The Egyptian cabinet has announced a new residency rule that requires expatriates who wish to be a resident of Egypt to pay fees in US dollars or other hard currencies. This is part of its efforts to boost dollar inflow and stabilize Egypt’s currency.
The country currently suffers from a shortage of dollars. The value of the Egyptian pound has also lost about half its value against the dollar since March of last year. This came amid strong support from the central bank and the banking system.
Egypt’s ongoing economic crisis is attributed largely to the Russia-Ukraine war that began in February 2022. This is in addition to the lingering ill-effects caused by the COVID pandemic.
Applying for residency
Foreigners who are illegally residing in the country are given three months to legitimize their residency. The Ministry of Interior requires applicants to be hosted by Egyptian nationals and pay administrative fees worth $1,000.
Earlier in March, the government previously stated that applicants should meet certain criteria. These include initiating or taking part in an investment project worth at least $350,000 or purchasing state-owned real estate valued at no less than $300,000.
Applicants must transfer the money from abroad, observing the central bank’s rules. Moreover, the money must be registered at customs and enter the country via a customs outlet.
For investors who want to apply for Egyptian citizenship, they must deposit the $350,000 in the state’s treasury, serving as direct revenues.
Curbing dollar shortage
To further mitigate dollar shortage and stabilize Egypt’s currency, the government has also been on a borrowing spree. One of the most critical is its $3 bn loan from the International Monetary Fund (IMF).
Speaking on Egypt’s efforts to address its crisis, Kristalina Georgieva, IMF’s managing director, said, “The authorities’ recent commitment to a durable shift to a flexible exchange rate regime and to unwind prior policy distortions, supported by an upfront monetary policy tightening and further enhancements to the social safety net, are welcome steps.”
Other measures to increase dollars include the introduction of a new pension plan. It allows Egyptians living abroad to create pension funds for as low as $500.
Back in May, the government also began incentivizing foreigners. They are providing them with temporary residence when they buy real estate worth at least $50,000 or deposit $50,000 in banks owned by the state.
Egypt, along with Saudi Arabia and the United Arab Emirates, will also be officially joining BRICS on January 1, 2024. This move will allow the country to transact with other member states in national currency. The bloc of economies currently comprises Brazil, Russia, India, China, and South Africa
Finance minister Mohamed Maait shared that such development will help in “rationalizing consumption in the currencies basket of the import bill.”
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