Trade agreements, golden licences, and operating costs that remain lower than those of neighbouring countries are among the key factors that have attracted foreign investment to Egypt across various sectors in 2025.
The government has also launched several initiatives this year to boost local manufacturing and create a more attractive investment climate. The initiatives are part of efforts to achieve targets set by the National Industry Strategy (2024-2030) that aim to increase the contribution of the industrial sector to GDP from 14 to 20 per cent by 2030.
One key step has been to improve the availability of land for industry, which had previously been a significant hurdle for new investments. Millions of square metres of serviced industrial land have been made available via the Digital Egypt Industrial Platform across various governorates of various sizes and catering for different activities.
The government has also announced a new package of relief measures for stalled industrial projects that have construction permits but have failed to meet the deadlines to build on the industrial land they have been allocated. The measures will remain in effect until 30 April 2026.
Also among the government’s support to the industrial sector is a new Export Rebate Programme for the fiscal year 2025-2026, doubling its total budget to LE45 billion.
The programme takes into account the value added by exports, the growth rate of exports, production capacity, and employment levels. It also covers participation in international exhibitions, penetration of strategic markets, support for branding, logistical improvements, geographic incentives, environmental compliance, and energy efficiency.
Several investors anticipate that 2026 will witness significant export breakthroughs driven by the expansion of new production capacities that are expected to bolster Egypt’s overall export revenues.
Hassan Mabrouk, head of the Home Appliances Division at the Chamber of Engineering Industries at the Federation of Egyptian Industries, told Al-Ahram Weekly that golden licences granted to foreign investors have played a pivotal role in attracting home appliance manufacturers to the Egyptian market.
A golden licence is a single approval that allows companies to set up, operate, and manage projects with minimal bureaucratic hurdles. It encompasses all necessary building permits and the allocation of the real estate required for projects.
The licences provide five-year tax exemptions, streamline profit repatriation, and accelerate the allocation of industrial land required by global manufacturers, which have collectively boosted investors’ appetite to channel their capital into Egypt, Mabrouk said.
In recent months, the sector has witnessed a strong influx of Chinese investment in the home appliance sector, including Haier and Hisense, both expected to record substantial growth in 2026.
This comes alongside Turkish investments such as in Beko and German investments led by Bosch’s home appliances. The minimum investment cost in this sector ranges between $500 and $800 million, Mabrouk said.
He said that tensions in US-China relations have reinforced the desire of Chinese companies to expand into Egypt, which now serves as a gateway for their products to the US market through Egyptian certificates of origin, in addition to facilitating entry into various other markets linked to Egypt through trade agreements.
Agreements that Egypt maintains with the European Union, the US, the African nations, and the Arab countries continue to position Egypt as a major export hub and an increasingly attractive investment destination.
Mabrouk anticipates that 2026 will witness the local production of home appliances that are currently imported, a shift that will intensify competition and ultimately improve product quality for consumers.
He noted that the influx of investment stimulates the growth of feeder industries and stressed the importance of upgrading suppliers and enhancing product quality to eliminate the need for importing production inputs altogether.
Hassan explained that the current local component ratio stands at around 70 per cent for cookers and electric water heaters and 50 per cent for gas water heaters.
These percentages are expected to rise in 2026, particularly with Fresh beginning the local production of refrigerator motors and, by the end of 2026, the Al-Arabi Group, in cooperation with a Taiwanese partner, launching production of air-conditioner compressors.
CARS AND GARMENTS: Khaled Saad, secretary-general of the Egyptian Association of Automobiles (EAMA), told the Weekly that Egypt’s production climate has become increasingly conducive to investment in the automotive sector, particularly Chinese investments supported by currency stability and the various trade agreements Egypt maintains with countries around the world.
The government’s commitment to localising industry has helped create a favourable investment environment, especially with the availability of industrial zones that have encouraged additional capital inflows, he added.
The automotive localisation strategy has also played a decisive role in providing clarity for foreign investors, with investment flows beginning in 2024 and profits expected to be realised in 2026, he said.
LE1 billion was allocated in the 2024-2025 state budget to fund the Automotive Industry Localisation Strategy, which targets to increase the local components of car manufacturing to over 45 per cent this year, meeting global supply chain needs and rising domestic demand.
Saad explained that the majority of recent investments have focused on producing fuel-powered vehicles, due to the incomplete infrastructure required for electric vehicles.
He emphasised the need for fully developed infrastructure to support EV manufacturing.
He said that 2025 saw the production of four new vehicles in the local market, with expectations for the production of five models in 2026.
He also highlighted the government’s support for export activities through the National Strategy, which includes financial incentives for exporters, and noted that this plays a key role in strengthening the export capabilities of investments within the automotive industry.
Mohamed Abdel-Salam, chair of the Chamber of Apparel and Home Textile Industries at the Federation of Egyptian Industries, told the Weekly that the rise in labour costs in Turkey has driven a number of Turkish investors to relocate to Egypt in 2025 and earlier.
There are around 200 Turkish companies operating in the Egyptian market, he said, all benefiting from lower operating costs compared to Turkey. Egypt enjoys a sound investment law, strong infrastructure, and competitive labour costs compared to rival countries, he added.
The apparel industry has also attracted Chinese investors, contributing to significant investment inflows in the recent period and coinciding with increasing interest from other investors expected to enter the Egyptian market in 2026, he said.
Abdel-Salam explained that 2025 had witnessed noticeable growth in the volume of investments within the sector, whether through new foreign investments, local investments, or expansions carried out by existing factories.
He noted that these foreign investments target production for export, as investors work to maintain their clients. This has driven many of them to subcontract manufacturing, while others have opted to lease full factories until the completion of their own facilities — a trend that positively affects export activity.
Abdel-Salam anticipates that the sector’s feeder industries will witness a boom in the coming years, aiming to meet the needs of foreign investors that currently rely on importing production requirements.
Some Turkish producers of garment accessories have entered the local market to sell their products, which may pave the way for major investments as a next step, he said.
The local industry will benefit from the influx of foreign investments through the training of new technical managers, supported by the expertise expected to be gained from industrial fields new to the Egyptian market, as well as from the technology used across various production stages, he added.
Magdi Tolba, a member of the board the chamber for its new term starting in January, called for drafting a clear technical plan within a specific time frame that will enable Egypt to reach its natural position on the global apparel production map.
He told the Weekly that Egypt possesses strong capabilities that qualify it to be among the largest producers and exporters of readymade garments, especially amid political conditions supportive of achieving industrial and export breakthroughs in record time.
Fadel Marzouk, Chair of the Apparel Export Council of Egypt (AECE), anticipates total garment exports to reach $3.6 billion this year, compared to $2.8 billion in exports in 2024.
The sector recorded a growth rate of 21.7 per cent during the first 10 months of 2025, achieving $2.8 billion compared to $2.3 billion during the same period in 2024, according to data from the Export Council.
The sector aims to achieve $12 billion in exports by 2031, requiring an annual increase of about $1.5 billion at an annual growth rate of 30 to 35 per cent.
With the completion of ongoing investments and their transition into the production phase, export targets may be revised accordingly. According to the council, the US tops the list of countries importing Egyptian garments, followed by the EU, Turkey, and some Arab nations.
* A version of this article appears in print in the 25 December, 2025 edition of Al-Ahram Weekly
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