Guidance

Overseas business risk: Egypt

Updated 2 June 2023

1. Political

The Arab Republic of Egypt was established in 1953. The period that followed saw large-scale nationalisation, state-led development, and public sector growth. A period of economic liberalisation followed, including a series of reforms in the 1990s.

Following a period of political unrest in 2011 to 2013, President Abdel-Fattah El-Sisi came to power, and has periodically sought to enact economic reforms, including in 2016. Under Egypt’s constitution, passed in 2014, the Head of State is elected every 6 years, with El-Sisi most recently elected in 2018.

Cabinet Ministers, including the Prime Minister, are appointed by the President and confirmed by Parliament. The country is divided into 27 Governorates, each with a Governor and Deputy Governor, appointed by the President. The legislative branch consists of the Senate (Upper House) and House of Representatives (Lower House). Elections are held every five years. The constitution stipulates that the principles of Islamic Sharia form the principle source of legislation.

The political environment remains restrictive, with limits on freedom of expression and assembly.

2. Economic

Egypt is the third largest economy in the MENA region and the second largest in Africa. The country’s economy is diversified, with hydrocarbons, manufacturing, tourism and agriculture playing a major role. After the 2011 revolution and subsequent political turmoil, macroeconomic performance improved between 2016 and 2019 with the implementation of an IMF-backed reform programme. But, the economy was then hit by COVID-19, which disrupted economic activity.

Although Egypt weathered the pandemic relatively well (with IMF support) and was one of the few countries globally that recorded positive growth in 2020, consequences of Russia’s invasion of Ukraine has dealt another blow to the economy, exposing some structural weaknesses.

In December 2022, Egypt signed its third programme with the IMF in six years. The programme aims to preserve macroeconomic stability, strengthen social safety nets, and push forward deep structural and governance reforms to promote sustainable private sector-led growth and job creation. The Egyptian authorities committed to further fiscal consolidation, moving to a durably flexible exchange rate, and introducing deep structural reforms to create a level playing field between public and private businesses.

Reforming the business climate is necessary to unleash the country’s significant economic potential.

3. Bilateral trade

Egypt is the UK’s third largest export market in Africa and has strong economic, historical and political connections with Great Britain. Total bilateral trade in goods and services amounted to £4.7 billion last year, which is a 38.5% increase on the previous year.

Egypt has a wide range of overlapping trade agreements including the African Continental Free Trade Area (AfCFTA), a European Union (Association Agreement), the Common Market for Eastern and Southern Africa (COMESA) and the Pan Arab Free Trade Area (GAFTA). A UK-Egypt bilateral investment treaty has been in force since 1976. The UK Egypt double taxation convention entered into force in 1980. The UK–Egypt Association Agreement entered into effect on 1 January 2021, and is now in force.

Egypt has signed up to many international agreements and is seen as a regional leader for Arab countries, and across Africa. Egypt is also a member of the World Trade Organization (WTO), and a member of General Agreement on Tariffs and Trade.

Egypt ranked 114 out of 190 economies in the final World Bank’s Ease of Doing Business report, published in 2019, rising 14 places from two years previously.

Egypt’s rank in the World Economic Forum’s latest Global Competitiveness Report was 93 out of 140, up from 100 two years earlier.

Market strengths include:

• strategic location with the Suez Canal the main transport route between Asia and Europe
• young growing population (Over 61% of the population is under the age of 30)
• diversified economy with strong agricultural and manufacturing base
• free trade and investment zones
• large consumer market (population over 100m)
• skilled and low wage workforce
• reasonably developed infrastructure
• competitive tax rate of 22.5%
• political and financial support from the Gulf monarchies and Western countries
• large oil and gas reserves, and significant sources of renewable energy

Market challenges include:

• delays in payment for goods/services
• lack of adequate protection for intellectual property rights
• ministerial trade decrees that mandate restrictions for the import of some products
• complex regulatory environment
• a lack of transparency of tenders, particularly in public procurement due to ‘sole sourcing’
• macroeconomic instability and IMF restrictions on government spending
• difficulty in obtaining project finance

4. Human rights

The FCDO’s annual human rights report lists Egypt as a human rights priority country. There are restrictions on freedom of expression, civil society and political opposition. Egypt ranks 166th in the RSF World Press Freedom Index. The death penalty is regularly used: in 2022, international NGOs recorded 24 executions and more than 500 death penalty sentences.

Egypt is a member of the UN Human Rights Council and has ratified a number of UN Treaties, including the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights.

5. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world. In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

In 2022, Egypt ranked 130 out of 180 countries, in Transparency International’s Corruption Perception Index (CPI), falling from 117th in 2021.

You are invited to visit the Business Anti-Corruption portal page providing further advice about handling corruption in Egypt and measures you can put in place to protect your company. Please also read the information provided on our Bribery and corruption page.

6. Terrorism

The UK government’s travel advice is kept up to date with latest information relating to the safety of British nationals overseas. Terrorists are very likely to try to carry out attacks in Egypt. Although most attacks occur in North Sinai, there is a risk of attacks across the country. There is a heightened threat of terrorist attacks in or around religious sites and during religious festivals.

You should follow the advice of Egyptian authorities, remaining particularly vigilant and maintaining a high level of security awareness in crowded places and at large gatherings. You can find a list of holidays on the British Embassy Cairo website. The authorities in Egypt maintain a significant security presence across the country, including armed security officers stationed at important sites, critical infrastructure, and road checkpoints. Extra measures are in place at tourist sites.

7. Protective security advice

The UK government’s travel advice is kept up to date with latest information relating to the safety of British nationals overseas.

7.1 Political and security situation

Since January 2011, Egypt has experienced significant political turmoil and the political environment remains restrictive. This has sometimes involved violent protests and disturbances. Police have previously used water cannons, tear gas, birdshot and live ammunition for crowd control. Foreigners engaging in any form of political activity or activities critical of the government may be at risk of detention or other measures. There are reports that personal electronic devices are being checked by security personnel, particularly around places of public gathering, such as Tahrir Square.

7.2 Crime

The crime rate in Egypt is generally low, but over the years visitors have sometimes suffered armed robberies, muggings (including in taxis), sexual assaults, and break-ins to accommodation and cars. Take care of your passport and valuables.

The British Embassy has responded to cases of sexual assault and harassment against British nationals in Egypt, though many incidents often go unreported. Take extra care when travelling alone, particularly at night, in taxis and microbuses.

8. Intellectual Property

The WTO’s TRIPs agreement sets out the minimum standards of intellectual property protection to be provided by the organisation’s members, which includes Egypt.

Egypt has taken steps to improve intellectual property (IP) rights enforcement, but concerns remain with the widespread use of pirated and counterfeit goods, including software, music, unlicensed satellite TV broadcasts, and videos. The lack of reliable systems for processing trademark and patent applications remains an obstacle for the growth of IP exports.

British businesses looking to protect their intellectual property rights in Egypt should seek advice from a local lawyer or IP adviser before they start selling into the Egyptian market. A list of lawyers can be provided by the Department for Business and Trade (DBT) team in country.

Read more information provided on protecting on our Intellectual Property page.

9. Department for Business and Trade (DBT)

The DBT team in Egypt is based in Cairo and although covering every sector their main focus is Energy, Infrastructure, Defence & Security, Education, Healthcare, and Financial Services. There is also a dedicated team that works on UK trade policy and market access barriers. DBT services include giving good and practical advice to UK companies, commissioning reports, finding reliable agents and partners in Egypt, holding events and arranging meetings with relevant Government officials. DBT has developed a wide range of expertise and contacts to help guide UK businesses through the process of setting up business and/or selling into the Egyptian market. UK Export Finance is available to exporters looking to do business with Egypt.

10. UK export finance

UKEF is the UK Government Export Credit Agency, and its mission is that no trade should fail due to lack of finance or insurance. UKEF has a local representative in Egypt based in Cairo, who provides support to UK Exporters as well as the Egyptian buyers of UK goods and services.

For more information about UKEF country cover for Egypt and contact details, please visit: UK Export Finance.

11. Contact

Contact the DBT team in Egypt for further information.