Set up your Business in Egypt
In the last few years, the Egyptian government’s policies have focused on economic recovery. Today, most economic regulation changes are centered on massive infrastructural initiatives, tourism development, increasing private sector investments, and luring (FDI) foreign investments.
Egypt has made remarkable economic progress in recent years; according to a World Bank report, Egypt has risen 8 spots to rank 120 out of 190 countries. Egypt improved yet again in 2020, ranking 114th. Egypt’s GDP increased by 3.6% in 2020 and 3.3% in 2021, with growth expected to exceed 5% in 2022 and remain strong in the coming years. All of these numbers are encouraging businessmen, founders, and investors to start investing in Egypt.
Steps for Setting Up a Business in Egypt
To set up a business in Egypt, you must first review the most recent GAFI “General Authority for Investment and Free Zones’’ regulations, which govern the establishment of all types of companies in Egypt.
Next, you need to decide on the most suitable company type for your business, as every company has a different set of regulatory requirements.
The most common types in Egypt are:
– Foreign company branches: According to Egyptian Companies Law no. 159 for the year 1981 and the new investment law no. 72 of 2017, foreign companies can establish a local branch in Egypt, provided they have a contractual agreement with an Egyptian partner. The foreign company can appoint a foreign general manager. The company’s whole operation would be totally controlled by the parent company. However, the activities that it can perform will be limited to the activities mentioned in its contract with an Egyptian organization.
– Joint stock companies: are one of the most commonly used legal forms of companies in Egypt. It requires at least 3 shareholders, with no restrictions on their nationalities. The company adheres to all the regulations of Egyptian law, and its annual financial statements are required to be published.
– Limited liability companies: LLCs are closed companies in which each partner’s liability is limited to the value of their share. The companies must be registered in the Commercial Registry, subject to GAFI supervision and inspection, and can be 100% foreign-owned with no minimum capital required.
– Sole Proprietorship incorporation: A company owned entirely by one person, whether a citizen or legal entity, without contradicting its objectives. A company’s founder will not be liable for its liabilities except within the limits of the capital allocated to it. In terms of capital, there is no minimum, but it will be determined by the owner.
To know more about different legal entities for companies in Egypt, read our blog here,
https://www.krestoneg.com/blog/which-legal-form-is-suitable-for-your-business
The last step is to prepare some critical documents required by GAFI and the authorities to establish your business. These are the common ones that are required by all types of companies:
– Non-Confusion certificate validated by the commercial registry (you can apply for it and get it through GAFI’s online portal)
– A banking certificate obtained through a capital deposit
– Copies of the power of attorney and the original for review
– The partners’ and Egyptian managers’ ID copies and passport copies for foreigners. You will also need the original documents for review.
– The original copy of the auditor’s report.
What are the Regulatory Requirements for Starting a Company in Egypt in 2023?
Two main laws govern company registration in Egypt; The Egyptian Companies Law No. 159 of 1981, as amended, and the Egyptian Investment Law No. 72 of 2017, as amended.
These laws dictate how businesses establish companies in Egypt. Below are some of the key requirements:
– Getting a certificate of trade name clearance
With the updated CRA system, the commercial registry will issue certificates after checking the availability of the business name of your choice; however, it does not reserve it.
– Notarizing the company’s contract
It has a capital cost of 0.25%. (Minimum of EGP 10 and maximum of EGP 1,000).
– Obtaining the Chamber of Commerce Certificate
This takes one day and costs 0.2% of the capital (minimum of EGP 24 and maximum of EGP 2000). The chamber of commerce certificate would be obtained on behalf of the client by a GAFI employee.
– Issuance of the Incorporation Notification
The already submitted Articles of Association are ratified by the competent authority, which issues a decree approving the company’s formation.
– Registration for taxes
Following incorporation, the company can complete tax registration and obtain a tax card. The documents needed for registration include the following:
– The articles of association.
– The power of attorney documents.
– A bank signature authentication will be issued to the appropriate person authorized to sign on behalf of the company.
– The tax card.
– A certified original extract from the company’s commercial register.
– The original copy of the company’s premises lease agreement.
Ahmed Mamdouh & Co. is Your Partner in Your Success Journey
Ahmed Mamdouh & Co. Kreston Egypt holds more than 35 years of local experience in Egypt and more than 50 years of global expertise through Kreston’s 160 global offices in 110 countries and 23500 experts.
We have helped numerous clients of all sizes establish their business entities in Egypt over the years, ensuring they are set for success through a proven methodology according to every client’s specific needs and requirements.
Ahmed Mamdouh & Co. Kreston Egypt is a part of various esteemed and prestigious associations, including Expatland, Forum of Firms, Public Company Accounting Oversight Board, Egyptian Society of Accountants and Auditors, and others. Our consultants have diversified experience and offer different services to help new businesses, such as:
– Accounting and Bookkeeping services
– Audit and Assurance
– Corporate maintenance services
– Financial services
– Tax services
If you are planning to establish a company and a business in Egypt soon, book a consultation with our team to explore your options and how Ahmed Mamdouh & Co. will help kickstart your business. Our team can advise you on the most suitable legal entity for your business and the best funding resources. We can also keep you updated with tax documentation through tax filing and offer you accounting services like bookkeeping, financial reporting, and payroll management.
References:
- https://www.tmf-group.com/en/news-insights/articles/2022/april/reasons-to-do-business-in-egypt
- https://www.gafi.gov.eg/English/StartaBusiness/Pages/Starting-a-business.aspx
- https://www.mondaq.com/contracts-and-commercial-law/969350/how-to-start-a-company-in-egypt
- https://egymarks.com/%D8%AA%D8%A3%D8%B3%D9%8A%D8%B3-%D8%B4%D8%B1%D9%83%D8%A9
- https://www.expatland.com/about
- https://egscholars.com/2021/12/04/how-to-register-a-company-in-egypt-a-general-guide
- https://www.mondaq.com/contracts-and-commercial-law/969350/how-to-start-a-company-in-egypt
- https://www.gafi.gov.eg/english/startabusiness/laws-and-regulations/publishingimages/pages/businesslaws/investment%20law%20english%20ban.pdf
- https://enterslice.com/company-registration-in-egypt
- https://www.wamda.com/2011/05/how-to-register-a-company-in-egypt-the-complete-process
