Egyptian citizenship now has a price tag. Under a new law passed by Parliament on July 16, foreign nationals who deposit at least LE7 million in a local bank will be granted a five-year residency and the opportunity to apply for citizenship.
The legislation is not unique. Many countries offer residency and a path to attain citizenship as an incentive to wealthy investors in a bid to attract foreign capital. Every year, several thousand people spend an estimated US$2 billion globally to acquire a second or third passport, according to the BBC.
What are the investment requirements and criteria in Egypt, how do they compare with the requirements in other countries and what benefits does Egyptian citizenship confer?
On July 16, Parliament approved a bill submitted by the government to amend provisions on Law 89/1960 on the entry and residency of foreign nationals in Egypt, and Law 26/1975 on Egyptian citizenship.
Under the new law, foreign nationals who deposit at least LE7 million, or the equivalent in foreign currency, are granted a five-year residency. They must reside in Egypt for five consecutive years, after which they can apply for citizenship. Under Law 26/1975, non-Egyptian residents previously had to live in Egypt for at least ten years before being able to apply for naturalization. The final decision to grant citizenship is made by the Minister of Interior. If the naturalization request is approved, the value of the deposit is transferred to the state treasury.
The legislation sparked backlash in Parliament from lawmakers who used nationalist arguments to criticize it, noting that the amendments essentially put Egyptian citizenship up for sale.
“My fellow representatives are asking me to tell you how disgraceful this is,” Haitham al-Hariri, a member of parliamentary bloc 25-30 Alliance, said during a July 15 parliamentary session. “But I suppose this goes along with the state’s effort to generate income, regardless of the source.”
Parliament Speaker Ali Abdel Aal defended the new law, however. “We value Egyptian citizenship above everything else,” he said. “It is indeed priceless. But this law is drafted in the spirit of reaffirming the seriousness of the citizenship applicants.”
“The citizenship law is based on the French law and other comparative positive laws, and it allows — as every law in the world does — granting citizenship based on long-term residence,” he added. “Parliament did not invent the bill we approved. It followed the footsteps of what every other country in the world does.”
Mohamed al-Sewedy, the president of the pro-state Alliance to Support Egypt coalition, which holds a parliamentary majority, also defended the bill. “This law is critical for investment and enables investors to come here, especially given that Egypt is already attractive for investment,” he said. The withdrawal of citizenship would be possible later on, he added, in the event that the individual granted it violates the conditions of the law.
Meanwhile, lawmaker Mostafa Bakry warned the bill posed a threat to national security, to which MP Kamal Amer, the head of the Defense and National Security Committee, responded by saying that “enlistment in the Armed Forces requires careful screening and this law cannot be used by naturalized individuals to infiltrate the Egyptian military.”
The bill is awaiting final ratification by President Abdel Fattah al-Sisi before it passes into law.
Reasons for seeking residency or citizenship in a foreign country vary based on the applicant’s country of origin, from those seeking investment friendly tax environments, to security considerations, to those who want to ease travel restrictions. In an interview with UAE-based newspaper The National, Armand Arton, the chief executive of Arton Capital, a Canadian advisory group that provides consultancy for immigrant investors, notes that the vast majority of those seeking second nationalities come from regions suffering political and economic instability, or from countries whose passports do not grant freedom of movement.
“The demand in the Middle East is growing faster than any other market because of the political instability that started with the Arab Spring,” Arton said.
How do the criteria for an investment-based residency and path to citizenship under Egypt’s new law compare to similar programs in other countries? The most glaring difference is the price tag. While the amount of LE7 million (approximately 334,000 euros) is comparable to the required investment in other states, in Egypt, the funds are transferred to the state treasury upon the approval of a naturalization request. This means that the foreign applicant surrenders their entire deposit. In contrast, many other countries require an investment in real estate or a financial instrument that the applicant later retains as an asset.
Here are some examples of the required criteria in other countries to obtain what is known as a “golden visa”:
The new law also poses the question of what benefits Egyptian citizenship offers. In terms of ease of travel, the Egyptian passport ranks low on the global scale. Arton Capital, the Canadian advisory group, ranks passports based on the freedom of movement they secure for their holders. Spanish, Portuguese and Greek passports are in third place, the Maltese passport fifth, the Cypriot ninth, and the Dominican passport 29th. The Egyptian passport stands far below, ranking 78th among 92 ranked countries.
Egypt also ranks low on the international scale in terms of offering a business friendly environment for wealthy investors. According to the Ease-of-Business Index developed by the World Bank, Spain ranks 28th, Portugal 29th, Cyprus 53rd, Greece 76th, Malta 84th and Dominica 98th. Egypt stands at 128 out of the 190 countries listed in the index.