Starting a business in Egypt can be a rewarding venture, given the country’s strategic location, growing economy, and government incentives for investors. However, navigating legal requirements, company registration, and tax regulations can be complex.

This guide will walk you through the key steps to establish your business in Egypt, from choosing the right legal structure to understanding tax obligations.

Step 1: Choose the Right Business Structure

The first step in setting up a business in Egypt is selecting the appropriate legal entity. The most common types include:

1. Sole Proprietorship (Individual Establishment)

• Ownership: Single owner with full liability.
• Best for: Freelancers, small traders, and service providers.
• Taxation:
  • Income is taxed under personal income tax (PIT) at progressive rates (0% – 27.5%).
  • Subject to VAT (14%) if annual turnover exceeds EGP 500,000.

2. One-Person Company (OPC)

• Ownership: Single shareholder with limited liability.
• Minimum Capital: EGP 1,000; however, it is advised to start with EGP 50,000 as required for most activities licenses such as exportation.
• Best for: Entrepreneurs who want liability protection without a business partner, or mother companies that wish to open a subsidiary in Egypt.
• Taxation:
  • Treated as a corporate entity, subject to Corporate Income Tax (CIT) at 22.5%.
  • VAT (14%) applies if revenue exceeds the mandatory registration threshold.

3. Limited Liability Company (LLC)

• Ownership: 1-50 shareholders (individuals or entities).
• Minimum Capital: No minimum capital; however, it is advised to start with EGP 50,000 as required for most activities licenses such as exportation.
• Best for: SMEs and startups with multiple investors.
• Taxation:
  • Corporate Income Tax (22.5%).
  • VAT (14%) on taxable goods/services.
  • 10% withholding tax (WHT) on dividends.

4. Joint Stock Company (JSC)

• Ownership: Multiple shareholders (private or public).
• Minimum Capital: EGP 250,000
• Best for: Large businesses and companies planning to go public.
• Taxation:
  • Corporate Tax (22.5%).
  • Capital gains tax (10%) on stock market profits.
  • Dividends subject to 10% WHT.

5. Branch or Representative Office of a Foreign Company

• Ownership: Extension of a foreign parent company.
• Best for: International companies expanding into Egypt.
• Trading Activities: The branch is allowed to execute projects in Egypt while Representative Offices are permitted to study the market without any commercial activities.
• Taxation:
  • Profits taxed at 22.5% (CIT).
  • VAT (14%) if engaged in taxable activities.
  • Withholding taxes may apply on remittances abroad.

Step 2: Register Your Business

1. Name Reservation – Submit your company name to the Commercial Registry to get it confirmed and reserved during the establishment phase.
2. Draft Articles of Association (AoA) – Notarized document outlining company structure.
3. Obtain Commercial Registration (CR) – Register with GAFI and Commercial Registry.
4. Tax Registration – Get a tax card from the Egyptian Tax Authority (ETA).
5. Social Insurance Registration – Mandatory for businesses with employees.
6. Industry-Specific Licenses – Required for sectors like healthcare, tourism, or import/export.

Step 3: Understand Tax and Social Security Obligations

1. Corporate Income Tax (CIT)

• Standard rate: 22.5%.
• Free zone companies may enjoy tax exemptions.

2. Value Added Tax (VAT)

• Standard rate: 14% (applies to most goods/services).
• Exemptions: Education, healthcare, and certain exports.

3. Withholding Tax (WHT)

• From 1% to 5% on payments depending on the purchased service or product.
• 20% on payments to foreign entities.

4. Social Security Contributions

• Maximum Salary to be insured: EGP 14,500 (For 2025)
• Employer contribution: 18.75% of Insured salary.
• Employee contribution: 11% of Insured salary.

5. Stamp Duty

Varies depending on the service or product.

Step 4: Open a Corporate Bank Account

Required documents:

• Commercial Registration
• Tax Card
• Articles of Association
• Shareholders’ IDs and UBOs’ documentation

Step 5: Maintain Compliance

• Submit tax & VAT returns on time.
• Renew licenses and permits as needed.

Why Hire HLUL LEGAL?

Navigating Egypt’s business laws can be complex. A legal expert from HLUL LEGAL can help with:
✔ Choosing the best legal structure.
✔ Drafting and notarizing documents.
✔ Tax registration and compliance.
✔ Obtaining licenses efficiently.

Ready to Launch Your Business in Egypt?