Egypt is overhauling its tourism industry in a bid to bring more foreign and domestic investment to the sector.
A draft bill amendment, approved by the Egyptian parliament in June 2008, will change aspects of law 38, 1977, which regulates tourism companies. The changes include allowing foreign tourism companies to operate in the country as long as they have a minimum capital amount of LE3m ($560,000). The amendment also raises the minimum capital requirement to establish a tourism operator from LE100,000 ($18,700) to LE2m ($373,700).
Adla Ragab, economic advisor for the ministry of tourism, believes the recent measures will have a positive impact on the industry, helping to create a more competitive and professional sector. "The increase in capital will help to differentiate long term operators and those adding quality to the industry from those that are not serious about investing in tourism in the country," she told OBG.
The tourism sector is an essential part of the Egyptian economy. It employs 13% of the country's workforce and accounts directly and indirectly for 11.3% of Egypt's gross domestic product (GDP), according to the fifth Egyptian Competitiveness Report, released in 2008. It is also a big foreign currency earner for Egypt, bringing in 19.3% of foreign exchange. The government expects this figure to rise by 26% to $12bn by 2011. The report also pointed out that every LE1 invested in the sector brings in LE4 in foreign currency.
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