Egypt sits comfortably amongst its neighboring countries as a provider of quality communication and information technology, ranking 1st in the MENA region and 4th internationally as a global outsourcing destination. Due to the obvious potential the country has in the field of ICT, many tier one vendors and distributors have started focusing their attention on the Egyptian market.
Additionally, the influx in technology startups which offer much needed services within the country, have also strengthened Egypt’s position as a globally recognized key market player. Teamed with a huge population, over half of which is under 40 and tech savvy, and low startup costs, Egypt is now rivaling India and the Phillipines in offering technology services.
Last year alone, 32 memorandums of understanding (MOU) were signed to improve networks infrastructure, host technological trainings, construct data centers and boost digital transformation in general. The MOUs were signed with well-known companies such as Huawei, Nokia and Ericsson.
The Government clarified measures in 2018 to incentivize international manufacturing companies to operate in Egypt, which sparked the interest of several big names such as Bosch and Mercedes. A report published recorded
internet users in Egypt at 37 million including landline and mobile phones, as well as ADSL subscribers reaching 5.43 million subscribers at the end of 2018, signifying an increasing growth in the sector.
Participation in this sector does not require costly seed investments, and the cost of developing a website or application is comparably lower than neighboring countries.
The introduction of the new technology zone under the New Investment Law will decrease associated costs further by exempting businesses located in the area from customs duty and tax on the tools, supplies and machinery that they require for their operations. A further incentive provided by the new law includes the ability to export products without the need to sign onto the exporter’s registry which is particularly useful for technology companies looking to expand globally The aforementioned technology zone will also provide dedicated support to businesses working on the design and development of electronics, data centers, outsourcing activities, software development and technological education, all of which are relatively new markets which previously had little assistance locally.
Key to the success of this industry is the close partnership between the government and businesses, and in light of this, there has been an ongoing deregulation of the business environment. This attempt at regulatory
reformation along with the introduction of a new technology zone under the Investment Law has already resulted in an increase in the number of companies operating within this sector.
The Chamber of Information Technology and Telecommunication (CIT) assists investors further by connecting local companies to their international counterparts, and providing consistent information on the developments of the sector to ensure businesses are in line with any changes made.