RIYADH: Egypt saw the number of newly established foreign companies rise 33.7 percent year on year to 5,022 in the first half of 2026, as the government works to attract investment and improve the business environment.

Capital inflows to newly established foreign companies also increased 20.9 percent year on year to 21.4 billion Egyptian pounds ($411 million) during the January-June period, according to a Cabinet statement.

Egypt is also seeking to expand the role of private capital in the economy, with the government targeting private investment to account for 64 percent of total investment by 2030, up from 59 percent in the 2026/27 development plan.

The medium-term plan also targets an increase in the investment-to-gross domestic product ratio to 20 percent by 2029/30, from around 17 percent in 2026/27, as authorities seek to strengthen private-sector participation and support economic growth.

Foreign investment brings wider economic benefits

“Immediate and obvious economic benefit of foreign company establishments is direct employment at newly established or enhanced facilities, driving also indirect jobs in local supply chains, and additional tax revenues for the government,” Yigit Saf, partner at Arthur D. Little, told Arab News.

He added that so-called “spillover effects” could be much more lucrative, where local workers and firms often pick up new production methods, management practices, and technical skills from foreign operations.

“New or better capability centers, so-called economic clusters, pave the way for future economic activity,” Saf said.

The ADL partner further explained that foreign investment can boost economic productivity, making a country more competitive in terms of its export capacity and attracting further investment. When supported by economic stability, this can create a cycle of increased investment and economic growth.

Egypt advances investment reform measures

In the newly released statement, the Cabinet said the increase reflects the state’s efforts to simplify procedures, improve the investment climate and facilitate investment as part of its economic reform program.

The World Bank has also highlighted Egypt’s progress under an ambitious reform program aimed at stimulating private investment and creating jobs.

The latest figures come as Egypt’s broader foreign investment flows show signs of improvement.

Foreign direct investment inflows rose by approximately one-third during the first nine months of fiscal year 2025/26, according to a government review of the country’s balance of payments released last week.

The report also showed that Egypt’s balance-of-payments deficit narrowed to about $1.8 billion during July-March, from around $1.9 billion a year earlier, with higher FDI and remittances supporting foreign-currency resources.

The government is seeking to build on this momentum through measures aimed at making the investment environment more transparent and efficient. These include simplifying administrative procedures, improving access to information and strengthening coordination among government authorities, according to the review.

Egypt’s accession to the World Trade Organization’s Investment Facilitation for Development Agreement, approved in October, is also intended to strengthen international investors’ confidence and reduce the costs associated with investment procedures.