Business dynamics – the process of firm entry, exit, survival and growth – are key forces for ensuring growth and innovation and sustaining wages in market economies. New firms are also key for a dynamic economy, as firm entry contributes to reallocating resources to growing economic activities. This report reviews the state of business dynamics in Egypt, including its institutional data infrastructure.
Egyptian data on business dynamics does not yet match international standards, but the government is committed to improving its data infrastructure. Several data sources are available for the evaluation of business dynamics, but each has limitations. The Economic Census lacks a panel component, which inhibits the analysis of firm dynamics. Data derived from administrative records lack employment information, which is crucial to examine job creation and destruction. Firm identifiers differ across datasets, limiting data integration. Furthermore, Egypt has not yet established a statistical business register (SBR), which is the primary source for analysing business dynamics in OECD countries. The government is aware of the importance of improving firm-level data for studying business dynamics. Consequently, it has set the government to government (G2G) initiative to facilitate data sharing across public institutions on bilateral agreements, and it plans to construct a single database of registered businesses, the Economic Entities Platform. To improve business data, Egypt should:
Enhance the quality and use of administrative data, improve their analytical and statistical use, and facilitate sharing and integration. The latter requires adopting a unique business identifier (UBI), that the government is planning to develop, and common classifications for industries and governorates.
Create an SBR within the Central Agency for Public Mobilization and Statistics (CAPMAS) by leveraging survey data (such as the Economic Census) and administrative data from the Commercial Register Authority, the General Authority for Investments and Free Zones (GAFI), the Egyptian Tax Authority and the National Organization for Social Insurance and the Micro, Small and Medium Enterprise Development Agency (MSMEDA). The Economic Entities Platform is being developed as the enabling backbone for a future SBR. It will operate under CAPMAS’s statistical custodianship, following clear and agreed data-governance and data-sharing protocols. Beyond studying business dynamics, the SBR can support other statistical activities and facilitate data linkages.
Expand the number of micro-data available for research by increasing the number of datasets accessible through the non-governmental Economic Research Forum micro-data portal (OAMDI-ERF) and opening remote or physical data-access facilities at CAPMAS.
Young firms contribute disproportionately to employment, but most are informal, highlighting the need to further ease registration procedures and increase formalisation. Results from Egypt’s inclusion in the OECD DynEmp database using the Economic Census 2022/2023 show that young firms (aged 0-2 years) accounted for 15% of firms in manufacturing and 18% in non-financial market services, similar to OECD countries in this study (14% and 19% on average, respectively). Most Egyptian young firms (70% in manufacturing and 58% in non-financial market services) come from the informal sector and were on average, smaller than young firms in OECD countries. Although smaller in size, young firms in Egypt contribute more to total employment (8% in manufacturing and 13% in non-financial market services) than OECD countries (5% and 10%, respectively), highlighting their crucial role for job creation. Investor Service Centers (ISCs) within GAFI have significantly streamlined company registration. However, the procedures for obtaining approvals for permits and various licenses remain a challenge. The government has already made some progress (such as the 2017 Industrial Permits Act, the “Golden License”, and recently, the creation of a Unified Licensing Platform) and it plans to further streamline licensing procedures by the end of 2026 (via the National Licensing Re-engineering Program). To support ongoing efforts, Egypt could:
Fully implement the national programme to streamline and expedite the issuance of licences, approvals and permits. Additionally, Egypt could prioritise incentives for formalisation and raise awareness of existing initiatives. The new Ministerial Group for Entrepreneurship, created in 2024, will play a key role in supporting young firms’ growth. Special attention could focus on industries where young firms trail OECD countries in their contribution to businesses and employment. These include Basic pharmaceutical products and pharmaceutical preparations, Computer, electronic and optical products, Transport equipment, Publishing, audiovisual and broadcasting activities and Telecommunications.
Small and medium-sized enterprises (SMEs) contribute comparatively little to employment; further addressing their structural and financial barriers is key to unlocking their potential. DynEmp data shows that SMEs (firms with 10‑249 workers) represent a smaller share of firms and employment in Egypt than OECD and selected emerging economy averages. In manufacturing, for example, micro (<10 workers) and large firms (250+) accounted for 74% of employment in 2022/23, while SMEs represented a smaller share than the OECD average (a phenomenon known as “the missing middle”). The Egyptian government already introduced several initiatives to address this, including the Central Bank of Egypt’s (CBE) Financial Inclusion Strategy, a simplified tax regime for smaller firms (Law No. 6 of 2025) and policies to enhance competition (Law No. 159 of 2023). To further enhance the role of SMEs, Egypt could:
Review the definition of MSMEs in the medium-term to account for employment, in addition to revenue or capital, to better target tax and non-tax incentives to MSMEs. A rigorous definition of MSMEs avoids incentives set for smaller firms going to large firms. To further enhance competition, Egypt could assess the presence of undue barriers to entry in industries where employment is dominated by large firms (250+) more than in the OECD – such as Basic pharmaceutical products and pharmaceutical preparations, and Publishing, audiovisual and broadcasting activities.
Women-owned businesses are few, calling for strengthening and better evaluating existing programmes. According to DynEmp, female-owned firms – a proxy for female entrepreneurship – represented only 4% of businesses in manufacturing in 2022/23. In non-financial market services, the share was only slightly higher at 10%. Several initiatives already aim to foster female entrepreneurship in Egypt, including job training led by the National Council for Women, as well as measures to expand access to finance through the CBE and the MSMEDA. Building on these efforts, Egypt could:
Strengthen training and mentoring programmes, simplify access to financing opportunities for women-owned businesses, and regularly evaluate initiatives (for example, through participant surveys). Programmes could also support women-owned businesses to expand into international markets and strengthen their access to business networks.