, of which 302 companies with total
investments of USD 1.48 billion in housing,
4152 companies with total investments of
USD 10.5 billion in contracting and 5305
companies with total investments of USD
14.58 billion in urban development .
Housing unit needs are estimated to be 7.5
million units during the period from 2007
2022. By adding current housing needs
this number is expected to climb to 8 mil-
lion in 2022.
The average rent for a three bedroom villa
in New Cairo is currently USD 3,100 per
month while two bedroom apartment rent-
als average almost USD 1,000 per month.
For 6
th
of October, the average rental for
three bedroom villa is around USD 2,800
per month while two bedroom apartments
rent for around USD 850 per month.
Average quoting rents for prime line stores
in Regional & Super Regional malls in
Greater Cairo is from USD 920 to USD
1,410 per m
2
per annum.
Real Estate
52
GAFI
Leading Opportunites in
a Dynamic Market
Leading Opportunites in
a Dynamic Market
As we move into 2014, the dust is now beginning to settle and more clarity is returning to the market. This is resulting
in increased levels of confdence and activity. Evidence of this includes:
Current and active demand for between 5,000 and 15,000 m
2
of offce space from a number of international Fast-
moving consumer goods and petrochemical occupiers.
Retailers continue to open new stores with recent examples including American Eagle and Pinkberry opening their
frst stores in Egypt at City Stars and Sun City mall in Heliopolis.
Some real estate projects will continue towards completion in 2013. Cairo Festival City delivered its frst offce phase
in mid-2012 and Damac is looking to open its retail and offce project opposite Dandy Mall. The market is witnessing
a revival of other mixed use projects driven mainly by Gulf countries developers.
With strong domestic economies and balance sheets, the positive long-term potential of the Egyptian market is an at-
tractive prospect for those frms with the liquidity to buy patience. This view is compounded by the results of the 2011
Colliers International Global Investor Sentiment Survey, which revealed that property investors from the Middle East
are keen to invest their money in residential real estate and hotels, with Egypt a particular target due to its historically
robust tourism sector.
Large new developments within central Cairo are almost non-existent with the exception of the Uptown Cairo project
by Emaar Misr leaving the private sector with an unprecedented opportunity for expansion.
Despite delays in some projects, the supply of retail malls is expected to increase further in 2013 and 2014. The major
new addition in 2013 will be Cairo Festival City, which will add a further 160,000 m
2
of high quality retail space into
the market in New Cairo.
53
5
Success Stories
Talaat Moustafa Group (TMG) Holding
TMG is the leading community real estate
developer in Egypt, with a land bank of
50 million square meters. The group has
a strong track record of over 37 years in
the housing and real-estate development industry, hav-
ing developed 8.5 million m
2
of land so far. Amongst the
groups largest and most prominent development projects
are Al Rehab City, East of Cairo, spread over 9.9 million
m2 to host 200,000 residents, and Madinaty project,
started in July 2006 spanning over 33.6 million m2 of land
with 600,000 target residents, making it the biggest all-
inclusive enclosed city in the Middle East. TMGs achieve-
ments also include signature compounds like May Fair in
Al Shourouk, East of Cairo and Al Rabwa I & II in 6th of
October City, West of Cairo.
TMGs activities also extend to the hotels and resorts
segment. It has developed three large scale luxury hotels,
Nile Plaza in Cairo, San Stefano in Alexandria, and Four
Seasons in Sharm El Sheikh, all managed by the interna-
tionally reputable Four Seasons chain, in addition to two
other Hotel & Resort projects currently under develop-
ment.
Emaar
A Dubai-based Public Joint Stock Compa-
ny operating in Egypt under its subsidiary
Emaar Misr for Development S.A.E, Emaar
is a global property developer and provider
of premier lifestyles and also the largest foreign direct
investor in Egypts real estate sector with an investment
portfolio of EGP 43.3 billion (AED 29.27 billion, USD7.97
billion). Its most notable projects include:
Marassi: a Mediterranean-styled development close to
Alexandria and a few miles away from the historic city of
El Alamein along the magical shores of Sidi Abdul Rah-
man bay. It has a network of lagoons line townhouses
and luxury resorts with up to 3,000 guest rooms while
a bustling community centre fosters a thriving sense of
community living.
Mivida: an upscale residential community, near the new
campus of the American University in Cairo. Nestled with-
in the ffth district of New Cairo City, this new develop-
ment of around 5,000 luxury homes unfolds on nearly 3.8
million square meters of gently rolling landscape.
54
GAFI
Sodic
SODIC was incorporated in Egypt in
1996 , Today it is one of Egypts lead-
ing real estate companies. Egypts SODIC, the countrys
third-biggest listed real estate frm, registered almost 570
million Egyptian pounds (USD 96 milion) worth of sales to
the end of September 2011. Its net proft in Q1 2012 is
EGP 35,7 million.
Sodics projects:
Beverly Hills: was one of the frst ever large scale resi-
dential compounds to be developed in Sheikh Zayed City,
off the Cairo-Alexandria Desert Road. With over 1,800 vil-
las and apartments, Beverly Hills has become a sought
out address in west Cairo. As a result, property value in
Beverly Hills has more than doubled in the past six to 12
months. Beverly Hills, SODICs frst venture, is a 1.75 mil-
lion square meters mixed-use residential and commercial
development that generated over EGP 1 billion in revenue
for the company.
Kattameya Plaza: Located in the heart of New Cairo
on 126,000 m2 It marks a new standard in contemporary
apartment living. Kattameya Plaza is designed and mas-
ter-planned by ArchGroup - the distinguished frm that
designed the Grosvenor House in Dubai, and landscaped
by Greenscape. The project is an investment of EGP 334
million.
Allegria: Located in Sheikh Zayed City, off the Cairo-Alex-
andria Desert Road on 2,430,0000 m2. The master-plan
for the project was designed by the world renowned New
York-based frm EDAW, which won an award of merit from
the American Society of Landscape Architects (ASLA) for
their work on Allegria. The project has also received two
CNBC Arabian Property Awards in 2008, for Best Develop-
ment and Best Golf Development in Egypt. The project is
an investment of EGP 2.5 Billion.
Eastown: To the east of Cairo lies EASTOWN, the bus-
tling town centre of New Cairo and Kattameya. EASTOWN
comprises of 860,000 m2 of land and has a built up area
of 920,000 m2. It will include 1,600 residential units,
1,000 Class A offces, 2,000 boutiques and retail outlets
and up to fve hotels.
Amer Group
25 years ago, Mansour Amer founded
Amer Group based on the core values
of character, courage and integrity.
Today, Amer Group continues to ensure commitment to
those values, while raising the standards for innovation,
outstanding design, quality & superior market value.
Amer Group is a leading real estate developer, offering
mixed-use, family oriented destinations. Amer has diver-
sifed businesses in the primary and secondary homes
market, as well as hotels, shopping malls and restaurants.
Real Estate Portfolio: 9 current projects (including one
in Syria) with total land area of 7.5 million m2 - Six up-
coming projects with total BUA of 2.7 million m
2
.
Hotels: 5 operational hotels in Egypt with 919 keys with
total revenues of EGP 67 million.
Restaurants: 6 brands, 59 restaurants with 9,696 seats
with total revenues of EGP 214 million.
Meeting point malls: 5 meeting point malls in Egypt with
GLA of 52,087 m
2
.
New Ventures: Porto Vacation Club (PVC).
55
5
Building Material
The construction and building material industry is considered one of the most dynamic sectors in the Egyptian Econ-
omy, and has been growing rapidly since the eighties. The sector continues to encourage related industries such as
cement, iron, and ceramic industry.
The growth in the construction sector is expected to be driven by the government plan to boost investments in infra-
structure projects, as well as low income housing and industrial development projects, in addition to the improvement
of under developed areas in Egypt. Furthermore, the private sector investments in the residential, commercial and
hospitality real estate segments are expected to support the construction sector, as well.
56
GAFI
Core Areas for Investment: Strong future domestic demand, where the strong
demand for housing and increasing population as well as urbanization have re-
sulted in the government undertaking major urban planning programmes.
Compettve Producton cost: Availability of local raw materials at reasonable
prices. One of the Egyptians cement competitive advantage is represented in the
abundant quantities of the necessary raw materials (limestone - clay) throughout
Egypt at a very high quality which have the major advantage of existing above soil
level thereby reducing the cost of extraction.
Increase in global demand: The demand for the building materials is expected
to rise globally due to the increase of population, manufacturing and exporting of
cement, steel and other building materials from Egypt allows construction compa-
nies worldwide to benefts from discount feedstock prices.
A wide variety of products: Strong domestic companies that work in the build-
ing materials (Steel, Cement, Marble & Granite, Pipe, Sanitary tools and Ceram-
ics), with high level of technical ability.
Largest trained workforce in the region: At about 27 million, Egypts labor
pool is the largest in the region.
The sector maintains the lead in the value of exports, total exports of building
materials during Jan - June 2013 reached USD 2.77 billion, representing 24%
of total exports of the country.
Construction is one of the most active sectors of the Egyptian economy, the
sector accounts for 4.57% of national GDP in 2011/2012.
As of July 2013, the total number of companies working in the building ma-
terial sector as well as Iron and Steel fabrication were 2,293 Companies, of
which 2,288 companies operating inland and 5 companies operating in free
zones, with total investment of USD 7.8 billion.
Building Material
57
5
The Major Sub- Industries in
the building material sectors
The Major Sub- Industries in
the building material sectors
Iron and Steel Industry
The Egyptian Steel Industry is the backbone of Egypts
economy which provides the impetus for the growth of
major and leading industries including construction and
building, ship building, automotive industry, and consum-
er goods industries. The Egyptian steel industry is domi-
nated by the private sector which controls over 95% of
total market capacity.
The Egyptian Steel Industry is divided into two segments
based on steel product:
Steel rebars: which are long steel products either in
the form of rods or bars, and are used primarily in the
construction and real estate sectors.
Flat steel: which is directed to the industrial sector in-
cluding the automotive industry, ship building industry,
and consumer goods industry, etc.
Cement Industry
Egypt is one of the oldest countries in cement manufac-
turing in the region, as it started cement production in the
early years of the 20th century, specifcally in 1927 with
the construction of Torah Cement Company.
Approximately 70% of the Egyptian cement sector is
partially or wholly owned by international cement frms.
Multinationals were attracted to Egypt due to the large
and growing market with healthy margins. Also the low
energy and labor costs were a bonus.
Consequently, cement producers in Egypt increased their
production capacities and enhanced their production lines
to meet the surging local cement demand. In 2002, Egypt
turned out to be a net exporter of cement and later in
2004 Egypt stopped importing cement and became one
of the largest cement exporting countries in the world.
Ceramics Industry
Due to the availability of raw materials and domestic de-
mand (feldspar, kaolin, clay and quartz), Egyptian inves-
tors, formerly ceramic tiles importers or traders, started
to invest in ceramic tiles sector to satisfy the domestic
needs. Recently, they entered the sanitary ware industry
to meet the emerging needs of a growing population.
58
GAFI
Success Stories
Ezz Steel
Ezzsteel is the Middle Easts leading
producer of high-quality long and fat
steel for use in a wide range of end applications, the com-
pany produces long and fat products.
Ezzsteel is the market leader in Egypt for long products,
which consist principally of rebars and wire rods, which
are used for strengthening concrete in building and other
construction applications, and also in fat products, which
consist of hot rolled coil, which are thin gauge sheets
manufactured to precise specifcation for makers of con-
sumer goods and industrial products.
Solb Misr (Suez Steel)
Solb Misr is an Egyptian Steel Group pro-
ducing a wide range of steel by-products,
semi-fnished, fnished and downstream
steel, in keeping with international stan-
dards.
The Group operates through an integrated steel complex
that produces steel from raw material. It is comprised of a
Direct Reduction Plant, 2 melting shops and 4 rolling mills,
all located in the Suez area.
Through its collaboration with top-notch equipment and
raw material suppliers, Solb Misr offers infallible quality
of steel.
ASEC Cement
ASEC CEMENT is a platform for in-
vestments in emerging cement mar-
kets in the Middle East and North Af-
rica Region and was created in November 2005 by Citadel
Capital, the MENA regions leading private equity frm.
ASEC Cement plan on having cement plants in high-
growth markets in Egypt, Algeria, Syria, Sudan and Kurd-
istan in order to be able to satisfy the continuously in-
creasing demands for cement in these countries.
ASEC CEMENT is continuing its effort to streamline opera-
tions and make the most of the opportunities that still ex-
ist in the region in order to create value for its customers
as well as for its shareholders with the help of the new
management team that combines international experi-
ence and in-depth knowledge of local markets.
Assuit Cement Company (CEMEX)
Assiut Cement Company is part of CE-
MEX, a growing global building mate-
rials solution company that provides
products of consistently high quality and reliable service
to not only customers but also communities.
Assiut Cement Company is located in the center of Egypt,
400 km south of Cairo, with a plant of 3 cement produc-
tion lines.
59
5
While ACC had an original production capacity of 3.8 mil-
lion metric tons/year, CEMEX invested to increase the ca-
pacity to 5.7 million metric tons/year, almost 50% more.
Lafarge
Lafarge is a leading producer of build-
ing materials in Egypt. Lafarge prod-
ucts - cement, concrete and aggre-
gates (sand and gravel) - are essential in creating the
structures that shape our landscape, from homes to hos-
pitals, bridges, roads and monuments.
Lafarge works with all actors in the building industry of
Egypt, from do-it-yourself builders to large construction
companies, architects and local artisans. Whether supply-
ing high-quality cement to a craftsman or helping lead-
ing architects explore and deliver creative possibilities,
Lafarge Egypt is committed to providing solutions that ft
the needs of all its clients.
Lafarge Egypt clients beneft from the technical expertise
and product innovation that are the hallmarks of Lafarge,
an international leader in building materials with a global
presence and over 175 years of experience. In Egypt,
Lafarge offers a range of innovative, high-performance
products - from Artevia, a collection of decorative con-
cretes, to Agilia, a highly fuid, labor-saving concrete that
fows easily into any form using gravity alone.
60
GAFI
The transportation sector is the main pillar of economic growth, as transportation networks are considered
the arteries which economic and social activities fow through, where all sectors of the national economy
depend on the services and facilities of this sector to link both production and consumption markets to-
gether, besides having the access to the needs of raw materials and services and operating.
The government is pushing for Egypt to become a global logistics hub and is opening up opportunities for
foreign investment across the sector. Industrial free zones are often located at or very near major ports.
Logistcs and
Transportaton
61
5
Core Areas for Investment: Road terminals and transit points, rail line expan-
sion, connections and terminals (road rail), value-added services around ports
and dry ports, airport infrastructure.
Unique Geographic Positon: Located at the crossroads of international trade
between Europe, the Middle East, Africa and Asia, Egypt is positioning itself to
become a major global logistics hub. Businesses are increasingly seeking to base
themselves in Egypt as a springboard to Europe and booming regional markets.
Rising Domestc Demand: A growing domestic demand for imports and a rapid
rise in export-oriented businesses are creating strong demand for logistics and
transportation services in a market that is far from saturated.
Greenfeld Opportunites: Greenfeld opportunities exist in subsectors such as
the road network, which is the most used means of transporting freight but cur-
rently has no logistics provider with a consistent distribution infrastructure. Almost
all areas have reached capacity ceilings, providing rich opportunities for investment
from infrastructure to specialized value-added services.
Statstcs:
8% of the worlds maritime
shipping passes through the
Suez Canal.
Accounting for 4.1% of
GDP, transportation, stor-
age and Suez canal sector
represents 11% of the
government economic plan
2012/2013.
Logistcs
62
GAFI
Strong Policy Support
for the Logistcs Sector
Strong Policy Support
for the Logistcs Sector
Transportaton: 2012/2013 Master plan
Railway
Develop, maintain and upgrade trains, stations, signal
systems, tracks, bridges, tunnels.etc.
Under Ground Metro
Completion of the three remaining phases of the third line
with total estimated cost of EGP 35 billion, of which EGP
3.5 billion as investments in 2013/2014.
Roads and Bridges networks
To construct new roads and bridges to face the traffc
congestion in the Nile Delta zone, with a total budget of
EGP 2.7 billion.
Air
The main goal is to reduce the operation, Supporting the
operation network.
Maritme
To Develop, maintain and repair the satellite monitoring
system and the maritime navigation systems in the Medi-
terranean sea, Marsa Matruh and Aqaba Bay.
The most important development projects in the plan are
in Red Sea ports, Alexandria ports, Port said port and
Damietta port.
The main strategic issue in this plan is to provide security, safety and comfort ability aspects for all transportation, facili-
ties networks and benefciaries of its services.
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5
Success Stories
KGL PI
Kuwait and Gulf Link Ports Inter-
national (KGL PI) is a subsidiary
of Kuwaiti transport giant KGL.
In 2006, KGL PI signed a 40-year concession agreement
with Damietta Port Authority (DPA) to build, fnance and
operate a USD 1 billion container terminal in Damietta.
Leader Group
Founded in 1996, Leader Group
is a freight forwarding and ship-
ping agency with a total of fve
offces in Alexandria, the Greater Cairo Area, Port Said
and Damietta. In 2007, the Alexandria based agency was
fully acquired by the multinational integrated supply chain
solutions company Agility. Aiming to provide more com-
prehensive service to its Middle East customers, Agility
was attracted by Leader Groups extensive experience in
customs clearance, haulage, sea and air freight, project
logistics and shipping agency services.
Egyptan Transport & Commercial Services SAE
Founded in 1973, (Egytrans) runs
freight transport and integrated
forwarding services. Its activities
cover: sea freight, airfreight, land transport, specialized
cargo, packing insurance, warehousing and customs
clearance. Egytrans issues its own bills of lading and can
provide international track and trace services through an
alliance with Germanys Schenker Logistics, its worldwide
partner in air and sea services. Land transport is handled
by the companys own feet of trucks and trailers. Egy-
trans acquired Egyptian Transportation & Logistics (ETAL)
in 2001.
The company has more than 350 employees and 8 branch
offces in Egypt, its revenue rose 6.5% from EGP 134.37
million to EGP 143.11 million, while net profts climbed
by an even greater margin, rising 15.1% from EGP 10.64
million to EGP 12.25 million. About 48% of revenues were
generated by the companys Alexandria operation.
Mediterranean Shipping Company (MSC)
Founded in 1970 in Geneva, Swit-
zerland. MSC launched its frst ser-
vice between the Mediterranean
and South and East Africa in the
mid-1970s.
In 2003 it became the second largest container shipper
in the world, and remains in that position. The carrier
operates 200 direct and combined services weekly, call-
ing at approximately 335 ports. It has 421 offces in 145
countries and employs more than 30,000 staff.
64
GAFI
EGYPTAIR HOLDING
EGYPTAIR is the world-renowned
national airline of Egypt, based
in the cosmopolitan city of Cairo.
It started operating on the 7th of
May 1932 as the frst airline in the
Middle East and Africa and the seventh in the world to
join IATA and become a treasured brand. Throughout its
80 years of service, EGYPTAIR has experienced signifcant
growth.
EGYPTAIR HOLDING Company has a highly reputable
and advanced Training Centre which provides training
programs in various felds for EGYPTAIR companies and
other international companies. Furthermore, EGYPTAIR
Training Centre includes the latest fight simulators in the
Middle East. On the 11th of July 2008, EGYPTAIR offcially
became the 21st member of Star Alliance.
EGYPTAIR is the nations fag carrier and will strengthen
65
5
the alliance network throughout Africa and the Middle
East.
EGYPTAIR CARGO established its 1st cargo terminal in
May 1981. Since its foundation, EGYPTAIR CARGO has
been on the forefront of transporting and handling of gen-
eral and special cargo.
In September 1991 another cargo terminal at Alexandria
International Airport was established with a capacity of
20,000 tons/year to better serve the northern region of
Egypt. Both terminals are connecting their operations
through a surface transportation in addition to the do-
mestic fights.
In February 2006 another cargo terminal at Luxor Inter-
national Airport was established sharing 50% with The
Egyptian Company for airports with a capacity of 20,000
tons/year to better serve the southern region of Egypt.
66
GAFI
Communicatons & Informaton
Technology
Egypts communications and information technology sector is a leading global outsourcing destination, Egypt is the
leader in the MENA region and 4th worldwide on A.T. Kearneys 2011 Global Services Location Index(GSLI) . This puts
Egypt ahead of competitors in the region including UAE which ranked 15th.
Egypt, one of the highest-growth potential IT markets in the Middle East, is receiving increasing attention from tier-one
vendors and distributors, most of which are already very familiar with the market. Given the huge population, rising
economy and relatively low PC penetration, the country will continue to be an important market over the forecast
period.
Leading global players ranging Intel and Oracle to Orange and Vodafone have established product development divi-
sions and call centers serving global operations. Home-grown players are making their marks nationally, regionally and
globally.
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5
Core Areas for Investment: Business process outsourcing, key-process outsourcing, call centers, localization and
Arabic-language development.
A Pro-Business Government and Regulatory Body: Egypts Ministry of Communications and Information Technol-
ogy is widely credited with having created the conditions allowing the sector to fourish. The National Telecommunica-
tions Regulatory Authority promotes competition in broadband, fxed-line and mobile telecommunications. And the
Information Technology Development Authority helps IT players based in Egypt become more globally competitive.
A Robust Infrastructure: Egypt is served by three mobile networks (Vodafone, Mobinil and Etisalat). Competition
between the 3 operating is positively refected on the cost of services, introducing the 3G network, spreading mobile
database services and mobile phones applications as well as preparing for accessing the 4G network. Telecom Egypt
(TE), The nations fxed-line player, serves 8.63 million subscribers Q1 2013. Wireless and wireline broadband cover
every major urban centre in Egypt.
A Large and Growing Domestc Consumer Base: More than 33.34 million Egyptians regularly surf the internet -
more than the population of many European countries of which over 2.31 million subscriber has ADSL line.
A Skilled Multlingual Workforce: Egypt generates tens of thousands of university graduates each year that have
strong commands of foreign languages and neutral, easy-to-comprehend accents. University graduates entering the
workforce 2011/2012 about 40.00 thousand received professional ICT training, compared to the 42.06 in 2010/2011,
representing an annual increase of 4.6%; Egypt has more than 217,780 working in the ICT sector in Q1 2013.
Critcal Mass: Egypt has emerged as a destination of choice for multinationals looking to establish cost-effective prod-
uct developments and call centers. Developments such as Smart Village, the premiere technology park in the Middle
East and North Africa, create key industry clusters providing high-tech Telecom and IT infrastructure.
Feeder Companies Abound: Major global and Egyptian companies based in Egypt can call on the expertise of
thousands of proven Egyptian niche players.
Egypt has three advanced mobile phone networks (Mobinil, Vodafone Egypt and Etisalat Egypt).
All three have 3G and 3.75 G infrastructure, they serve over 94 million subscribers as In Q1 2013.
Growing by 2.43% since Q1 2012 and hitting a penetration rate of 113.20%
There are more than 33.34 million regular internet users in Q1 2013.
Over 2.31 million subscribers enjoy ADSL line in Q1 2013, with annual growth rate of 21.7%.
Fixed line subscribers 8.63 million in Q1 2013.
As of August 2013, the ICT industry consisted of 5450 companies operating inland with total in-
vestments of USD 10.78 billion, and 38 companies operating in free zones areas with total invest-
ments of USD 100.95 million.
I.C.T
68
GAFI
Policy Support for ICT
Industry Investment
Policy Support for ICT
Industry Investment
The governments Information Technology Industry Development Agency (ITIDA) supports the IT and BPO industries
in Egypt.
The General Authority for Investment operates a One-Stop Shop that streamlines and expedites investor services -
most businesses can incorporate in 72 hours.
Nile University is dedicated to improving technology-related education, and enhancing the skills of the nations young
labor.
The government provides an incentives package to cater to the investors needs:
- Provides data and internet centers, a high-tech Pyramids Smart Village and a free zone (Telecom Hotel) for inter-
national call centers and transit regional Internet traffc.
- Offers special tax exemptions and reductions for ICT industries.
- There are special reductions on land prices for investors in the ICT sector.
- Easing of export and import regulations.
- Offers training programs for professionals in IT, communications and networks according to investors standards
and specifcations. These training programs are often offered at the governments expense.
- Assigns a government offcial to facilitate interaction with government organizations.
Inar, the frst Egyptan Tablet
Inar is not just the frst tablet to be designed and manufactured in the Middle East and Africa,
it is more of an initiative to introduce and instill knowledge, open new markets, create new
opportunities for hardware industry in Egypt and the region, and above all, make a signifcant
contribution to the global content industry.
ITIDA intiated Inar, a brand owned be the entity, to be distributed among university students, university staff, and
government offcials during the frst fase of the project.
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5
Success Stories
Etsalat Misr
Is a leading international telecom
company operating in 15 countries
around the world. Egypt is one of the countries where
operation was launched in May 2007 as the frst 3.5 G
operator. Etisalats entry to the Egyptian market ushered
in a new era for the Telecom Industry.
Today, Etisalat Misrs 2G and 3G robust and high qual-
ity network covers and serves 99% of the population in
Egypt. Moreover, Etisalat Misr is the frst and the only op-
erator in Egypt that has an exclusive international gateway
and its customers enjoy competitive international rates to
all destinations around the globe. In order to complete
Etisalat Misrs product portfolio, two well-established ISPs
(Internet Service Providers) were acquired and provide
broadband services to customers while at home and while
on the move.
Vodafone Egypt
In 1998, Vodafone Egypt (Ex Misrfone
Telecommunication Company/Click GSM)
entered the Egyptian Telecom Market as
the second operator; a consortium be-
tween Vodafone international, Air Touch, and local/ inter-
national partners.
In January 2002, Click GSM was rebranded to Vodafone
Egypt. 2006 witnessed another important step as Voda-
fone Egypt launched its off-shore operations under the
name of Vodafone International Services. This subsidiary
is dedicated to outsourcing business processes and IT ser-
vices for Vodafone operators and beyond. Both its Busi-
ness Process Outsourcing and Information Technology
Outsourcing business units have seen success year after
year with over 2,200 employees who collectively speak
ten different languages to provide world class customer
and technical support for customers in 80 countries.
Vodafone Egypt has grown over the years to become the
leading mobile operator in Egypt, not only in revenue
share but also to become the number one mobile op-
erator in Egypt with the largest customer base. Vodafone
proudly serves more than 36.3 million customers (Decem-
ber 2011) offering the most advanced technology for its
customers, the best working environment for its 6,500
employees and the strongest corporate responsibility ini-
tiatives for the community.
Global Telecom Holding
Global Telecom Holding began as
Orascom Telecom Holding (OTH),
a member of the Orascom group
of companies established in 1976.
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GAFI
Retail
The key factors behind Egypts forecasted growth in retail sales are an extremely large and youthful population, the
emergence of a more affuent middle class, a vibrant tourism industry and the growing acceptance of modern retail
concepts. Factors such as more women entering the workforce and Egyptians having increasingly busy lifestyles are
likely to see the value of the retail segment increase by 79.7% in local currency terms, from an expected EGP 192.66
billion (USD 35.48 billion) in 2012 to EGP 346.29 billion (USD 63.77 billion) by 2016, with long-term political stability
the only question mark.
Booming retail sub-sectors include autos as sales forecast to increase by 126% between 2012 and 2016, over-the-
counter (OTC) pharmaceuticals with sales expected to grow by 96.6% from by 2016 and consumer electronics with
sales forecasted to increase by 50.8% in 2016.
Wages in the wholesale and retail sector average USD 32.20 weekly.
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5
Core Areas for Investment: Large shopping centers, modern grocery distribution, hypermarkets, supermarkets,
retail and mixed-use real estate development.
Growing Domestic Market: Average annual GDP growth of 4.2% is predicted by BMI
until 2015. With the population increasing to a forecast 88.2 million people by 2015,
GDP per capita is expected to rise by 70.0%, reaching USD 4,957.
Retail Greenfeld: Still populated by micro enterprises, the Egyptian retail sector is
a Greenfeld for investors. 70% of the grocery retail sales were from non organized
and independent enterprises in 2007; this number is expected to fall by 7% in 2017.
The top fve retail players hold only 1.8% of total market share, leaving plenty of
space for new market entrants, while regional centers outside of Cairo and Alexandria
are virtually untouched markets with millions of under-served consumers.
Growth Potental: The global retail development index ranks Egypt 15th in the
world in terms of growth potential and second in terms of low market saturation. And
with the retail market increasingly saturated in previous key growth countries such
as China and Russia, retailers are turning to the Middle East for new opportunities.
Egypts location is good for trade as it has access to the Mediterranean and the Red
Sea, not to mention the Suez Canal that connects Europe with Asia.
Low Cost Base: The Egyptian labor force is internationally recognized for its high-skills and low-cost. Wages in the
wholesale and retail sector average USD 32.20 weekly. Every year, more than 324,000 university graduates enter the
workforce, manual labor is in abundant supply, and high school graduates speak European languages. Businesses in
Egypt also enjoy some of the lowest energy costs in the world, while the domestic building materials industry - including
cement and steel producers - are amongst the worlds cheapest suppliers, making retail space affordable.
The value of the retail seg-
ment is forecast by BMI to
grow by 63.4% in local cur-
rency terms over the review
period, from an expected EGP
223.82 billion (USD 41.22 bil-
lion) in 2013 to EGP 365.73
billion (USD 67.35 billion) by
2017.
Retail
72
GAFI
the Retail Industry
the Retail Industry
The Egyptian government has proven its commitment to improving the ease of doing business in the country, which
was refected in recent tax reforms and the cutting of red-tape for foreign investors.
The government is looking to develop an effcient retail environment supporting various sectors of the growing econ-
omy.
To this end, it sees itself as a key strategic partner in the coordinated development of Egypts retail sector and is keen
to attract foreign investment to enhance competition and modernize the retail environment.
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5
Success Stories
Metro Supermarkets
As a Mansour Group company, Metro
supermarket was introduced in Egypt
in 1998. The frst branch was opened in
Khalifa Al Mamoun, Heliopolis. Since its
operation in the Egyptian market, the
chain has expanded now to 43 branches covering Cairo,
Giza, 6th of October, Helwan, Alexandria, Mansoura, Is-
mailia, Sharm El Sheikh, Hurghada and Port Said; and
more stores are to be opened soon to meet the growing
needs of our diversifed customers.
Carrefour
Carrefour Egypt started fully
functioning at the end of 2002 and
the other stores opened thereafter.
International company operating with regional partner
Maijd Al-Futtaim Group.
Market leader, driving trend towards hypermarket shop-
ping in Egypt.
Carrefour plans to be operating 17 hypermarkets and 70
supermarkets in Egypt at the end of a fve-year devel-
opment plan to 2014.
GB Motors
The largest Egyptian automotive supplier by sales reve-
nue, market share and production capacity is Cairo-based
GB Auto, which has regional reach in the Middle East and
North Africa. It is a holding company for a diversifed
group of subsidiaries which are involved in the assembly
import and distribution of Hyundai passenger cars, and
the distribution of imported and locally assembled Volvo
Cars, Mitsubishi Motors, Hyundai Motor and Ghabbour
commercial vehicles, as well as retail sales of Bajaj two-
and three-wheelers.
HyperOne
USD 17.6 million in sales at two stores
with an average sales area of 10,000 m
2
.
Owned by Egyptian retailer El-Hawary.
More discount oriented than Carrefour, targeting aver-
age and lower income.
Located outside central Cairo.
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GAFI
Automotve
Industry in Egypt dated back to 1951, when Ford Motor Company established an assembly factory in Alexandria. The
earliest beginnings of the Egyptian automotive industry date back to the year 1960. During the socialist era, the gov-
ernment pledged to transform the country from an agricultural economy to an industrial one, and the frst completely
Egyptian car was produced.
Egypts large population makes it an attractive market for manufactured goods given robust consumer demand, which
is set to increase with the pace of expansion in the overall economy and per-capita income levels.
The automotive sector is one of the most important and critical sectors of the Egyptian economy. If one places it on
the MENA map, Egypt has a long way to go compared to Turkey, however compared to Morocco, Egypt has a market
double the size though very similar in its characteristics.
In 2013, Egypt was the third largest car-producing market in Africa, after South Africa and Morocco.
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5
Core Areas for Investment: Passenger Cars, Local parts supply, Bus-
es, Trucks, Commercial Vehicles, Motorcycles.
Largest Trained Workforce in the Region: The labor pool is expand-
ing, as Egypt possesses a large skilled labor force of 18.5 thousand engi-
neers and technicians that graduated in 2011/2012.
Preferental access to Key Global Markets: Egypt has access to
large key markets through various multilateral and bilateral trade agree-
ments with the USA, European, Middle Eastern and African countries;
which secures benefts to Egyptian-based producers supplying these
markets.
Large consumer market: Egypts large population makes it an attrac-
tive market for manufactured goods given robust consumer demand,
which is set to increase with the pace of expansion in the overall economy and per-capita income levels.
Feeder Companies Abound: Around 30 assembly plants churn out models from international brands such as Ger-
manys BMW, Koreas Daewoo, the USs Jeep and Frances Citroen to meet rapidly increasing domestic demand. In
addition, local subsidiaries of brands such as Nissan and BMW are expanding their operations to better use Egypts
competitive advantages as an export location.
Car sales in Egypt rose by 43%, to 17,463 units, in January 2013.
Total Exports of vehicles and cars component products during Jan - June 2013
reached USD 489 million, representing 4.2% of total exports.
As of July 2013, the automotive industry consisted of 509 companies operating
inland with total investments of USD 1.3 billion, and 19 companies operating in
free zones areas with total investments of USD 45.88 million.
Automotve
76
GAFI
Master Plan 2012/2013
Automotve Sector
Master Plan 2012/2013
Automotve Sector
Egypt has one of the few production bases in the region, Strong domestic production industry: 65% of units sold are
Egyptian built. So Automotive sector aims to reform the Auto sector through new strategy:
Egypt must attract a diversifed base of automotive component foreign direct investment on the basis of low labour
costs and other advantages. These companies will bring skills and technology, further strengthening the Egyptian
automotive industry and increasing its integration with the global automotive industry. They will also contribute to
Egypts exports and its reputation as an automotive location.
Egypt must develop a viable vehicle assembly sector, producing for both the local and regional markets. This will
require international automotive companies to select Egypt as their regional base for assembling specifc vehicles
and models.
Egyptian component companies must free themselves from their dependency on the local market, including both
assemblers and aftermarket. The most promising companies must move beyond their domestic status to become
independent, modern and internationally active suppliers.
Egyptian bus companies must build upon their current skills to become more effcient and cost competitive, making
Egypt a leading country in the region for bus production.
Objectves of Automotve sector plan for 2012/2013:
The government is seeking to maintain a balanced tariffs that leads to growth.
Improving the quality of locally produced parts to encourage the production growth.
Prepare capacity building program for the industry personal.
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5
Success Stories
General Motors Egypt (GM Egypt)
GM started assembling vehicles in Egypt in
1985. It produces light commercial vehicles,
light duty trucks and passenger vehicles.
Since 1975, Al-Mansour Automotive, a pri-
vately held subsidiary of the Mansour Group, has been
one of Egypts largest importers, distributors and retailers
of vehicles. In 2001, the company attained exclusive dis-
tributorship of GM products in Egypt.
GM Egypt has started manufacturing the Chevrolet Move
car at its facility in 6th of October City. Production of
the Move car will use kits supplied by GMs Chinese joint
venture SAIC-GM-Wuling.
GM has invested USD 10 million in developing and in-
stalling new tools at the facility to support plans to make
almost 5,000 vehicles a year for the Egyptian market. GM
will start production of the sixth generation of the Isuzu
KB range in Egypt in the second half of 2013.
Manufacturing Commercial Vehicles Company
(MCV)
Manufacturing Commercial Vehicles
Company (MCV) was established in
1994 to represent Mercedes-Benz in
Egypts commercial vehicle sector. The companys plant in
Salheya zone produces buses and trucks for the domes-
tic market and export markets in the Middle East, Africa
and Eastern Europe.
Opened in 2000, the plant has an annual production ca-
pacity of 3,200 buses per shift and a daily production
capacity of six light trucks and four medium or heavy
trucks. MCV exports to 29 countries, including the UK,
South Africa, the UAE, Algeria and Sudan. It has also set
up a JV with the Cubas Transport Ministry. MCV has 2,000
employees.
Toyota Motor
Toyota Motor operates in Egypt through
marketing company Toyota Egypt. Estab-
lished in 1979, the unit serves as the sole
local distributor for the groups cars, commercial vehicles
and spare parts.
Toyota Egypt has two affliates: Toyota Automotive Indus-
tries Egypt SAE, which is dedicated to the service centers,
with the main centre in Abassia zone and the other un-
der construction in Giza; and Toyota Misr SAE, which
sells passenger cars, commercial vehicles and brand
spare parts.
In April 2012, it was revealed that Toyota launched the
frst production line for its Fortuner sports utility vehicle
at Egyptian carmaker Arab American Vehicles Company
(AAV)s Cairo plant.
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GAFI
Nissan Motor
Established as a joint stock company in
March 1995, Nissan Egypt manufactures
and assembles the groups passenger
cars, commercial vehicles, SUVs, buses
and minibuses, as well as spare parts and components.
The company has an annual production capacity of
30,000 units and employs 580 staff. The actual production
volume is 5,000 annual units, with the Sunny, Maxima,
Patrol and Pathfnder in its core product range.
Nissan acquired the production operations of former
agent Modern Motors in 2004 and plans to invest USD 100
million in the facility. The plant produces pick-up trucks,
but will be adapted to manufacture the Sunny sedan and
X-Trail SUV.
Ghabbour Auto
Over the past six decades, Ghabbour
Auto has thrived under the leadership
of one of Egypts visionary business
families, transforming itself from a family operation into
a leading regional automotive producer and distributor,
guided by world-class executives with proven track re-
cords locally, regionally and internationally.
Ghabbour Auto represents and partner with some of the
worlds leading automotive brands, including Hyundai,
Geely, Mazda, Volvo, Mistubishi, Marcopolo, Iveco Irisbus,
Bajaj, Lassa, Yokohama and Westlake.
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5
Healthcare
Egypt has a long history in healthcare and medical practice, which dates back to Pharaonic times. In recent decades,
the country has achieved several improvements both in health indicators and healthcare provision.
The healthcare system in Egypt is dynamic and involves great complexity which incorporates both the public and private
sectors of the health insurance market. Healthcare services are provided by three main sectors, the government, the
public sector, and the private sector.
The Egyptian government has undertaken an ambitious reform of the national healthcare system, to build on a reputa-
tion as an excellent source of healthcare in the region and as a major destination for both health tourism and invest-
ment. As a result the government pledged to involve the private sector in every aspect of the economic reform process,
the healthcare sector is well positioned for a healthy expansion.
80
GAFI
Core Areas for Investment: Private hospitals, health tourism, elective proce-
dures, pharmaceuticals, continuing education programs, platforms and software,
rural healthcare.
Largest Trained Workforce in the Region: With an annual average of 10,000
graduates from medical schools, Egypt produces more doctors and pharmacists than
any other country in the Middle East.
At 27.2 million as of Q2 2013, Egypts workforce is the largest in the Arab world and
the second largest in the MENA region, after Iran.
Ongoing Training and Networking: Egypts healthcare workforce has an ex-
cellent reputation in the region for high quality standards and experience. Medical
personnel have access to state-of-the-art training programs from such companies as
Intel and Microsoft, while networking and chat sites allow knowledge sharing. Ad-
ditionally, Egypts doctors have access to online medical journals, allowing them to
keep up-to-date on the latest medical innovations.
High Doctor to Patent Rato: In 2012, Egypt recorded 8.0 physicians and 14.2
nursing staff, in addition to 1.4 dentists, and 2.6 pharmacists per ten thousand
citizen.
Upgrade of the Natonal Healthcare System: The governments plan to over-
haul the national universal healthcare system will drive new traffc to more than
1,607 hospitals and will create additional opportunities for investment, particularly
through the PPP program.
In 2012, Egypt recorded 8.0
physicians and 14.2 nursing
staff, in addition to 1.4 den-
tists, and 2.6 pharmacists
per ten thousand citizen.
No of Healthcare units are
recorded 5,263 and no of
beds in hospitals reached
128,47 in 2012.
As of June 2013, the health-
care industry consisted of
2062 companies operating
inland with total investments
of USD 1.86 billion.
Total Exports of pharmaceu-
tical and healthcare prod-
ucts during Jan June 2013
reached USD 231 million,
representing 2% of total ex-
ports.
Healthcare
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5
Healthcare Master Plan
2012/2013
Healthcare Master Plan
2012/2013
Healthcare policy aims to reform the healthcare system and health insurance through the program Health Insurance
for everyone.
Health strategy focuses on:
Development of health insurance fnancially and administratively.
Establishment of family healthcare fund in different governorates of Egypt.
Covering all citizens who are not covered by the current health insurance system.
Expansion of primary healthcare units in all provinces.
Development of public hospitals and health insurance in a manner consistent with the development of insurance
systems.
Objectves of healthcare plan for 2012/2013:
Increasing of life expectancy average to 72.2 years for females and 69.1 years for males.
Reducing child mortality rates of infants and newborns and children under the age of fve as well as reducing maternal
mortality rates.
Increasing the number of benefciaries of the health insurance from 52% out of whole population in 2006/2007 to
58% in 2012/2013.
Developing 26 hospitals in 2012/2013.
Target Investments 2012/2013:
Investments in the health sector in 2012/2013 plan are estimated to be EGP 7.6 billion, including about EGP 4.6 billion
invested by the public sector and about EGP 3 billion invested by the private sector.
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GAFI
Success Stories
Misr Internatonal Hospital
Misr International Hospital is a joint-stock company, capi-
talized at EGP 60 million. Its shareholders include 160
university professor and doctors specialized in all felds of
medicine, the Egyptian banking sector and a number of
Egyptian, arab and foreign investors.
The purpose of the company is to establish an interna-
tional hospital in accordance with the highest standards of
technology and equipped with the most modern and up-
to-date methods of diagnosis and therapy in all felds of
medicine .It is provided with the latest western scientifc
equipment from Europe and the United States.
Dar Al Fouad Hospital
Dar Al Fouad Hospital was founded in 1995 and special-
izes in a number of felds, including cardiothoracic sur-
gery, oncology and organ transplants.
The 42,000 square meter hospital in Sixth October City
was built in collaboration with Cleveland Clinic Interna-
tional and is renowned for providing high-quality care in
state-of-the-art medical facilities.
Dar Al Fouad Hospital provides the highest quality and
safest healthcare in Africa and the Middle East. The hos-
pital is renowned for its cardiothoracic, cardiology, oncol-
ogy, organ transplant, and orthopedic departments.
Cleopatra Hospital
Cleopatra Hospital has received her frst patient in 1984.
The services focus on two major aspects, clinical excel-
lence ethical conduct, in a cost effective single source
solution.
This is attained by very close collaboration between the
Hospital many consultants holding honorary chairs and
senior lectureships in the university. The new building
which was annexed to the hospital early 1999 is a mate-
rial testimony to a success story. Keeping that momentum
looking to further progress we intend after crossing to the
new millennium.
Arab Contractors medical Center
Arab Contractors medical Center has been established in
1981 by Arab Contractors Company (Osman Ahmed Os-
man & Co.).
Arab Contractors medical Center has been launched as
a leading healthcare provider in Egypt, focusing on pro-
viding quality medical services, compassionate care and
state-of-the-art technology. The unique location on the
top of a widely green hill and the physical design of the
hospital set us apart from others.
The hospital is 350-bed, ranging from economic up to
luxurious suites. It has been submitted to successive
stages of development including the buildings, technol-
ogy and equipments, work procedures and information
technology.
83
5
GlaxoSmithKline (GSK)
GSK operates in Egypt through its
91%-owned subsidiary GSK Egypt,
which employs around 1,500 staff.
The subsidiary, established in 1990,
principally manufactures ethical drugs, but also markets
and distributes other pharmaceuticals products and toi-
letries.
GSK was listed in Egypt in 1985 and has a market capitali-
sation of EGP 1.55 billion (USD 266.45 million). The com-
pany has more than USD 100 million of investments in
Egypt. According to IMS Health data for September 2009
MAT, GSK ranked frst in Egypt, with an 8.7% value share
of the market. GSKs main activities in Egypt are manu-
facturing, packaging, marketing, selling and distributing
GSK products.
GSK Egypt also imports and distributes a range of its par-
ent companys products that are not manufactured in
Egypt.
In addition, GSK Egypt manufactures a range of products
under licence from other pharmaceuticals manufacturers.
GSKs production capacity in Egypt equates to approxi-
mately 107 million medicine units per year.
Al Borg Laboratory
Al Borg Laboratory was established in 1991 as a share-
holding company and is now the largest private laboratory
in the Middle East.
The company has opened 60 labs throughout Egypt and
14 labs in the Middle East. Throughout the years, the
company has served 17 million patients and carried out
50 million laboratory tests all over Egypt. It was recently
the subject of a highly proftable private equity takeover.
84
GAFI
Address: 3 Salah Salem Road, Nasr City, Cairo, Egypt.
Tel. : +202 240 55 452
Fax : +202 240 55 425
The information in this publication may be freely re-used and reproduced provided appropriate credit is given
to the source.
Publication Team
Hanaa Dakroury
Rabab Marie
Hanan Saad
Rasha Makhlouf
Akram Emara
Design
Akram Emara
Published by : General Authority for Investment and Free Zones
(GAFI)
The Arab Republic of Egypt
www.gaf i.gov.eg
for
a
gypt
General Authority for
Investment & Free Zones
www.ga.gov.eg
for
a
gypt

Doing Business in Egypt

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