It is no secret that Egypt is one of the most compelling locations to start a business or expand your existing business internationally. Due to the established and continuously growing economy of the country, It has become the go-to choice for hundreds of investors who decided to test the Middle Eastern market for business expansion.
The limitless opportunities, rapid development, strategic location, and growing population are only a few factors in the decision-making process of investors and young entrepreneurs who aim to establish their businesses in Egypt, in addition to the governmental facilitation of projects and investments whether it is foreign or local.
According to research, Egypt is one of the largest recipients of Foreign Direct Investment (FDI) in the Middle East and North Africa (MENA) region. It was ranked the third-largest FDI recipient in the Arab region in 2021. Over the years, Egypt has pursued economic reforms and investment-friendly policies to attract foreign capital and stimulate economic growth.
Throughout this enlightening article we will learn more about:
- Benefits of Starting a Company in Egypt
- The Required Steps to Establish Your Company
- How to Register Your Company in Egypt
- What is Ovarc and How Can It be of Help
You are now a few paragraphs away from learning the exact guidelines for starting a company in Egypt. If this has been your short-term/long-term dream, let’s turn it from an idea to an actual action plan.
Benefits of Starting a Company in Egypt
Egypt offers a compelling blend of strategic location, growing market opportunities, investment incentives, and infrastructure development, making it an attractive destination for starting a company or expanding a business internationally. With its diverse economy, skilled workforce, and supportive business environment, Egypt holds immense potential for businesses looking to establish a strong foothold in the region and beyond.
We gathered a few of the most important reasons why you should consider Egypt if you are planning to start a company or expand your existing one into the Middle East. If you’re an Egyptian who was born and raised here, the following reasons might be familiar, however, if you are an investor/a foreigner, let us give you a small eye opener aiming to convince you to make the move. Let’s dissect the benefits:
- High population level
As you may know, the country has a large and diverse population of over 100 million, allowing a vast growing potential market for businesses. It is highly recommended that you perform thorough market research and have your business proposition present a needed market product or service to guarantee business success and to able to utilize that high population and ultimately reap what you sow.
- Strategic location
Egypt has always been and will always be appealing to the whole world due to its strategic location which makes it an attractive hub for trade and commerce between Europe, Africa, and the Middle East. This positioning provides access to diverse markets across continents making it easy to conduct business with other countries in the region.
- Utilizing the Suez Canal:
The Suez Canal, a vital waterway connecting the Mediterranean Sea to the Red Sea, plays a crucial role in global trade and shipping. Businesses located in Egypt benefit from proximity to this strategic route, facilitating international trade and logistics operations.
- Infrastructure Development:
The country has made significant investments in infrastructure development, including transportation networks, logistics hubs, and industrial zones. These improvements enhance connectivity and facilitate the movement of goods and services, supporting business operations and supply chain management.
- Gateway to Africa and the Middle East
Egypt serves as a gateway to both the African and Middle Eastern markets. With numerous trade agreements and economic partnerships in place, businesses operating in Egypt can easily access neighboring markets, benefiting from preferential trade agreements and reduced tariffs.
- Governmental Facilitation
The Egyptian government has implemented various policies to encourage foreign investment and entrepreneurship, including tax incentives, streamlined bureaucratic procedures, and the establishment of special economic zones, in addition to the availability of HR solution companies like Ovarc which can handle everything from the incorporation of your company to the benefits provided to your employees.
- Skilled Workforce
Each year, around 500,000 students graduate from universities in different fields in Egypt, who are young and tech-savvy, creating an opportunity for startups in various industries, particularly those involving technology and e-commerce. This pool of talent will provide you with access to skilled labor at competitive costs, driving innovation and productivity.
- Growing startup ecosystem
Egypt has a vibrant startup ecosystem with several incubators, accelerators, and venture capital firms that provide funding, mentorship, and networking opportunities for entrepreneurs. This ecosystem is supported by a growing network of experienced entrepreneurs, industry experts, and investors who are committed to helping startups succeed.
- Cultural background
Egypt has a rich and diverse cultural heritage that provides a unique backdrop for businesses in various industries, including tourism, arts, and crafts, and cultural events. In addition to the hospitality mentality that lives within every single citizen, so whether you are interested in a touristic approach or an investment one, you will be welcomed with open arms.
- Stable Political Environment:
Despite occasional challenges, Egypt maintains a relatively stable political environment compared to some other countries in the region. This stability provides businesses with a predictable operating environment and reduces the risk associated with political instability.
All of these factors make Egypt an excellent place to start and grow a successful business.
5 Required Steps to Establish Your Company in Egypt
Starting a company in Egypt involves several steps, but the process has been streamlined in recent years to make it easier for entrepreneurs to set up their businesses, whether they are nationals or foreigners.
In regards to expats who are interested in investing in the country, following the same procedures as local investors will be needed. The process begins with obtaining a valid residency permit or work visa from the Egyptian government. Here are the general steps involved in starting a company in Egypt:
- Choose your business idea and conduct market research
To determine your business idea’s feasibility in Egypt, you should conduct thorough market research aiming to identify market gaps and regional needs. You could also consult with a business lawyer to help you navigate the legal and financial aspects of starting a business in the country.
- Register your business with the General Authority for Investment and Free Zones
(GAFI) is the government agency responsible for business registration in Egypt. You can do this online through the GAFI portal, which will guide you through the process of registering your business and obtaining the necessary permits and licenses.
- Register your business with the tax authorities
To obtain a tax identification number and be eligible for tax collection, this is a mandatory step as it is a requirement for all businesses operating in Egypt.
- Open a bank account
It is crucial to open a bank account for your business to be able to obtain the necessary permits and licenses from the Central Bank of Egypt. It is also recommended to separate your business and personal bank accounts to maintain accurate records of your business transactions and expenses and to avoid any confusion between your assets
- Obtain necessary permits and licenses from authorities
Depending on the nature of your business, you will need certain permits and licenses. For example, if you plan to open a restaurant, you will need to obtain a health license from the local health department, or if you are building a construction company, you will need a building permit and a contractor’s license.
- Recruit employees
For your business to be officially up and running, you might need to recruit a few employees to help you establish your company for your business considering being complicit with labor laws and regulations in Egypt. (You can check out our article on how to avoid a bad hire)
- Market your business and start operations
Once you have established your business in Egypt, it is crucial to market it effectively to reach your target audience. Effective marketing will help you reach your target audience, generate leads, and ultimately increase sales and revenue
These are the general steps involved in starting a company in Egypt, but the specific requirements may vary depending on the nature of your business and its location. It’s always a good idea to consult with a business lawyer, an accountant, and an HR expert or an HR solution company to ensure that you comply with all legal and financial requirements.
How to Register Your Company
After you decide on your company’s structure, there are a few steps that are mandatory to complete registering your company. The most common company types under Egyptian law include:
- One-person company (OPC)
- Limited Liability Company (LLC)
- A company limited by shares
- Joint-stock Company
- Partnership Company
- Limited Partnership Company
- Sole proprietorship
Company registration steps are:
- Company Name Approval:
Your company will need a unique name that is distinct and not used by another entity before you can start doing business. Receiving name permission from the commercial register is step number 1
- Documents Submission:
Submitting necessary paperwork to GAFI’s Companies Establishment Department for review.
- Incorporation Certificate:
Upon approval, GAFI issues a certificate indicating your company’s establishment.
- Bank Account Opening:
Opening a business account for financial transactions.
- Tax Registration:
Registering your company with GAFI’s Tax Office.
- License Acquisition:
Obtaining any required licenses or permits for your business activities.
Once these steps are completed, you can proceed to register your company as an employer and start hiring staff.
You can also read:
– 5 Tips to Avoid Common Legal Mistakes
– 5 Tips to Avoid Common Legal Mistakes
What is Ovarc and How Can it be of Help?
Ovarc provides a digitalized all-in-one platform for international expansion, managing incorporation, legalities, people operations, assets, and international payments, that simplifies business processes and frees companies to focus on business growth.
The services we provide include:
You can reach out to us by filling out the form at the following contact us page link to have a representative contact you and discuss how we can be of help
