This comes as the government is intensifying its efforts to introduce new initiatives in preparation for the completion of the fifth and sixth reviews of Egypt's loan programme under the International Monetary Fund, scheduled for this year.
As Egypt works on attracting private capital for sectors, legal clarity has become a decisive factor in sustaining investor confidence and project momentum.
Tahoun breaks down the legal intricacies behind PPP contracts, the evolving corporate and labour frameworks, and the high-stakes legal considerations underpinning Egypt’s IPO and privatization wave.
She also highlights how structural reform, transparent risk-sharing, and modernized regulations are reshaping Egypt’s investment ecosystem.
Moreover, she sheds light on what more is needed to ensure the country's resilience and competitiveness on the global stage, drawing on over two decades of legal practice.
Ahram Online: What are the primary legal challenges you have encountered while drafting and reviewing PPP contracts?
Nermine Tahoun: PPP contracts face several critical legal challenges, including ensuring a fair and balanced risk allocation between public and private partners to encourage investment.
This also includes safeguarding public interests, drafting contracts that are flexible enough to adapt to evolving legal frameworks (eg, tax or environmental laws) over long project lifecycles, addressing land acquisition issues such as ownership disputes and compensation to prevent delays, and aligning contract terms with lender requirements, including step-in rights and guarantees, to ensure bankability.
Clearly defining termination provisions and compensation formulas for legal certainty and investor confidence, establishing effective and enforceable dispute resolution mechanisms (often through international arbitration), and striking a balance between transparency, competition, and confidentiality to comply with public procurement laws are also among the legal challenges.
Based on our practical experience, approximately 20-30 percent of PPP contracts in Egypt encounter legal challenges during implementation, whether in the form of disputes over risk allocation or the need for renegotiation due to regulatory or economic shifts.
This percentage tends to rise in large-scale or internationally financed projects, where legal and technical complexities are significantly higher.
When analyzing the root causes of these challenges, the most problematic clauses typically involve termination and compensation provisions, accounting for nearly 40 percent of contractual disputes.
This is followed by risk allocation clauses (around 25 percent), particularly in projects with volatile revenue streams such as transportation or utilities.
Additionally, renegotiation and amendment mechanisms often cause delays, especially when contracts lack flexible frameworks to adapt to changing regulatory or financial conditions.
Regarding the timeline, the average legal review period for PPP contracts typically ranges from 6 to 12 months, depending on the project's complexity and structure.
In some high-value or multi-stakeholder deals, this can extend up to 18 months.
Naturally, contracts requiring substantial revisions, or those modelled after previously disputed agreements, tend to take longer, as they must be carefully aligned with local laws and international standards while maintaining investor appeal and bankability.
AO: How do you see the role of PPPs evolving in Egypt’s infrastructure and development plans?
NT: Egypt is positioning PPPs model as a core driver of its Vision 2030, shifting from limited pilot projects to a strategic framework that harnesses private capital and expertise to expedite critical infrastructure development.
The country aims to develop airports, ports, power, and water facilities, while promoting sustainability without overburdening public finances.
By integrating private-sector innovation, PPPs enhance the efficiency and quality of public services. This is evident in initiatives such as the New Cairo wastewater treatment plant and planned EGP 39 billion tenders for energy and water projects, which are backed by partnerships with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC).
These efforts preserve public ownership while fostering a pipeline of projects aligned with Egypt’s sustainable growth ambitions. However, their success relies on navigating legal complexities, such as equitable risk-sharing, adaptable contracts, and robust dispute resolution, to sustain investor trust and project momentum.
PPPs are helping shift the government's role from direct operator to regulator and enabler, while ensuring that essential public services are delivered efficiently without adding pressure to public finances.
With Egypt targeting $100 billion in infrastructure investment by 2030, PPPs are expected to account for at least 25–30 percent of project financing in key sectors, especially as fiscal consolidation continues.
Still, the sustainability of this model depends on overcoming key challenges, such as improving legal frameworks, enhancing transparency, and providing viable risk-sharing mechanisms, to build long-term investor confidence.
AO: What key elements should both the public and private sectors prioritize when entering into a PPP agreement?
NT: When entering into PPP agreements, both public and private sectors should prioritize transparent risk allocation by assigning construction, demand, or political risks to the party best equipped to manage them and ensuring legal and regulatory clarity by aligning the agreement with national laws and establishing transparent approval and dispute resolution processes.
They can also do this by structuring financial viability through sustainable revenue models with guarantees or subsidies to attract financing, defining measurable performance standards with KPIs and service levels tied to penalties or incentives, and adhering to transparent procurement practices through open, competitive bidding to ensure fairness and attract qualified private partners.
AO: What recent reforms in Egyptian companies law do you consider most impactful for local and foreign investors?
NT: Recent reforms in Egyptian companies law significantly enhance the investment landscape for both local and foreign investors by streamlining company formation through a single authority and legalized digital procedures.
They also introduce enhanced incentives under Law 160/2023, such as significant tax refunds, utility discounts, and extended land use rights, allow 100 percent foreign ownership in commercial import companies under Law 173/2023 by removing the previous 51 percent Egyptian ownership requirement, and implement pre-merger control in 2024 for mandatory Competition Authority review to improve transparency and deal certainty.
This also includes enacting labour law reforms to introduce flexible employment models and stricter non-discrimination and confidentiality rules, as well as advancing digital transformation through upgrades to free zones that enable one-day company registration, faster licensing, and reduced fees for new investors.
AO: How can Egypt enhance its corporate legal framework to attract more international business?
NT: To bolster its appeal to international business, Egypt can enhance its corporate legal framework by fully digitizing company registration and implementing single-window services to streamline processes.
This can also occur through strengthening legal transparency and contract enforcement, particularly through efficient dispute resolution mechanisms, simplifying tax laws with consistent application for foreign investors, liberalizing foreign ownership regulations across additional sectors, and reinforcing governance and anti-corruption measures to boost investor confidence.
Aligning corporate, labour, and data protection laws with international standards, such as those of the EU and OECD, and ensuring greater predictability and stability in regulatory changes are also essential to foster a reliable investment environment.
AO: The new labour law has stirred a lot of debate. In your opinion, what are the most significant changes introduced?
NT: Egypt’s new labour law introduces transformative reforms to modernize employment practices.
This includes modernizing contracts by enforcing fixed-term agreements without automatic conversion to indefinite status (though contracts over 4-5 years become permanent) and requiring four contract copies for employer, employee, social insurance, and labor office.
Recognizing flexible work arrangements like remote work, part-time, flexible hours, job sharing, and platform-based jobs is also essential.
This also involves enhancing job security by invalidating pre-signed resignations (Form 6), mandating valid cause or three months' notice for terminations of open-ended contracts, and providing compensation for terminations of fixed-term contracts.
Essential practices also include extending maternity leave to 120 days (up to three times), introducing paternity leave (1 day per child, up to three times), adding childcare and breastfeeding breaks, and expanding annual leave to 15 days in the first year, 21 days thereafter, and 30 days for over 10 years of service, alongside improved sick, emergency, and disability leave terms.
Anti-discrimination measures should be strengthened by ensuring workplaces are free from harassment and mandating five percent hiring of workers with disabilities for employers with 20+ staff.
Freelancers, gig-workers, and remote employees should be recognized with labour protections, and specialized Labour Courts and mediation committees should be established for rapid dispute resolution.
This includes introducing a training fund based on 0.25 percent of the minimum wage for companies with over 30 employees, aligning Egypt’s labour framework with global trends to enhance job stability, protect vulnerable workers, and promote modern work arrangements.
AO: As the Egyptian government prepares for a new wave of IPOs and privatization deals, what legal considerations are most critical in these transactions?
NT: The critical legal considerations include ensuring regulatory compliance with the Capital Market Law, Financial Regulatory Authority (FRA) rules, and stock exchange listing requirements; maintaining transparency through complete and accurate financial and operational disclosures in prospectuses to meet due diligence standards and attract investors; and conducting independent valuations and adhering to fair market pricing rules to prevent legal or political disputes.
Added to these are clearly defining post-IPO governance structures, including minority protections and potential state-held golden share provisions; implementing robust anti-corruption and conflict-of-interest safeguards to prevent insider dealing or favouritism; addressing labour and social obligations, such as employee rights and benefit continuity, to avoid disputes; and ensuring compliance with foreign investment rules, including sector-specific restrictions and national security reviews where applicable.
AO: What are the common legal pitfalls in government-led mergers and acquisitions, and how can they be avoided?
NT: Government-led mergers and acquisitions in Egypt face several legal pitfalls, including ambiguities in ownership rights or regulatory authority that can stall transactions, incomplete due diligence that misses hidden liabilities like tax or litigation risks, weak valuation and pricing transparency that sparks political or investor disputes, and delays from multiple regulatory bodies such as the Financial Regulatory Authority or competition authority.
Pitfalls also include unaddressed labour and pension liabilities, leading to post-closing conflicts, conflicts of interest, or corruption risks due to insufficient separation between deal parties and decision-makers, as well as overlooked sector-specific foreign ownership restrictions.
These risks can be mitigated by conducting thorough legal and regulatory due diligence early, securing clear governmental approvals with documented authority, utilizing independent valuations and transparent bidding processes, and proactively engaging with regulators to avoid delays.
Contractually addressing labour obligations with transitional protections, enforcing anti-corruption safeguards like external oversight, and ensuring compliance with foreign ownership and national security laws are also essential factors.
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