No doubt that Egypt is recognized as an attractive market to invest in, thanks to its unique mix of demographics and commercial links to the broader world, strategic location at the gateway of trade and commerce for Southern Europe as well as Africa and the Middle East position and population of over 83 million makes it the largest Arab country a in addition to that the government ability to apply new package of incentives to the new and old investors.
Low Taxes and Customs
As a part of its ongoing efforts to make Egypt the most attractive investment destination in the MENA region, the government has clarified the tax code and corporate tax rates and personal tax rates 22.5%, and Sales Tax / VAT Rate is 14% .
In order to improve Egypt’s standing as a global manufacturing hub, the custom tariff ranged from 0 to 30% according to the Degree of manufacturing and from 0 to 10% on the imported machines.
Reforms instituted in this sector over the past several years have positively impacted the economy, placing increased emphasis on the role of the Central Bank of Egypt and consolidating the banking sector through a variety of methods ranging from mergers to privatizations.
The Central Bank of Egypt has created a sounder and more efficient banking system by hiking capital reserve regulations, encouraging mergers and acquisitions, developing its regulatory and supervisory apparatus and addressing the legacy of non-performing loans.
The sector saw further growth of non-bank financial products including mortgage finance, financial leasing, fixed-income products, factoring and insurance.
The Egyptian Financial Supervisory Authority (EFSA )is a public Authority, is responsible for supervising and regulating non-banking financial markets and instruments, including the Capital Market, the Exchange, all activities related to Insurance Services, Mortgage Finance, Financial Leasing, Factoring and Securitization.
EFSA's role is to regulate the market and ensure its stability and competitiveness to attract more local and foreign investments, in addition to limiting inconsistency risks and addressing problems arising from applying different supervisory rules.
The Capital Market Authority (CMA) which is the market regulatory agency responsible for ensuring the development of a transparent and secure market for investors in Egypt remained strong with both the oldest and one of the newest exchanges in MENA.
Egyptian Stock Exchange (EGX) has been among the best-performing exchanges in the world since 2003, closing up more than 100% in both ’03 and ’04. The EGX, the oldest stock market in the MENA region, became the first Arab member of the World Federation of Exchanges in 2005, in recognition of Egypt’s regulatory soundness and sophistication.
The CMA introduced the Nilex, the region’s first small-cap stock exchange, in 2007, SMEs are the backbone of Egypt’s economy . The Nilex offers SMEs access to financing and investors a clear picture of companies they wish to invest in as well as a clear exit strategy — now as simple as selling shares.
The regulatory and institutional frameworks governing investment in Egypt have seen significant overhauls in the past several years. The government has taken bold steps to slash red tape and make Egypt -one of the world’s oldest economies- also one of the easiest in which to do business. Some examples of reforms and protections based on the concepts of property rights protections, equality and ease of doing business include:
- Fast-track dispute resolution services for all investors.
- 100% foreign ownership of companies.
- Profit and dividend repatriation, dispute resolution and settlement mechanisms implemented.
- Comprehensive corporate governance principles which means the rules, processes, or laws by which businesses are operated, regulated and controlled, anti-money laundering, anti-trust and consumer protection laws.
- New commercial court system now rolling out nationwide to settle business disputes
- Incorporation time slashed from an average of several months to only 72 hours.
- One Stop Shop which contains 53 representative offices from different authorities, taking into consideration that the One-Stop Shops introduced at multiple locations throughout the country.
- Minimum capital requirements for LLC reduced to EGP 200.