Everything you need to know to set up an operating company with a bank account.
• Banks are partially subject to strict customer due diligence regulations (old FATF recommendation 5 / new FATF recommendation 10).
• Banks are largely required to maintain sufficient records of their customer and transaction data for law enforcement (old FATF recommendation 10 / new FATF recommendation 11).
• Banks and / or other covered entities are NOT required to report large transactions in currency or other monetary instruments to designated authorities.
Egypt's business setup can only be 100% foreign-owned for certain industries such as mining, tourism, real estate, shipping, software design, and electronics production. Starting a business with activities such as importing or investing in the Sinai area requires the approval of the relevant Egyptian authorities and is therefore not eligible for 100% foreign ownership.
A limited liability company (LLC) is a common entity used to establish a small business in Egypt. Egypt company setup requirements allow LLCs to engage in any commercial or industrial activity. In setting up the business, our Clients must appoint i) at least two shareholders and ii) at least one manager who must be a citizen of Egypt.
During incorporation, the LLC must also register with the Commercial Registry and is under the supervision of FATF. No minimum capital is required for a limited liability company. However, to ensure a smooth incorporation process, it is recommended to have a minimum paid-up share capital of US $ 1,000.
Setting up a joint-stock company in Egypt requires at least 3 shareholders and a minimum capital of US $ 36.000 for a closed company and US $ 2.900.000 for a listed company. An Egyptian JSC can conduct all business activities subject to Egyptian laws and regulations.
Once the commercial installation in Egypt is completed, the JSC are required to publish their annual financial statements which are audited by an Egyptian auditor.
Foreign companies interested in starting a business in Egypt can also establish a branch in Egypt if the company has a contract with an Egyptian party. The foreign branch is authorized to carry out commercial, financial and industrial activities included in the contract. The branch must have its annual financial statements audited by an Egyptian auditor and is only allowed to have 10% of its employees as foreigners
An Egyptian representative office can be 100% foreign owned, but it is not allowed to make direct sales in Egypt. According to Egyptian company law, such an office can only carry out activities that do not amount to conducting business, for example market research.
Foster Swiss helps our Clients secure offices or we provide an office address. Most emerging markets require our Clients to have a 12-month office lease before company registration is approved.
We help our Clients overcome this challenge in the following ways:
DDepending on the country and city, the rates range from US $ 900 to US $ 2000 and the annual active virtual office services range from US $ 1500 to US $ 4000).
LThe one-time fee is US $ 850. Thereafter, our Client pays the monthly rent directly to the owner).
D Depending on the country and the city, the rates range from US $ 5.000 to US $ 8.000).
Foreign companies in Egypt have a corporate tax rate of 22,5%. Companies only pay taxes on the profits generated by their business activities in Egypt.
Non-residents of Egypt are subject to a 20% withholding tax on the gross amount of interest paid abroad.
Companies that carry out activities such as oil exploration and production companies are subject to a higher tax rate of 40,55% on profits.
Since a representative office does not carry out any commercial activity, it does not make a profit and is therefore not subject to tax.
TAll foreign companies in Egypt must have an Egyptian auditor. Its annual financial statements must be audited and submitted to the Department of Companies.
According to the Egyptian Companies Law, companies cannot have more than 10% of their employees as foreigners, regardless of the type of business entity.
According to the Egyptian Investment Law, foreigners cannot own more than 2 real estate units for residence purposes.
Typical business hours in Egypt are between 8:00 AM and 14:00 PM. Banks are open from 10:00 to 15:00; no business will be conducted on Friday as it is a Muslim holiday.
Setting up a company in Egypt requires at least one Egyptian manager, this manager does not have to be a shareholder.
The Memorandum of Association is a contract between the shareholders and includes i) activities of the company ii) registered office iii) details of the shareholder and director iv) capital stock and v) profit distribution method.
All companies in Egypt are required to submit an annual statement confirming the relevant details of the company for public record, including the names and addresses of all directors, the address of the principal place of business, and details of the shareholders and their holdings. A company is exempt from this obligation if it does not have relevant accounting operations in the year.
The process of canceling a company is dictated by the Government. This process will take a minimum of 6 months. The Healy Consultants fee to manage the company registration cancellation project is US $ 1.450. During this 6-month period, it is mandatory to maintain a resident company secretary and a registered office
SAccording to the Egyptian Investment Law, foreign investors cannot i) import goods for the purpose of trading in Egypt or ii) act as commercial agents.
Business registration in Egypt is risky due to an unstable political situation. The country has been on the brink of civil war since the 2011 revolution and is currently ruled by a military commander. Further unrest should not be ruled out and in that context foreign investors may find it difficult to protect and maintain their business interests in Egypt. The Sinai region remains particularly troublesome.
The corporate tax rate in Egypt is 22,5%. However, companies operating in oil production are subject to a higher tax rate of 40,55%. Egypt imposes a 10% withholding tax on dividends. However, this is reduced to 5% for shareholders who own more than 25% of the shares of the company.
According to Egyptian Companies Law 159/198, all Egyptian companies require an Egyptian national director.
Running a business in Egypt can be complex and frustrating.
Investors may find it difficult to recruit qualified personnel.
Registering a subsidiary in Egypt is a long process. Building permits can take 6 months to be approved and the property registration process can take up to 2,5 months.
It is mandatory for each Egyptian company to appoint an independent company auditor during company incorporation to annually audit the financial statements of the entity.
All shareholder and director information must be officially translated into Arabic, notarized and certified by the Egyptian embassy in your home country. In addition, all corporate documents for Egypt will be in Arabic.
Along with the incorporation of the company, it is necessary for the Egyptian government to carry out a security check on each individual director and shareholder. This process can be extended up to two months.
• The national company registry includes the identity information of the legal owner, all companies require the registration of all legal owners
• All businesses require the registration of all legal owners.
• All names plus countries of residence plus addresses or NITs or dates of birth, passport or personal identifications, or incorporation numbers are always registered.
• The registry of national companies does not include the identity information of the final beneficiary. The companies are available without registered information on the final beneficiary
• It is not always necessary to present the annual accounts to a public authority.
• No country-by-country public reporting at all.
• OECD legislation: The secondary mechanism is subject to the restrictions imposed by the OECD model legislation; or no secondary mechanism (only the ultimate national parent entity has to present the CbCR).
• Unilateral cross-border tax rulings (eg advance tax rulings, advance tax rulings) are available in laws or regulations, or administrative practice
• The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory.
• The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory for some financial market operators.
• The use of an annually updated LEI for the identification of reporting financial institutions (in accordance with the Common Reporting Standard (CRS) is not mandatory.
• Payment of dividends: Unilateral double tax relief through a tax credit system for all three payment scenarios (beneficiaries always receive a unilateral tax credit, regardless of whether it is an independent or related legal person, or a natural person).
• Interest payments: Unilateral relief for double taxation through a tax credit system for both payment scenarios (recipients always receive a unilateral tax credit, regardless of whether it is a legal person or a natural person).
• None or restricted access to BOTH criminal and civil tax processes.
• None or restricted access to BOTH criminal and civil tax judgments / verdicts.
• The jurisdiction does not issue or accept the circulation of large bills/ cash notes of your own currency (value over 200 EUR / GBP / USD).
Bearer shares are always immobilized / registered by a public authority.
Series LLC / Shielded Cell Companies are not available.
Trusts with escape clauses are not prohibited.
Egypt is not on the FATF List of countries that have been identified with strategic AML deficiencies.
The last Mutual Evaluation Report related to the implementation of the rules against money laundering and terrorist financing in Egypt was carried out by the Financial Action Task Force (FATF) in 2009. According to that Evaluation, Egypt was considered to be in compliance with 5 and largely complied with 20 of the 40 + 9 FATF Recommendations. Partially or non-compliant with 3 of the 6 main recommendations.
Overall Non-Compliance Score of FATF Standards in Percentage: 46,5%.
(100% = all indicators rated as not met / low level of effectiveness; 0% = all indicators rated as completed or highly effective).
The automatic exchange of information is extremely secret in Egypt.
Egypt is not a signatory to the Multilateral Competent Authority Agreement (MCAA), which provides the multilateral legal framework to engage in Automatic Exchange of Information (AEOI) in accordance with the OECD Common Information Standard (CRS).
The international and digital banks They're available.
Real bank operations: 90%.
Visa type: EGP, US $, €
Joint accounts: SI.
Remote management account: To consult.
Asset management Depending on the rating of the company.
Rates: It depends on the type of account.
Credit / debit cards in local currency
Crypto-friendly banks: Depends on the correspondent bank.
Portfolio availability: It does not depend on the correspondent bank.
Ability to issue letters of credit: SI
Foster Swiss is an international company registered in Switzerland aimed at providing financial and compliance advice on a variety of topics related to company formation
and commercial banking internationally. We are specialized in the implementation of businesses in different jurisdictions, which means that we offer value-added services helping our clients in their expansion abroad.
Some of these services include:
Advice and consultancy,
visas, offices, nominated director / shareholder / secretary,
accommodation if necessary… to name a few.
Check with your assigned consultant for more information.