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“Parent” company is a foreign company |
Representative Office |
Branch office |
Local foreign own subsidiary |
Trading company |
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Permitted Activity(ies) |
Conducting market studies and research without exercising of any commercial activity including that of commercial agents. |
The use of a branch is limited to the purpose of implementing a specific contract the Parent company has in Egypt; and the permitted activities shall be the same of the mother company permitted activity. |
Conduct business according to the approved purpose of the company, and services |
Exporting, importing, trading in Egypt and outside according to the approved purpose of the company, and services |
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Law |
Article 173 of the Companies Law No. 159 of 1981* |
Articles 165 – 172 the Companies Law No. 159 of 1981* |
Articles 116 – 129 the Companies Law no. 159 of 1981 |
Articles 116 – 129 the Companies Law no. 159 of 1981 and the Importrs`Registry Law no. 7 of 2017 |
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Legal form |
Representative Office will be registered at the Companies Department and will not be subject to any taxes as it will not conduct any commercial activities. |
Branch office |
LLC A joint stock company is also possible, but it is not considered in this study. |
LLC A joint stock company is also possible, but it is not considered in this study. |
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Paid in capital |
Min. 1,200 EGP (deposit on a bank account only) |
Min. 5,000 EGP (deposit only) |
minimum nominal capital required is EGP 200 (two hundred Egyptian Pounds) |
Minimum nominal EGP 2,000,000 (two million Egyptian Pounds) |
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Liability |
Foreign Parent company |
Foreign Parent company |
Limited to paid in capital |
Limited to paid in capital |
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Location |
One office location only |
One office location only |
May have multiple branches in Egypt and abroad |
May have multiple branches in Egypt and abroad |
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Import license from Importers Registrar |
No |
No. Note: Trading business in Egypt may be conducted by the branch with products already imported (by third party) |
No. Note: Trading business may be conducted by LLC with products already imported (by third party) |
Yes, however if the company has a min. annual turnover of EGP 5 mio. in the year before applying for an import license |
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Foreign ownership |
Yes |
Yes |
Yes, up to 100% |
Yes, up to 49% |
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Partners required |
No |
No |
At least 2, max. 50 |
At least 2, max 50 |
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Foreign Management |
Yes |
Yes |
Yes, together with at least one Egyptian manager. |
Yes, together with at least one Egyptian manager. |
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Corporate tax |
No invoicing (income) allowed |
Entitled to deduct a head office charge of an amount up to 10% of its taxable income, which is not subject to Egyptian withholding tax. Other than this, the branch is subject to a flat rate of 22.5 %. |
Flat rate of 22.5 % on all profits |
Flat rate of 22.5 % on all profits |
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Profit sharing with employees |
NO. |
Yes, not less than 10% of distributable profits and not more than the total annual salaries of the employees |
No, however, LLC with capital more than EGP 250,000 is subject to this distribution of profit share. |
No, however, LLC with capital more than EGP 250,000 is subject to this distribution of profit share. |
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Profit repatriation |
All expenses should be met by the parent company, no profits are allowed. |
No restrictions |
No restrictions |
No restrictions |
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Invoicing |
No (only Parent from abroad) |
Yes |
Yes |
Yes |
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Auditor |
No |
Yes |
Yes |
Yes |
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Staffing restrictions |
Manager may be foreigner. For each foreign employee, 10 Egyptians must be employed. |
Manager may be foreigner. For each foreign employee, 10 Egyptians must be employed. |
At least 1 Egyptian manager. For each foreign employee, 10 Egyptians must be employed. |
Manager may be foreigner. For each foreign employee, 10 Egyptians must be employed. |
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Security Clearance |
Yes, after registration. |
Yes, before registration. |
Yes, after registration. |
Yes, after registration. |
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Establishment formalities |
6 – 8 weeks |
6 – 12 weeks. The long registration Foreign Company is due to an intense security clearance in Egypt which is beyond our control. It depends on the security approval especially when the manager is an expatriate. |
2 – 4 weeks |
2 – 4 weeks |
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Charge V.A.T. |
No |
Yes, 14% |
Yes, 14% |
Yes, 14% |
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Geographic scope |
Egypt |
Egypt |
Egypt, including free zones. May establish branches or subsidiaries abroad |
Egypt and it May establish branches and subsidiaries abroad |
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Register process |
To register a representative office with the Companies Department, FOREIGN COMPANY should attach to its application the following documents: 1. FOREIGN COMPANY constitutive documents (bylaws) 2. A resolution of FOREIGN COMPANY’s board of directors approving the opening of the new office and appointing its manage 3. A Power of Attorney issued by the representative of the FOREIGN COMPANY to our office to handle the establishment procedures of the new representative office 4. A copy of the passport of the appointed manager 5. A lease agreement authenticated at the public notary. The documents mentioned in points 1. to 3. should be legalized at the nearest Egyptian Consulate. The Arabic translation for the documents mentioned in points 1. and 2. shall be done by our office. After dispatching the above documents to us, we will open the bank account by virtue of the POA. Then, we will send FOREIGN COMPANY the account particulars in order to enable FOREIGN COMPANY to transfer the amount of EGP 1,200 to this bank account. |
To register a branch or an LLC, FOREIGN COMPANY must attach to its application the following documents: 1. A power of attorney appointing attorneys to handle the process of establishing the new branch/company signed by the representatives of each founders, notarized at the public notary, and legalized at the nearest Egyptian Consulate. 2. As corporate entities will be founders, there will be a need of an approval of the board of Directors of each corporate founder to establish the new company. The minutes of the Board of Directors shall be drafted by our office prior the legalization. 3. Copies of each founder representatives’ passport. 4. Bylaws of the founders’ companies and their commercial registry legalized at the nearest Egyptian Consulate. 5. Copy of the contact that shall be executed in Egypt.
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Same as branch, except the copy of the contract that shall be executed in Egypt |
Same as branch, except the copy of the contract that shall be executed in Egypt |
