EGYPT GUIDE
EMPLOY IN EGYPT WITH EASE
- Access and hire global talent & deploy them anywhere in the world
- Remove restriction from only hiring from local markets
- Enter any international market without the requirement of opening a local entity
Expanding into Egypt allows international companies to set foot into the Cradle of Civilisation. It is home to magnificent historical icons such as the Sphinx and the Pyramids of Giza, with the estuary of the world’s longest navigable river, the Nile, on its Mediterranean coastline. It is geographically and politically strategically placed in North Africa giving easy access to markets in Europe, the Middle East, and the rest of Africa with Asia within reach through the Suez Canal and the Red Sea. Egypt is a popular destination for foreign workers, especially teachers, IT specialists, media personnel and the oil and gas industry.
Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.
Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework. This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.
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Egypt – The Economy
The Economy of Egypt used to be highly centralised, focused on import substitution under president Gamal Abdel Nasser (1954–1970). During the rule of president Abdel Fattah el-Sisi (2014–present), the economy follows Egypt’s 2030 Vision. The policy is aimed at diversifying Egypt’s economy.
The country’s economy is the second-largest in Africa after Nigeria regarding nominal GDP and 33rd in the worldwide ranking as of 2022. Since the 2000s, the pace of structural reforms (including fiscal and monetary policies, taxation, privatisation and new business legislation) helped Egypt move towards a more market-oriented economy and prompted increased foreign investment. The reforms and policies have strengthened macroeconomic annual growth results.
Egypt is a significant economic force in the region with a membership in the Greater Arab Free Trade Area, the African Free Trade Zone and the Common Market for Eastern and Southern Africa. Globally, Egypt has a free trade agreement with the European Union (EU) and is a member of the United Nations, the International Monetary Fund, the World Bank and the World Trade Organisation.
Egypt is a significant oil and gas producer, with large sectors in construction, architecture, engineering, health care, telecommunications, and tourism. Investment also goes into chemicals, pharmaceuticals and renewable energy. Egypt’s population of 100 million and a workforce of around 30 million includes a pool of well-educated, highly-trained and often multi-lingual professionals.
Small and Medium-Sized Companies
Egypt is a lower-middle-income country with an estimated population of 80 million that is growing at an annual rate of just over 2%. Recent reforms in Egypt resulted in spectacular progress at the macro level. The real GDP growth rate reached 7.2% in 2008, while annual GDP growth averaged 4.7% from 2000 to 2008. This was reflected in very healthy economic indicators, such as high growth, a stable exchange rate, commendable accumulation of foreign reserves, a balance of payments surplus and an unprecedented spurt of both domestic and foreign investment.
However, the impressive growth rates witnessed over the past few years did not translate to lower poverty levels, improved income distribution or higher per capita expenditure. This is explained by the fact that this growth was mainly the result of an increase in revenue from the Suez Canal, tourism, oil and worker remittances from the Gulf and was by no means coming from the development of the SME sector or the growth of innovative entrepreneurship.
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Country |
Egypt (the Arab Republic of Egypt) |
|
Capital |
Cairo |
|
No. of Provinces (Governorates) |
27 - Alexandria, Aswan, Assiut, Beheira, Beni Suef, Cairo, Dakahlia, Damietta, Fayoum, Gharbia, Giza, Ismailia, Kafr el-Sheikh, Matrouh, Minya, Menofia, New Valley, North Sinai, Port Said, Qualyubia, Qena, Red Sea, Al-Sharqia, Soha, South Sinai, Suez, Luxor. |
|
Principal Cities |
Cairo, Luxor, Aswan, Alexandria, Sharm El Sheikh, and Hurghada |
|
Language |
Egyptian Arabic (Masri) |
|
Local Currency |
Egyptian Pound (EGP) |
|
Major Religion |
Islam (Sunni) |
|
Date Format |
dd.mm.yyyy |
|
Time Zone |
Eastern European Time (UTC+2) |
|
Country Dial Code |
+20 |
|
Population |
107.7 million (estimated 2022) |
|
Border Countries |
Lybia, Israel, Sudan and the Gaza Strip of Palestine |
|
Tax Year |
Calendar Year (1 January - 31 December) |
|
VAT & |
14% |
|
Minimum Wage |
EGP 2,700/month (EUR 106.2 - USD 110) since July 2022 |
|
Taxpayer Identification Numbers |
TIN |
|
Leading Sectors |
Agriculture, media, petroleum imports, natural gas, manufacturing and tourism. |
|
Main imports |
Wheat, crude petroleum, cars, broadcasting equipment, and refined petroleum. |
|
Main exports |
Petroleum and petroleum products, raw cotton, cotton yarn, and textiles. |
|
Main trading partners |
United States of America, United Arab Emirates, Turkey, Saudi Arabia and Italy. |
|
Government Type |
Unitary semi-presidential republic |
|
Current President |
Abdel Fattah El-Sisi |
The Main Sectors of the Egyptian Economy
- Agricultural – The government aims to increase Egypt’s fertile area to 4.8 million hectares by 2030 through additional land reclamation. Even though only 3 per cent of the land is arable, it is highly productive and can be cropped twice annually.
- Automotive industries – El Nasr Automotive Manufacturing Company is Egypt’s state-owned automobile company. The company manufactures various vehicles under license including Kia and Peugeot. Other automobile manufacturers include Arab American Vehicles, Egy-Tech Engineering, Ghabbour Group, WAMCO, and MCV.
- Steel industries – In 2021, Egypt ranked the 20th largest steel-producing country, producing 10.3 million tons. EZDK is the largest steel company in Egypt and the Middle East. It was ranked 77th on the list of the world’s largest steel companies by the World Steel Association in 2020, with a production of 4.57 million tons.
- Textile industries – Textiles and clothing are one of the country’s largest manufacturing and exporting processes and a vast employment absorber. The Egyptian apparel industry is attractive for two reasons. Firstly, its proximity to European markets, and secondly, the production of garments that is a low-capital and high-labour-intensive industry.
- Banking – The banking sector has gone through many stages since the establishment of the first bank in 1856, followed by the emergence of the private sector and joint venture banks during the Open Door Policy in the 1970s. The banking sector has been undergoing reforms, privatisation, and mergers and acquisitions from 1991 up to today.
- Tourism – The Egyptian tourism industry is one of the most critical sectors in the economy in terms of high employment and incoming foreign currency. It has many constituents of tourism, mainly historical attractions, especially in Cairo, Luxor and Aswan.
- Communications – Egypt has long been the cultural and informational centre of the Arab world, and Cairo is the region’s largest publishing and broadcasting centre. Private sector companies operate in mobile telephony and Internet access.
Tax and Labour Authorities in Egypt
The Egyptian Tax Authority (ETA) – Established in 2006 by a presidential decree merging
the General Tax and Sales Tax Departments. The Egyptian Tax Authority is the competent
authority to collect taxes in Egypt.
Labour Law No. 12 – Employment legislation in Egypt is covered mainly by the Labour Law, officially Labour Law No. 12 (2003). The Law covers virtually all relationships where the employer is an Egyptian individual or Egyptian-incorporated entity and applies to all local and foreign employees. Therefore subsidiaries, branches or other entities established by foreign companies in Egypt come under
the Labour Law and must comply with its provisions.
Any areas falling outside the scope of the Labour Law can come under the Egyptian Civil Code and the Egyptian Social Insurance Law of 1975. In April 2022 Egypt’s Senate began drafting amendments to the 2003 Labour Law which could change various aspects of the employment relationship.
Labour Contracts Law in Egypt
General requirements
- Draw up employment contracts in Arabic with copies for the employer, the employee and the local office of the National Authority for Social Insurance.
- The contract can be either indefinite or fixed-term.
- Register employees with relevant local authority providing contract, ID/passport, educational qualifications, Form (1) for social insurance, birth certificate and work permit, where required.
- Register employees with the relevant Tax Authority office of the Ministry of Finance and obtain their Tax Identification Number.
- Remit employees’ contributions for tax and social insurance by the 15th of the following month and submit employees’ reconciliations for gross income and tax paid by January 1 following the financial year, which runs from January 1 till December 31.
- Keeping employees’ employment records and payroll accounts for a minimum of five years.
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