Why invest in Egypt ?

Egypt is now building its new political structure to fulfill the dreams of all Egyptians who called for change, dignity, freedom of speech and social.

· After the ratification of the new constitution in January 2014 through a public referendum with 98.1% approval rate and the election of a new President in June 2014 through direct elections. The Parliamentary election law; the final prerequisite for holding the elections, was ratified by President Abdel Fattah El-Sisi in December 2014.

The Egyptian Economy’s resilience is capable of overcoming its economic challenges as it did in the 2008 financial crisis, and long-term investors will see many opportunities. ·Egypt has started its transformation to a stable, democratic and modern economy, where the dividends of growth and prosperity will be shared by all who participated in its achievement. ·The Egyptian economy’s ability to post positive real economic growth rates amid the global economic downturn as well as during the political unrest that prevailed in 2011-2013 indicates how resilient economic activity in Egypt.
At about 28 million, Egypt’s labor pool is the largest in the region. For decades, Egypt has had a reputation as a net regional exporter of educated, skilled labor. However, as domestic demand for skilled labor rises, and the increase of youth searching for job opportunities. a national industrial training program is provided for labors through world-class universities ​​
Egypt has emerged as a consumer market of significant importance in the region, as witnessed by the arrival of dozens of global brands and the sharp expansion of retail sales in the past two years. This is partly due to the sheer size of Egypt’s population that put it as the most populated country in Africa and the Middle East
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Egypt boasts a world class infrastructure base. Three independent mobile (cellular) phone networks cover nearly 100% of the country’s inhabited land. Wire line broadband is readily available in urban centers. The country’s 15 commercial ports serve the nation’s exporters and importers alike, while an expanding, upgrading airport network caters to both passengers and cargo traffic, Egypt’s Air Cargo Airport, currently has three cargo terminals, dealing with textiles, vegetables and many industrial products. Also the country has a well-established network of railways and roads. .The road network has reached 108,784 KM, Railway network 9,570 KM and 20 Airports. · Egypt also provides competitively prices and reliable supplies of power, water and gas. Egypt possesses an abundance in natural resources that can easily meet the needs of agricultural, industrial and mining activities.

Corporate taxes top out at only 22.5% in Egypt.​

The nation’s newly overhauled tax code is easy to navigate, and the country has moved to random-sample auditing. The nation’s largest corporate taxpayers are served by a special, highly trained unit at the Tax Authority.

·        For more information…click here(3)

  •  Key global markets in Europe, the Middle East, Africa and the Indian Subcontinent are all readily accessible from Egypt. Closer to the European and North American markets than other major exporters including India, China and the Philippines, Egypt is also located on key international logistics routes.

    ·  Egypt enjoys the existence of the Suez Canal, which is considered to be the shortest link between the east and the west due to its unique geographic location. Approximately 8% of the world’s maritime shipping passes through the Suez Canal each year. 

    ·  Vessels transiting through the canal from east to west or from west to east make significant savings in distance, time and operating costs. 

    · Moreover, the maritime transport is the cheapest means of transport, with more than 80% of world trade volume transported via waterways (seaborne trade).

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  • Egypt’s economy is among the most diverse in the Middle East and North Africa, Diversity is a key strength in the Egyptian economy where growth is driven by many sectors, helping ensure long-term growth prospects for all sectors.

Egypt has recently adopted a bold and ambitious reform plan to ensure fiscal sustainability and solve macroeconomic imbalances with the objective of reducing economic risk and bolstering confidence among investors.

The reform plan aims at increasing tax base, streamlining spending on fuel and electricity subsidies, leveraging capital spending and allocating more resources to public services and social security.

After 25th revolution Government has embraced an intensive 3 dimensional promotion strategy based on business reform, FDI attraction, and investor care, As follows:

For efficiency and simplification:

·     Reduction of the time required for registering foreign representation offices to 72 hours instead of 40 days has been made.

·     Paying subscription fees to the Chamber of Industry and the Federation of Egyptian Industries is available at the one stop shop.

·     The launch of the second phase of electronic companies establishment on GAFI official web site.

·     And, Increasing GAFI’s processing centers in governorates.

For the licenses

·     Lifting the required preliminary industrial license when establishing at GAFI.

·     Lifting the security approval requirement for media companies.

·     Issuance of the imports/exports certificates for specific activities for one to five years.

·     For SMEs: the Establishment of “Bedaya Center” to help develop and assist SMEs in gaining access to bank financing.

·     For the reduction of the industrial business cost through the decision of the ministry of industry to reduce the value of Letters of Guarantee required to acquire land from industrial zones.​​​

Finally and most importantly for investor care:

·     Establishment of the “Contracts Committee” which GAFI is a member of, to resolve any conflict that might arise between the investors and different governmental bodies over previously signed business contracts.

·     ​And, Modification of the Investment law No. (8) year 1997 to allow the reconciliation between the investor and the government in the cases of proven fraud.

·     There are five investor protection schemes which GAFI is currently endorsing:​

 Prior the 25th of Jan. Revolution

1.  Investor Care Department: established within GAFI to support and guide investors to resolve any conflicts they might face with the different governmental authorities.

2.  Disputes Settlement Center: established in 2009 for the reconciliation and disputes resolution between business partners.

3.  The Investment Disputes Resolutions Committee: which GAFI hosts its the technical secretariat.

 Post the 25th of Jan. Revolution 

1.  The “Contracts Committee” which GAFI is a member of, to resolve any conflict that might arise between the investors and different governmental bodies over previously signed business contracts.

2.  Modification of the Investment law No. (8) year 1997 to allow the reconciliation between the investor and the government in the cases of proven fraud. ​

 

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There are two main laws:

  1. Egyptian companies Law no. 159 of 1981 and its amendments.
  2. Egyptian investment Law no. 72 of 2017 and its amendments.

You can find English versions of the Egyptian Companies Law, Egyptian investment Law and their executive regulations on our website. 

Companies Law is the main law that all types of companies may be established under its provisions while the investment law is the law which including a group of incentives and guarantees to attract investors in some activities, hence no companies may be established under the provisions of the investment law except if the activity of the company was included in the activities mentioned in the article no. 1 of the general provisions of the executive regulation of the investment law.

  1. One-person company (OPC)
  2. Limited Liability Company (LLC)
  3. A company limited by shares
  4. Joint-stock Company
  5. Partnership Company
  6. Limited Partnership Company

  1. The liabilities of the partners are differ based on the type of the company as follows:

     

    1. Joint-stock company: the liability of shareholders is limited to the value of their shares.
    2. Limited Liability company: the liability of the partners is limited to the value of their shares.
    3. The company limited by shares: there two types of partners 1- shareholder: the liability of the shareholder shall be limited to the value of his share 2-  Acting or Active partner: The liability of this partner shall not be limited in its share in the company but it shall extend to include his own money and it shall be owned by one shareholder and one active partner at least.
    4. One-person company: the liability of the owner of the company shall be limited to the capital of the company.
    5. Sole proprietorship: it is an establishment and the liability of the owner of this establishment shall not be limited in the capital of the establishment but it shall extend to include his private money.
    6. Partnership Company:  The liability of the partner shall not be limited to its share in the company but it shall extend to include his own money
    7. Limited partnership company: There two types of partners 1. Active partner: The liability of this partner shall not be limited to its share in the company but it shall extend to include his private money. 2. Dormant partner: The liability of this partner shall be limited to its share in the company and it shall not extend to include his private money.

  1. The incorporation fees are different based on the capital value, the type of the company and the governing law, however, the governmental fee is not too much in general and anyone may establish a company with a governmental fee not exceed USD 100. Feel free to contact us to know the actual cost to incorporate your company.

  1. It is possible to incorporate a company in Egypt on the same day under the VIP service, for extra-governmental fees, upon preparing all documents.

  1. The minimum numbers of partners in the limited liability company are two partners

  1.  The minimum numbers of founders in the Joint-stock company are three founders.

The minimum numbers of partners in the partnership company are two partners.

No minimum capital required in the limited liability company, moreover, it is not required to deposit the capital of the company at the time of incorporation.

The minimum capital limit required for establishing a joint-stock company which not offering its shares in public is EGP 250000, ( Two hundred and fifty thousand Egyptian pounds)  while the minimum capital limit required for establishing a joint-stock company which offering its shares in public is EGP 1000000 (one million Egyptian pounds).

The minimum capital limit required for establishing partnership and limited partnership companies are EGP 300000.

The authorized signatory can contract and conduct business in the name of the company upon registering the company at the commercial register

Yes, however, the purpose of the branch shall be limited to perform a certain project in Egypt. 

  1. A notarized power of attorney to be legalized from the Egyptian consulate.
  2. Choosing the name of the company
  3.  Transferring the capital of the company which shall be EGP 50000 to extract bank certificate.
  4. A copy of the founder’s passport
  5. The Certificate of the Auditor of the company; and
  6. A possession deed of the company’s headquarter or the lease contract of the same

  1. 1- An application submitted in the name of the GAFI attached with two copies of the power of attorney issued by the Mother Company (Note: it had to be authenticated and notarized).

    2- A copy of the Mother Company’s Bylaws and/or a copy of the commercial register of the mother company.

    3- A copy of the resolution issued by the Mother Company to open a branch in Egypt.

    4- A statement from the Mother Company states that (“It has not opened a BRANCH before in Egypt”).

    5- Opening a Bank Account in the name of the BRANCH.

    6- A banking Certificate provides transferring, in dollar currency, an amount equals to 5000 EGP.

    7- A number of two copies of the lease contract or the ownership deed of the Branch’s location (Notes):

    1. It has to be stamped from the Notary Public Office with having a date proven;
    2. showing the original contract for reviewing purposes; and
    3. The contract shall state that the objective is to use the place as a branch for the company.

    8- A number of two copies of the contract concluded with any Egyptian entity.

    9- A number of two copies of the commercial registry of the Egyptian company that the Mother Company contracted with.

    10- Filling in the security checks made for the Mother Company and the manager of the branch in case s/he will be a non-Egyptian.

     

    General Notes:

    (1)- All the above-mentioned documents shall be translated to a certified Arabic Translation and it shall be legalized from the Egyptian Consulate and the Egyptian Ministry of Foreign Affairs.

    (2)- Certain Activities need the approval of the related competent authorities before registering the Branch at the GAFI (“General Authority for Investment and Free Zones”). Accordingly, you have to mention exactly and in detail what kind of Technology activities you will exercise in Egypt.

  1. There are some documents that you are kindly requested to prepare from your side which are as follows:

    1. Notarized powers of attorney from all founders (minimum two founders) to be legalized form the Egyptian consulate. 
    2. Copies of valid ID and passports of founders;
    3. An official original certificate obtained from the register of Accountants and Auditors in order to review and approve the balance sheet of the company. In case the original was previously furnished to GAFI, and an acceptance declaration shall be submitted.; 

    We shall prepare the following documents from our side:

    1. A certificate of non-confusion of company name approved by the Commercial Register;
    2. A copy of the Bar Association Card of the lawyer who signs the articles of association;
    3. A security check on foreign founders and managers;
    4. The name and address of the company’s legal consultant (who must be a lawyer at least admitted before the Court of Appeal);
    5. In the event of sharing in-kind shares upon incorporation, the report provided by the experts specialized in the professions stated by the law, must be submitted.
    1. A certificate of non-confusion of company name approved by the Commercial Register;
    2. A bank certificate to the effect that at least 10% of the issued capital has been deposited;
    3. Copies of relevant powers of attorney from all founders (minimum three founders). It shall be noted that Original Powers of Attorney must be submitted for matching against the copies;
    4. Copies of valid ID of founders
    5. An official original certificate obtained from the register of Accountants and Auditors to the effect that the company’s auditor is entitled to review and approve the budgets of the company. In case the original was previously furnished to GAFI, an acceptance declaration shall be submitted.
    6. A copy of the Bar Association Card of the lawyer who signs the articles of association;
    7. A security check on foreign founders;
    8. The name and address of the company’s legal consultant (who must be a lawyer at least admitted before the Court of Appeal);
    9. In the event of sharing in-kind shares upon incorporation, the original report of GAFI’s committee, which evaluated such in-kind shares, must be submitted; and
    10. In the event of incorporating a company to operate under the Free Zones System in accordance with Law No.72 of 2017, the aforementioned required documents must be submitted together with the following:
    • In respect of the public free zone, GAFI’s approval prior to incorporation must be obtained.
    • In respect of the private free zone, the approval of the Cabinet must be obtained prior to incorporation.

    1. It is forbidden for the representative office to conduct business in Egypt since the only purpose for establishing the representative office is market study.

    1. Not required recently.

    1. Yes, it is permitted except for the activities restricted for Egyptians

    1. First of all, we should note that the article of association is a model contract prepared by GAFI and it is not permitted to amend its provisions or conditions or replace it by another contract and The founders are only entitled to complete some data related to the founder’s names, shares numbers, capital …………etc. 

    1. Besides the article of association, the partners may sign a separated agreement provided that the provisions of this agreement shall not breach or contradict with the provisions of the article of association, otherwise the breached term shall be void.

    1. The minimum capital limit required for establishing a one-person company is EGP 50000 (fifty thousand Egyptian pounds) to be paid in full at the time of incorporation.

    1. The corporate tax rates in Egypt are 22.5% on the company’s taxable profits as per the provisions of Egyptian law

    1. The authorized signatory can contract and conduct business in the name of the company upon registering the company at the commercial register