If you plan to start a business in Africa, Egypt is a good choice for registering your company. The Manimama Law Firm has conducted in-depth research, analyzed the main subtleties of incorporating in Egypt, and is ready to share its results and help you choose the right jurisdiction.
What are the main advantages of incorporating a company (business) in Egypt?
1. Promising Location and Access to Global Markets
Egypt is strategically positioned at the crossroads of three continents—Africa, Asia, and Europe—making it a global logistics hub. A key advantage is its control of the Suez Canal, one of the busiest trade routes in the world. Companies registered in Egypt gain direct access to markets in the Middle East, Africa, and the European Union.
2. Large Domestic Market with High Growth Potential
With a population exceeding 110 million, Egypt boasts one of the largest consumer markets in the region. A growing middle class, rapid urbanization, and increasing digitalization create a favorable environment for business growth in sectors such as retail, services, technology, and manufacturing.
3. Investor-Friendly Policies and Tax Incentives
Egypt actively promotes foreign investment by establishing free and special economic zones (SEZs). Companies operating in these zones benefit from various incentives, including exemptions from customs duties, VAT, and certain income taxes.
4. Developed Infrastructure and Logistics Capabilities
Egypt offers a modern transportation network, including high-speed highways, major seaports, international airports, and an efficient railway system. The country is also investing in telecommunications infrastructure and industrial parks. This robust infrastructure supports efficient operations across various sectors, including logistics, manufacturing, and IT.
5. Skilled Workers
Egypt has a young, educated, and tech-savvy population, particularly in engineering, information technology, and finance. The wide availability of skilled labor allows companies to build strong teams at competitive costs.
6. Streamlined Company Registration through GAFI
The General Authority for Investment and Free Zones (GAFI) serves as a one-stop shop for investors, significantly simplifying starting a business. Most companies can be registered within 2–4 weeks, depending on the nature of the industry and the documentation provided. Process automation and centralized administration ensure an efficient and predictable registration experience.
How to register a company in Egypt and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Company registration
- Choosing a unique company name and get it approved;
- Facilitating the notarial process for the company’s official registration;
- Incorporating the company’s data into the GAFI;
- Obtaining the Certificate of incorporation from the GAFI, Memorandum and Articles of Association;
- Registration for tax and social security purposes;
- Obtaining any required business licenses and permits.
Requirements for registering a company in Egypt on the example of a Limited Liability Company (LLC):
Shareholders: minimum 2 shareholders, which can be both individuals and legal entities. The maximum number of shareholders is 50. In general, foreign businesses with 100% full ownership are allowed to be established in Egypt. However, foreigners may face restrictions on conducting certain types of business.
Director: the company must appoint at least 1 director who is an Egyptian resident.
Company secretary: there is no requirement.
Minimum share capital: the minimum capital requirement is EGP 50,000 (~ $1,000).
Legal address: the company is required to have a registered office in Egypt in order to conduct official communications and maintain documents and records.
Liability: shareholders are only liable to the extent of their shares, which offers protection against personal liability for the company’s debts.
Accounting: the company is required to file annual financial statements and annual tax returns.
What do you have to know about taxes when registering a company in Egypt?
Corporate income tax (CIT):
- The CIT is 22.5% on the net taxable profits of a company.
- Non-resident corporations and partnerships pay tax on income derived from their permanent establishments in Egypt.
- Specific rates apply to certain sectors, such as 40.55% for oil exploration and production.
Personal income tax (PIT):
The rates are the following:
- from EGP 1 (~ $0,020) to EGP 40,000 (~ $800) – 0%;
- from EGP 40,000 (~ $800) to EGP 55,000 (~ $1,100) – 10%;
- from EGP 55,000 (~ $1,100) to EGP 70,000 (~ $1,400) – 15%;
- from EGP 70,000 (~ $1,400) to EGP 200,000 (~ $4,000) – 20%;
- from EGP 200,000 (~ $4,000) to EGP 400,000 (~ $8,000) – 22.5%;
- from EGP 400,000 (~ $8,000) to EGP 1,200,000 (~ $24,000) – 25%;
- more than EGP 1,200,000 (~ $24,000) – 27.5%.
Value-added tax (VAT):
- The standard VAT rate is 14%.
- The reduced rates are 5% (machinery and equipment that are necessary for producing goods or providing services, etc.) and 0% (exported goods and services).
- Compulsory VAT registration applies to businesses with annual taxable sales exceeding EGP 500,000 (~ $10,000).
- Exemptions apply to necessities such as dairy products, certain medical supplies, agricultural goods, financial services and educational materials, etc.
For readers
Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Egypt. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Egypt, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Egypt and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
