New tax incentives grant companies seeking to list and offer shares on the Egyptian Exchange a 15% reduction in their tax liability for 3 years, renewable, provided they offer at least 20% of the company’s shares and meet one of the conditions linked to the company’s size or the value of the shares offered.
The implementation of the incentives will put the tax cut’s ability to attract new companies to the capital market to a practical test, amid differing views among company executives and market participants over the adequacy of the current rate, the benefit period and the eligibility thresholds, alongside other factors including funding needs, market conditions, ownership structure, and governance and disclosure requirements.
Funding and expansion drive listing decisions
Ayman El-Ashry, chairman of El-Ashry Steel, said the incentives could push hesitant companies to take more serious steps toward listing, particularly companies with expansion plans that need additional sources of funding. He added that the capital market provides access to a broader base of investors, while also helping develop governance and raise disclosure and transparency standards.
Hossam El-Sallab, chairman of Ceramica Royal and head of the ceramics division, said the tax cut could tip the balance in favor of an offering for companies weighing whether to remain privately held or obtain funding through the exchange. The decision, he said, is also linked to expansion, new investments, liquidity provision, bringing in partners and creating exit opportunities for some shareholders.
Hany Hamdy, managing director of Mubasher Securities Trading, said the incentive’s success would require raising companies’ awareness of the benefits of entering the capital market and avoiding an assessment of the decision based solely on its tax aspect. Listing provides new funding sources and helps companies finance their expansions instead of relying on a single source, he added.
Calls to increase the cut and extend the benefit period
Yasser El-Masry, managing director of Arab African Securities Brokerage, said the 15% reduction was attractive, but the 3-year benefit period might not be enough to persuade all companies, given that listing represents a long-term transformation in a company’s structure and management and entails disclosure and governance obligations as well as dealing with new shareholders.
Mohamed Amer, chairman of Mepco, proposed raising the reduction to 25% and extending the benefit period to 5 years, giving companies more time to offset some of the costs and obligations associated with an offering and listing. He also called for clear guidelines enabling company managements to calculate the expected net benefit before making a decision.
Rand Hamed, managing director of Okaz Portfolio Management, said assessing the incentive’s impact would require waiting 3 to 6 months to monitor companies’ response and whether it translates into actual listing and offering decisions. She said the minimum market capitalization at the time of the offering, at 50 billion Egyptian pounds, was high compared with the size of many companies, and proposed lowering it to 25 billion Egyptian pounds. The requirement to offer 20% of the shares, she said, was reasonable and did not represent a major obstacle.
Mohamed Farouk Massoud, managing director of Global Invest, said the 15% reduction for 3 years represented a good incentive in principle, but the threshold linked to company size could limit the number of beneficiaries. He proposed lowering the threshold to 1 billion Egyptian pounds, stressing that offering 20% would allow major shareholders to retain a controlling stake while diversifying the investor base.
Governance and ownership structure among listing challenges
Essam Shoheib, general manager of Uni Pharma, said the incentives available to companies in 2008 had been more effective and that the current reduction might not be sufficient on its own to change companies’ strategies. Family-owned companies need additional motivations given the changes in ownership, governance and disclosure associated with an offering, he explained.
Hamdy Abou El-Enein, chairman of Al Rehab Clothing, said capital-market volatility was making some companies cautious about considering an offering. Industrial companies’ priorities include securing raw materials, keeping factories operating, covering labor and wage costs, and maintaining working capital, he added, and these issues may take precedence over a listing decision.
In an example of a company considering entering the market, Ashraf Salah, sales and marketing director at Jam Pack, said the company was targeting an offering by 2028 after completing governance and preparation requirements. He said it currently relies on self-financing, while a listing could provide additional funding sources and diversify its investor base.
New offerings between 2021 and 2025
In 2021, 3 companies were listed and offered shares: eFinance, Taaleem and Emerald. In 2022, a single company, Macro Group, conducted an offering. The number rose to 4 companies in 2023: Digitize, Fitness Prime, A Capital and TAQA Arabia.
In 2024, 2 companies conducted offerings: ICFI Financial and United Bank. In 2025, 3 companies entered the market: Bonyan, Tasaheel Factoring and National Printing.
