DOING BUSINESS IN EGYPT IN 2022
Healy Consultants Group PLC 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.
|Compare different Egypt entities||LLC||Nominee Fast Solution||Free Zone||JSC||Branch||Representative Office|
|Best use of company?||All products and services||Marketing & research||Close a customer deal now||Manufacturing and export trading||To secure public funding||Professional services|
|How soon can you invoice Clients/sign sales contracts?||2 months||1 month||3 months||3 months||3 months||NA|
|How soon can you hire staff?||2 months||1 month||3 months||3 months||3 months||2 months|
|How soon can you sign a lease agreement?||3 weeks||1 week||1 week||3 weeks||3 weeks||3 weeks|
|How long to supply corporate bank account numbers?||3 months||1 month||4 months||4 months||4 months||3 months|
|How long to supply company registration/tax numbers?||2 months||1 month||3 months||3 months||3 months||2 months|
|Corporate tax rate on annual net profits?||22.5%||22.5%||0%||22.5%||NA||NA|
|Limited liability entity?||Yes||Yes||Yes||Yes||No||No|
|Government grants available?||Yes||Yes||Yes||Yes||Yes||No|
|Government approval required for foreign owners?||Yes||Yes||Yes||Yes||Yes||Yes|
|Resident director/partner/manager/ legal representative required?||No||No||No||Yes||Yes||Yes|
|Minimum paid up share capital/ security deposit?||US$1||US$1||Varies||US$15,000||US$350||US$350|
|Can bid for Government contracts?||Yes||Yes||Yes||Yes||Yes||No|
|Corporate bank account location?||HSBC Egypt||SCB Egypt||NBE Egypt||Banque MISR Egypt||CIB Egypt||Alex Bank Egypt|
|Can secure trade finance?||Yes||Yes||Yes||Yes||Yes||No|
|VAT payable on sales to local customers?||14%||14%||0%||14%||14%||No Local Sales|
|Average total business set up engagement costs?||US$23,150||34,350||US$22,750||US$20,750||US$21,900||US$21,900|
|Average total engagement period?||3 months||1 month||4 months||4 months||4 months||3 months|
|Accounting and tax considerations||LLC||Nominee Fast Solution||Free Zone||JSC||Branch||Representative Office|
|Statutory corporate tax payable?||22.5%||22.5%||0%||22.5%||NA||22.5%|
|Legally tax exempt if properly structured?||No||No||No||No||No||No|
|Group HQ tax incentives?||Yes||Yes||Yes||Yes||No||No|
|Must file an annual tax return?||Yes||Yes||Yes||Yes||Yes||No|
|Must file annual financial statements?||Yes||Yes||Yes||Yes||Yes||No|
|Must appoint an auditor?||Yes||Yes||Yes||Yes||Yes||No|
|Access to double taxation treaties?||Yes||Yes||Yes||Yes||Yes||No|
|Withholding tax on payments to foreign shareholders?||10%||10%||10%||10%||10%||10%|
|Company Registration||LLC||Nominee Fast Solution||Free Zone||JSC||Branch||Representative Office|
|Resident director/partner/manager/ legal representative required?||No||No||No||Yes||Yes||Yes|
|Minimum number of shareholders/partners?||1||1||1||3||Parent Company||Parent Company|
|Maximum shareholding for foreigners?||100%||100%||100%||100%||100%||100%|
|Minimum statutory paid up share capital/security deposit?||US$1||US$1||Varies||US$15,000||US$350||US$350|
|Security deposit to be kept with Government?||No||No||No||Yes||No||Yes|
|Shelf companies available?||Yes||Yes||Yes||Yes||No||No|
|Time to incorporate a new entity?||2 months||1 month||3 months||3 months||3 months||NA|
|Can easily convert to a PLC?||Yes||Yes||Yes||Yes||No||No|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes||Yes||Yes|
|Can have preference shareholders?||Yes||Yes||Yes||Yes||No||No|
|Good entity for trademark registration?||Yes||Yes||Yes||Yes||Yes||No|
|Can secure an import and export license?||Yes||Yes||Yes||Yes||Yes||No|
|Sponsorship by a local citizen required?||No|
|Our Client needs to travel to Egypt for business set up?||No|
|Temporary physical office solutions available?||Yes|
|You need a local resident as bank signatory?||No|
|Can be wholly foreign owned?||Yes|
|The entity will likely be regulated by?||GAFI|
|Minimum number of directors/managers?||1|
|Monthly VAT reporting to the Government?||Yes|
|Must sign an office lease agreement during incorporation?||No|
|Shareholders & directors documents to be attested/translated?||Yes|
|Each foreign director needs a personal income tax number?||No|
|Foreign director needs a residence visa?||No|
|Maximum number of staff allowed?||Unlimited|
|Expatriate to local staff ratio?||Foreign labour may not exceed 10% of total workforce|
|Can secure residence visa for business owner?||Yes|
|Other useful information|
|What will be included in my customer sales invoice?||Click link|
|This country has signed free trade agreements?||Yes|
|This country is a member of WIPO/TRIPS?||Yes|
|This country is a member of the ICSID?||Yes|
|Average custom duties suffered?||5% to 40% on CIF (Cost, insurance and freight)|
|Government foreign investment approval required?||Yes|
|Average monthly office rental? (US$ per sq m)||US$35|
|Minimum statutory monthly salary?||US$174|
|Average monthly US$ salary for local skilled employees?||US$941|
|US$ deposit interest rate? (1 year average)||1.10%|
|Overseas remittance currency controls?||Yes|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Good|
|Crowd funding available in this country?||Yes|
Egypt business setup summary
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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) two shareholders of any nationality, ii) 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;
- Egypt is the third largest economy in Africa ( by GDP) with a population of 99.9 million people. As a result, businesses are likely to have a wide consumers base and they can launch new products in the Egyptian market whilst maintaining a substantial profit margin.
- Clients needing a fast turnaround may pay Government VIP service fees to have the company set up in 2 weeks.
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 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;
- Running a business in Egypt can be complex, if you don’t know how. According to the 2021 Doing Business Survey by the World Bank, Egypt is ranked as the world’s 114th easiest place to do business. A great improvement since 2016, when Egypt hold the 131st position but still far from other major countries. According to the same survey, Egypt places 90th for ease of starting a business, down from 73rd in 2016 or 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;
- Egypt is poorly ranked at the 93rd out of 141 countries in the latest edition of the Global Competitiveness Index. This is majorly due to the nation’s i) political instability, ii) poor macroeconomic environment due to widespread corruption and a high inflation and iii) an inadequately trained labour force.
- Unfortunately, Clients can only apply for an import license 18 months after company registration. In addition, prior to applying for the licence, the company must appoint i) a 51% Egyptian shareholder and ii) an Egyptian managing director. In addition the company must iii) have a paid up share capital of US$130,000 (EGP2 million) and iv) have issued invoices for an amount above US$320,000 (EGP5 million). If required, Healy Consultants Group will be happy to supply you an Egyptian national as managing director and 51% shareholder. Our one-time nominee introduction fee is US$1,950. Expected annual nominee shareholder fees amount to US$6,600.
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.
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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