Egypt - Country Commercial Guide
Digital Economy
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Overview

The Information and Communications Technology (ICT) sector in Egypt remains highly robust, with a growth rate of 15.2% for fiscal year 2022/2023, surpassing the overall GDP growth rate. The sector’s contribution to GDP increased to 5.1% in fiscal year 2022/2023, up from 4.4% in fiscal year 2019/2020. Total investments in the ICT sector surged to $4.2 billion in fiscal year 2022/2023, reflecting a significant increase of 20% from the previous fiscal year.  Numerous U.S. companies are physically present in Egypt and contributing to the growth and advancement of Egypt’s digital economy, including Microsoft, IBM, Amazon, Visa and others.  Most are also actively interacting with Egyptian youth on skills training and workforce development.   

Under its ICT 2030 strategy, the Egyptian government is undertaking a series of investments, capacity building and training programs, digital government services reforms, and infrastructure upgrades. The strategy calls for launching new initiatives to maximize the contribution of the ICT sector to Egypt’s digital economic growth by focusing on capacity building, electronics design and manufacturing, and technology parks. The strategy also includes a plan for the digital transformation of core government services in the following areas: education, healthcare, and government services. 

The Ministry of Communications and Information Technology (MCIT) has an initiative called “Our Future is Digital” that aims to train 100,000 young Egyptians and develop their ICT skills in areas of high market demand, including website design, data analysis, and digital marketing.  MCIT also launched in 2020 the “Our Digital Opportunity” initiative to engage with SMEs in the digital transformation process. Meanwhile, the ministry’s Digital Egypt Project aims to supply all government entities with fiber-optic cable connections. This process has been completed in 5,300 government buildings across Egypt, and when fully completed will connect some 32,000 buildings at a total cost of 6 billion Egyptian Pounds (approximately $125 million USD).  

The New Administrative Capital (NAC), 50 miles east of central Cairo, now houses the majority of national government offices and ministries.  The government has structured the NAC to be a “Smart City” and is investing heavily in the new city’s telecommunications and ICT infrastructure. The first phase of “Knowledge City,” which will be located inside the NAC, is completed. It includes applied research centers for technology to facilitate technical training, software and applications development, and data design. The Knowledge City is estimated to cost a total of 12 billion Egyptian Pounds ($250 million USD). Within the city, they are planning to establish Creative Innovation Hubs that will provide technical assistance to promote innovation and entrepreneurship (still pending). 

The Ministry is also working on developing six technology parks in the cities of Minya, Menoufiya, Mansoura, Sohag, Qena and Aswan. These parks are aimed at supporting entrepreneurship and innovation and will consist of hardware design labs, startup incubators, training institutions, and integrated systems for AI training, data science, and cybersecurity.   

The Ministry of Communications and Information Technology oversees the following organizations:    

  • National Telecom Regulatory Authority – NTRA 
  • IT Industry Development Agency – ITIDA 
  • Egypt Post 
  • Information Technology Institute – ITI 
  • National Telecommunication Institute – NTI 
  • Center for Documentation of Cultural and Natural Heritage – CULTNAT 
  • The Technology Innovation and Entrepreneurship Center – TIEC 
  • Smart Villages 
  • Silicon Waha 
  • Technology Development Fund 

Market Challenges  

The Government of Egypt (GoE) talks about moving towards a digital economy and accelerating the country’s digital transformation, which does and will offer opportunities for U.S. ICT companies, but Egypt has experienced a crippling economic crisis over the last two years.  This crisis has hampered the government’s ability to implement its ambitious plans, and the lack of hard currency in the economy left some U.S. exporters struggling to receive payments.  As of September 2024, the crisis has subsided somewhat, but external pressures (Russia-Ukraine war, conflict in Gaza, Houthis in the Red Sea) continue to restrict Egypt’s ability to generate enough hard currency to pay its arrears and fund new developments. 

Furthermore, the regulatory environment in Egypt lacks transparency and clarity.  Intellectual Property Rights (IPR) are a concern and Egypt remains on the United States’s 301 Watch List.  The Special 301 Report is an annual report by the Office of the United States Trade Representative (USTR) that identifies countries that have problems with intellectual property (IP) protection and enforcement.  The report includes a Priority Watch List and a Watch List, and USTR places countries on these lists to indicate that they need to address IP issues.  The Special 301 Report is based on U.S. trade law, which requires USTR to review IP protection and market access practices in foreign countries each year.  The USTR’s goal is to help prevent losses in U.S. jobs and competitiveness.  The USTR considers a range of concerns when identifying countries for the Special 301 Report, including: Deterioration of IP protection and enforcement, Inadequate trade secret protection, Copyright piracy, Market access barriers, and Indigenous innovation policies that may disadvantage U.S. rights holders.  The GoE also needs to improve its data privacy and data governance implementation and enforcement.  Egypt passed a new Personal Data Protection Law in 2020, but implementation hasn’t started yet because the GoE first needs to create and staff a new Data Protection Authority that will be responsible for this.  It is not clear when the new Data Protection Authroity will open for business. 

Navigating the regulatory and registration process in Egypt’s ICT sector requires understanding of the legal framework and engaging with relevant authorities.  U.S. companies should ensure compliance with licensing requirements, data protection laws, and sector-specific regulations.  All foreign investors are advised to collaborate with local partners and consult with legal and business experts to facilitate a smooth entry into the Egyptian market. 

Egypt has a free trade agreement with Europe that makes products from European suppliers very competitive, as there are no customs duties applied.  Customs duties and shipping fees for American products can cut into their competitiveness. 

Market Entry

The Ministry of Communications and Information Technology (MCIT) in Egypt is actively seeking suggestions, recommendations, and innovations in new technologies and processes. This openness reflects the government’s commitment to advancing Egypt’s digital economy and fostering an environment conducive to technological growth. Companies interested in entering the Egyptian market will find opportunities for collaboration and partnership with the government, especially in areas related to digital infrastructure, cybersecurity, and e-governance. 

Tenders: In Egypt, the decision-making entities responsible for procurement and project tenders typically publish tenders on their official websites. Occasionally, Requests for Proposals (RFPs) are issued for specific projects, inviting select companies to participate. The procurement system in Egypt is largely conducted through open tenders, fostering a competitive environment. 

Tender Publication and RFP Process 

  • Publication of Tenders: Tenders are published on the official websites of relevant government bodies and decision-making entities. This ensures transparency and provides all interested parties with equal access to procurement opportunities. 
  • Requests for Proposals (RFPs): For certain high-profile or specialized projects, RFPs may be issued to invite specific companies to submit their proposals. These RFPs are designed to attract qualified firms with relevant expertise and experience. 

Evaluation Criteria 

  • Technical and Commercial Merits: Proposals are evaluated based on both technical and commercial criteria. Decision-makers assess the technical feasibility, innovation, and compliance of the proposals alongside their commercial viability, including cost-effectiveness and value for money. 

Decision-Making Entities 

  • Varied Decision-Makers: The decision-making entities vary depending on the nature, location, and sensitivity of the projects. Key entities involved in procurement decisions include: 
  • Ministry of Communications and Information Technology (MCIT): For projects related to IT infrastructure, digital services, and telecommunications. 
  • Ministry of Defense: For projects involving defense technologies and national security. 
  • State-Owned Enterprises (SOEs): For projects related to public utilities, infrastructure, and large-scale industrial projects. 

Procurement System 

  • Open Tenders: The procurement system predominantly utilizes open tenders, which promotes fairness and competition among bidders. This system allows for a transparent evaluation process and provides opportunities for both local and international companies to participate. For businesses interested in participating in tenders or submitting proposals, it is advisable to regularly check the websites of the relevant decision-making entities and stay informed about upcoming opportunities. Engaging with local partners or consultants can also provide valuable  nsights into the procurement process and help navigate the regulatory landscape effectively. 

Regulatory Framework 

Primary Regulatory Bodies: 

  • Ministry of Communications and Information Technology (MCIT): Responsible for setting policies, regulations, and strategic planning for the ICT sector. 
  • National Telecommunication Regulatory Authority (NTRA): Oversees the regulation and development of telecommunications and internet services, including licensing and compliance. 

Key Regulations: 

  • Telecommunications Law (Law No. 10 of 2003): Governs the telecommunications sector, including licensing, service provision, and competition. 
  • Information Technology Law (Law No. 15 of 2004): Regulates IT services, e-commerce, and cybersecurity. 
  • Data Protection Law (Law No. 151 of 2020): Establishes guidelines for data protection and privacy. 

Licensing and Compliance: 

  • Licensing: Companies must obtain licenses from the NTRA to operate in the telecommunications sector. This includes licenses for providing telecom services, operating networks, and managing frequencies. 
  • Compliance: Companies are required to comply with technical standards, quality of service requirements, and data protection regulations. Regular audits and reports may be required to ensure adherence. 

Registration Process 

Company Registration: 

  • General Authority for Investment and Free Zones (GAFI): All ICT companies must register with GAFI. This involves submitting documentation such as the company’s charter, proof of capital, and details of directors and shareholders. 
  • Commercial Registry: Companies must also be registered with the Commercial Registry, which involves providing business details and legal documentation. 

Sector-Specific Registration: 

  • Telecommunications License Application: For companies providing telecom services, a license application must be submitted to the NTRA. This application includes technical and financial details, business plans, and compliance measures. 
  • Frequency Allocation: Companies requiring frequency allocation for wireless services must apply to the NTRA, detailing the technical specifications and intended use of the frequencies. 

Data Protection and Cybersecurity: 

  • Data Protection Registration: Companies handling personal data must register with the Data Protection Authority and comply with the Data Protection Law. This includes implementing data protection measures and conducting impact assessments. 
  • Cybersecurity Compliance: Companies must adhere to cybersecurity regulations and standards as set by the MCIT and NTRA. This may involve certifications, audits, and regular security assessments. 

Tax Registration: 

  • Egyptian Tax Authority: Companies must register with the Egyptian Tax Authority to obtain a tax identification number and comply with tax obligations, including VAT and corporate taxes. 

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Commercial Specialist in charge of the ICT Sector: Dina Bissada