Egypt: Operating a Business

Limited Liability Company or LLC

Number of partners: From 2 to 50 shareholders.
Capital (max/min): Minimum EGP 1 000 divided in equal shares, fully paid up front when formed.
Shareholders and liability: Their responsibility is limited to their contribution.

Joint Stock Company (public limited company)

Number of partners: Minimum 3 shareholders.
Capital (max/min): EGP 250,000  of which 10% must be fully paid when formed. EGP 20 million when offering shares for public subscription, fully paid up.
Shareholders and liability: Their responsibility is limited to the contribution amount.

Limited Partnership

Number of partners: One general partner, unlimited number of limited partners.
Capital (max/min): Minimum EGP 250,000.
Shareholders and liability: General partners' liability is unlimited. Limited parters' liability is limited to their contribution.

Sole Propietorship

Number of partners: One natural person.
Capital (max/min): No minimum capital required.
Shareholders and liability: Responsibility limited to the capital allocated therefor.

General Professional Associations

Egyptian businessmen's Association

Business Setup Procedures

For Further Information

Consult Doing Business Website, to know about procedures to start a business in Egypt.
General Authority for Investment and Free Zones (GAFI), an investment guide for Egypt
The United States Commercial Services Guide, information on the business, political and economic context

The Competent Organisation

GAFI has a role in guiding and promoting foreign and Egyptian investments. It helps the investors in their administrative steps. GAFI has created a single point of liaison known as a One-Stop Shop counter. The formalities for setting up a company are done at this counter. The One-stop Shop counter thus provides useful documents on law no. 8 of 1997 for encouraging investments, guarantees, exemptions, company creation procedures, the different zones with special statutes to the investors. For speeding up the setting up process, GAFI is authorised to grant temporary licences for starting the project.

The ITIDA (Information Technology Industry Development Agency) was established by law no. 15 of 2004. It is attached to the Ministry of Information Technology and Communication. ITIDA guides investors for executing their projects with a single counter which helps them with various relevant administrative authorities, particularly it is the e-signature regulatory authority. This allows both public and private interests access to esignature authorisation.
Since 2006 the IDA (Industrial Development Authority), which comes under the Ministry of Commerce and Industry, has been responsible for developing and facilitating industrial establishments. In connection with the governing bodies the IDA recovers, prepares and sells land for developing industrial zones by foreign and Egyptian promoters. The State develops the road network and other networks for these lands. The IDA also offers a one-stop shop for industrial investors to give them information on the available lands and help them get the permits for industrial operations.

Recovery Procedures

Principle

The procedure is to put the company under supervision, which does not necessarily lead to bankrupcy.

Bankruptcy Laws

The main problem of the law on bankrupcy is the length of the administrative procedure.  The average length of time it takes to finish the procedure is 4 months.  The cost is considerable, approximately 20% of the goods.  The recovery rate is 16.8 cents on the dollar.

Opening Hours

 

• Legal Weekly Duration

The length work is 8 hours per day, 6 days per week with a maximum of 48 hours per week, and a rest obligation of a minimum of 24 consecutive hours in a week. There is a minimum 1 hour of rest for a day of work. If an employee works for more than 8 hours per day, he has a right to a 35% bonus for day work and 70% bonus for night work.

• Maximum Duration

The maximum length of work is 48 hours per week.

Working Rest Day

24 consecutive hours per week of compulsory rest.  Week-ends are Fridays and Saturdays, if the 24 hours are not given during those days, they have to be compensated by another day.

Paid Annual Vacation

21 days minimum paid holidays, of which 6 are consecutive.  30 days if the employee has been in employement for more than 10 years, and/or if he is aged more than 50 years.  Additionally, there are 16 days of public holidays per year.

Retirement Age

60 years.

Child Labour and Minimum Age For Employment

Officially, 3 to 15% of children work.  According to observers, in reality, children are an important part of the active population, most of the time in the informal sector, therefore difficult to quantify (selling in the streets, seasonal agricultural work).  According to the Human Rights Watch, the conditions are difficult, between 9 and 11 hours of daily work in precarious sectors.

Informal Labour Market

Egypt's labor force has grown steadily in recent years, with upwards of 700,000 new entrants into the labor market each year. Official statistics put the labor force at 26.7 million. Unemployment officially stood at 11.9% at the end of 2011, though experts estimate the real level of unemployment, particularly among youth, to be much higher. Nearly 6.5 million people work in the informal sector, that is to say 40% of the active population. These people's work conditions (timetable and health) are generally very bad.

Pay

Minimum Wage

The minimum wage in Egypt as of 2020 is EGP 2,000 per month (Ministry of Labour).

Average Wage

The average Egyptian salary is EGP 2,167 per month in 2016 according to the ILO (lastest available data).

Other Forms of Pay

• Pay For Overtime

30% of the normal salary.

• Pay For Rest Days Worked

If it is a normal annual vacation day (not a week-end), the salary is doubled.

• Pay For Overtime at Night

70% of the normal salary.

Social Security Costs

The Areas Covered

Unemployment, sickness and maternity, old age and work injury

Contributions

Contributions Paid By the Employer: The social insurance contribution of the employer is 18.75% of the total social insurance salary (although the country is developing a new system which will be implemented within a 15-year period and over six phases).
Contributions Paid By the Employee: On monthly base salary: 14%, capped at EGP 1364.
On variable salary: 11%, capped at EGP 2 795 per month.

NB: current upper limit for the first quarter of 2018, likely to be elevate in July and December each year.

Competent Organization

Ministry of Social Solidarity
MOSS Official Site (Arabic)

Recruitment

Recruitment Agencies

Recruitment agencies or head-hunters are private companies commissioned by employers.  They often have their own rules.  They require registration in their database first, before being able to submit candidacy.  They often have their own websites for classifieds and job announcements and can insist upon their own job interviews.

Recruitment Websites

Jobs in Egypt
Arabo Egypt: advertisement site
American Chamber of Commerce in Egypt

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

There are 23 trade unions (labor unions) which are represented by the ETUF (Egyptian Trade Union Federation).

Unionisation Rate

Union membership is around 20%.

Unions

Egyptian Trade Union Federation

Regulation Bodies

Ministry of Labor (in Arabic)