OECD FDI Regulatory Restrictiveness Index (OECD – 2024): The Middle East and North Africa is the most restrictive region in the world… and Egypt launches qualitative reforms in land ownership with a marked decline in restrictions

On 9 October 2025, the Organisation for Economic Co-operation and Development (OECD) released the latest policy paper on the OECD FDI Regulatory Restrictiveness Index 2024 – FDIRRI, entitled “OECD FDI Regulatory Restrictiveness Index 2024: Key findings and trends”, as part of the OECD Business and Finance Policy Papers series, No. 93, issued by OECD Publishing, Paris.

This index measures the legal and regulatory restrictions imposed on foreign investors in more than 100 economies and 22 economic sectors, on a scale from 0 (completely open to foreign investment) to 1 (completely closed). It focuses on statutory, de jure restrictions embedded in laws and regulations, rather than on practical or informal barriers, and it provides a comparable, time-series indicator for policymakers and investors interested in the degree of openness of the investment framework.

For Egypt, this edition has double significance for two reasons:

1. It confirms that the Middle East and North Africa (MENA) region continues to be classified as the most restrictive region in the world in terms of foreign direct investment (FDI) regulations.
2. It provides, through the index database, an updated time series for Egypt’s FDI restrictiveness score, showing a gradual decline in restrictions after a peak in 2022, with the score falling to about 0.2484 in 2024 after standing at around 0.2721 in 2022. This comes in the context of legislative reforms in the land ownership file, including Law No. 11 of 2024.

First: What is the FDI Regulatory Restrictiveness Index (FDIRRI)?

Nature of the index:

FDIRRI is a composite policy index developed by the OECD to measure how open or closed the statutory framework is to foreign investors, based on the legal texts and official regulations (“statutory restrictions”) in each country. It does not evaluate the actual business climate on the ground, but rather the degree to which laws and regulations discriminate against foreign investors compared to domestic investors.

The four pillars of the index:

1. Foreign equity limits (Foreign equity limits): Ceilings on foreign ownership shares in companies and specific sectors (such as prohibiting 100% foreign ownership or requiring a local partner with a majority stake).
2. Screening and approval for economic reasons (Screening & approval): Regimes that require prior review or special approval of foreign investment transactions based on economic criteria or other considerations.
3. Restrictions on key foreign personnel (Key foreign personnel): Requirements relating to the nationality of members of the board of directors or senior management, or requirements that a certain share of leadership positions be held by nationals.
4. Other operational restrictions (Other operational restrictions): Such as restrictions on land ownership, reciprocity requirements, limits on profit and capital repatriation, and “local content” or similar requirements.

Method of calculating the score (0–1):

• Each set of restrictions in each sector is converted into a score from 0 (completely open) to 1 (completely closed).
• These scores are aggregated at the sector level, then at the economy-wide level, using standardised sectoral weights that reflect economic importance, with the weights fixed across countries and over time to ensure comparability.
• The index reflects the rules in force up to 31 December of each year and is updated annually or quasi-annually.

What the index does not measure:

• It does not measure the volume of FDI flows or stocks.
• It does not measure the quality of the actual business environment, the level of corruption, or administrative efficiency.
• It is an indicator of the “ceiling of statutory openness” towards foreign investors, not of the volume or quality of actual investments.

Second: Main global messages in the 2024 edition

The 2024 FDIRRI policy paper sets out a number of core messages for decision-makers, which can be summarised as follows:

1. A long liberalisation path… but a clear slowdown in recent years

Over past decades, the world has seen a significant reduction in statutory barriers to foreign investment, with new sectors opened to foreign ownership and easing of conditions for entry and operation.

However, the paper notes that the pace of liberalisation has clearly slowed in recent years. Many of the “easy reforms” have already been implemented, and remaining restrictions are concentrated in politically and strategically sensitive sectors such as energy, certain services, and critical infrastructure.

2. The first increase in average restrictions since 2018

For the first time since 2018, the 2024 update records a slight increase in the global average level of restrictions. The net effect of newly introduced restrictive measures has outweighed the effect of liberalising reforms in some economies.

The paper sees a significant share of these new measures as being driven by domestic regulatory priorities (such as protecting consumers or the environment), rather than by geopolitical tensions alone.

3. Sharp divergence between economies and regions

The data show that the most restrictive countries register levels of FDI restrictions more than 22 times higher than the least restrictive countries, reflecting a deep gap in the statutory investment climate between groups of countries.

On average, OECD countries are about 3.2 times less restrictive than non-members, with the average score for OECD countries around 0.05 compared to about 0.16 for other countries.

4. The Middle East and North Africa (MENA) at the centre of the picture

According to the 2024 results, the Middle East and North Africa (MENA) region records the highest average FDI restrictions among global regions, with an average score of 0.239.

It is followed by East Asia and the Pacific (0.198), and Sub-Saharan Africa (0.196).

In contrast, Europe and Central Asia (0.043), Latin America and the Caribbean (0.056), and North America (0.102) appear as relatively more open regions to foreign direct investment.

5. The nature of restrictions: equity limits at the forefront

The paper shows that restrictions on foreign ownership shares still account for the largest component of measured restrictions worldwide (around 60% of total restrictions), especially in sectors such as transport, media, telecommunications, distribution, and electricity.

They are followed by other operational restrictions (such as land ownership and horizontal requirements), then screening and approval regimes, while restrictions relating to key foreign personnel represent a smaller share of total restrictions.

Third: Egypt in the picture – from a gradual rise in restrictions to a marked decline after 2022

Unlike reading the paper text alone, the FDIRRI database available through the OECD Data Explorer allows users to see the annual scores for each country. For Egypt, the most recent time series (total economic activities – “Total, all activities”, total policy categories – “Total”) shows the following values for Egypt’s FDI restrictiveness score on the 0–1 scale:

• 2018: about 0.2532
• 2021: about 0.2714
• 2022: about 0.2721
• 2023: about 0.2498
• 2024: about 0.2484

1. What do these numbers mean?

Increase in FDI restrictions between 2018 and 2022:

Egypt’s score rose from about 0.253 in 2018 to about 0.272 in 2022, an increase of roughly 0.019 points on the 0–1 scale. On average, this reflects an increase in the measured statutory restrictions during this period, whether through ownership limits, additional requirements, or operational restrictions in specific sectors.

Beginning of a downward trend in restrictions after 2022:

Starting in 2023, the score declined from about 0.272 to about 0.250, then to about 0.248 in 2024. This represents a decrease of about 0.024 points between 2022 and 2024, a notable reduction on the index scale, although the score remains slightly higher than the MENA regional average of 0.239.

Comparison with the region:

This indicates that, according to the 2024 score, Egypt remains somewhat more restrictive than the average for the Middle East and North Africa. At the same time, it shows a tangible improvement compared with the 2022 peak, as well as a decline in restrictions relative to 2018 (from about 0.253 to about 0.248).

2. Linking the numbers to legislative reforms – the desert land ownership file as an example

The policy paper itself documents a number of reforms carried out by various countries in 2023–2024, including reforms related to Egypt in the area of foreign ownership of desert land. One of the most prominent of these is Law No. 11 of 2024, which:

• Abolished the requirement that Egyptians own at least 51% of companies holding desert land under Investment Law No. 72 of 2017, including agricultural investment projects.
• Retained a specific ceiling on the share of any single foreign individual in the company’s capital.
• Maintained the prohibition on transferring ownership of desert land to non-Egyptians upon dissolution or liquidation, while allowing, by presidential decree with Cabinet approval, nationals of Arab countries to be granted property rights similar to those of Egyptians.

From the point of view of the FDIRRI, such amendments contribute to:

• Easing restrictions somewhat in the land ownership component (typically a highly sensitive file), which may help explain part of the decline in Egypt’s score between 2022 and 2024.
• Nevertheless, leaving in place core restrictions on foreign ownership of desert land, for security, strategic, or social reasons, which is why the country remains in the relatively restrictive group.
• Providing a model of how carefully targeted reforms can reduce statutory restrictiveness while taking national considerations into account.

3. What does Egypt’s 2018–2024 time series tell us?

The underlying message in Egypt’s score evolution can be summarised as follows:

• A phase of relative tightening (2018–2022): A gradual rise in measured restrictions, which may be linked to regulatory or legislative decisions, or to the reclassification of some existing restrictions in the updated index methodology in 2022.
• A phase of relative liberalisation (2022–2024): A clear decline in the restrictiveness score (around 0.024 points), which means that some legal or regulatory provisions that were constraining foreign investors have been amended or removed, or re-evaluated under the updated methodology as less restrictive.
• The outcome as of 2024: Despite Egypt still being classified among economies with relatively high restrictions compared with OECD countries, it is moving towards a gradual improvement in the “ceiling of statutory openness” to foreign investment. This opens up space for deepening this trajectory in the coming years.

Fourth: What do the results mean for Egypt and the Arab region? – ENCC’s reading

Based on the figures above and the regional and global context, the Egyptian National Competitiveness Council believes that the 2024 update of the FDI Regulatory Restrictiveness Index conveys four main messages for decision-makers in Egypt and the region:

1. From simply opening sectors to improving the quality of the regulatory framework

Many Arab countries have already opened key sectors to foreign investment over the past two decades, but restriction levels (including in Egypt) remain above the global average.

The challenge now is to improve the quality of the regulatory framework – clarity of rules, their stability, speed of procedures, and competitive neutrality – rather than merely announcing that sectors are open while keeping detailed restrictions that constrain foreign investors in practice.

2. The need for a coordinated regional approach on investment

The continued classification of MENA as the most restrictive region for FDI means that the region’s collective image can influence investors’ decisions, even if some countries (such as Egypt) have undertaken important reforms.

This opens the door to regional dialogue on how to bring restriction levels closer to global averages and to leverage regional agreements (with the European Union, Africa, and the Arab world) to enhance investment integration.

3. Linking investment reforms to the broader competitiveness agenda

FDI restrictions are not an isolated file; they are closely linked to competition policy, governance, taxation, ease of doing business, infrastructure, and human capital.

Therefore, ENCC stresses that analysis of the FDIRRI should be part of a broader dashboard of indicators used to assess Egypt’s competitiveness, including the Council’s Quarterly Economic Report.

4. Moving from “rankings” to “using the index in policymaking”

Clear figures such as 0.272 (2022) → 0.249 (2023) → 0.248 (2024) enable decision-makers to track the effect of reforms quantitatively, rather than relying on impressions.

What is needed is for these data to become regular inputs into policymaking, by linking each reform package (such as Law 11/2024) to subsequent changes in the index in the following years.

Fifth: Proposed steps to enhance Egypt’s attractiveness to FDI in light of the index

Building on the above analysis, the Egyptian National Competitiveness Council proposes a set of practical steps in the short and medium term, which can be summarised as follows:

1. Build a national, regularly updated database for FDIRRI

• Compile Egypt’s time-series scores (and those of its regional neighbours and selected comparator countries) from the OECD Data Explorer.
• Store them in a shared national data repository.
• Update this database annually with each new release.

2. Prepare a “diagnostic note” on Egypt’s position in the index

• Analyse the evolution of Egypt’s score between 2018 and 2024, breaking it down as far as possible by: type of restriction (equity limits, screening, key foreign personnel, other operational restrictions) and economic sectors (services, industry, agriculture, real estate, etc.), where data permit.
• Compare Egypt’s position with a defined set of benchmark countries (for example: Morocco, Jordan, Türkiye, the United Arab Emirates, and selected OECD countries).

3. Link the index to the legislative and executive reform agenda

• Before adopting any new legislative amendment affecting FDI, carry out an ex-ante assessment of its expected impact on Egypt’s FDIRRI score.
• Use subsequent index results as an ex-post evaluation tool to verify that the reforms strike an appropriate balance between openness and protection of national interests.

4. Build a unified institutional narrative on “the openness of Egypt’s investment framework”

• Coordinate the messages issued by different government bodies responsible for investment so that they all rely on a single reading of international indicators, including FDIRRI.
• Use the available figures – such as the decline in the restrictiveness score from 0.272 to 0.248 between 2022 and 2024 – in investment promotion materials as evidence of a continuous reform process, while clarifying remaining gaps compared to regional and global peers.

5. Integrate the index into reports and international dialogues

• Use FDIRRI results in dialogues with the European Union, international financial institutions, and strategic investors to highlight what has already been reformed, what is planned next, and where international partnerships (financing, technical assistance) can help reduce remaining restrictions in a way that respects national security and sustainable development considerations.

Sixth: Comment from the Egyptian National Competitiveness Council

Seventh: Brief note on FDIRRI and ENCC

1. Brief note on FDIRRI

• Full name: OECD FDI Regulatory Restrictiveness Index – FDIRRI.
• Developer: Organisation for Economic Co-operation and Development (OECD).
• Coverage: more than 100 economies and 22 economic sectors.
• Scale: from 0 (completely open) to 1 (completely closed), measuring statutory legal restrictions that discriminate against foreign investors.
• Update: approximately annual, reflecting rules in force up to 31 December of each year.

2. Brief note on the Egyptian National Competitiveness Council (ENCC)

The Egyptian National Competitiveness Council is an independent institution that serves as a platform for dialogue between government, the private sector, civil society, and researchers, with the aim of enhancing the competitiveness of the Egyptian economy regionally and globally.

It works on:

• Monitoring and analysing international indicators and benchmark reports related to competitiveness and investment.
• Preparing studies, policy memoranda, and practical recommendations for decision-makers.
• Developing partnerships with international and regional institutions active in the fields of investment, development, and innovation.

Eighth: Official reference for the edition

OECD (2025), “OECD FDI Regulatory Restrictiveness Index 2024: Key findings and trends”, OECD Business and Finance Policy Papers, No. 93, OECD Publishing, Paris, 9 October 2025, DOI: 10.1787/88e61362-en.