DOING BUSINESS IN EGYPT
Healy Consultants can help you to start and expand your business in Egypt, efficiently and effectively. Our services include i) Egypt company registration ii) government license registration iii) business bank account opening iv) employee recruitment v) employee visa strategies and vi) office rental solutions.
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Advantages and disadvantages
Advantages of Egypt company registration
- Registering a wholly foreign-owned company in Egypt is possible and can be done within 2 months. A Egypt LLC entity can be set up with only i) one Egyptian director, ii) two shareholders of any nationality, iii) a legal registered address and iv) US$1,000 of capital, which however does not have to be fully paid-up before incorporation;
- Although Arabic is the official language in Egypt, the majority of businesspeople are proficient in English. Consequently, foreign investors can easily communicate with Egyptian business professionals;
- Registering an Egyptian company operating in agriculture may qualify the company for a 10 year exemption from income tax;
- Our Clients who start an Egypt company will benefit from an ample supply of cheap labor. The average monthly labor cost ranges from US$65 to U$200.
Disadvantages of Egypt company registration
Before registering their company in Egypt, foreign entrepreneurs should be aware of the following challenges with which our Egyptian business registration specialists will assist:
- Under Egyptian Investment Law, foreign investors are not eligible to i) import goods for the purpose of trading in Egypt or ii) act as a commercial agent;
- Business registration in Egypt is risky because of an unstable political situation. The country has been on the edge of civil war since the 2011 revolution and is currently ruled by a military commander. New riots are not to be ruled out and, in such context, foreign investors may find it difficult to protect and maintain their business interests in Egypt. The Sinai region remains particularly problematic;
- The corporate tax rate in Egypt is 22.5%. However, companies operating in oil production are subject to a higher tax rate of 40.55%;
- Egypt imposes a withholding tax of 10% on dividends. However, this is reduced to 5% for shareholders owning more than 25% of the company’s shares. These rates may be reduced under double taxation avoidance treaties – Healy Consultants can help your firm to plan its tax structure for investing in Egypt;
- In accordance with the Egypt Companies Law 159/198, every Egyptian company requires one Egyptian national director. If required, Healy Consultants will be happy to act as passive professional nominee director for your Egypt LLC. To ensure your assets are fully protected, the nominee will not be a bank signatory nor will have an active role in daily corporate activities.
- Running a business in Egypt can be complex and frustrating. According to the 2016 Doing Business Survey by the World Bank, Egypt is ranked as the world’s 131st easiest place to do business. However, it places 73rd for ease of starting a business, down from 69th the year before;
- Due to the unstable political system and cheap labor costs, a brain drain has occurred due to large number of highly-skilled Egyptian workers have left the country to seek higher-paid jobs overseas. Investors may have difficulties in hiring qualified staff for their companies;
- Sporting events in Egypt can cause severe traffic disruptions and violent riots. This may obstruct business logistics and delay the speed of operations;
- Registering a subsidiary in Egypt is a long process. Construction permits may take 6 months for approval and property registration process can take up to 2.5 months.
- It is mandatory for every Egyptian company to appoint a company independent auditor during company incorporation to annually audit the entity’s financial statements. Most of our Clients appoint Healy Consultants’ preferred auditor for company incorporation without an additional fee. The auditor’s annual fees will be payable directly and independently to the auditor at the end of each year. The estimated of these fees are US$4,500 per annum;
- Unfortunately, all shareholder and director information must be officially translated into Arabic, notarized and attested by the Egyptian embassy in their country of origin. In addition, all Egypt corporate documents will be in Arabic. If required, Healy Consultants will be pleased to translate all Arab company documents into English and vice versa
- Together with company incorporation, it is necessary for the Egyptian government to conduct a security check on each individual director and shareholder. This process can take up to 3.5 months! However, after the company is fully registered, your Firm will start conducting business as usual;
Best uses for an Egyptian company
North African expansion
- Setting up an Egyptian is a good way to ride the growth in the north African economy, which is recovering from a period of political instability. Thanks to the country’s rich cultural history, tourism is a popular business for foreigners to establish in Egypt.
- Time to incorporate: Four weeks
- Cost to set up: US$20,600
- Minimum capital: US$1,000
- Physical office required: No
- Shareholders: 2
- Manager: 1
- Company secretary: Yes
- Resident manager: Yes
- Corporate tax rate: 22.5%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: LLC
Frequently asked questions
I want to learn how to register a business in Egypt. What do I need to know?For business registration, our Client will be required to i) reserve the company name ii) lease an office in Egypt iii) sign the incorporation forms iv) register for tax and social security and v) obtain any necessary business license(s). Healy Consultants’ experts know perfectly how to register a company in Egypt and will make the process simple and pain-free for our Clients.
Can I start a company in Egypt as a foreigner?Yes, foreigners may fully own companies in Egypt, as most industries open to foreign investment without any local or national ownership requirement. Howver, our foreign Clients will need to appoint an Egyptian national as a director for their company. Healy Consultants can provide our Clients with nominee director services or assist them with finding the right director to manage their company.
What are the different business entities available to start a business in Egypt?There are several different types of companies in Egypt, the most common being i) the limited liability company ii) the joint stock company iii) branch offices and iv) representative offices.
Why should I expand my business into Egypt?While Egyptians’ purchasing power is limited to approximately US$3,300 per year, Egypt is inhabited by 88 million people, the largest population among Northern African and Middle-Eastern Countries. This large population provides entrepreneurs with significant market opportunities. Thanks to low labor costs, Egypt is also a great place to establish a manufacturing business.
Useful links for Egypt
Government and public authority websites:
- Ministry of Investment
- Ministry of Finance
- Ministry of Trade And Industry
- Central Bank of Egypt
- Egypt Stock Exchange
- Egyptian international trade point
- Egyptian Tourism Authority
- Egypt hotels
- Egypt Baker Mckensie – Doing Business
- Egypt KPMG – Doing Business
- Egypt Investment Climate
- Egyptian Business & Commercial Laws
- Doing Business In Egypt 2014
- The Egyptian Tax System
- Access To Finance and Economic Growth in Egypt