By Moustafa Daly
One of the Middle East’s largest economies, Egypt has been struggling with a foreign currency shortage that’s driving up inflation rates and increasing its vulnerability to external factors such as the Russian war in Ukraine.
To address this shortage, the Egyptian government has taken several steps throughout 2023 – one is loosening the conditions needed to obtain its citizenship by investment (CBI). Although this program was first launched in 2019, it has since failed to attract a significant number of investors. The government has yet to release official figures on the program.
Moreover, Egypt reduced the minimum investment threshold by $100,000 in July 2023. It stands now at $250,000. Also, it made it legal for foreigners to buy property from private developers and citizens –foreigners seeking CBI had to purchase property from government-owned projects before this decision.
Another factor benefiting Egypt’s CBI is that it’s also an E-2 country, a treaty between the U.S. and a number of countries that enable their citizens to apply for investor visas to the U.S. that require much lower investment thresholds than the renowned EB-5 program.
Egypt’s CBI program vis-à-vis Turkey’s
Egypt also shares the E-2 advantage with its Middle Eastern neighbor Turkey, which has an economy almost twice as large as Egypt’s, is closer to Europe, and has a well-established CBI program since 2016.
Rivaling Turkey’s CBI offerings would be an uphill battle for Egypt’s young program – albeit not an impossible one.
“Egypt overall has good relations with its eastern, economically stronger neighbors [referring to Gulf Cooperation Council (GCC) monarchies],” says Mehmet Cura, founding partner at Istanbul-based Cura Legal. “It is a relatively safe country, and it has promising infrastructure projects - at least in Cairo.”
For those seeking Turkey’s CBI to be eligible for E-2 visas, Egypt may prove competitive as the minimum investment threshold in Turkey is $400,000 – much higher than Egypt’s $250,000.
However, on Nov. 20, the Biden administration introduced a domiciliation condition to applicants for the E-2 visa – which has reportedly impacted the popularity of E-2 stepping-stone countries like Turkey and Grenada, and would have a similar impact on Egypt’s CBI program.
Is Turkey better for business than Egypt?
While Egypt and Turkey are transcontinental countries with strategic locations and influence across Africa, Asia, and Europe, Turkey holds an advantage for foreigners taking the business investment CBI route.
“Turkey is part of European Customs Union, which makes it easier for Turkish citizens to do business with EU member states,” explains Cura. “On the other hand, Turkey is experiencing high inflation rates and devaluation of its currency in recent years,” he adds, alluding to the possibility of these conditions potentially discouraging business investment in Turkey.
Another factor to consider is that Arabs and Middle Easterners constitute one of the largest groups applying for citizenship by investment in Turkey – with Iranians and Iraqis being the two most sizable nationality groups applying for CBI between 2017 and 2020.
However, with rising anti-Arab sentiments in Turkey, the Egyptian CBI program could possibly serve as a convenient alternative for Middle Eastern CBI investors who would have otherwise considered the Turkish route.
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