The EGX is asking for a full tax exemption on transferable-asset funds to pull stalled real estate into the bourse

The bourse has asked for a full income tax exemption on transferable-asset funds, aiming to revive investment funds through tax breaks and pull more capital into the market, two government officials tell EnterpriseAM. The EGX is also pushing to expand the list of exempt fund types from the five currently defined under Article 50 of the Income Tax Law (pdf) (debt instrument funds, listed-equity funds, venture capital funds, real estate investment funds, and charitable funds) to 38 categories. But the exchange “asked to focus on the full exemption for transferable-asset funds given the pressing need for it right now,” the officials say.

The request targets stalled real estate first. It is aimed at funds that invest in receivables-based funds, including products built on real-estate finance like mortgage-backed Ijarah funds, to bolt the property market onto the capital market. “Given the stalled projects out there, this can be a strong investment tool that draws fresh capital through the bourse,” the officials tell us.

Why now: New financial products built on securities tied to the real-estate sector are surging. Those products let investors take a cut of returns from the portfolios of securities rather than buying property directly — funneling money into real estate outside the traditional bank credit system. The first such vehicle — which Synergy Capital and Nawy Now billed as Egypt and the Middle East’s first transferable-asset fund backed by an Ijarah mortgage portfolio — launched in October 2025, raising EGP 443 mn. A second issuance closed earlier this month at EGP 633 mn, bringing the program to EGP 1.08 bn.

Each of the five exempted fund categories is subject to specific conditions like bank-deposit caps and minimum asset-allocation ratios. Transferable-asset funds — which invest in a broader range of financial rights such as mortgage receivables, lease-backed portfolios, and deferred payment obligations — fall outside that framework.

Gold, precious-metals, and carbon funds are also on the EGX’s wish list, alongside other fund types it’s trying to revive, the officials say. Precious-metals funds already operate under a Financial Regulatory Authority (FRA) framework, with rules for custodians and trading counterparties, and the market has reached EGP 9.35 bn in net assets with 329k investors as of June 2026. Carbon funds investing in carbon-reduction certificates would work within the FRA’s voluntary carbon market rules.

Market experts are split

The EGX’s rally on the mere removal of the tax burden shows how tax-sensitive these instruments are, capital markets analyst Safaa Fares tells us. Exempting transferable-asset funds “will boost sectors affected by inflation, including real estate, and help overcome the current stagnation.” But the fix needs mortgage funds as new tools, she says, plus scrapping the double tax on both the asset and the fund’s returns. “That would encourage investors to take on risk and expand the launch of such funds.”

Not everyone agrees: Economist Walid Gaballah calls it a violation of tax equity — carve out real estate, and every sector will want the same treatment. Investment funds already hold developer shares, he points out. He argues that incentives should go to industry and agriculture, not prop up real estate bottom lines, and that the shrinking margins in property are a chance to redirect capital toward production. Gaballah says the market should be regulated through new mechanisms, such as ins. companies covering projects against exceptional circumstances. Any tax-exemption resolution should cover all investment funds, he argues.

What’s next: No legislative amendment is needed. “Additional fund types can be added to the exempt list by a decision from the finance minister, per the executive regulations of the Income Tax Law. That ensures quick implementation once the Tax Authority finishes its review,” one official says. The request is currently being studied by the Tax Authority.