Photo courtesy of Egypt's cabinet
Speaking at a conference on the government's recently approved capital market reforms to attract investment, Minister of Investment and Foreign Trade Mohamed Farid, Chairman of Financial Regulatory Authority (FRA) Islam Azzam, and Chairman of the Egyptian Exchange (EGX) Omar Redawan outlined the measures, which include abolishing the capital gains tax, introducing tax incentives for large companies that go public, exempting market makers from stamp duty, and accelerating the digital transformation of capital market services.
EGX chairman Omar Redawan said the exchange is fully prepared to receive new listings under the new legislative framework, noting that the package includes incentives designed to encourage companies, particularly those with capital exceeding EGP 50 billion, to use the stock market as a financing platform.
Redawan said the reforms coincide with the rollout of new market products and mechanisms, including short selling, derivatives, market makers, and a new trading system, alongside upgrades to the exchange's technological infrastructure and preparations to integrate artificial intelligence into its operations.
He added that the Egyptian capital market has recently posted record performance, with daily trading values exceeding EGP 13 billion in several sessions and cumulative trading since the beginning of the year surpassing EGP 380 billion.
On his side, FRA chairman Azzam said Law No. 153 of 2026 abolished the long-debated capital gains tax and replaced it with a stamp duty on securities transactions, ending years of uncertainty that had weighed on investor sentiment.
Azzam said the legislation also grants a three-year corporate tax reduction to companies valued at more than EGP 50 billion that list at least 20 percent of their shares on the Egyptian Exchange, describing the measure as a key incentive to encourage large companies to enter the market.
He added that market makers will also be exempt from stamp duty under the new legislation to support liquidity and trading efficiency, while stressing that tax incentives alone would not be sufficient without a broader investment climate that encourages business expansion and investment.
For his part, Investment Minister Mohamed Farid said the current level of daily trading, between EGP 10 billion and EGP 12 billion, remains below what Egypt's economy can support, calling for turnover to double to EGP 24 billion before eventually reaching EGP 48 billion.
Farid also stressed the need to increase the number of large-cap companies listed on the Egyptian Exchange to reduce market concentration and improve Egypt's weighting in global equity indices.
He revealed that the ministry has begun pilot-testing a digital platform which will electronically process capital increases and connect all relevant government entities, significantly reducing processing times for investors.
Farid also said only around 2,000 companies accounted for approximately 95 percent of Egypt's exports between 2021 and 2026 despite the country having around 45,000 joint-stock companies. He said the ministry's Egypt Exports initiative aims to bridge that gap by connecting companies with government export support programmes and services.
The government is currently trying to broaden financing channels beyond bank lending and attract more private-sector and sovereign-linked listings to the EGX as a clear obligation under the country’s $8 billion Extended Fund Facility (EFF) loan programme with the International Monetary Fund (IMF) that is concluded by mid-December this year.
Making the EGX a more active source of liquidity, corporate funding, and foreign portfolio inflows is a strategic goal for the government in this respect, especially after years in which market depth and turnover lagged behind the size of the economy.
It's worth noting that Egypt’s initial public offering (IPO) programme has evolved from broad announcements into an increasingly technical reform effort. The launch of the FRA’s IPO readiness programme for state-owned firms, aimed at preparing companies for listing through governance, regulatory, and financial upgrades, aligns with the government’s latest effort to make the EGX a more effective platform for larger offerings. Earlier reports similarly highlighted that the government intended to offer stakes in energy, oil, fintech, and banking firms, with individual offerings kept below 25 percent in some cases.
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