Once upon a time, – no, this is not some bedtime fairy tale – it used to take many frustration-filled months for any UK business to set up or expand into Egypt. Not any more. And depending on the business sector involved, it can now take as little as 72 hours!
Egypt offers a myriad of opportunities for business people and entrepreneurs alike from across the world. A look at the country’s 6,000-year history tells you this has always been the case, mainly because of the strategic location it occupies, acting as a bridge between east and west, and north and south.
With the number of people estimated at around 82.5 million, Egypt is third in terms of size of population within the African continent, behind Nigeria and Ethiopia. It’s the most populous Arab country.
Most of Egypt’s population is centred in three areas. These are Cairo, the capital and the largest city in the Arab world; Alexandria and along the banks of the River Nile; the Nile Delta, situated to the north of the capital; and along the Suez Canal.
Starting a business in Egypt is an extremely attractive proposition now because of a new legal framework, which allows 100% foreign ownership of companies, as well as 100% foreign representation on the board of directors. Protection is also in place to prevent expropriation, the taking of private property into public ownership by the government. There is also protection against double taxation, through international treaties, and compulsory pricing.
Corporation tax at a rate of 20% is paid on net profits up to EGP 10 million, and 25% on profits greater than that. Personal income, an aggregate of employment income, business income, non-commercial income and income from real estate assets, is similarly taxed. Earnings up to EGP 10 million are taxed at 20%, with a 25% rate for earnings greater than EGP 10 million.
Egypt has a thriving and thoroughly modern financial services sector, not to mention a state-of-the-art communications infrastructure, too, both of which are extremely sensitive to the aspirations and needs of the business community. With more foreign direct investment than any other country in North Africa, some of the best-known multinational companies – Microsoft, IBM, Vodafone, Oracle, to name but a few – have set up shop in Egypt, attracted by a business-friendly environment offering both incentives and protection.
Since the 1970s, Egypt has been creating Free Zones in parts of the country – usually near seaports and airports – in a bid to attract foreign investment, increase exports and create jobs. Incentives and guarantees to set up in the zones include a lifetime exemption from all taxes and customs, and exemption from all import/export regulations.
Corruption, the perception of it at the very least, has haunted the Middle East for decades and has been a major disincentive in attracting inward investment. But in Egypt, times have certainly changed for the better. Tougher legislation and long-running government campaigns have dramatically reigned in corruption levels. New anti-corruption agencies have also been set up, alongside monitoring and prosecution authorities, too, all of which has helped improve Egypt’s image across the world.
Article written by Jonathan Swain
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