ARTI Egitto definitivo - ARTI Puglia

Private Equity has not been widely used in Egypt in the past as a source of funding for
businesses. The government, however, has instituted a number of policy changes and
reforms specifically intended to develop internal private equity funds and to attract private
equity funding from international sources.
The major industries include textiles, hydrocarbon and chemical production, and generic
pharmaceutical production. Unemployment is high at about 10 %.
Major fiscal reforms were introduced in 2005 in order to tackle the informal sector which
according to estimates represents somewhere between 30% to 60% of GDP. Significant tax
cuts for corporations were introduced for the first time in Egyptian history. The new Income
tax Law No 91 for 2005 reduced the tax rate from 40% to 20%. According to government
figures, tax filing by individuals and corporations increased by 100%.
Many changes were made to cut trade tariffs. Among the legislator’s goals were tackling the
black market, reducing bureaucracy and pushing through trade liberalization measures.
Amendments to Investment and Company law were introduced in order to attract foreign
investors. For example, the number of days required for establishing a company was
dramatically reduced.
Significant improvement to the domestic economic environment increased investors’
confidence in Egypt. The Cairo & Alexandria Stock Exchange is considered among the best
ten emerging markets in the world. The changes to the policy also attracted increased
levels of foreign direct investment in Egypt. According to the UN Conference on Trade and
Development’s World Investment Report, Egypt was ranked the second largest country in
attracting foreign investment in Africa.
Given the large number of amendments to laws and regulations, Egypt has succeeded to a
certain extent in conforming to international standards. Very recently the Cairo &
Alexandria Stock Exchange (CASE) was welcomed with full membership into the World
Federation of Exchanges (WFE)—the first Arab country to be invited.
In April 2008, The IFC — the private sector arm of the World Bank Group — signed a
memorandum of understanding with Egypt’s Industrial Development Agency (IDA) that
seeks to streamline and decentralize the process of obtaining industrial licenses, reducing
cost and time needed to register a company. Over the next two years, the project will help
create an integrated platform for business start-up procedures at the national level.
Managed by the IFC, the project will involve the government as well as the private sector in
identifying issues that hinder processes for obtaining licenses and permits. IFC will
introduce international best practices, replicate pilot reforms at the municipal level, and
streamline approval procedures required by public entities.
1.11. Challenges
The development of the Egyptian economy is facing some challenges which must be dealt
with. Some of these challenges are :
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THE RESEARCH AND INNOVATION SYSTEM IN EGYPT