The Egyptian Economy
With a growing economy and major developments in the tourism sector, Egypt satisfies the requirements of many discerning property investors today. Forward thinking government policies and a solid infrastructure are making Egypt the next property and tourism hotspot. With high capital returns of up to 30% per annum in key locations, the investment climate in Egypt is widely regarded as a promising one. Due to recent reforms, the process of property purchase in Egypt has been streamlined, facilitating property purchase for overseas buyers and focusing investors' attention on Egypt as a prime investment location. Economic conditions have started to improve considerably after a period of stagnation from the adoption of more liberal economic policies by the government, as well as increased revenues from tourism and a booming stock market.
In its annual report, the IMF has rated Egypt as one of the top countries in the world undertaking economic reforms. Some of the major steps concerning economic reforms taken by the new government since 2003 include a dramatic slashing of customs and tariffs, a new taxation law implemented in 2005 that decreases corporate taxes from 40% to the current 20%, resulted to the stated 100% increase in tax revenue by the year 2006. FDI (Foreign Direct Investment) into Egypt has increased considerably in the past few years due to the recent economic liberalization measures taken by the current government.
Egypt is slated to overcome South Africa as the highest earner of FDI on the African continent in 2007. The legal framework which governs foreign investment is based on Law No. 8/97 concerning investment guarantees and incentives. Several domains are explicitly mentioned such as, for example, the purchase of land, accommodation, industrial, agricultural or tourist projects, oil activities, goods transport services, drinking water networks, the treatment of sewage, etc.). It imposes no restriction on the acquisition of the land necessary for the creation, operation and extension of the enterprises whatever the nationality, the equity stake and the place of residence of the holders of capital in the companies. Moreover, the country opened participation in national corporations to foreign investors very early, including in strategic sectors such as banking.