The Central Bank of Egypt (CBE) has issued an important circular on August 7, 2024, addressing the procedures for banks operating in Egypt regarding the opening of…
Egypt’s Attractiveness: Lower Costs and Streamlined Access
Egypt has emerged as a compelling destination for Turkish companies, offering substantially lower labor and production costs compared to Turkey. In a significant move in April, Egypt eliminated visa requirements for Turkish citizens, further facilitating the relocation process. Current figures indicate Turkish investments in Egypt for the ongoing year have already reached $2.5 billion, with projections suggesting a potential increase to $3 billion by the close of 2023.
Chairman of the Turkish-Egyptian Business Council, underscored the critical role played by the visa-free regime, stating that it has catalyzed momentum for Turkish companies contemplating a move to Egypt. Presently, 35 Turkish industrial enterprises operate within Egypt, generating an annual turnover exceeding $1.5 billion.
Economic Advantages for Turkish Companies
Beyond reduced labor costs, Turkish companies operating in Egypt can participate in tariff-free trade with third-party countries, presenting new avenues for global expansion. Denizer emphasized the significance of Egyptian trade agreements with the US, EU, South America, and select African countries, providing Turkish companies in Egypt with diverse market access.
Noteworthy Shifts: Turkish Companies Already in Motion
Several notable Turkish companies have discreetly shifted production to Egypt. While specific names are omitted, the automotive and textile sectors are experiencing noteworthy transformations. The success stories of these companies reflect the broader trend of Turkish investments diversifying into Egypt.
Overcoming Challenges Through Diplomacy
While the reception of Turkish companies in Egypt has been warm, challenges such as a foreign currency shortage leading to delayed payments for domestic market goods persist. Ongoing negotiations between the Turkish and Egyptian central banks aim to address these challenges.
In October, Turkish Minister of Trade, Ömer Polat, and a business delegation visited Egypt with the goal of doubling Egyptian-Turkish trade volume to $15 billion over the next five years. Focus sectors include automotive and textiles, with plans for collaboration and active participation in Egyptian trade fairs. Ibrahim Burkay, Chairman of the Chamber of Commerce and Industry in Bursa, expressed optimism about the prospects for increased economic cooperation between the two nations.
As Turkish companies navigate economic challenges, Egypt’s inviting business environment and economic incentives position it as an increasingly attractive destination for those seeking stability and growth in an ever-evolving economic landscape.
For Turkish companies planning on investing in Egypt or vice versa, Eldib & Co stands ready to assist. As the only Egyptian firm with a branch in Turkiye, we are committed to facilitating smooth and successful business ventures between the two nations.
