Egypt

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DOING BUSINESS

 


Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The Egyptian government strongly encourages foreign investments. For instance, in order to obtain tax deductions, companies have to carry out plans aimed at developing areas such as Sinai, or rural zones. The rate of these tax exemptions depends on the activity of the company and the opportunities of hiring contained in the plans. Egypt appears, from an economical point of view, as one of the most powerful countries in the Arabic world, even though the country meets important economic problems. Egypt has established free trade zones allowing to boost the industrial development of the country. Consequently, the government grants several advantages to foreign investors. The following free trade zones can be listed: Nasr City (near the airport of Cairo), Alexandria, Port Sad (Entrance of the Canal of Suez), Suez (first port in the Red Sea), Ismailia (between Port Sad and Cairo) and Damiette.
The General Authority for Investment (GAFI) provides support and assistance for international investors.

 

Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Sole Proprietorship 1 person. No minimum capital. Liability is unlimited. They vary depending on the corporate form. No
Private Limited Company (WLL) Minimum 2 partners. Maximum 50 partners. Minimum LE 50,000, totally released at the creation Liability is limited to the amount contributed. They vary depending on the corporate form. Yes
Joint Stock Company is a Public Limited company. Minimum 2 partners. LE 250,000: half of it released when created. LE 500,000 in case of takeover bid (1/4 released) Liability is limited to the amount of contributions. They vary depending on the corporate form. Yes
General Partnership Minimum 2 partners. No minimum capital. Partners' liability is several and indefinite. They vary depending on the corporate form. No
Limited Partnership Minimum 3 partners.
Two types of partners: active partners (General Partner) and sleeping partner (Limited Partner).
Minimum LE 250,000 . Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount of investments. They vary depending on the corporate. No

Registration and licensing procedures
Status should be made in a deed drawn up by a solicitor notary. Registration and deposit of status should be made with the Trade Register. The competent Register is the one where the company's headquarters are located. A notification must be published in a journal of legal announcements and a copy of the articles of incorporation must be transmitted to the General Authority for Investment (GAFI) in Cairo. Agencies and branches of foreign companies should be registered with a specific register.

Foreign exchange control
Since the Company Act 381 of 1994, there is no exchange control in Egypt anymore. Free conversion of currencies is carried out, as well as the right to transfer profits and capital, with no limitation of amount nor any permanence time limit.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is authorized in Egypt. Moreover, holding more than 49% of a local bank capital is authorised since the law 97/1996.  


Foreign Direct Investment inflows in Egypt

FDI inflows 2003 2004 2005 World rank (*)
2005
FDI inflows (USD million) 237 2157 5 376 66/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

 

Last modified in 2006 - ongoing update
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