Egypt relaxes visa and citizenship laws to attract foreign capital as debt crisis deepens
Egypt is effectively opening the doors for investors from sanctioned countries to use its shores to evade sanctions. Citizenship-by-investment programmes may not have rigorous due diligence procedures
Egypt announced an overhaul to its visa regulations to attract more tourists. Particularly, Egypt will grant Visa Upon Arrival for Chinese, Turkish, Indian, and Iranian tourists who wish to visit the country for a short term. Furthermore, Egypt will grant those with EU, UK, the US, and other western countries visas the right to obtain an Egyptian entry Visa Upon Arrival. The country also introduced a five years multi-entry visa in exchange for $700.
Prior to this announcement, another government announcement was made regarding the sale of Egyptian nationality via citizenship-by-investment programmes. According to the new laws, Egyptian nationality will be offered to foreigners based on one of four conditions:
- Purchasing state-owned property worth USD 300,000 (EGP 9,270,630);
- Depositing USD 500,000 (EGP 15,451,050) in an Egyptian bank account to be reimbursed in local currency after three years;
- Founding or co-founding an investment project valued at USD 350,000 (EGP 10,815,735);
- Making a non-refundable deposit of USD 250,000 (EGP 7,725,525) into the state’s public treasury.
Egypt has been facing a severe economic crisis for years, with high levels of public debt ($160 billion) and an ongoing shortage of foreign currency. The tourism sector is a critical source of dollars for Egypt. However, the sector has been adversely affected by the COVID-19 pandemic and the conflict in Ukraine, leading to a decline in tourist arrivals and revenue.
Politically, the new visa regime reflects changing geopolitical dynamics in the region including the rapprochement between Saudi Arabia and Iran and the growing ties between Asian countries and the MENA region.
The new visa and citizenship systems have been criticised by locals for they may compromise Egypt’s sovereignty. Furthermore, the economic sustainability and the attractiveness of the new schemes have been put into question by regional and international observers.
Business implication
Egypt is effectively opening the doors for investors from sanctioned countries to use its shores to evade sanctions. Citizenship-by-investment programmes may not have rigorous due diligence procedures or proper oversight. This could damage Egypt's reputation and credibility globally and potentially lead to diplomatic and economic consequences.
While such programmes have become increasingly common in many countries, they also raise concerns about the potential implications for Egypt’s national security. This may affect the security of existing and future foreign investments.
In addition to the potential political implications, the new laws will deepen dependence on foreign capital, which can be unstable and unpredictable. Hence, it may result in more societal instability.