Registering, Starting a Business in Egypt

Region: Middle East & North Africa
Income category: Lower middle income
Population: 81,527,172
GNI per capita (US$): 1801.25
Capital: Cairo

Egypt straddles both the African continent and the Middle East and is a gateway between the regions. Consequently, the Egyptian economy is one of the strongest in Africa and the Middle East. The expanding economy creates opportunities for entrepreneurs who simply need to ensure that their business becomes a formally recognized legal entity to begin operations. Egypt outpaced other reformers worldwide and in the Middle East and North Africa in making it easier to do business, with improvements in five of the 10 areas studied by the report, it said. Egypt cut the minimum capital required to start a business, from 50,000 Egyptian pounds to just 1,000 and halved the time and cost of start-up. It reduced fees for registering property from 3 percent of the property value to a low, fixed amount. It eased the bureaucracy that builders face in getting construction permits.

Starting a Business in Egypt
List of Procedures:

  1. Obtain a certificate from an authorized bank
  2. Submit documents to the Department of Companies and obtain invoice
  3. Notarize company’s contract
  4. Obtain the notification of incorporation
  5. Register for taxes
  6. Register employees with the National Authority of Social Insurance

It requires 6 procedures, takes 7 days!
Egypt, Arab Rep. is ranked 24 overall for starting a business.

Detailed:
Verify the availability of your proposed business name by checking with the Commercial Registry. To do this, you must go to the office of the Commercial Registry in the Egyptian capital of Cairo.

  1. Obtain a bank certificate from an authorized Egyptian bank. Depending on the bank, the cost is anywhere between 200 to 500 Egyptian pounds (EGP), the equivalent of $35.28 to $88.20 U.S. dollars (USD) as of June 2010. Within a day or two of payment, the bank will issue a certificate of payment which must eventually be notarized.
  2. Register the company with the Department of Companies by submitting the Articles of Association. Additionally, as of 2010, you must pay the following processing fees: a notary public fee which will amount to 0.25% of the business’s capital, an establishment fee equal to 0.1% of capital , a service charge which amounts to 0.1% of capital, a commercial syndicate fee of 125 EGP or 250 EGP ($22.05 or $44.50 USD), depending on the capital share. Additional fees include a publication fee of 150 EGP to register a limited liability company in Arabic (approximately $26.46 USD) or 300 EGP to register a limited liability company in Arabic and English (approximately $52.92 USD), Chamber of Commerce fees equal to 0.2% of business capital, a commercial registration fee of 51 EGP ($9 USD) and finally, 29 EGP (approximately $5.12 USD) to receive an operation certificate.
  3. Notarize all necessary business documents by submitting the following documents: an original certificate of non confusion, an original bank certificate, a copy of the powers of attorney issued by the business owner to a legal representative, a copy of the owner’s proof of identification, security clearances for any foreign investors, an original certificate indicating that the company’s auditor is listed in the Registry of Accountants and Auditors, and a notarized copy of the Articles of Association. This process is free of charge and will take approximately one day.
  4. Obtain a notification of incorporation document once the Department of Companies approves all business documents and forms. The business will also receive formal approval and recognition from the Chamber of Commerce and will be formally included in its business registry.
  5. Register for tax purposes by visiting a One Stop Shop (OSS) and filling out the appropriate forms as instructed by an OSS employee. The business will receive a tax card within one to two days. The procedure is free of charge.
  6. Register the names of all employees with the National Authority of Social Insurance. To do this, submit the business’s lease agreement, the business’s tax card, the employee’s identification card and a copy of his or her birth certificate, and a copy of the employee’s and business owner’s graduation certificate. This process is free of charge and will be completed in two days. Failure to register employees for Social Security purposes will result in the business facing eventual punishment.

Tips & Warnings

Before opening a business in Egypt, contact the American Chamber of Commerce in Egypt, which helps business owners understand how to navigate through Egyptian laws and business culture. It is best to hire a lawyer to complete the business registration, especially if the business owner is not a native-Arabic speaker.

Construction Permits
List of Procedures:

  1. Obtain technical approvals from independent syndicate engineer
  2. Submit building permit application to municipal authority
  3. Obtain project clearance from electricity authority
  4. Receive inspection prior to permit issuance from municipality
  5. Pay real estate tax at the tax authority
  6. Obtain building permit
  7. Receive on-site inspection from the municipality – I
  8. Receive on-site inspection from the municipality – II
  9. Receive on-site inspection from the municipality – III
  10. Receive on-site inspection from the municipality – IV
  11. Receive on-site inspection from the municipality – V
  12. Receive on-site inspection from the municipality – VI
  13. Receive on-site inspection from the municipality – VII
  14. Receive on-site inspection from the municipality – VIII
  15. Receive on-site inspection from the municipality – IX\
  16. Receive on-site inspection from the municipality – X
  17. Receive final inspection from by a committee from the Municipal Authority
  18. Obtain letters from Municipality about water and sewage connection and about electricity cables installation
  19. Obtain certificate of natural disaster
  20. Obtain water and sewerage connection
  21. Apply for electricity connection
  22. Receive electricity inspection
  23. Obtain electricity connection
  24. Obtain phone connection
  25. Register the building with the real estate registry

Egypt, Arab Rep. is ranked 156 overall for Dealing with Construction Permits.

Employing Workers
Egypt is ranked 107 overall for Employing Workers.

Minimum Wage
According to Article (34) of the Labor Law, the National Counsel for Wages undertakes to set minimum wage levels taking into consideration the cost of living and striking a balance between wages and prices. The Counsel also sets the minimum annual increase which must not be less than 7% of the basic salary which is used to calculate the social insurance.

Working Hours
The working hours according to the Labor Law are a maximum of 8 hours per day or 48 hours per week in the case of a six-day work week. However, the employee may, from time to time, be required to work additional hours when necessary.

Annual Leave
According to Article (47) of the Labor Law, the duration of the employees’ annual leave is 21 days per year for those who have worked one year in the service of an employer. For those who have worked more than 10 years in the service of one or more employers, the annual leave is 30 days. Also, employees that are over 50 years of age are entitled to annual leave of 30 days. As for employees that have worked less than one year in the service of an employer, their annual leaves shall be pro-rata to their period of service,

With a population of approximately 80,000,00 and the economy it is in, hiring employees is extremely easy but hiring educated employees takes a little more effort.
Registering property
List of Procedures:

  1. Request for registration presented by the buyer
  2. Site inspection by the measurement department
  3. Payment and issuance of the inspections report (maqbul)
  4. Final contract is drafted and approved at the Lawyers Syndicate
  5. The buyer obtains the contract from the real estate registry
  6. Seller and buyer sign the contract before the real estate registrar
  7. The buyer picks-up the new contract/title at the registry

Egypt, Arab Rep. is ranked 87 overall for Registering Property.

AAE

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