There is a cooperation agreement with the European Union in force since 2004. It allows industrial goods to enter duty free within Europe. A free trade agreement was signed with 4 countries of EFTA (European Free Trade Association) in 2007 and with Turkey in 2005. The agreement of Agadir between Egypt, Morocco, Jordan and Tunisia entered in force since April 2007.
The country have signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
Non Tariff Barriers
There is no licensing system, although importing some products requires the prior authorization of the Treasury Department. One of the difficult principles governing imports is the obligation to ship the goods directly from the country of origin (decree 619/98, November 1998), thus preventing the goods from being regrouped. This law has however been relaxed for companies having subsidiaries in other countries by permitting them to ship from the country of their registered office or from their overseas subsidiaries. Together with this the obligation to get the certificates of origin legalized in the country of origin of the goods has been introduced. In fact, some products are still banned, especially in the field of textiles and poultry, and automobiles must be imported in the year of their manufacture. Packaged goods must have an Arabic instruction booklet and all handling instructions must be written in English and Arabic.
Egypt has joined the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto Convention) in 2007. Joining the convention would align Egypt’s customs procedures with those of the World Customs Organization standard. The convention is an instrument for the harmonization of customs techniques. It also aims at ensuring that customs system is not barriers to international trade and growth.
Egyptian law requires that all commercial agents and importers have Egyptian nationality. If it is a company, the chairman and all members of the board must be Egyptian, and it must be 100% Egyptian-owned. However, distributor-type companies with any foreign ownership can market goods under certain conditions that limit flexibility of the foreign entity.
There are significant documentary restrictions; the original sales invoice and two copies of it, the original certificate of origin and two copies of it are required. These two documents must be certified and authenticated by the Egyptian consulate in the country of origin. For the certificate of origin, it is necessary to specify that the information given is exact and accurate. Further, the package list, the bill of lading with the name and address of the sender and the number of bills of lading sent are required. Since 1999, The Central Bank of Egypt informed national banks that all the letters of credit should be paid 100% in cash by the importer. A complete description of the product content is also required for products for which analyzes are compulsory.
The Customs accept the entry of samples exempt from all duty for the purpose of sales promotion or exhibition. The value of these samples must not exceed 500 EGP or it should not be possible to sell them as such. These conditions must be repeated specifically in the accompanying documents. If they do not meet these conditions, a deposit must be made to the Customs with a file which will ensure a re-export of the product. The deposit will be returned on proving the re-export of the goods. For medical samples, health conditions must be met.
Price continues to be the dominant factor in buying decisions in Egypt. Quality takes the second place even if this fact is beginning to change. The importance of a good after-sales service quality should also be considered.
Consumer Profile and Purchasing Power
The emerging Egyptian market offers good outlets for foreign goods. The rapid growth of the Egyptian population is a major advantage. Moreover, the Egyptians deprived of choice for a long time are constantly demanding new products and equipments in the face of globalization. They show a special taste for new technologies and especially information technology. However, they remain in the low and medium range because of their weak purchasing power. Only the well-to-do, elite class can afford higher range products.
It is possible to carry out direct sales in Egypt; nevertheless most of the foreign companies prefer to rely on a local partner company. This choice has the advantage of being closest to the market and consumer expectations. The sales agents, distributors and wholesalers are registered for the most part with the Ministry of Industry and Foreign Trade. Most of these intermediaries remain generalists. The franchises have also had an unprecedented boom. If in the past they were kept mainly for the restaurant trade (Mc Donald's, Pizza Hut, Baskin & Robin, KFC), they are expanding into new sectors including hotel business, clothing industry, beauty salons, distribution and services.
The market is still dominated by a large number of small family-run stores. The development of mass distribution is a rather recent trend and it only caters to a small fraction of the population having sufficient income. Many private mini-markets having a store space exceeding 100 m2 (Sunny Supermarket, ABC, ALPHA MARKET, METRO) have opened. In addition, several supermarkets have burgeoned in the country and from this point of view the Carrefour group with five supermarkets dominates the field. A more recent trend: the advent of discount supermarkets. For example, the Awlad Ragab group (in Arabic) or the Khir Zaman chain. In terms of market shares, the supermarkets and hypermarkets represent 30% of sales compared to 70% for the small family-run stores.
Egypt has embarked on a modernization process of its transport infrastructures. Thus, many highway projects were launched and some of them have been finished successfully like the highway linking Cairo to Ain Sokhna. In the same way, Egyptian airports are under full-fledged renovation. Cairo International Airport is part of a construction project for a new terminal. In fact, the shipping sector at this time experiences new perspectives with the construction of a container project to Port Saïd east.
The manufacturing sector contributes to more than 17% of the GDP. It is showing growth thanks to the number of foreign investments especially in the pharmaceutical, chemical, gas, oil, agricultural food, automobile sectors....
All.biz - Egypt - Directory of companies in Egypt. Egyptian Trading Directory - Egyptian trading directory to locate factories, import and export companies, agents, banks, hotels, insurance companies and maritime companies in Egypt. Eyoon - Business directory for several countries in Africa and in the Middle East. Yellow Pages - Find a business in Egypt.