Egypt’s construction market has grown into one of the largest in the Middle East and North Africa, with future projects valued at $565.5 billion, a report has found.
A report by global property consultancy Knight Frank identifies Egypt as the third-largest construction market in the region, following Saudi Arabia and the UAE, with $120 billion in projects currently under execution.
The annual report, Egypt’s Construction Landscape 2025, outlines a market shaped by steady activity and large-scale infrastructure developments.
Residential and commercial real estate projects dominate contract awards, but mega-projects in energy, transport and other sectors have also played a significant role in the country's construction output over the past decade.
According to Knight Frank, 51 per cent of projects are still in the study phase, while 39 per cent are in the design phase.
This means that while opportunities in planning, feasibility studies and pre-construction services are significant, most projects are not yet ready for groundbreaking.
While Egypt’s construction boom has historically been driven by government-backed infrastructure projects such as the New Administrative Capital, the Suez Canal expansion and the many satellite cities built by the state to accommodate the growing population, private-sector developers are now playing a more prominent role.
Tightened public spending, a condition of Egypt’s loan programme with the International Monetary Fund has made more room for private-sector investment in housing, office spaces and coastal developments, a report from the Egyptian Chambers of Commerce said.
Tourism-related construction has also grown, with developers targeting high-demand areas such as the Red Sea, North Coast and New Alamein.
These projects are catering to domestic buyers and Egyptians living abroad, who now account for a significant share of real estate demand, the report said.
Despite the sector’s growth, rising construction and input costs remain a challenge. Inflation, volatile exchange rates and reliance on imported materials have led to higher property prices.
According to industry estimates, prices for residential and commercial properties could rise by as much as 30 per cent this year on the back of high inflation, rising production costs and interest rates, which the central bank has kept high to reduce inflation.
Knight Frank’s report emphasises the long-term potential of Egypt’s construction market, particularly as the country continues to and expand its urban infrastructure.
However, with 90 per cent of future projects still in early stages, the pace of development will depend on economic stability, foreign investment and mitigating the cost of imports.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
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UAE currency: the story behind the money in your pockets
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Price: From Dh149,900
Ticket prices
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Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
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Dubai World Cup draw
1. Gunnevera
2. Capezzano
3. North America
4. Audible
5. Seeking The Soul
6. Pavel
7. Gronkowski
8. Axelrod
9. New Trails
10. Yoshida
11. K T Brave
12. Thunder Snow
13. Dolkong
