EGYPT: OVERVIEW OF THE HOUSING SECTOR

Overseas Private Investment Corporation 

Office of Economic Development 

Issues Paper 1:2005 

July 2005 

 

 

The OPIC team that produced this report was headed by Stephen Everhart, Managing 

Director-Chief Economist, and Debra Erb-Director of Housing Programs. Members of the 

OPIC team include: Berta Heybey-Director of Economic Analysis & Project Monitoring,

Patrick Carleton-Senior International Economist, and Tony Ieronimo-Director of Economic 

and Market Analysis. 

OPIC appreciates the invaluable support and advice of Gregg Wittala, Leader-Private Sector 

Programs, Office of Policy and Private Sector of the USAID Mission to Egypt, and Steven

A. Bernstein, Senior Advisor-United States Department of the Treasury. 
EGYPT: OVERVIEW OF THE HOUSING SECTOR

Housing investment is a key component of economic development, both because housing is 

a basic social need and because private home ownership is often an important source of

capital for entrepreneurship at the grass roots level. A fully functioning housing market,

including clearly defined titles to privately owned property, is an important element in the 

construction of a dynamic market economy.1 Developing mortgage finance helps low- and 

middle-income citizens to acquire ownership of housing and enables these citizens to turn 

housing assets into a source for financing small business activities. 

Currently, there is little to no mortgage financing in Egypt. Though Parliament passed a 

Mortgage Law in 2001, there have been a total of only 16 mortgages completed since that 

time. Without mortgage financing, low- and middle-income households cannot afford to buy 

housing in the formal sector. Consequently, most of this part of the population lives in 

public housing or informal housing units with no clear legal title. The biggest obstacle to 

mortgage finance in Egypt is property registration, a cumbersome process with high 

registration fees, as well as the lack of critical legal infrastructure, particularly in terms of

contract enforcement, to support it. Other issues include restrictions on extending bank

credit to the housing sector; lack of valuation information; lack of credit risk information;

and complex regulations. 

Potential investors should be aware of these structural challenges before investing in the 

housing market in Egypt. However, despite these issues, there are still substantial

opportunities for foreign investors in housing finance, construction and infrastructure 

projects. Such opportunities could be significantly enhanced by further legal reforms. In 

recent years, Egypt has passed a number of laws helping to establish a legal framework for 

housing finance, though a number of shortcomings remain. International and bilateral

organizations are also working with the Egyptians on legal reforms. USAID, for example,

has a $35 million project to assist with the development of a mortgage finance system, while 

the US Appraisal Institute is helping to train and certify appraisers. 

The following sections expand on the topics discussed above: 

• The importance of housing finance in economic development 

• Structural challenges to mortgage finance in Egypt 

• The current state of the housing market in Egypt 

• Opportunities for foreign investment/involvement in the Egyptian housing sector 

THE IMPORTANCE OF HOUSING FINANCE IN ECONOMIC DEVELOPMENT

Improving housing finance supports economic development through several channels: 

increasing saving, investment and employment; strengthening and deepening the financial

sector; and reducing poverty. In many developing economies, including Egypt, the lack of a 

fully functioning mortgage market constrains the development of the housing sector. 

Without financing options, low- and middle-income households cannot afford to purchase 

 

1 de Soto (1997). 

2
homes. Since a house is often the primary investment and savings vehicle for those groups, a 

lack of housing finance also constrains overall saving rates. Low saving and investment rates 

restrict economic growth and limit economic development. 

International experience suggests that living standards increase when there is widespread

availability of home mortgages because mortgages have a positive impact on the quality of

housing, infrastructure, and urbanization. Mortgage availability for low- and middle-income 

groups encourages investment in both residential property and other real estate (such as 

retail shops and other small businesses). This, in turn, encourages medium- to long-term 

growth. New construction also provides jobs for low- and middle-income workers. 

Housing finance also encourages the growth of the financial services sector, which studies 

have also shown to be a key factor in economic development.2 If consumers begin to save 

for down payments and loan repayments, these actions increase both the assets available to

the financial services sector, and the demand for more financial services. Additionally, 

financial markets and intermediaries act as a lubricant in well functioning economies. They 

perform the crucial task of mitigating information and transactions costs and provide a 

needed bridge and filter between economic agents of information that otherwise would not 

be shared. This enables firms to allocate their resources more effectively and increase their 

productivity, resulting in greater overall economic growth.3

Finally, empirical studies show that there is a positive relationship between land distribution

equality, poverty reduction and economic growth.4 More accessible housing finance could 

lead to more ownership by low and middle income households. Low and middle income 

households are the most limited in financing options, both because of an inability to afford 

down payments and also an inability to access capital markets for long-term loans.5 At the

same time, housing is often their biggest expense, accounting for 50 to 70 percent of their

budgets. If housing finance can be made more affordable, that will free up resources that the 

poor can then use for other opportunities, such as starting small businesses. Therefore,

improving access to housing finance for low-income households will help reduce poverty,

and serve as another channel to increase economic growth. 

The main challenge facing the housing sector in Egypt and other Middle Eastern and North 

African countries is the lack of affordable housing, not a lack of available housing stock. The 

lack of efficient financing options is a large component, and the single most correctable 

component, of these high housing costs. Since housing policies affect the entire economy -

influencing saving, consumption, financial depth, employment (construction and homes

used as a place of business), and government budgets6

 - improving the availability of housing 

finance would go a long way towards furthering overall economic development and reducing 

poverty. 

 

2 See Beck et al (2000). 3 See Schumpeter (1912) and Diamond (1996), among others. 4 Galal and Razzaz provide detailed information on the empirical literature. For example, Alesina and Rodrik

have shown that reducing inequality in land ownership across income levels by one standard deviation increases 

economic growth by more than one percentage point (Alesina and Rodrik, 1994). 5 Erbas and Nothaft (2002). 6 World Bank (2003). 

3
STRUCTURAL CHALLENGES IN THE EGYPTIAN HOUSING MARKET

Implementing a fully functioning mortgage market often requires structural reforms that may 

take a long time to implement. Mortgage finance is not possible until property rights and

land registration rights are enforceable, for example. In Egypt, estimates are that over 90 

percent of urban housing is in the informal sector – that is, without a formal title. Because 

the residents do not have a formal title to their property, they cannot use their houses as

collateral for other investments, such as building small businesses, limiting economic growth.

The lack of formal titles also limits infrastructure development. Since it is not possible for 

utilities to know who owns the properties using their services, and therefore who is 

responsible for paying for them, there is a disincentive to develop these services fully.7

The biggest obstacle to mortgage finance in Egypt is property registration, a cumbersome 

process with high registration fees, as well as the lack of critical legal infrastructure,

particularly in terms of contract enforcement, to support it. Other issues include restrictions 

on extending bank credit to the housing sector; lack of valuation information; lack of credit 

risk information; and complex regulations. 

The lack of mortgage lending in Egypt is due in part to the following issues: 

• Inadequate legal infrastructure: The lack of well-defined legal procedures for 

enforcing claims, curing defaults and evicting former owners of foreclosed property 

has limited the willingness for providing housing finance. Similar reasons limit the 

availability of mortgage and property insurance. The inadequate infrastructure forces 

interest rates on secured loans to increase, approaching the level of unsecured loans. 

Although the Real Estate Finance Laws of 2001 (much of which were put into 

operation in early 2004) attempt to address this problem, their effectiveness is still 

unproven. 

• High registration fees, taxes and inefficient property registration procedures: 

The regulatory burden is such that much of Egypt’s housing is in the informal sector. 

Estimates are that as much as 90% of property is either unregistered or is registered 

at unrealistic valuation levels. The percentage of housing in the informal sector in

Egypt is much higher than in neighboring countries. (In Tunisia, for example, only 

29 percent of housing is in the informal sector.) Some progress has been made in

this area, reducing fees from 12 percent to 3 percent with consideration to further 

reducing the fees to the administrative cost of registration (less than LE 1000). 

• Restrictions on bank credit to the housing sector: The Central Bank has

imposed a 5 percent ceiling on real estate lending, which local analysts suggest may 

be raised to 10 percent in the future. This limit applies cumulatively to both the 

supply and demand side of the market: residential and commercial real estate loans,

as well as loans to individuals and housing developers. 

• Lack of risk information for lenders: There are no credit bureaus in Egypt, though 

one is currently in development by a group of Egyptian banks and financial 

institutions, meaning lenders have no way of assessing credit risk of the borrower. 

 

7 de Soto (1997). 

4
Quite often lenders mistakenly assume that low-income people are poor credit risks

and so do not tend to lend to them. Instead, lenders assume the rich are a better risk,

so that there tends to be a good supply of high-income housing, but a shortage of

low- and middle-income housing. 

• Inconsistent approach to property valuations: The lack of valuation information 

makes the effective use of financing very difficult, as lenders have very little idea of

the true value of property that they will recover in the case of default. A program to 

train and certify appraisers is currently under development with assistance from the 

US Appraisal Institute. 

STATE OF THE EGYPTIAN HOUSING MARKET

All of the issues discussed above contribute to inefficiencies in the housing sector in Egypt. 

Comparing Egypt with Algeria, Jordan, Morocco, and Tunisia shows that Egypt has the 

lowest rate of owner occupied property, the highest ratio of civilians in public housing, and 

the highest ratio of citizens in the informal housing sector (see Table 1). Egypt and Tunisia 

have the longest delays in settling foreclosure disputes. All of these measures are either 

impediments to a well functioning property sector, or indicators of current troubles in that

sector. 

In the Middle East and North Africa, developing the housing sector is particularly important 

to support the needs of a quickly growing population. Population growth in the Middle East 

and North Africa is among the highest in the world. The rise in the working age population 

is particularly significant, requiring more jobs to prevent the current high unemployment 

rates from increasing further. In Egypt, the unemployment rate is around 12 percent, while 

the population aged between 20 and 29 years grew about 30 percent between 1990-2000, and 

is projected to grow a further 20 percent between 2000 and 2010.8 New housing

construction therefore serves two purposes: providing shelter and construction jobs. 

Due to these demographic issues, housing and construction represent almost 50 percent of

the Egyptian government’s investments.9

 In 1998, for example, the government subsidized

housing program financed about half of all low-cost units built in the formal sector 

(approximately 63,000 units).10 The public sector owns about 29 percent of all housing units 

in urban areas, compared to 25 percent in Algeria and only 8 percent in Tunisia.11 

Despite this emphasis on housing, Egypt currently has a supply-demand mismatch in the 

sector. There is an excess inventory of medium- and high-end properties, while the demand

is for low-income housing. Low- and middle-income households do not have access to 

financing that would allow them to purchase any of the available housing units. MERIS 

(Middle East Ratings and Investors Service) estimates that total annual demand for housing 

units is approximately 750,000 units (480,000 for newlyweds; 220,000 for replacement of

marginalized areas; and 50,000 for old buildings that are about to collapse). However, total

 

8 World Bank (2005). 9 MERIS, Middle East Rating & Investors Service (2004). 10 Erbas and Nothaft (2002). 11 World Bank (2005). 

5
supply to the formal real estate market was only 260,000 units in 2004 (see Table 2), about 

35 percent of demand. 

Rent control regulations further exacerbate the situation. While Egypt has cancelled these 

regulations for new leases, existing stock is still subject to them. The result is that over 1.8 

million housing units in Egypt are vacant. Over 1 million of those are in Cairo, resulting in a 

vacancy rate of 14.5 percent, very high by international standards. These units are vacant for 

several reasons: parents may be keeping them for their children’s future use; owners may not 

want to rent them because the low rents they can receive due to rent controls do not make it 

worthwhile; or owners may not be able to find buyers who can afford to buy the unit due to

the lack of available financing options.12 

The Mortgage Law of 2001 

The Egyptian Parliament approved a new real estate mortgage law in 2001 (although much

of it was not implemented until 2004) to regulate real estate bank financing. The law, which 

is geared towards encouraging housing of low and middle-income groups, allows banks to 

offer subsidized and non-subsidized loans for the purchase of houses as well as 

administrative and commercial units and renovating existing ones. The goal is for borrowers

to be able to make a 20% down payment and pay off the remainder in installments over 20-

30 years. Buyers will receive title while still subject to mortgage. Further, under the new law,

banks supposedly will be able to foreclose on loan defaulters in case they default on 

payments for between six and nine months. 

Egypt modeled its Mortgage Law after US mortgage regulations, but there are some serious 

differences. Financing from both bank and non-bank mortgage lending groups is permissible

according to the 2001 law, but the two groups are not regulated identically. If a bank is 

lending money for housing finance, the contract is between the bank and the buyer, as in the 

US. However, this type of lending is strictly regulated, including the 5% ceiling on all lending 

to the housing sector discussed above. 

On the other hand, in Egypt the non-bank finance houses, as described under law 148, 

operate similar to banks but are not limited by strict regulations and lending percentages. A 

non-bank finance house operates as a third party entity between buyers and sellers. Finance 

houses purchase properties from sellers, increase the price as appropriate under market 

conditions, and then resell the property to buyers using the installment method. It is

recognized that the lender’s lien on the property being financed gives it the rights to benefit 

from the outstanding percentage of loan to the original purchase price of the real estate.

Since it is the buyer who retains the physical rights to possession, the difference in price due 

to mark-up is the compensation for the outstanding loan-to-value percentage. 

To encourage the development of this sector, the government created a program that

subsidizes housing payment for three months in the event of unemployment so that the 

default rate drops and the non-bank institutions are not disadvantaged.13 Another difference 

 

12 World Bank (2005). 13 It should be noted, however, that Egyptian policy makers (academics, various political parties) are 

currently discussing changes in the approach to these subsidies. Under the new proposals subsidies would 

6
is that leasing companies retain property ownership and can repossess assets without having 

to follow tedious enforcement guidelines. 

Current financing options 

Since the Mortgage Law was passed in 2001, there have been only 16 mortgages completed.

Instead, financing is done either with a personal loan or through the housing developer. In 

either case, loans are for less than 8 years. In addition, since borrowers are unable to use the 

property as collateral for the loan, the loans are at high interest rates, making it especially 

difficult for low- and middle-income households to buy a home. 

When developers finance housing, they use an installment system. The down payment is 

normally between 25 and 50 percent of the purchase price, with the rest of the payments

occurring over the next 3 to 8 years. The title does not formally transfer until the entire 

amount has been paid. The high down payment is a severe constraint, especially for lowincome households. 

In April 2005, the Egyptian government approved a joint cooperation program between the 

Mortgage Financing Authority and the National Bank of Egypt. The program is designed to 

finance mortgages with interest rates at or below 12 percent and a term of 10 to 20 years.

While this program sounds promising, it is not clear when or how it will be implemented.

 

 

OPPORTUNITIES FOR FOREIGN INVESTMENT/INVOLVEMENT IN THE EGYPTIAN

HOUSING SECTOR

There are opportunities for foreign investment in housing finance, housing construction and 

associated infrastructure. Possible investment areas include the following: 

• New cities: In 2000, about 64 percent (42.5 million) of Egypt’s population lived in

urban areas. By 2025, this number is projected to rise to 83 percent (78.8 million)

due to natural population increases and migration.14 To accommodate this demand, 

the Egyptian government plans on increasing the number of new urban cities from 

the current 17 cities to 59 cities by the end of 2017,15 creating substantial 

opportunities for investors in financing, housing construction and infrastructure. 

• New housing developments: The structural reforms discussed above are necessary 

before a fully functioning mortgage market can exist in Egypt. In the near term,

many analysts suggest that the most potential in Egypt may be in projects that 

support construction of low-income housing, with a lease-purchase option, rather 

than in straight mortgage finance (similar to OPIC’s Jopa Villas project in Kenya).

This way, financiers would be able to support the provision of low- and middleincome housing, and perhaps structure the deal such that a local bank provided 

be shifted away from the three month payment and would instead help low income borrowers with down

payments. 14 PlanBleu. 15 MERIS (2004). 

7
financing. These projects could serve as demonstration projects and provide a step in

creating a more robust mortgage market. 

• Existing housing: There may also be opportunities for private financing in the

middle-income market. There is high demand for housing among the middle class, 

while at the same time there are many vacant units. The mismatch exists because 

households cannot obtain financing to purchase these units. Providing financing will 

help both buyers and sellers. The new owners will have housing, and the sellers will 

be able to invest capital that had been locked up in the vacant units in other areas. 

Current players 

Some of the international companies and organizations currently involved in the Egyptian

housing market include: 

• There are 4 firms offering mortgage financing in Egypt, Al Tameer Co., Egyptian 

Housing Finance Co., National Societe Generale Bank, and the Arab Investment

Bank.16 

o Al Tameer has authorized capital of $86.2 million, and is owned by a 

consortium of Egyptian banks, both public and private. 

o The Egyptian Housing Finance Company (EHFC), a private company 

dedicated to long-term affordable housing finance, was formed in 2004 with

the help of the IFC, who took a $1.6 million equity share (20%). {Egyptian

banks own 50%; the German Company for Investment and Development 

(DEG) owns 20%; and the Indian Mortgage Finance Corp. owns 10%}. 

EHFC will target middle class buyers, with a 14% rate and a maximum of 10 

years tenor. 

• Century 21, ERA, and Coldwell Banker realtors have offices (or officers) working 

within this market. 

• Stewart International, a large US based international company that provides services

to support the real-estate financing industry, such as title assurance, and escrow 

services worldwide; is reportedly in the process of establishing a new holding 

company to provide these services in Egypt. Stewart reportedly will control 55% of 

the new company, and its three Egyptian partners {Coldwell Banker Middle East/ 

Mansour and Maghraby, the Olympic Group, and the Osman Group} will each 

control 15%. 17 

• USAID’s current major project is a $35 million Financial Services Project, whose 

objectives are to provide technical assistance, training and information technology to 

both public and private sector participants in the real estate and finance industries. 

This five-year project has four parts: 

o Legal reform and technical assistance and training to lenders to develop an

environment conducive to a fully-functioning real estate finance industry 

 

16 Hafiz (2005). 17 Nametalla (2005). 

8
o Modernization of property registration in urban areas: USAID has a pilot 

project in two districts in Cairo to create a systematic title registry that they 

hope to use as a template for the registration process 

o Establishment of a credit information system to assist lenders in assessing 

risk 

o Development of a broader range of financial instruments for the capital

markets to increase financing opportunities. 

• Chemonics International Inc. is implementing the USAID project.18 The project will 

provide assistance to the Ministry of Justice (for property registration), the Ministry 

of Investment (Mortgage Finance Authority and Capital Market Authority), and the 

Central Bank of Egypt (for credit information services). 

• The US Department of Commerce’s Commercial Law Development Program is 

working to help implement and refine Egypt’s new real estate legal framework. 

• The World Bank is currently in discussions with the GOE on a program that would 

o Expand property registration based on lessons learned from the USAIDfunded pilot registry program 

o Support development of secondary markets for real estate finance. 

• Canada plans to support the establishment of a housing and real estate unit within 

the Egyptian Ministry of Housing. 

CONCLUSION

Home ownership, with well-established property rights, forms the foundation of a healthy 

financial system. Despite the sophistication and scale of the U.S. capital market, mortgages 

remain its cornerstone. The existence of this large, stable pool of finance – with a welldiversified risk basis (and much of it insured) – has been critical in the development of U.S. 

capital markets. Moreover, creation of a “homeowner class” is one of the surest methods to

help a society achieve long-term political stability. As the preceding review of the Egyptian 

mortgage market makes clear, the Egyptian government has begun the process of building 

out the institutional capacity and infrastructure necessary to grow a sector that will bring 

broad economic and social benefits. 

 

18 Chemonics is working with the US Mortgage Banker’s Association and the Egyptian Banking institute, as 

well as the following Egyptian firms: Bahaa-Eldin Law Office; Hassouna &Abou Ali; Zarrouk, Khaled & Co.; 

FinBi Consulting; ARABSOFT; and Quality Standards Information Technology. 

9
Definitions: [B] Median House market price to median income; [C] ratio of housing loans to total loans in government and financial 

institutions; [D] percentage of dwellings occupied their owners; [E] percentage of dwellings owned managed and controlled by the public 

sector; [F] percentage of dwelling not incompliance with current regulations and those that occupy land illegally; [G] present replacement cost

per square meter of a median priced unit; [H] median time to get approvals, titles an permits for a 50-200 unit residential subdivision at 

the urban fringe where residential development is permitted; and [I] typical time from start to finish of foreclosure (including eviction) an a

seriously delinquent mortgage. 

Table 1: Housing Indicators Comparison, MENA and select countries.19

Gdp per 

capita 

$US1992 

House

price to

income 

Housing 

Credit 

Owner

occupancy

(%)

Public Housing 

(%)

Informal 

Housing 

Construction

Costs 

($US/M^2) 

Permit 

Delays

(months) 

Foreclosure 

Delays

(months) 

[A] [B] [C] [D] [E] [F] [G] [H] [I]

Algeria 2,060 12 45 25 4 500 2

Egypt 600 7 7 32 29 65 67 3 24

Morocco 950 7 7 46 15 16 158 3

Jordan 1,240 3 19 75 12 15 150 7 3

Tunisia 1,440 6 6 67 15 29 359 12 24

USA 21,790 4 44 61 1 5 500 36 5

Turkey 1,630 5 3 60 5 51 110 2 6

Mexico 2,490 4 18 83 54 16 267 3 6

 

Table 2: Supply of Housing 20

2002/2003 2003/2004

Number % Number %

URBAN HOUSING 

Economy Level 125,600 50.1% 131,000 50.4%

Medium Level 32,000 12.8% 35,000 13.5%

Above Medium Level 9,000 3.6% 10,000 3.8%

Total URBAN 166,600 66.5% 176,000 67.7%

Economy Housing at Rural and Land 

Reclamation 84,000 33.5% 84,000 32.3%

Grand TOTAL 250,600 100.0% 260,000 100.0%

 

19 Erbas and Nothaft (2004). 20 MERIS (2004). 

10
Sources: 

Alesina, Alberto and Dani Rodrik. “Distributive politics and economic growth.” Quarterly Journal of Economics

108, no. 2, May 1994, pp. 465-490. 

American Chamber of Commerce in Egypt. Egypt-US Investment. 19 Aug 2004 

http://www.amcham.org.eg/BSAC/ustrade/Investment.asp 

Beck, Thorsten, Ross Levine and Norman Loayza. “Financial Intermediation and Growth: Causality and 

Causes,” Journal of Monetary Economics, 46, August 2000, pp. 31-77. 

Boleat, Mark. Developing Mortgage Finance in Egypt. March 2002. 

De Soto, Hernando. Dead Capital and the Poor in Egypt. The Egyptian Center for Economic Studies, 1997. 

Diamond, Douglas W. “Financial Intermediation and Delegated Monitoring: A Simple Example,” Economic 

Quarterly, Federal Reserve Bank of Richmond, 82/3, Summer 1996, pp. 51-66. 

Eldin, Ziad Bahaa, Mahmoud Mohieldin, and Sahar Nasr. Prospects of Mortgage Markets in MENA Countries: An

Analysis of Financial, Legal and Institutional Aspects with Emphasis on the Egyptian Case Study. ERF 11th Annual

Conference, September 2004. 

Erbas, S. Nuri and Frank E. Nothaft. The Role of Affordable Mortgages in Improving Living Standards and Stimulating 

Growth: A Survey of Selected MENA Countries. IMF Working Paper 02/17, January 2002. 

Galal, Ahmed and Omar Razzaz. Reforming Land and Real Estate Markets. World Bank Policy Research Working

Paper 2616, June 2001. 

Hafiz, Ayman Abdel. House Finance Dreams Come True, Al Mal Newspaper, 20 Feb 2005. 

Krauss, Joseph. “Title Insurance on the Horizon.” American Chamber of Commerce in Egypt Business Monthly, April 

2005. 

Loza, Pierre. “The Not-So-Real Estates Market,” Al Ahram Weekly, 2004. 

MERIS: Middle East Rating & Investors Service. Housing & Development Bank- Analysis. July 2004. 

Nametalla, Ahmed. “Raising the Roof,” Business Today- Egypt, June 2005. 

PlanBleu, http://www.planbleu.org/pdf/demo_uk_egy.pdf 

Schumpeter, Joseph A. The Theory of Economic Development, 1912, translated by Redvers Opie. Cambridge, MA: 

Harvard University Press, 1934. 

World Bank. Housing: Enabling Markets to Work. World Bank, 1993. 

World Bank. The Macroeconomic and Sectoral Performance of Housing Supply Policies in Selected MENA Countries: A

Comparative Analysis. April 2005. 

www.ahram-eg.com

www.elakhbar.ord.eg

11
APPENDIX: GENERAL US FDI INFORMATION

• According to official Egyptian statistics, the United States tops the list of investing 

countries in Egypt. Seven percent of US total foreign direct investment (FDI) in the 

Middle East and Africa goes to Egypt. The US is also the largest petroleum and

second largest non-petroleum, non-Arab, foreign direct investor in Egypt. 

• Egypt's General Authority for Investment & Free Zones (GAFI) calculated the total

stock of U.S. foreign direct investment (FDI) in 272 projects as of December 2003 at 

approximately L.E.2.62 billion (approx. $426.6 million, L.E.6.14/$1), up from 

L.E.2.14 billion in May 2003. This represents 12.8% of total non-Arab, nonpetroleum FDI in Egypt. It is worth noting that GAFI tracks only U.S. investment in

Egyptian companies formed under Law 203; it does not deal with U.S. investment in

the petroleum sector, the chief recipient of U.S. FDI in Egypt. 

• GAFI statistics show that the highest U.S participation in companies’ capital is in the 

textiles, chemicals, and engineering sectors. 

• The total stock of U.S. direct investment in petroleum and natural gas sector

amounts to 65% of total U.S. FDI in Egypt. Houston-based Apache Oil Company 

is the largest foreign investor in Egypt with investments reaching $2.1 billion as of 

December 2003. Other U.S.-based oil exploration and production companies 

operating in Egypt include BP-Amoco, Arco, Caltex, Exxon-Mobil, Marathon, 

Phoenix, Seagull Energy Corp. and Texaco. 

• In addition to their dominant role in the energy sector, U.S. firms are active in the 

banking sector and in a wide range of manufacturing industries, producing goods for

the domestic and export markets. Among the most prominent of the country’s U.S. 

investors are American Express, American Standard, Bechtel, Bristol-Myers Squibb, 

Citibank, Coca Cola, Commercial International Bank (CIB), Energizer, General

Motors, Gillette, GlaxoSmithKline, H.J. Heinz, Johnson & Johnson, Microsoft, 

PepsiCo, Pfizer, Procter and Gamble, and Xerox.21

 

21 American Chamber of Commerce in Egypt, 19 Aug 2004 

http://www.amcham.org.eg/BSAC/ustrade/Investment.asp 

12