The formation of a British University in Egypt arose from a 1998 Memorandum of Cooperation between the UK and the Egyptian Governments. It was envisaged that such an institution would produce graduates of UK standards for key sectors of the Egyptian economy, particularly in the areas of engineering, computer science and business studies.

Planning for the new institution was put in train and financial support was provided by a group of prominent Egyptian business and public figures, principal among st whom was Mr. Farid Khamis, Chairman of Oriental Weavers, a major international carpet manufacturing company. In 2004, with strong support from the British Embassy and the British Council, a Presidential decree was issued establishing the British University in Egypt. The initial phase of the University campus was already under construction and the University welcomed its first cohort (only 200 students) of undergraduate students in September 2005.