Egypt is a country situated in North Africa that has a strategic location. It offers numerous opportunities for entering many local and world markets. The country has developed transportation, telecommunications, retail, and tourism sectors. If you wish to start doing business in this jurisdiction, this endeavor is possible to realize using one of the following registration options.
Major Forms of Legal and Business Presence
If you wish to form a company in Egypt or establish your business presence in any other manner, this list of basic registration options may help you with making the final choice:
- Limited Liability Company – the simplest opportunity for starting and doing business in Egypt, a small one preferably. This option requires two shareholders at least (but up to fifty) and one manager who is an Egyptian resident. The shareholders of this enterprise don’t risk losing in excess of the funds contributed in case of potential losses. It is recommended to form a chartered capital in the amount of USD 1,000 at least.
- Joint-stock Company – an option suitable for large business in Egypt where three shareholders are required at least. Their liability is also limited to the amounts of funds contributed. This corporate option is used for involving external financing. It can have a form of (i) a closed joint-stock company where certain restrictions to the shares transfers are applied (such should be indicated in the company's statutory documents), or (ii) an open joint-stock company – where shares can be offered freely for subscription to third parties and transferred later without restrictions.
- Branch – an option suitable for a foreign entity that intends to carry out industrial and commercial activities with local contractors. The list of activities is limited to those a foreign entity is allowed to do abroad and those related to legal relations with a local contractor. Registration is required in this case.
- Representative Office – if a foreign body corporate intends to carry out promotional activities or market investigation, this option is suitable for those. Direct commercial transactions are not allowed in this case. The registration is also necessary for a representative office.
Registration Requirements and Steps
The process of company registration in Egypt covers the following preliminary steps:
- Clarifying your business objectives that should be realized through the local enterprise.
- Choosing the most suitable legal and organizational form for doing business in Egypt.
- Selecting and checking a business name for a future company.
- Collecting data about the future founders, beneficiaries, and officials of the Egyptian enterprise.
- Arranging the registered office for an Egyptian company.
- Drafting statutory and registration documents.
- Paying up the initial amount of authorized capital.
- Lodging the ready set of registration documents to the registrar.
- Registration for tax and social security purposes.
- Arranging a corporate bank account for a newly registered enterprise.
- Applying for and getting licenses and special permits necessary for regulated activities.
The exact registration procedure may slightly vary depending on the background of each business case. For more precise consultation, please contact our lawyers with initial details about the registration you wish to carry out in Egypt.
Legal and Regulatory Framework
The local legal framework may be considered as open to foreign investments. At the same time, lots of local legal formalities can make the process of company registration in Egypt a bit bureaucratized and time-consuming. In general, it is allowed to establish 100% fully-owned foreign enterprise in this jurisdiction. But, foreigners may face restrictions on doing certain types of business in Egypt also. Our lawyers may guide you more precisely on certain business objectives you may realize through a local enterprise without obstacles.
The Companies Law, the Investment Law, and the Capital Market Law are major legal acts that regulate doing business in Egypt. The General Authority for Investment and Free Zones and the Egyptian Financial Supervisory Authority are major state authorities foreign investors may deal with while establishing their presence in this jurisdiction.
Tax System in Egypt
If you wish to buy a company in Egypt or create a new one, it is better to consider this option along with the next tax highlights:
- Corporate income tax rate – 22.5%;
- Personal income tax rate – 25%;
- Value-added tax rate – 14%;
- Withholding tax rates (for non-residents) – (i) dividends – 5% or 10% (ii) interests – 20% (iii) royalties – 20%;
- Capital gains tax rates – (i) corporate – 0%, 10%, or 22.5% (ii) personal – 0%, 10%, or 25%.
Advantages of the Jurisdiction
A realized opportunity of company registration in Egypt may turn out to be a beneficial dealing taking into account the following advantages this jurisdiction offers to foreign investors:
- no restrictions concerning the residency of investors;
- developed local infrastructure;
- low employment-related costs;
- existence of free zones with incentives provided.