Egypt

General Information Entry and Exit Requirements
Banking Intellectual Property
Business Etiquette Tips Legal and Registration of a Business Entity
Embassy Locations and Registration Safety and Crime
Employment-Legal Requirements Taxes

General Information

EgyptWhether you agree or disagree on the Nile being the longest river in the world, there can be no denying the mystique and attraction that surround the ancient pyramids, varied archaeological wonders, or the rich history of Egypt. Egypt is the most populous country in the Arab world and the second-most populous on the African continent. Nearly all of the country's 79 million people live in Cairo, Alexandria, along the banks of the Nile, and along the Suez Canal. These regions are among the world's most densely populated, containing an average of over 3,820 persons per square mile (1,540 per square kilometer), as compared to 181 persons per square mile for the country as a whole.

Egypt is a republic with a strong, developing economy and an ever-expanding tourist sector. It has extensive facilities for tourists, and it is a significant importer of American agricultural commodities, machinery, and equipment. The United States is also the second-largest investor in Egypt. Roughly two-thirds of total U.S. investment is in the oil and gas sector, but it also includes investment in areas such as consumer goods, pharmaceuticals, automobile production, and financial services.

With a population of 79 million, Egypt is by far the largest Arab country. It sits in the heart of the Middle East with a fast-growing economy that has become much more diversified than in the past. It is a major oil and gas producer, with natural gas production increasing rapidly.

There may be political unrest and/or targeted crime against visitors to the country.  Travelers should check with the U.S. State Department Web site for current travel safety information.

Major Cities Capital: Cairo
Major cities: Alexandria, Aswan, Asyut, Port Said, Suez, Ismailia
Official Currency Egyptian pound (EGP)
Time Zone UTC+2 (7 hours ahead of Washington, D.C. during Standard Time)
Language Arabic (official), with English and French widely understood by educated classes

 

Legal System and Government

Type of Legal System

The Egyptian legal system is based on Islamic and civil law (particularly Napoleonic codes) with judicial review by the Supreme Court and Council of State (oversees validity of administrative decisions). It accepts compulsory International Court of Justice (ICJ) jurisdiction with reservations. 

Form of Government

Republic

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Banking

Available Banking Services

ATMs
Online banking
Banking in English
Overdraft protection 

Bank Holidays

Coptic Christmas
El am Hejir New Year
Prophet's Anniversary-Eid-Milad Nnabi 
Sinai's Liberation Day
Orthodox Easter
Coptic Easter Monday (Sham al Nessim) 
Labor Day/May Day
Bank Holiday
Revolution (or National) Day 
End of Ramadan
Armed Forces Day 
Eid-ul-Adha - Feast of the Sacrifice
El am Hejir New Year 

U.S.  and Other Major Banks in Country

This list of banks is provided only as a general resource and starting point. 

(Note: Addresses and contact information subject to change.)

HSBC Bank Egypt SAE
Zamalek, Cairo
6 HSBC Bank Egypt SAE
Cairo, Egypt
Phone: +20-2-735-9286
Fax: +20-2-736-1457
Web: http://www.egypt.hsbc.com

Barclays Egypt 
(Banque du Caire Barclays S.A.E)
11516 Garden City
Cairo, Egypt
Phone: +20-2-366-2600
Fax: +20-2-366-2814
Web:  http://www.barclays.com

National Bank of Egypt 
(66 locations worldwide including within the United States)
Down Town, Cairo
Cairo, Egypt
Phone: +20-2-574-9101

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Business Etiquette Tips

Hierarchy and rank are very important. Note that many companies close on Thursdays and Fridays, making the weekend Thursday and Friday in observation of religious obligations. It is advisable to check the local newspapers to determine the exact times of prayer for a region throughout the day as meetings may not be scheduled during these times.

Business Attire

Typical business attire in Egypt is formal and conservative. Men are advised to dress well and wear dark-colored, lightweight, conservative business suits and to avoid wearing visible jewelry. Women's dress is also conservative and modest. Skirts and dresses should cover the knees, and pants should not be form fitting with a preferred sleeve length to the wrist.

Business Negotiations

Personal relationships and long-term networking are a necessary component of success in the Egyptian business world. Business moves at a slow pace, and decisions are reached after great deliberation and can be highly bureaucratic. Including senior staff with impressive titles in your team can help with the decision process, since Egyptians respect age and experience. While Egyptians are tough negotiators they do not respond well to high-pressure tactics.

Proper Greetings

Greetings are based on both class and the religion of the person. It is best to follow the lead of the Egyptian you are meeting. Handshakes given with a hearty smile and direct eye contact are the customary greeting among individuals of the same sex. Once a relationship has developed, it is common to kiss on one cheek and then the other while shaking hands, men with men and women with women. When greeting someone of the opposite sex it is advisable to bow your head in greeting, unless a woman extends her hand first.

Public and Social Behavior

Expect to be offered coffee or tea whenever you meet someone, as this demonstrates hospitality. Even if you do not take a sip, always accept the beverage. Declining the offer is viewed as rejecting the person. Egyptians believe direct eye contact is a sign of honesty and sincerity, so be prepared for disconcertingly intense stares. You should demonstrate deference to the most senior person in the group, who will most often be the spokesperson.

Scheduling Appointments

Appointments are necessary and should be made far in advance. Confirmation one week prior to the meeting, either in writing or by telephone, and again a day or two before the meeting is recommended. In general, Egyptians have an open-door policy even during meetings. Be prepared for others to wander into the room and start a different discussion.

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Embassy Locations and Registration

Americans living or traveling in Egypt are encouraged to register with the nearest U.S. embassy or consulate through the State Department's travel registration Web site and to obtain updated information on travel and security within Egypt. Americans without Internet access may register directly with the embassy.  By registering, American citizens make it easier for the embassy to contact them in case of emergency.

(Note: Addresses and contact information subject to change.)

Embassy of the Arab Republic of Egypt
3521 International Court, NW
Washington, D.C.  20008
Phone: 202.895.5400
Fax: 202.244.4319
Web:  http://www.egyptembassy.net/

U.S. Embassy
8 Kamal el-Din Salah Street
Garden City, Cairo
Phone: +20-2-2797-3300
Fax: +20-2-2797-3602
Web:  http://egypt.usembassy.gov

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Employment-Legal Requirements

Employment contracts are required to be in writing, in triplicate, and in Arabic. The employer, employee, and social insurance office each keep one copy of the employment contract, which must include personal identifying information as specified in the Labor Law.  An employment contract may be drawn up for a fixed-term or indefinite period of time.

Terminating Employees

An employee is entitled to a 60-day notice for dismissal if his period of service does not exceed 10 years, and 90 days if it does. Employees dismissed without proper notice receive two or three months of salary payment in lieu of notice. Throughout the notification period the labor contract remain in force. (The Labor Law states that compensation shall not be less than the wage of two months of salary for each year of employment in cases of wrongful dismissal.)

Legally Mandated Benefits and Leave

Annual Vacation Leave 21 days (increased to one month if age 50 and over or after 10 years of consecutive employment)
Sick Leave Up to 6 months of paid sick leave annually (between 75 percent to 100 percent of the employee's normal wage)
Accidental Leave No more than 6 days per year (taken 2 at a time) and related to unexpected emergencies (applied against annual leave)
Holidays 13 days per year (fully paid)
Pilgramage Up to 1 month (once per employment period after 5 years of service)
Maternity Leave 3 months of 100 percent paid leave (following 10 months of employment)

 

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Entry and Exit Requirements

A passport and visa are required. Travelers can obtain a renewable 30-day tourist visa on arrival at an Egyptian airport for a small fee, payable in U.S. dollars. Visitors arriving overland and/or those previously experiencing difficulty with their visa status in Egypt should obtain a visa prior to arrival. Travelers arriving from Israel at the Taba border crossing are advised to obtain a visa prior to their arrival.

Foreigners can acquire a work permit from the Ministry of Manpower and Immigration offices in the district of the employer, and accordingly are authorized residency in the country. Work permits must be obtained through the employer. Foreigners are generally not allowed to change residency status from nonworking to working while in the country. Proof of yellow fever immunization is required if arriving from an infected area.  Evidence of an AIDS test is required for everyone staying over 30 days for the purpose of studying or working in Egypt.

Visit the Egyptian Ministry of Foreign Affairs Web site for the most current visa information.

Foreign visitors to Egypt can get a visitor's visa stamped in their passport at the port of entry, except for nationals for certain countries who require a visa to be obtained from the Egyptian consulate in the country where they live. The visitor's visa is valid for one month and can be extended for periods up to six months. Visitors must register with the police within seven days of arrival, and this can also be handled by one's hotel. Work permits will be granted to foreigners by the Ministry of Labor on a case-by-case basis. It takes about three months to process an application.

Work permits are easier to obtain for technical staff than for unskilled or semiskilled workers. The permits are usually granted to foreigners for a period of one year or less than one year. It may also be issued for a period exceeding one year after settling the relative fee for the requested period. One of the primary documents necessary for obtaining a work permit is a letter from the Work License of Foreigners Department granting approval to issue the visa. Generally it should be addressed to the Passport Authority, the appropriate Manpower Department, the Companies Department, or the General Authority for Investment and Free Zone (GAFI).

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Intellectual Property

Nature of Rights and Available Protection

Patents (utility and design)

A patent shall be granted, in accordance with the provisions of this law, to any industrially applicable invention, which is new and involves an inventive step whether it is connected with new industrial products, new industrial processes, or a new application of known industrial processes. Patents are protected 20 years as of the filing date.

Trademarks

Trademarks are generally protected for 10 years as of the official, recognized filing date. The person who has registered a trademark and made use of it for a period of five years as of the date of its registration shall be deemed the owner of such a trademark unless precedence of use by a third party is proven. A prior user of the mark may, within the said period of five years, challenge the validity of its registration. The registration of a mark may, however, be challenged at any time if the registration is made in bad faith.

Copyrights

Copyrights protection extends for 50 years as of the filing date. Although registration is not necessary for successful enforcement of rights, it does carry the benefit of establishing a date of authorship. This is crucial in litigation where the copyright holder may have to prove that he or she was the first one to create the work in question. Under Egyptian evidentiary rules, having a government date of record is essential if a party wants to submit such evidence to the court.

Enforcement

The prescribed protection of copyright and related rights covers Egyptians and foreigners, whether natural persons or legal entities, who belong to a member country in the World Trade Organization or have such status.

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Legal and Registration of a Business Entity

The primary forms of business for foreign companies are branch, representative office of a foreign company, and limited partnerships. A company is considered a resident if it is established according to Egyptian law, has its main headquarters in Egypt, or is a company in which the state holds more than 50 percent of its capital. Nonresident companies are taxed only on profits derived from an Egyptian source.

Foreign investors may carry on business in Egypt through a branch office rather a locally incorporated company. There is, however, no tax advantage in doing so. Where a branch is set up it must be registered in the commercial register, and it must keep separate accounts approved by locally registered auditors.

Registration Formalities (Including Timing)

Egypt has established a one-stop business registration shop to assist in establishing branch offices known as GAFI. GAFI provides services that range from company registration to site location to partner identification to contracts and licenses acquisition.  The World Bank lists the approximate time to establish a business in Egypt as seven days including 6 separate steps.  The steps are listed here in a straightforward manner and can be retrieved in more detail from either the GAFI or World Bank Web sites.

The steps in simplified form are:

  1. Obtain a certificate from an authorized bank.
  2. Submit documents to the Department of Companies and obtain invoice.
  3. Notarize company's contract.
  4. Obtain the notification of incorporation.
  5. Register for taxes .
  6. Register employees with the National Authority of Social Insurance.

(Source:  The World Bank, Doing Business - Egypt) 

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Safety and Crime

The crime rate in Egypt is low. While incidents of violence are rare, purse-snatching, pick-pocketing, and petty theft do occur. Travelers are strongly cautioned not to leave valuables such as cash, jewelry, and electronic items unsecured in hotel rooms or unattended in public places. Unescorted women are vulnerable to sexual harassment and verbal abuse.

The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the U.S. Embassy in Cairo. If you are the victim of a crime while overseas, please contact the U.S. Embassy for assistance in addition to reporting to local police.  The embassy consular staff can assist in finding appropriate medical care, contacting family members or friends, and explain how funds can be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can also help you to understand the local criminal justice process, find an attorney if needed, and identify additional resources.

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Taxes

Taxes in Egypt may be divided into two categories. The first one concerns direct taxation of individuals and legal entities on their income or profit. The second involves indirect taxation of goods, services, and events. The tax year in Egypt follows the standard calendar year and runs from January 1st through December 31st. There is a double-taxation treaty between the United States and Egypt. 

Individual and Employee Taxation

In addition to the specific taxes that are levied on specific types of income as mentioned above, the Egyptian legislature imposes a general tax on income applicable to individuals. This tax is an additional tax, and the tax base is regarded as the total net income that the individual receives during the year. The general tax on income is progressive and also applies to foreign employees in Egypt unless there is a particular statutory or regulatory provision exempting them.

NonTax Resident Employees

Nonresidents are taxed only on income that originates in Egypt.  Nonresident (and resident) employees who receive income (other than from their original place of employment) are subjected to a flat tax rate. There is no tax on mandatory profit sharing, pensions, or end-of-service bonuses.

Tax Resident Employees

Individuals that have been working in the country for more than 183 days, deemed to have a permanent residence, or reside abroad but maintain income from Egyptian sources are considered residents for tax purposes. All income received from employment, commercial or industrial activities, and noncommercial professional activities is subject to tax at progressive rates.

For foreigners who do not have a work permit, the tax burden is transferred from the employee to the employer. This includes multinationals that have to pay a tax on employees hired abroad. The manager of a foreign company's representative office in Egypt is liable to taxation on the portion of his salary that is related to his services rendered in Egypt only. Foreign experts who are employed for more than six months during the tax year are eligible for deductions and reliefs. But those who already pay taxes to their home governments will not have to worry about paying taxes twice due to "the non-double-tax treaty" that Egypt has signed with many countries.

Corporate and Employer Tax Obligations

The Egyptian corporate tax regime applies to joint-stock companies, limited liability companies, partnerships limited by shares, foreign companies, and branches of foreign companies whose head office is situated abroad. This tax is imposed on salaries paid in Egypt or abroad for services performed in Egypt. Taxable salary includes the value of all benefits, apart from housing allowances given to foreign experts.

Social Insurance Contributions 

Employers must pay social insurance contributions to the Ministry of Social Insurance and Social Affairs with respect to their Egyptian employees. Egyptian employees also are liable for contributions. The amount of these contributions is contingent upon whether employees are hired on a basic or variable pay (i.e. production incentive bonuses) salary. The social insurance laws do not generally apply to expatriate staff. Employees' contributions are withheld by the employer from the employees' salaries and wages each month and paid to the ministry together with the employer's own contributions within the first two weeks of the following month.

Withholding Tax

Any business operating in Egypt must withhold a percentage against any payments made to a contractor or supplier of goods or services for services, commissions, professional fees, or the selling of goods for trading or manufacturing.

More information about employer and employee tax rates can be found on the Info-Prod Research (Middle East) Ltd. site.

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