Via The Economist, an interesting look at investing in Egypt:

A WOMAN with shiny brown locks stares down from billboards at motorists navigating Cairo’s chaotic streets. This is how TREsemmé, an American hair-care brand, introduced itself to Egyptians in February. At 65 Egyptian pounds ($9.25), a large bottle of shampoo is not cheap. Yet Unilever Mashreq, the Dubai-based branch of the European multinational, reckons it will sell in the volatile north African country.

Compared with other emerging markets such as India and China, Egypt looks forbidding. Hundreds have died in street protests; bombs explode often. The economy is a mess. Tourism, a mainstay before the “revolution” in 2011, collapsed. Abdul Fattah al-Sisi, an ex-field-marshal who is almost certain to win the presidential election on May 26th, is likely to end Egypt’s brief experiment with non-military rule. Funds from the Gulf prop up the economy.

Yet foreign firms, though wary, have not abandoned Egypt. With about 90m people, it is the region’s most populous country and still a cultural trendsetter in the Arab world. Middle-class incomes have been growing. And though poverty has soared even the poor must eat and wash. Consumers are “internet-savvy”, says Fadi Malas, who runs Just Falafel, a Dubai-based food chain that advertises online.

All this makes Egypt hard to overlook for producers of consumer products. Dove soap and Pantene shampoo sell well. Procter & Gamble, a consumer-goods giant, reckons that its products reach nine out of ten homes. Carrefour has more than 20 stores in Egypt. After much delay, IKEA opened a furniture store at the end of 2013. Officials from HSBC are scouting for opportunities to expand, even as the bank scales back in nearby countries such as Lebanon.

It takes more courage to manufacture in Egypt, but for some the cheap labour force makes that worthwhile. Foreign direct investment has made a modest recovery. Coca-Cola, which already exports to more than 40 countries from Egypt, said in March that it would invest a further $500m there, part of which will finance the building of a juice factory.

Nonetheless, political violence and uncertainty take a heavy toll. Some companies had to pull out staff, though most returned. In the courts activists are challenging privatisations that took place under the pre-revolutionary government. But many of the obstacles that deter some foreign investors are the same old frustrations they faced during regimes gone by. IKEA’s staff often apologise for wares that are sitting in Alexandria’s port rather than on its shelves. Import duties are high on some goods. Clothes at Marks & Spencer, a British chain, cost more than they do in Britain, where GDP per person is 12 times higher. Regulation is capricious: the government recently banned the import of two- and three-wheeled vehicles, with little consultation.

In April the government enacted a new investment law, mainly to stop people from challenging contracts that investors signed with the pre-revolutionary government. But Egypt must do more if it wants to woo investors. It ranks 128th out of 189 countries in the World Bank’s league table for ease of doing business. Along with many Egyptians, foreign businesses hope that Mr Sisi will restore stability. And they pray he will clear away the red tape left over from the old regime.