A Guide to Setting up a Business in Egypt as a Foreigner
Egypt is quite popular as a travel destination for a lot of people. However, it’s also a great location to set up a business. So, if you have been thinking of setting up a business there too, you can do so with an Egypt visitor visa.
This visa is an electronic document issued by the Arab Republic of Egypt. You may apply for a single-entry/multiple-entry visa, based on your needs. You can stay for a period of up to 30 days with the single-entry Egypt visitor visa, and 90 days with the multiple-entry visa. Furthermore, you’ll have to have a valid passport, travel booking documents, proof of financial stability, etc. to apply for this visa.
After gathering all these documents, you’ll have to visit Egypt Visa Online, fill in the required information, pay the necessary fee, and then wait for a few days (between 5-7) to receive your visa.
Reasons for Starting a Business in Egypt
As a first-timer, you must be curious as to what makes Egypt such a great location for a business. Let’s delve into it.
Firstly, Egypt has the 3rd largest economy in Africa, after Nigeria and South Africa. Apart from that, it has a significantly young population with more than half of its population in the age group of 16-54, and about a third in the 0-14 age group.
This leads to an increased demand for products like clothes, electronics, etc. as young people like to stay updated with the latest trends.
Apart from that, businesspeople can invest in industries spread across the domains of finance (due to relaxed interest rates), agriculture, mining (because of the presence of natural minerals), etc.
One of the biggest areas for setting up a business is in the tourism sector. You can explore all these opportunities when you travel there with your Egypt visitor visa.
Furthermore, due to its location, Egypt also offers chances for investing in the shipping industry, since you can transport the cargo of other goods via the Suez Canal.
Benefits of Starting a Business in Egypt
When you set up a business in Egypt, you can enjoy quite a few advantages such as a readily available workforce of young people, increased focus on infrastructure expenditure, and a positive attitude towards foreign direct investments.
Apart from that, there have been a lot of construction projects going on as well, so you can easily find a place to set up your office or business headquarters as applicable.
Some other reasons that should compel you to set up a business are its improved security, (which you can experience when you are scouting Egypt with an Egypt visitor visa, and passing new investment laws.
Legal and Regulatory Framework for Foreign Businesses
Now, you should be aware of some things like the type of companies, and the new investment laws that the Government passed, before you can set up a business in Egypt.
You can set up the following types of companies in Egypt, a One Person Company, an LLC, a Company Limited by Shares, a Joint Stock Company, a Partnership, a Sole Proprietorship, a Limited Partnership, a Representative, and a Branch Office.
Different Types of Companies You Can Set up in Egypt
One Person Company
As the name suggests, this company is owned by a single individual who has used a portion of their inheritance to obtain the business capital, and the owner’s liability is linked to his/her capital.
LLC
You can set up a Limited Liability Company with a minimum of two shareholders whose liability will be limited to the value of the overall assets they own.
This is one of the most popular types of companies that people generally set up over, as you can engage in any type of industrial activity or business.
Representative Office
You cannot carry out any commercial activity when you set up this office. The term indicates that you can only establish this office as an arm or ‘representation’ of your parent office, and carry out surveys, etc.
Branch Office
In simple terms, this is an outlet of your main company that you can set up in Egypt. This means that you can carry out all commercial activities etc. as per the prevailing laws of your company, and the business laws of Egypt.
Ensure to choose a suitable location for your branch office when you visit Egypt with your Egypt visitor visa.
You can get in touch with our online helpdesk for more information about the different types of companies you can set up there.
Egypt’s Investment Laws: An Overview
Now, some things you should know about Egypt’s investment laws are that they prevent your business from being confiscated, a fifth of your workforce from being non-native workers, tax incentives of up to 30% in the form of profits, and a Supreme Council of Investment, etc.
Furthermore, the law divides the types of investment into the Internal Investment System, Investment Zones System, and Free Zones System.
Under the Internal Investment System, you can invest in areas not covered by the other systems, whereas under the Investment Zones System, you can designate a separate investment zone after the Prime Minister’s Approval that will be free from Free Zone restrictions.
Finally, under the Free Zone system, you can designate either public or private Free Zones that you can use only for the exportation of goods.
How You Can Set Up a Business in Egypt
After exploring all the locations for your business with your Egypt visitor visa, you have to do the following to set up your business.
Before Incorporation Steps
Firstly, you have to conduct the necessary market research. You can do that by studying your audience very carefully and segregating them based on their demographics.
After that, you should go through your competitor’s websites, see what they offer, and check out the customer testimonials. That will give you an insight into what your potential customer base appreciates about the services they utilize.
Apart from that you should do audience surveys via online feedback forms, real-time user opinion feedback testing, and targeted cold emails, once you’ve established your audience or decided upon a group.
Once you’re done with all those steps, you have to determine what kind of business you wish to set up, from an LLC to a Branch Office, etc. This will help you streamline your registration.
Registering Your Business
After determining your business structure, you’ll have to submit documents like a Memorandum of Association (MoA), Proof of business address, and Articles of Association (AoA) to the General Authority for Investment and Free Zones (GAFI).
Post-Incorporation Steps
Lastly, you’ll have to open a corporate bank account that will store your financial corpus. To do so, you’ll have to furnish documents like identification documents for your company’s directors, tax compliance proofs, and company registration documents.
Do remember to be tax-compliant by registering with a Tax Identification Number and VAT.
Taxation and Financial Regulations: What You Should Be Aware of
Egypt’s new tax laws allow you to enjoy up to 22.5% of income tax, as opposed to 40% when the old rates were followed, paying up to 27.5% tax if your business declares an income of more than 1.2 EGP, and following internationally compliant tax codes.
On the other hand, if your business has a turnover of EGP 500,000, then you will be subject to about 14% of VAT.
Apart from that, you should be registered as a joint-stock company that offers SME financing, factoring, financial leasing, microfinance, etc. Additionally, you should have a paid-up capital of EGP 15 million or an equivalent in foreign currency for each service that you provide.
Furthermore, one-fourth of your company should be owned by financial technology experts, and you should submit documents that show that you fulfil various requirements like e-KYC, information security, etc.
Lastly, you should also sign undertakings to the Forward Rate Agreements for approval, such as those for operations, etc.
Tips for a Successful Entrepreneurial Venture
Now that you know everything about how to set up a business in Egypt, you should keep some vital things in mind to ensure that you don’t make a mistake.
Firstly, you should respect the culture of the natives when you travel to Egypt with your Egypt visitor visa.
Apart from that, you shouldn’t undermine the bureaucratic processes since they can be quite time-consuming, and be ready to engage in networking, as this will help you build valuable business connections.
Lastly, be a native-first business when building your team. This is how you can set up a business with ease after you gather all the necessary information by visiting Egypt with your Egypt visitor visa. Good luck with your endeavors!
Check your eligibility for Online Egypt Visa and apply for Egypt e-Visa 5 (five) days in advance of your flight. Citizens of many countries including Georgian Citizens, Irish citizens, Moldovan citizens, Russian citizens and New Zealand citizens can apply online for Egypt e-Visa.