 Encouraging the world’s companies, Whether you are thinking about setting up in Egypt or have already decided to invest and want to start a company now! Egypt Business Lawyers are the place to go for help and advice: ITIDA, the Egyptian IT Industry Development Agency. A successful partnership between the Egyptian Ministry of Communications and Information Technology (MCIT) and the private sector, ITIDA is responsible for developing IT in Egypt. A big part of this responsibility is to attract and facilitate direct foreign investments. From first thoughts through to setting up and developing your business, from help with incorporation to advice on incentives, work permits, customs clearance, and technical approvals – ITIDA is on hand to provide guidance and support. It’s about helping you make the most of the opportunities every step of the way. In good company Egypt receives more foreign direct investment than any other country in North Africa. IBM, Oracle, Microsoft, Teleperformance, Vodafone, and Wipro are just some of the leading multinationals that have made substantial investments in Egypt. In Egypt you can set up a company in 72 hours with as little as US$200 in capital. Founding principle of the General Authority for Investment and Free Zones (GAFI). Options for legal structure of companies Type Eligibility criterion Sole proprietorship – Engages in a commercial activity for his or her own account – Egyptian nationality unless business under the Investment Law, or an exporting activity Simple partnership – No minimum capital required; profit of the partnership itself as a legal entity is not taxable – Firm formed between two or more partners – Foreigners can participate in partnerships but their share capital cannot exceed 49% Limited partnership – Minimum share capital – US$45,000 by shares – At least one of the founders has unlimited liability; rest same as a joint stock company – Prohibited from conducting the business if insurance, banking or investing funds – Each manager shares, each not less than US$1,000, should be reserved, and cannot be disposed of as long as the unlimited founder is a manager of the company Limited liability – Minimum share capital – US$350 company – Managed by one or more managers, of which at least one must be an Egyptian – 2 to 50 shareholders; a supervisory council to be formed if more than 10 shareholders – Profits distributed to employees when the capital reaches US$45,000 Joint stock – Minimum share capital – US$45,000 for private and US$90,000 for public companies company – Minimum of three founding shareholders; managed by a board of directors – Minimum legal reserve of at least 5% of the paid-in capital – Legally allocate to the employees an amount (“employee bonus”) equal to a minimum
of 10% of the distributed profits and a maximum of the aggregate annual salaries Business in Egypt 9 Source: GAFI – *Conversion rate US$1 = 5.5 EGP (as on March 17, 2008) Pre-registration During this stage, you need to do five things: • First, decide the legal structure of the company – see options on page 8 • Second, ensure that the company to be set up complies with the ICT company laws • Third, notify GAFI that you intend to set up a business in Egypt and obtain a comprehensive incorporation package from them • Fourth, obtain a certificate for approval of the company’s name from the Commercial Registry • And fifth, make the guarantee deposit in a bank and issue the power of attorney. This stage should only take a few days. Registration During this stage, you need to: • Verify documents • Pay fees (see below) • Gain approval from the state notary • Complete commercial registry • Become a Chamber of Commerce member • Assume legal responsibility and juridical personality on the date of registration • Obtain tax cards and social security for employees after registration. This stage takes seven to nine working days. Registration fees Type of fee Authority Amount Authentication – Lawyer’s syndicate – 0.5% of the issued capital up to US$900 Notarization – Public Notary – 0.0025% of the issued capital up to US$90 Commercial registry – Commercial registration – US$9-18 (for any form) Publishing in the – The Legal Department – Sole proprietorships: US$35 Investment Gazette of Authority – Partnerships (all three types): US$150 – Joint stock company: US$720 Tax license – The Investment Tax – Sole proprietorships: Nil Department – Simple partnership: US$16 – Limited partnership & limited liability: US$160 – Joint stock company: US$320 Issuing shares – The General Authority – 0.05% with a maximum of US$1,800 (joint stock and for Capital Market partnerships limited by share) Evaluating a corporeal – GAFI – 0.2% of the corporeal share between US$900 and US$1,800 share for inland investment |
