doing business in egypt

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for a Brighter Future

General Authority forInvestment & Free Zones

SectorSnapshots

&Investment

foragypt

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Population: 85.9 million (Jan 2014).

Capital: Cairo.

Official 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 InvestmentUSD 3 billion (2012/2013).

Unemployment12.7% (2012)

ExportsUSD 26 billion (2012/2013).

ImportsUSD 57.5 billion (2012/2013).

Exchange Rate (2012/2013)USD = 6.45 EGPEUR = 1.29 USD

£.E. = 1.56 USD

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GAFI

Contents1 Why Egypt?

1-1 A large, Trained, Competitively Priced Labor Force1-2 Large Consumer Market1-3 Developed Infrastructure1-4 Competitive Tax and Custom Rates1-5 Population1-6 Political System

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2 Economic Development

2-1 Economic Road Map2-2 Proposed Plan to Encourage Investment2-3 Investment Map

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3 Investment Regime

3-1 Inland Investment 3-2 Egyptian Free Zones3-3 Investment Zones3-4 Special Economic Zones 3-5 One Stop Shop

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4 Key Investment Regulations

4-1 Investment Laws Incentives and Exemptions4-2 Mechanisms of Reconciliation and Arbitration with Investors4-3 Key Investment-Supportive Laws

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5 Sector Snapshots

5-1 Agribusiness5-2 Tourism5-3 Textiles5-4 Petrochemicals5-5 Real Estate5-6 Building Materials5-7 Logistics and Transportation5-8 Communication and Information Technology5-9 Retail5-10 Automotive5-11 Healthcare

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1for a Brighter Future

1-1 A Large, Trained, Competitively Priced Labor Force

- At about 27 million, Egypt’s 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 fill 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, financial services and tourism are among Egypt’s eco-nomic leaders. Wages in these sectors are very com-petitive and more stable than wage levels in other countries.

Why Egypt?

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1-2 Large consumer market

- Egypt has emerged as a consumer market of significant 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 Egypt’s 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 benefits 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 world’s 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 country’s inhabited land. Wire line broad-

band is readily available in urban areas. The country’s 15 commercial ports serve the nation’s exporters and import-ers alike, while an expanding, upgrading airport network caters to both passengers and cargo traffic, Egypt’s 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 Competitive 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 modified 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 Egypt’s 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 Population

Since ancient times, Egypt has been carrying census for its population. The first census was carried out in 1882.

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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 1st October 2013, Egypt’s 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 figures 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 Political 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 Egypt’s land and views it as an honor and sacred duty.

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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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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 finan-

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

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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 financial insti-

tutions to take risk and finance.

- Achieving social justice through a variety of service

projects in the field 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

reflects the State’s interest in maximizing the advantage

of Egypt’s 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 benefits 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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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-ernment’s 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 confirming that the concerned ministry should back serious investors to obtain the licenses required for the establishment of projects.

5. Defining 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 “first 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 fields:

- Reclamation and cultivation of barren and desert land.

- Animal, poultry and fish production.

- Manufacturing and mining.

- Tourism: hotels, hotel flats, 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

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- 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 sector’s 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 sector’s 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 defines 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 Egyptian 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 State’s terri-tory. Despite the fact that they fall within the State’s 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 country’s 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 fields.

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 field of investment.

- Transferring profits 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 project’s 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 filed 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/m2 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 confined 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 fields 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 Egypt’s economic growth through effective in-vestment system characterized by the ease and conve-nience in dealing with investors

Objectives

- Establishing integrated clusters in all fields.

- 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 country’s 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 five 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 company’s establishment.

- Companies and establishments within the investment zone shouldn’t be nationalized or Confiscated.

- 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 profit.

- 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 fields and distributed among (7) Egyptian governorates as follows:

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Zone Activity Governorate Location Area(Acre)

Industrial zones

1 CBC Egypt for Industrial Develop-ment Building materials Giza 6th of October 357

2 Polaris International Industrial Park Textile industries Giza 6th of October 463

3 The Industrial Development Group Auto-feeding industries Giza 6th of October 463

4 Pyramids Industrial Parks Engineering industries Sharqiya 10th of Ramadan 262

5 Al-Tajamouat Industrial Park Textiles and RMG Sharqiya 10th 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 Scientific Research

8 City of Scientific Research and Tech-nology Applications Nanotechnology and biotechnology Alexandria Alexandria 135

9 Cairo University Higher education and scientific research Giza 6th of October 749

10 Ain Shams University Higher education and scientific research Qalyubiya Obour 163

11 Fayyoum University Higher education and scientific research Fayyoum New Fayyoum 150

Communication and Information Technology

12 City of Scientific 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 first 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 km2.

Vision

To be a premier international investment destination by creating a superior business environment for attracting investments to Egypt while ensuring maximum benefits 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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• Increase Egypt’s share in the international trade.

• Increase exports, not only in terms of accelerating ex-port growth, but export diversification as well.

Incentives and Benefits

• 10% unified income tax in the SEZone (versus 25% outside of SEZone) applicable on the profit 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 filed to appeal the decision and the panel did not decide the appeal.

Contact

Email: [email protected]

Web site: www.sezone.gov.eg

3-5 One Stop Shop

Definition

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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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 fifth year.

• Awarded a Certificate 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 unified 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 offices (registering, amendment, cancellation).

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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 certificates 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 Egypt’s experience in the “one-stop shop” service for the Investment Authority.

c. The World Bank praised Egypt’s leading experiment in the One Stop Shop “Following the example of Egypt’s One Stop Shop, it will be examined in other countries. It is designed in a manner that encourages its emulation. “Many countries asked for Egypt’s as-

sistance in the establishment of a similar One Stop Shop.

• Many countries sought Egypt’s 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.

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4-1 Investment Laws Incentives and Exemptions

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 profits 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, fisheries and fishing 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 offices as well as in-vestment, saving and deposit certificates 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 Regulations

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5. Revenues obtained by individuals from:

A. Yields of bonds and financial 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 five 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 fiscal stamps and authentication

fees for five 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 fiscal 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 profit tax. This percentage is determined by

the Central Bank of Egypt lending and discount rates,

provided that the company’s stocks are listed on the

stock exchange.

- Revenues of bonds, financial instruments and other se-

curities issued by joint stock companies are exempted

from the tax on floating 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 profits.

Customs exemptions

- Full customs exemptions for free zone projects.

- A unified 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 unified 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


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 beneficiary be-

fore the completion of the implementation of the project

and the actual start of production.

Employment incentives

Under Minister of Trade and Industry’s and Minister of

Finance’s 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 certificate 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 guarantee’s 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 liquefied letters of

guarantee if the reasons for liquefaction are proven.

26

GAFI

- A permanent industrial register can be issued and re-

viewed every five 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 IDA’s offices 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 finish 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 financing.

4-2 Mechanisms of Reconciliation and Arbitration 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-supportive laws

1- Labor Law in Egypt

The Egyptian labor market is regu-lated by the unified 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


ployer to fire 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 office are required. A certificate 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 foreigner’s name, surname, nationality and re-ligion

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GAFI

• Birth date

• Job title and exact job description

• Qualifications

• 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-ficers and entitles public authorities to intervene in union financial 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


AgribusinessWith 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 Egypt’s GDP in 2011/2012.

The government has made development of the agricultural sector a priority ensuring continued levels of investment,

the country’s food production industry is better developed than that in many neighboring states, creating strong export

opportunities.

SectorSnapshots

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: Egypt’s climate - which allows for extended and extra growing seasons -

and significant groundwater resources make it particularly conducive to agribusiness

projects. Especially beneficial 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.

Preferential Access: Egyptian agriculture and food exports enjoy preferential ac-

cess to important markets including the European Union and the Arab world.

Location: 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 country’s 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-specific 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.

Competitive Strengths and Capabilities

• Egypt represents one of the largest markets in the re-gion; agriculture contributed to around 14.5% of Egypt’s 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


A Large and Growing International 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 country’s 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 field.

High Export Potential: Egypt is ranked among the top five 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.

Critical 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 SectorPolicy 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-specific 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 industry’s 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 Egypt’s membership in several

regional free trade agreements, including GAFTA and

COMESA. Through Egypt’s COMESA membership, for-

eign investors in Egypt can benefit from the customs

exemptions granted to COMESA member nations,

whereas Egypt’s trade pact with the European Union

gives Egyptian processed food items duty-free access

to the EU market.

33


Success Stories

Farm FritesEstablished 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 Egypt’s 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.

SekemIn 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 BrosEstablished 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 five-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 Certificate for its extra-virgin olive oil, and it received

the distinguished Organic Agriculture Certificate, 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-certified since 1999.

35


TourismEgypt’s tourism industry is among the most diverse and vibrant in the world. Beyond the pristine beaches and year-round sunshine, Egypt’s 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 five-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 Egypt’s 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 significant draw. The country’s

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 country’s 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: Significant 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


Tourism DestinationsTourism Destinations

Beaches and ResortsCelebrated 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 SitesThe remnants of Egypt’s 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 Egypt’s Pharaonic past. In Greater Cairo, tour-

ists may visit Egypt’s most iconic destination: the pyra-

mids of Giza and the Sphinx.

Religious SitesReligious tourism has steadily increased over the past

several years. One of the most popular destinations is St.

Catherine’s 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 SitesEgypt has striking natural sites in addition to sunny beach-

es, including desert landscapes, oases, canyons and falls.

Egypt’s 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 RejuvenationEgypt 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 fields 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;

office buildings; residential towers, and a medical center.

Misr TravelEstablished 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 HoldingIs 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 company’s flag-

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 first-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


EmecoEstablished 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 diversified transportation group

offering solutions ranging from 5-passenger vehicles to

50-person buses.

Egyptian 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 field 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 five

years and plan to renovate around 1,227 existing rooms

and create 320 new rooms our the next three years.

40

GAFI

TextilesEgypt 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 government’s 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


Core Areas for Investment: Cotton production, yarn making, spinning,

weaving, knitting, dyeing and ready-made garments.

High Quality Raw Materials: Egypt’s cotton is internationally prized

and valued for its quality.

Competitively 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 Location: The country’s 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, Egypt’s

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.

Textiles

42

GAFI

Strong Government Support for the Textiles IndustryStrong Government Support for the Textiles Industry

The Egyptian government is actively looking to attract new private investments into the industry’s upstream segments

in order to sharpen the nation’s 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


Success Stories

Al-Arafa Investment and ConsultingArafa 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 company’s 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

Egyptian 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 Textiles (KABO)Established in 1940, El-Nasr Clothing and Textiles Co. (KABO) is one of the pioneers in the textiles and garments field 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 company’s flagship product is the Jil brand, manufactured under license from Jil Inter-national. An Egyptian household name; and it represents roughly 90% of the company’s products.

44

GAFI

Chourbagi Moderne for Clothing and Textiles 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, finishing, cutting, sewing and final pack-aging and distribution.

“Charmaine” and “Pink Powder Room” brands continue to find 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


PetrochemicalsThe 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 country’s 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 liquefied 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. Egypt’s

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 benefit 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.

Competitive Production 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 Egypt’s 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


Strong Policy Support for Petrochemicals IndustryStrong Policy Support for 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 Refinery (MIDOR)MIDOR is an Egyptian joint stock company

established in 1994 under Investment Law

No. 230 of year 1989 and its amendments.

MIDOR Refinery is classified as a deep con-

version refinery using the latest scientific

and technological methods to suit the fluctuating market

needs, the refinery investment is almost USD 1.4 Billion.

MIDOR refinery 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 first refineries in the Middle East that

is designed to cope with the most demanding world en-

vironmental standards for effluent treatment and product

specifications.

The Spanish Egyptian Gas Company (SEGAS)The Spanish Egyptian Gas Company (SEGAS) liquefied

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 final 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-fired power stations in Spain. This LNG

project was the first facility of its type in Egypt and is one

of the world’s 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

m³/year) of LNG by air-cooled refrigeration and fraction-

ation. The complex requires 270 personnel and produc-

tion is around 600 t/hr (24°C 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 first 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


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 BlackEstablished 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 satisfied. 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 five 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


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: Egypt’s 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 6th 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 m2 per annum.

Real Estate

52

GAFI

Leading Opportunities in a Dynamic MarketLeading Opportunities 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 confidence and activity. Evidence of this includes:

• Current and active demand for between 5,000 and 15,000 m2 of office 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

first 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 first office phase

in mid-2012 and Damac is looking to open its retail and office 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 firms 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 m2 of high quality retail space into

the market in New Cairo.

53


Success Stories

Talaat Moustafa Group (TMG) HoldingTMG 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 m2 of land so far. Amongst the

group’s 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. TMG’s 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.

TMG’s 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.

EmaarA 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 Egypt’s 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 fifth 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

SodicSODIC was incorporated in Egypt in 1996 , Today it is one of Egypt’s lead-

ing real estate companies. Egypt’s SODIC, the country’s third-biggest listed real estate firm, registered almost 570 million Egyptian pounds (USD 96 milion) worth of sales to the end of September 2011. Its net profit in Q1 2012 is EGP 35,7 million.

Sodic’s projects:Beverly Hills: was one of the first 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, SODIC’s first 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 firm 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 firm 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’ offices, 2,000 boutiques and retail outlets and up to five hotels.

Amer Group25 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-sified 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 m2.

• 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 m2.

• New Ventures: Porto Vacation Club (PVC).

55


Building MaterialThe 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.

Competitive Production cost: Availability of local raw materials at reasonable

prices. One of the Egyptian’s 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 benefits 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, Egypt’s 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


The Major Sub- Industries in the building material sectorsThe Major Sub- Industries in the building material sectors

Iron and Steel Industry

The Egyptian Steel Industry is the backbone of Egypt’s

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, specifically in 1927 with

the construction of Torah Cement Company.

Approximately 70% of the Egyptian cement sector is

partially or wholly owned by international cement firms.

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 SteelEzzsteel is the Middle East’s leading

producer of high-quality long and flat

steel for use in a wide range of end applications, the com-

pany produces long and flat 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 flat products, which

consist of hot rolled coil, which are thin gauge sheets

manufactured to precise specification 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-finished, finished 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 CementASEC 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 region’s leading private equity firm.

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


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.

LafargeLafarge 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 fit

the needs of all its clients.

Lafarge Egypt clients benefit 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 fluid, labor-saving concrete that

flows 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 flow 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.

Logistics and Transportation

61


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 Position: 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 Domestic 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.

Greenfield Opportunities: Greenfield 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.

Statistics:

• 8% of the world’s 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.


Statistics:

Logistics

62

GAFI

Strong Policy Support for the Logistics SectorStrong Policy Support for the Logistics Sector

Transportation: 2012/2013 Master plan

RailwayDevelop, maintain and upgrade trains, stations, signal

systems, tracks, bridges, tunnels….etc.

Under Ground MetroCompletion 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 networksTo construct new roads and bridges to face the traffic

congestion in the Nile Delta zone, with a total budget of

EGP 2.7 billion.

AirThe main goal is to reduce the operation, Supporting the

operation network.

MaritimeTo 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 beneficiaries of its services.

63


Success StoriesKGL 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, finance and

operate a USD 1 billion container terminal in Damietta.

Leader GroupFounded in 1996, Leader Group

is a freight forwarding and ship-

ping agency with a total of five

offices 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 Group’s extensive experience in

customs clearance, haulage, sea and air freight, project

logistics and shipping agency services.

Egyptian Transport & Commercial Services SAEFounded 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 Germany’s Schenker Logistics, its worldwide

partner in air and sea services. Land transport is handled

by the company’s own fleet of trucks and trailers. Egy-

trans acquired Egyptian Transportation & Logistics (ETAL)

in 2001.

The company has more than 350 employees and 8 branch

offices in Egypt, its revenue rose 6.5% from EGP 134.37

million to EGP 143.11 million, while net profits 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 company’s Alexandria operation.

Mediterranean Shipping Company (MSC)Founded in 1970 in Geneva, Swit-

zerland. MSC launched its first 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 offices 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 first 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 significant

growth.

EGYPTAIR HOLDING Company has a highly reputable

and advanced Training Centre which provides training

programs in various fields for EGYPTAIR companies and

other international companies. Furthermore, EGYPTAIR

Training Centre includes the latest flight simulators in the

Middle East. On the 11th of July 2008, EGYPTAIR officially

became the 21st member of Star Alliance.

EGYPTAIR is the nation’s flag carrier and will strengthen

65


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 flights.

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

Communications & Information Technology

Egypt’s 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. Kearney’s 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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Core Areas for Investment: Business process outsourcing, key-process outsourcing, call centers, localization and Arabic-language development.A Pro-Business Government and Regulatory Body: Egypt’s Ministry of Communications and Information Technol-ogy is widely credited with having created the conditions allowing the sector to flourish. The National Telecommunica-tions Regulatory Authority promotes competition in broadband, fixed-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 reflected 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 nation’s fixed-line player, serves 8.63 million subscribers Q1 2013. Wireless and wireline broadband cover every major urban centre in Egypt. A Large and Growing Domestic 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 Multilingual 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.Critical 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 exper¬tise 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

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GAFI

Policy Support for ICT Industry InvestmentPolicy Support for ICT Industry Investment

• The government’s 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 nation’s young

labor.

• The government provides an incentives package to cater to the investor’s 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 traffic.

- 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 specifications. These training programs are often offered at the government’s expense.

- Assigns a government official to facilitate interaction with government organizations.

Inar, the first Egyptian Tablet

Inar is not just the first 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 significant

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 officials during the first fase of the project.

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Success Stories

Etisalat 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 first 3.5 G

operator. Etisalat’s entry to the Egyptian market ushered

in a new era for the Telecom Industry.

Today, Etisalat Misr’s 2G and 3G robust and high qual-

ity network covers and serves 99% of the population in

Egypt. Moreover, Etisalat Misr is the first 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 Misr’s 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 EgyptIn 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 HoldingGlobal Telecom Holding began as

Orascom Telecom Holding (OTH),

a member of the Orascom group

of companies established in 1976.

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GAFI

RetailThe key factors behind Egypt’s forecasted growth in retail sales are an extremely large and youthful population, the emergence of a more affluent 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.

71


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 Greenfield: Still populated by micro enterprises, the Egyptian retail sector is

a Greenfield 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 five 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 Potential: 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.

Egypt’s 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 world’s 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

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GAFI

Strong Policy Support for the Retail IndustryStrong Policy Support for the Retail Industry

The Egyptian government has proven its commitment to improving the ease of doing business in the country, which

was reflected in recent tax reforms and the cutting of red-tape for foreign investors.

The government is looking to develop an efficient 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 Egypt’s retail sector and is keen

to attract foreign investment to enhance competition and modernize the retail environment.

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Success Stories

Metro SupermarketsAs a Mansour Group company, Metro

supermarket was introduced in Egypt

in 1998. The first branch was opened in

Khalifa Al Ma’moun, 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 diversified 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 five-year devel-

opment plan to 2014.

GB MotorsThe 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 diversified

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 m2.

• 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

AutomotiveIndustry 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 first completely

Egyptian car was produced.

Egypt’s 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.

75


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.

Preferential 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 benefits to Egyptian-based producers supplying these

markets.

Large consumer market: Egypt’s 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-

many’s BMW, Korea’s Daewoo, the US’s Jeep and France’s 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 Egypt’s

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.

Automotive

76

GAFI

Master Plan 2012/2013 Automotive SectorMaster Plan 2012/2013 Automotive 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 diversified 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

Egypt’s 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 specific 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 efficient and cost competitive, making

Egypt a leading country in the region for bus production.

Objectives of Automotive 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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Success StoriesGeneral 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 Egypt’s 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 GM’s 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

Egypt’s commercial vehicle sector. The company’s 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 Cuba’s Transport Ministry. MCV has 2,000

employees.

Toyota MotorToyota Motor operates in Egypt through

marketing company Toyota Egypt. Estab-

lished in 1979, the unit serves as the sole

local distributor for the group’s cars, commercial vehicles

and spare parts.

Toyota Egypt has two affiliates: 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

first 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 MotorEstablished as a joint stock company in

March 1995, Nissan Egypt manufactures

and assembles the group’s 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 Pathfinder 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 AutoOver the past six decades, Ghabbour

Auto has thrived under the leadership

of one of Egypt’s 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

world’s leading automotive brands, including Hyundai,

Geely, Mazda, Volvo, Mistubishi, Marcopolo, Iveco Irisbus,

Bajaj, Lassa, Yokohama and Westlake.

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HealthcareEgypt 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, Egypt’s workforce is the largest in the Arab world and

the second largest in the MENA region, after Iran.

Ongoing Training and Networking: Egypt’s 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, Egypt’s doctors have access to online medical journals, allowing them to

keep up-to-date on the latest medical innovations.

High Doctor to Patient Ratio: 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 National Healthcare System: The government’s plan to over-

haul the national universal healthcare system will drive new traffic 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

81


Healthcare Master Plan 2012/2013Healthcare 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 financially 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.

Objectives 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 five as well as reducing maternal

mortality rates.

• Increasing the number of beneficiaries 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 International HospitalMisr International Hospital is a joint-stock company, capi-talized at EGP 60 million. Its shareholders include 160 university professor and doctors specialized in all fields 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 fields of medicine .It is provided with the latest western scientific 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 fields, including cardio¬thoracic 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 HospitalCleopatra Hospital has received her first 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 CenterArab 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.

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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 first in Egypt, with an 8.7% value share of the market. GSK’s 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 company’s products that are not manufactured in Egypt.

In addition, GSK Egypt manufactures a range of products under licence from other pharmaceuticals manufacturers. GSK’s 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 profitable private equity takeover.

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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 TeamHanaa DakrouryRabab MarieHanan SaadRasha MakhloufAkram Emara

DesignAkram Emara

Published by : General Authority for Investment and Free Zones(GAFI)

The Arab Republic of Egypt

www.gaf i.gov.eg

foragypt

General Authority forInvestment & Free Zones

www.gafi.gov.eg

foragypt

doing business in egypt

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