Business Opportunities in Egypt
Egypt offers enormous possibilities for businesses looking to grow with the established and developing economy of the country. After Israel and Saudi Arabia, it is the third-largest economy in the region. It was one of the few economies worldwide along with China that kept expanding throughout the COVID-19 pandemic.
Egypt’s GDP increased by 3.6% in 2020 and 3.3% in 2021. In 2022, growth is anticipated to exceed 5% and remain robust. The country is one of the largest FDI (foreign direct investment) receivers. It is drawn to Egypt by its sizable domestic market, strong GDP growth, favorable geographic location, and massive and educated labor pool.
Companies planning to expand globally can benefit from the developing economy of Egypt and can start a business in Egypt. Read this guide to know the requirements to do business in Egypt.
Benefits of Starting a Business in Egypt
Setting up a company in Egypt offers numerous advantages to business owners:
- The Investment Law also governs Egyptian Free Zones. To capitalize on Egypt’s advantageous geographical position and attract foreign investors, the state has been constructing and marketing free zones for almost 3 decades. Most products and supplies imported for a Free Zone project are exempt from import taxes and other customs requirements, which benefits companies. Additionally, there are no export taxes or restrictions on products and materials exported from the Egyptian Free Trade zone.
- Egypt exhibits a strong work ethic. The employees there are among the most skilled in the continent. It also possesses a comparatively advanced infrastructure to support it. This can be perfect for your Egyptian business.
- The country has a reliable market. It offers 39 commercial banks, multiple financial institutions, law firms, specialized local and global management consultancies, and various commerce chambers for particular sectors or bilateral ties with overseas nations. Various governmental organizations such as CAPMAS and ECES provide reliable data about the Egyptian market. Businesses can benefit from a wide range of commercial space and free trade zones benefiting from exclusions from custom clearance taxes, payroll taxes, and many other fees.
- By making significant efforts to liberalize the economy, the Egyptian government is enhancing the nation’s attractiveness as a location for investments. To increase Egypt’s competence on the global stage, it began a program of institutional adjustment in 2016. The following year, a new Investment Law was adopted to lower entry barriers for foreign businesses and expedite the beginning procedure. Overseas investors and Egyptian citizens are now represented reasonably under the legislation. Expatriates have the freedom to transfer profits overseas, with two new protections added to the law to increase investor trust.
Requirements for Starting a Business in Egypt
Setting up a company in Egypt could seem like a good idea, but without the right advice, it can be challenging. When businesses establish operations abroad, the process becomes more difficult.
Companies must learn the correct steps to set up business in Egypt. The following are the requirements to do business in Egypt:
Reserving the company’s name
You must first register your business in Egypt with the nearby Register of Commerce. To reserve a company name, you must pay 25 Egyptian pounds. After that, they will give out a certificate of eligibility with the government’s official stamp.
Getting a bank certificate
The Alexandria Bank at the GAFI issues the bank certificate, which is helpful for the company registration process in Egypt and submitting capital. Getting a bank certificate might take one or two days to complete and can cost between 300 and 500 Egyptian pounds. But if you want this statement, you may still create an account with another bank.
Accountants and auditors registry
The auditor for your firm must be listed in the Accountants and Auditors Registry, after which they will give out a certificate.
The Investment Notarization Office at the GAFI must notarize the company’s contracts, constitution, and statutes.
Getting a certificate of incorporation
The GAFI issues the certificate of incorporation after validating the company’s bylaws within 24 hours. The next step is registering with the Chamber of Commerce for an operating certificate. After that, you must formally register the business with the Registry of Commerce. If there are no objections, the Companies Department will issue the official incorporation notification in the Official Gazette in 15 days.
Registering for taxes
After incorporation, the business can register with the GAFI’s Tax Office. After that, the application is sent to another Cairo office for printing, and you will get the certificate in a day.
Types of Business Structures in Egypt
When setting up business in Egypt, you can opt for any of the following business structures:
- A joint-stock company (JSC) has its capital divided into shares of equivalent worth. The shareholder’s responsibility is limited to the value of their investments rather than being held responsible for the company’s obligations beyond the scope of those shares.
- It could be a closed or publicly traded company. The firm must have a trademark based on the reason it was founded. The name or title of any or all of the company’s founders must appear in the brand name.
- There should be at least 3 partners.
- Minimum capital required to set up a Joint Stock Company is 250,000 LE.
Limited liability company
- Due to the partners’ restricted responsibility to the value of their business shares, the Limited Liability Company (LLC) is a closed corporation.
- The business must have a trading name for its formation, and one or more of its founders’ names or titles may appear in the firm’s name.
- Minimum capital required to form an LLC is 1000 LE.
Branch of a foreign company
- Only work of a commercial character related to a contract executed with any Egyptian organization, including the Egyptian Government, Public Sector, or Private Firm, may be performed by a branch of a foreign company established in Egypt.
- No matter its legal structure, every foreign firm that does any commercial, financial, manufacturing, or contractual activity in Egypt must register the branch with the Commercial Registry and General Authority for Investment and Free Zones.
- After the most recent amendments to the Companies Law No. 159 of 1981 were made in 2018, a new type of company known as the “One Person Company” was added.
- With the help of a ‘one-person company’, a small investor can now set up a company in Egypt by himself, which is different from other companies.
- A one-person business is controlled by a single individual, whether that individual is a natural or legal person. The owner of the corporation is alone responsible for its debts unless they fall under the authorized share capital.
Company Registration Process
Company registration process in Egypt starts with deciding the legal business structure for your company. The steps required for offshore company registration in Egypt are:
Step 1: Business name registration in Egypt
- A corporation must receive name permission from the commercial register before it may start doing business.
- The business’s proposed name must be distinct and not currently used by another entity.
Step 2: Documentation and Application Submission
- Companies must deliver documents and a proposal for company registration to GAFI’s Companies Establishment Department.
- The authority examines the paperwork and application.
Step3: Get a certificate of incorporation
- The authority will issue the incorporation certificate for the company’s creation if the application is filed and the authority approves the supporting papers.
Step 4: Corporate bank account
- You must create a business account in the company’s name. The business may conduct all of its financial transactions through this bank account.
Step 5: Registrar of Taxes
- The following incorporation, the business may register with the GAFI’s Tax Office.
Step 6: Obtain licenses or permits
- You might need a license or authorization to function.
- A license may be required depending on the company activity you want to engage in. Consequently, acquiring permissions or licenses is necessary.
Once you have finished the company registration process in Egypt, you can register your company as an employer. Following that, you can launch your company and hire additional personnel.
How Much Does it Cost to Incorporate a Company in Egypt?
For an Egyptian LLC, the cost of incorporating in Egypt is US$9,750 in the first year and US$2,450 in the second and subsequent years. The table below provides an overview of typical engagement costs for company incorporation, opening a corporate bank account, and other governmental and intergovernmental fees.
Types of entities
Are Foreigners in Egypt on Certain Passes Allowed to Start a Business in Egypt?
Many businesses that want to start a business in Egypt wish to work right away with a team of ex-pats. Regrettably, Egypt’s lengthy procedure for work permits can cause some applications to languish in the processing stage for more than a year. The secret to rapid and straightforward development is understanding how to obtain a work visa in Egypt. The permits required to set up business in Egypt are listed below:
- Work visa: A foreign national’s visa, such as a temporary or tourist visa, will be transformed into a work visa after they receive a work permit.
- Ordinary visa: A typical visa has a three- to five-year validity period and enables the spouse of a professional to get a residence visa for the duration specified on their work permit.
Government Assistance for Foreign-owned Businesses in Egypt
One of the several economic incentives provided by the Egyptian government in recent months to draw foreign investment to Egypt is the golden license. The new law provides certain safeguards for foreign investors in order to promote fresh growth in Egypt:
- According to the law, foreign investors shall be treated equally to Egyptian citizens.
- With the Council of Ministers’ permission, foreign investors may receive preferential treatment.
- Investments shall not be subject to inconsistent rules or unfair judgments.
- Investment-related initiatives won’t be nationalized.
- Licenses for investment projects cannot be revoked or suspended administratively without due procedure, appropriate notice, and a chance to fix any problems.
- During the project’s duration, international investors are guaranteed residency in Egypt.
- Investors are allowed to send their earnings overseas.
- Up to 10% of individual investors and 20% of investment firms may be foreign workers on a project.
- Investment company personnel from overseas can transfer their pay abroad.
How Multiplier Can Help
When beginning a business overseas, much consideration must be given to planning, research, and finance. When the initial company incorporation in Egypt is complete, you must hire the right people to ensure smooth operation. It is a protracted process that could be difficult without support from a worldwide PEO-EOR business like Multiplier.
Multiplier will reduce your HR workload by managing your worldwide employee team, taking care of employee payroll, and onboarding new hires. Our professionals can help you hire employees overseas and grow your company internationally without the need to establish a subsidiary. You get to investigate new markets and focus on the administrative aspects of your firm while we handle the routine HR tasks.