Egypt is home to a very welcoming business environment offering both protection and incentives for companies setting up in Egypt.
Under the new legal framework, the Egyptian government allows:
- 100% foreign ownership of companies
- 100% foreign representation on the board of directors
- Full rights of profit and dividend repatriation in any currency
- Protection against expropriation
- Protection against double taxation through international treaties
- Protection against compulsory pricing
- Transfer pricing assessment on the “arm’s length” principle, based on worldwide practices such as competitive free price, the total costs plus profit margin, and the resale price methods.
Under the traditional tax regime, income is taxed at 20% of profits, import duties at 2–32%, and sales tax at 5–10% for services. Payroll taxes range from 10–20%.
Export-oriented companies registered under Law 8 of 2007 can gain certain exemptions and benefits in custom duties and sales tax.
Egypt was named the leading global economic reformer by the World Bank in 2008, thanks to the tax, customs and financial sector reforms undertaken by the Egyptian government. The highest personal tax rate, for example, has been cut from 32% to 20%; corporate tax has been more than halved, from 42% to 20%; and tariffs have been simplified and reduced from an average of 14.6% to 6.2%.