posted
Ok, anyone here who has started a legitimate business here in Cairo - simple partnership or limited company...
I know there are various licences etc to be got, but when you approached the relevant government department how much other business-related stuff did they want to see eg:
business plans cashflow forecasts market research
etc etc?
Any or none?
Were you allowed to talk to the office / present the stuff or did your Egyptian business partner ('sleeping' or 'active') have to do it?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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"various licenses" and "relevant government department"??
What kind of business?
None of the 3 items (business plan etc) listed are technically required to form a partnership, since thats a relationship that can arise from circumstance. A limited company, or limited liability partnership, would be formed much more deliberately and you would absolutely need a lawyer in that process. The items you mentioned would be useful.
Your post seems to take for granted that there is an Egyptian business partner involved. I just want to make sure you are aware that Egyptian investment law applies equally to everyone in Egypt, unlike residential real-estate etc.
You can own any land assets etc. regardless of the nationality or place of residence of business partners, shareholders, or the percentage of their participation. IOW: Companies in Egypt can be wholly owned by foreigners. This did not used to be the case, and incidents have happened where unscrupulous business partners show outdated statute to foreigner to persuade them to involve a local player.
Back to your question. Lets say for example you are starting a jeep safari business in Hurghada. You will encounter multiple government agencies, from the port where the vehicles are shipped, vehicle permits form another office, income tax numbers and registration from another government office. Nobody will ask for the items you listed.
Also at no point in this process is there EVER a reason for the investor (YOU) to not be "Allowed" to "talk". This is absolutely ridiculous and if anyone tries to tell you that you are not 'allowed' to be the voice of the company then you're getting screwed majorly. Your liability for what your partners do extends 100% to you, if you don't incorporate, and so you have to decide what level of agency you want to give that person. Do you trust them with the company? Will they be allowed to sign cheques and loans etc? This will all be in the articles of the company, which will be registered by law if you want to incorporate.
Since it sounds like you don't (or shouldn't ) trust the local partner, I will say that if you decide to incorporate, when you list yourself as a director of the company, get the incorporation lawyer to put their law firm address instead of the physical company address. That gives you a lot more security to be sure you are getting the mail and not a censored version thereof.
Any specific business law topics that really concern you? When you imagine your future company, what worries you the most?
Posts: 214 | From: Cairo | Registered: Mar 2006
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posted
I *do* trust the Egyptian potential partner but he will just be a 'sleeping' partner - ie there to do the minimum required by law to be done by an Egyptian, not really do anything to do with actually doing the business as its not his 'thang'. Theres never been the remotest suggestion from him of me not being allowed to do things - its mine 'what if' brain coming out to play.
I'm just trying to find out all the things I need to have in place should I decide to set up a business (which I probably will).
I've been checking out this site for the legal stuff and the proposed partner is going to give them a call and see if I can just go along on my own to talk to them, or whether he will have to come too.
Neither of us have done anything like this before here and I want to be well-prepared and I read some thing somewhere, possibly on the Amcham website saying that the Egyptian partner has to make all the business decisions (don't quote me exactly, I haven't got time to dig out the reference right now).
The business I am interested in setting up does not require any premises or any assets other than a laptop and internet connection, so I don't know if I have to make out a case for this kind of business here in Egypt or if it is permitted or if they don't care as long as you get the right legal bits and bobs done.
I was planning to do this in a few months time but the 'visa crisis' means I am jumping it up my agenda somewhat!
To answer your last question - what specifically concerns me... where to start! Is this GAFI place the right place or not!
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
OK - I just reread what you wrote CS - are you saying that I can run a business in Egypt WITHOUT an Egyptian partner?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
1) why do you want a partner? Is this person an investor?
You say "Amcham website saying that the Egyptian partner has to make all the business decisions"... NO NO NO YOU DON'T EVEN REQUIRE A PARTNER, MUCH LESS ONE WHO MAKES ALL DECISIONS!!
2) can you be more specific with the nature of the business?
are you creating a business for immigration purposes? (this can still be a legitimate business if the answer is yes)
GAFI used to be in charge of approving the factories located in the free trade zone. they also qualified joint ventures with Israeli companies for tax free purpose. Looks like their mandate has changed. I doubt that is your starting place. Explain the project further please?
Posts: 214 | From: Cairo | Registered: Mar 2006
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posted
As far as I am aware a non Egyptian has to have an Egyptian partner. Their level of involvement is dependant upon the type of Company you wish to set up.
Posts: 11097 | From: Cairo | Registered: May 2008
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posted
That's what I have been told too LF by everyone I've ever talked to on the matter!
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
The problem with the old law was it forced major players like Coke and Pepsi and sony and bank swiss to involve Egyptian partners, which nobody wanted to do.
The joint ventures almost always ended in disaster (for the non-Egyptian parties) and the courts got tired of the parade of wounded foreign personalities.
posted
CS but what about just normal businesses not 'investment projects'? Can they be 100% foreign owned as well?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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Hopefully we can agree that an Egyptian parter is not a requisite component of operating a business in Egypt.
Moving right along, the OP has raised an interesting issue, incorporating a business for the purposes of sponsoring one's own employment visa.
Unfortunately, before a company can sponsor a foreigner for an employment visa in Egypt, the company needs to be solvent and actually making a profit.
I have seen employment visa applications to Egypt fail where the company cannot assure the Egyptian government that money exists to pay the salary. I have also seen employment visa applications fail where the company cannot establish that the company actually exists (that application had undertones of prostitution). This process is detailed and takes time too. Ironically these measures are in place to protect the foreign worker.
In short, unless you are prepared to make a major capital investment in Egypt, incorporating a company for immigration purposes is a bad idea and will likely fail....
On the other hand,
Egypt is ripe with opportunity, and enterprising foreigners have, in some cases, been very successful. So starting a business is not a bad idea. Doing it with the mind to solve the immigration problem is a different matter.
Posts: 214 | From: Cairo | Registered: Mar 2006
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posted
Ok but do they have a minimum salary in mind? I know EXACTLY (and can demonstrate it!) how much its cost me to live here for 1 year, so if I am a sole trader and my business requires say X LE to run, and I need Y LE salary, can I show them I have (X + Y) LE and pass that test? or would it have to be 5 x (X + Y) LE (for say 5 years) to pass that test?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
If its a 1 year employment contract you need to show money for one year. But the people in the Egyptian commercial offices are not going to like the looks of this. It could backfire in several ways.
First off, you are going to get taxed, both on your salary and on the supposed 'profits' of the business. So you are giving your money away (twice). ....
posted
Ok apart from getting married, what's the cheapest way of staying here? I don't really understand about this Investment stuff. Last week I saw some projects listed on the Investment Authority website which looked interesting - can I just go along say 'here's my $50k - put it towards that project there' and go on my way with a 5 year sticky in my passport - do I get the 'return' they say paid to me or is that 'hopeful' return that may never come? Or do I have to do something else?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
Back to the other thing though CS - if I OWN the business do I have to get a work permit? or can I get a residence based on the fact that I have a legitimately registered business?
Alternatively - does anyone know any real estate agents who can quite definately put an **already registered** property for the requisite amount my way so I can just transfer the registration?
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
Please do I am so stressing about this situation and I would really prefer not to have to get married. Why don't married people have to put up all this money and stuff as well? NOT FAIR - crossing arms and sulking.
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
Never mind the return, you might loose the original investment too!!
No I do not recommend putting 50k into anything on that website (or any other website). You are a distracted investor, perfect target. Your objective is not the investment but the visa. Its a recipe for disaster.
If you are looking to solve your problem with 50k that is easily done, buy a guaranteed bond from any Egyptian bank, problem solved. Otherwise I have no suggestion. You say you are tutoring English. Can you just get a legitimate job teaching English?
posted
CS - I told the police guys in the mogamma I had $50k in the bank (knowing if I have to I can get hold of it and bring it over) but they said 'that doesn't count any longer'. Are they wrong?
I teach adults English for no more than 4 hours a week. That's enough. I want to actually do my new business!!!!
So I guess I should still set up my business but as cheaply as possible - any suggestions where to start? Do I find a lawyer, is there an official office somewhere?
PS is a guaranteed bond the same as a certificate of deposit? I've got some of those.
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
Your embassy website has a list of lawyers who can incorporate your business. Personally I don't see the point of incorporation until you are making a profit, but you need advice.
As far as I know there has been no change in the visa rules. Usually when the law in Egypt changes its big news. I'm not an immigration lawyer, not called to the bar in Egypt, I consult on international business law.
If the police guy you talked to was behind a counter, he probably knows the rules better than me. If the police guy you talked to was not behind any kind of desk, I dunno...
You will pay 200 English pounds for a consult with a lawyer. you should just do it.
Also, by the way, 50k USD is big money in Egypt, for most. The only safe way to bring this money to Egypt is through HSBC or another major bank. investments schemes, real estate deals, etc. are fought with risk. In your case, I would try to work on the real-estate title ownership angle re your visa.
Posts: 214 | From: Cairo | Registered: Mar 2006
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quote:Originally posted by Shanta Qadeama: Back to the other thing though CS - if I OWN the business do I have to get a work permit? or can I get a residence based on the fact that I have a legitimately registered business?
Alternatively - does anyone know any real estate agents who can quite definately put an **already registered** property for the requisite amount my way so I can just transfer the registration?
Sorry I overlooked this. I assume you have UK citizenship. There is a visa for commercial activities but that is a short-term visa, for people who can't enter Egypt on a tourist visa. For example a Syrian business-person.
Posts: 214 | From: Cairo | Registered: Mar 2006
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We have a situation at the moment where people are being turned away for one year tourist visa renewals in Cairo but it is not being consistently applied within the Mogamma or across Egypt.
The rules set out for the non-touristic include $50k if you can bring appropriate letter from your bank saying it came from abroad - this is what the police guys behind the desk in the mogamma said no longer applied. This is what sent me into a tail spin because I it is relatively easy for me to satisfy.
Unfortunately because my property is on a new compound not yet completed, we cannot register our properties until the compound is completed and handed over to the local Governate which is probably going to be at least 4 years. 2 years ago when I bought the property I didn't think this would become and issue because I always knew I could do the $50k thing if I had to.
I have made considerable investment in this country by buying property and having money in the bank but because you can't 'mix' two criterion it doesn't count (eg property value + savings is considerably more than $50k but each individually is not, especially with the exchange rate fluctuations).
I barely work here living mainly off savings - I have earned the princely sum of 4200LE this year! (I know that's what some Egyptians live on for a year etc etc) and could give it up without undue effect.
I'm a bit gutted about this situation to be honest even though I do understand fully why Egypt is playing tit for tat with westerners.
I feel gutted that if I sell up and take everything out of this country there will be more than $100K walking away.
I'm just glad that I am ok for the next 6 months. I want it sorted though because the parents want me home for their golden wedding anniversary shindig in August but if I'm on a 3 months 'notice to quit the country' at that time I won't be able to go.
And the thought of my poor kitties having to go through a plane trip and 6 months in quarantine just does not bear thinking about.
posted
I will take this to the PMs and maybe I can give you more direction.
Generally speaking,...
My assumption is that there has been NO CHANGE in the VISA laws and some manager in the Tahir govt building is trying to 'implement' the law differently than it is written.
As your experience suggests, in a government office you ask two people and get two different answers.
You need an agent, a lawyer, to send a memo on behalf of affected non-national property owners, who purchased their properties (or brought a 50k bank deposit !) for residency purposes, to establish if the law is being either spontaneously or arbitrarily changed.
Because, as history has shown, the first sign of the nationalization process for foreign residents is always putting the foreigners residency status in peril. It is easier to confiscate property when the owner has been deported for invalid visa.
The simplest solution? Find a publication in a touristy area like Sharm, or if you are able, get the Cairo english daily paper to take an interest in this problem. One phone call or visit from a reporter to the tahir civic building will get the "official" version of changes, if any.
In the alternative, concerned parties from Egypt search can pool resources, and select an English licensed lawyer with Egyptian connections to make the inquiries.
I work for 'biglaw' and they don't take on these cases, unless theres a majot politica angle.
I have also discovered that offices abroad, for example the Egy embassy in London, can provide the most dependable answers to these questions. If there was an official change in the visa process fo foreigners, the Egyptian embassy in London might provide a straight answer.
For example, when I make commercial inquiries for clients, I do not deal with the commercial offices in Egypt, i talk to the commercial office in or New York. Civil servants in Cairo, hey, they do not give inaccurate info, period. Way less run-around from Egyptian offices abroad.
Your web searches are all misinformed (not to be harsh!!). You need to find a donkey and hear the story from his mouth.
If the officer told you the savings account of 50K is not acceptable, you've got to INSIST on knowing the actual section of law that was changed. A foreign female is not going to assert herself in this context (without getting jerked around) and so you should bring someone along with you. I hope to god its a lawyer. You need a statute or specific reference of law to actually believe what a civil servant says.
Posts: 214 | From: Cairo | Registered: Mar 2006
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4 years, relatively cheap, you get something at the end of it, no chance of being 'screwed', less headache, by then the property will be registered. Posts: 3416 | Registered: Oct 2007
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posted
You know what. I actually need a partner for a business venture in Cairo. I would like to set up one of those "Virtual Office" kind of concept. I considered Maddi but I think Closer to downtown Cairo makes more sense. Interested? Posts: 132 | Registered: Aug 2005
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posted
Thanks everyone for your inputs. I have so much conflicting information now, my head is in a complete spin with all this so I'm taking time out from it until after New Year.
Next steps:
(1) clear head - by New Year (Jan 2nd) (2) contact lawyer re residency issues (have a contact now) - Jan 3/4 (3) work up business plan etc anyway for business as always a good idea - end Jan (4) see if there's a course of study I would GENUINELY like to do - mid Jan.
Posts: 5593 | From: Egypt | Registered: Dec 2005
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posted
So, no real conclusive or optimistic news here really.
The links I was going to post all related to a LLC and not Sole Trader. The person I originally researched this for has just opened a second branch to her business but it is not what we were researching.
Why is it so complex? People are interested in doing things properly and have businesses that are not overly profitable but beneficial to the immediate Egyptian Community!
Maybe I should approach the media. We cannot be the only expats asking these questions. I know numerous people who would like to go above board and set up a sideline.
Posts: 11097 | From: Cairo | Registered: May 2008
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