The Syrian business owners setting up shop in Egypt since 2011

Big industrial manufacturers forced to leave their homeland have invested more than $1bn in their new home over the past decade, but overly complex bureaucracy means they can only do so unofficially

Reuters

Working on a cotton-spinning machine in Aleppo. Big Syrian textile manufacturers have now moved their families and business operations to Egypt.

The Syrian business owners setting up shop in Egypt since 2011

Joseph Daher

last update on 28 Aug 2024

The eruption of the war in Syria in 2011 sent millions scattering. While many made their way to Europe, others made for more stable regimes in the Middle East, including Egypt, where 1.5 million have landed since 2012.

Among them were around 30,000 successful Syrian businesspeople and investors, looking to start afresh under Cairo’s jurisdiction. In doing so, they have used family ties, business connections, or personal networks.

But the the country’s brief open-door policy towards Syrians came to an end in recent years.

The authorities have asked the Syrians to apply for a visa and obtain security clearance before travelling to Egypt.

Egypt’s Syrians

Of the 1.5 million Syrians in Egypt today, around 156,000 are registered refugees. The vast majority settled in urban areas, including Cairo and Alexandria. Of the 30,000 businesspeople, around half are manufacturers.

Reuters — A view of damaged machines inside Kawai's battered factory in Aleppo's Belleramoun Industrial Zone, Syria, on July 12, 2017.

Syrian business folk, whose firms often have interests stretching across the region, find Egypt to be a hospitable environment, welcomed by Egyptian authorities, but they have also faced legal challenges in trying to register their companies. Many now operate informally.

Similarly, many Syrian workers now in Egypt could not meet the increasingly demanding legal requirements to confirm their status in the country, including the recent requirement that they pay administrative fees in foreign currency.

Around 30,000 Syrian business owners and investors have looked to start afresh under Cairo's jurisdiction since 2011

Without residence permits, many have remained unemployed or opted to work informally, where they face difficult and exploitative working conditions.

Syrian business owners, likewise, have faced complex bureaucracy both to establish their businesses and to expand them. Despite these challenges, Egypt is still considered one of the better host countries for Syrians.

Carry on in Cairo

Egypt is an attractive destination for Syrian business leaders, with its huge local market (from a population of 114 million) and facilitated access to African, Gulf, and European markets.

By contrast, Jordanian and Lebanese markets are relatively small, while the United Arab Emirates market is highly competitive for newly arrived Syrian investors.

Shutterstock — People relaxing at restaurants near Al-Hussein Mosque in Cairo. The city is now home to a huge community of Syrian refugees.

The cost of labour and of living is relatively low in Egypt, and its state infrastructure in intact, whereas the likes of Jordan and the UAE are expensive, with Turkey and Lebanon also suffering high inflation levels.

Despite growing hostility in other host countries, Egypt has remained welcoming for Syrians. Some social media comments blame immigrants for the country's economic problems, they have generally failed to gain traction.

In part, this is because Syrians' presence in Egypt is viewed positively by many Egyptians. In contrast, Lebanon and Turkey increasingly harbour anti-Syrian sentiment, with authority's seeking ways to force them to return to Syria.

Between 2020-22, as the economic and security situation continued to deteriorate in Syria, there was a new wave of small and medium-sized (SME) Syrian business owners and workers settling in Egypt.

Setting up shop

Syrian investments in Egypt between 2011-18 are valued at around $800m, although given how many are operating in the informal sector, that figure is highly likely to be an underestimate.

The head of the Syrian Businessmen Association in Egypt (SBAE), Khaldoun al-Mouakeh estimated in 2022 that Syrian investments in Egypt exceed $1bn and that around 5,000 industrial workshops and factories are Syrian-owned. These produce more than 100 million units every month.

Thousands of Syrian businesspeople are manufacturers, specialising in the production of textiles, clothing, food, and furniture.

Muhammad Kamel Sabbagh Sharabati, a prominent Syrian manufacturing industrialist in Egypt, expanded his investments in Egypt in 2018 with the establishment of the Fourtex complex in Sadat City for around $200m.

Thousands of Syrian businesspeople are manufacturers specialise in the production of textiles, clothing, food, and furniture

Likewise, Ammar Sabbagh, owner of the Sabbagh Group for Industry and Trade in Syria, also now owns the Cotton & More company in Egypt.

Significant investments have also been made in the service sector, particularly in restaurants, shops and beauty salons. Syrian food is proving popular among Egyptians, with several Syrian outlets opening multiple branches.

No lure from home

Since 2017, Syrian government has been trying to entice Syrian industrialists and manufacturers back, especially targeting those in Egypt, offering incentives for them to return and resume production in their former facilities.

Getty Images — Many Syrians have started successful businesses in Egypt, especially in the restaurant sector.

These offers have largely been rebuffed, however, with business leaders choosing to stay in Egypt and grow their businesses there. The industrialists' relationship with Syria, where conditions remain unfavourable, has changed substantially. Many now only go back to visit family.

In Syria, there are significant problems including damaged infrastructure, sanctions, the cost of production, and interrupted electricity and fuel supplies.

There is also a predatory business environment, in which those with close ties to the ruling regime try dominate all sectors of the economy, using fair means and foul to discourage new entrants to the Syrian market.

The host has problems

Egypt's dangerous economic wobble over recent months and years has been made worse by escalating tensions in the Red Sea since November that have reduced Suez Canal revenue.

Syrians have made significant investments in Egypt's restaurants, shops and beauty salons, with Syrian food proving popular

The depreciation of the Egyptian pound (from EGP6 to the US dollar in 2012 to EGP48 by August 2024) is evidence of a chronic problem, along with a shortage of US dollars and high inflation raising the cost of living.

Lyse Mauvais / Syria DIrect — A Syrian supermarket chain selling Syrian product and sweets in Cairo's southern Maadi neighbourhood, on March 17, 2024.

Between September 2022 and September 2023, inflation neared 40%, with some food prices up 154%. Last year, Egypt was listed as "the country second most at risk of a debt crisis" after Ukraine, according to Bloomberg, taking account of public debt, interest rates, and yields on dollar bonds.

All this gives pause for thought to Syrian companies considering further investments in Egypt, yet for all the clouds of the horizon, an exodus of Syrian business owners from Egypt has not yet transpired.

With the region in a state of flux, many will be biding their time, waiting to see which way the economic winds blow.

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