How to Register a One-Person Company (Sole Proprietorship) in Egypt
In the last few years, Egypt’s economy has been growing strongly. This is due to the government’s efforts to implement economic reforms in 2016. Since then, the authorities have been encouraging people to register a one-person company in the region. Giving them the necessary tools to succeed in different sectors.
In this article, you will learn everything about how to register a one-person company in Egypt. Establishing a company in Egypt is very advantageous, but it also can be an arduous task. However, with the right kind of help, you will be able to achieve it in a short time.
- What is a One-Person Company?
- Benefits of a One-Person Company
- Downsides of a One-Person Company
- What is the registration process of a One-Person Company in Egypt?
- What are the required documents to register a One-Person Company in Egypt?
- How can EOR Middle East help you?
1. What is a One-Person Company?
A one-person company is a type of business typically possessed by a single person, whether natural or legal. It was introduced in Companies Law No. 159 of 1981, and its last amendments were inducted in 2018. You are obligated to register your one-person company for a sole specific purpose.
These types of companies are popular in many regions due to their limited liability which is restricted to the value of the shared capital. Subsequently, protecting the investor from any risks that may put their fortune in danger. Once you register a one-person company in Egypt, you will become the main beneficiary of your business.
This business model allows 1099 employees, independent contractors, entrepreneurs, investors, and freelancers to be in charge of their companies. A one-person company is usually under the same name as the owner. They are an easy way of establishing a business form if the individual counts with the support of a consultancy agency.
Egypt is one of few African regions expected to record positive growth in its economy in the next five years. It follows the ambitious Egypt Vision 2030 agenda, which intends to improve the region’s quality of life, economy, environment, innovation, and more. Consequently, to reach these objectives, the government is offering immigrants and locals the opportunity to register a one-person company.
Even if setting up a company in Egypt can seem like an impossible task for a foreigner, it can be easier with the right kind of help. Hiring immigration services to register a one-person company is imperative when you are new in the region. An agency can help you deal with the administrative work and any complex regulations you may encounter.
2. Benefits of a One-Person Company
Registering a one-person company can be a nerve-wracking process. There are a lot of things to deliberate before founding one. It is vital to know the advantages that having a proprietorship can bring. The most significant benefits are:
2.1 Complete Independency
When you register a one-person company in Egypt, you will be able to be in charge of your working schedule, your earnings, time off, and more. Also, you will be conducting your business under your name. Before the law, you are the only authority of your company.
Proprietors can choose how many projects they take on at the same time. They will be able to provide their services to many companies at the same time. This practice allows freelancers to receive a higher income than permanent employees. Independent contractors frequently acquire the services of a recruitment agency to help them find job opportunities in many sectors.
2.2 Sub-contracting
When working independently, you will be able to subcontract other workers for some assignments. Registering a one-person company means that you will be the only owner of your business, but it does not mean that you will work alone. As a sole proprietor, you can hire as many individuals as you seem fit for your company.
Sub-contracting allows your business to expand. You can hire remote employees located in other regions and, if you have the support of an agency, paying them remotely will not be a problem. Once you register a one-person company with a team of experts by your side, confronting any challenges will be easier.
2.3 Limited Liability
The main advantage of registering a one-person company is the limited liability. In this type of company, the liability is limited to the amount of capital invested in the business. Any loss or debt will not impact your savings. In addition, the minimum capital to start your company is AED 12.000.
When someone registers a company, they need to be in charge of remaining compliant with the law. Just like in other regions, individuals have to obtain the necessary permits to work independently. This is where the services of a setup agency come in handy. They are available to help you with any requirement you may need when you register a one-person company.
2.4 Other privileges
One-person company is one of the most popular business structures right now. Big corporations prefer to hire the services of an individual under a one-person company rather than others. After you register a one-person company, you can start conducting your business as you please. You will have more opportunities to jump into a specific business field.
Furthermore, a one-person company can easily change into a private or public company with the support of a business consultancy agency. You can increase your status as your company develops in the market. If you decide to transform it into an LLC after it is established, you can achieve it with the help of PEO services.
Under a one-person company, you do not need to separate business and personal taxes. There will not be a division between your incomes. It will all remain under your account if you decide. Maintaining a proprietorship is easier than managing other types of companies.
3. Downsides of a One-Person Company
Before you register a one-person company in Egypt, you have to be aware of the disadvantages it may carry. Owning a company is not as easy as it may seem. There are a lot of challenges along the way. From looking for workers to sub-contract, to finding the right opportunities to work, the drawbacks of having a one-person company are bearable with additional support.
3.1 Difficulty to raise capital
Having to be the main owner of a company can bring difficulties to obtain capital. Banks are usually more careful about loaning money for a one-person company. This is because a single individual is responsible for paying these loans. Regardless, if you are unable to pay any debt, any bank entity is entitled to take your assets as a form of payment.
This is where hiring the support of an agency can be beneficial. Agencies can act as a bridge between you and banks to make the process of raising capital easier. These companies will offer you a tailored selection of their services to help you put your business in place.
3.2 Excess of responsibilities
Once you register a one-person company, you are responsible for your business. You will be the one in charge of sufficing payrolls if you have any sub-contracted workers. Additionally, you have to take care of any debts, taxes, and other legal inquiries.
In this case, having the support of a business consultancy is necessary. Their experience and knowledge will help you avoid any risks. They can manage your taxes while dealing with any new regulations.
3.3 Other limitations
Under a one-person company, the nominee takes charge of the business if the sole member becomes unable to enter into a legal contract. Generally, nominees are not involved in the daily operations of the company. As a result, the probabilities of an effective succession are low if a nominee becomes the sole member.
This type of company is not suitable for large businesses as they will not be able to enjoy its benefits and will not succeed under its structure. Owners also have difficulties with decision-making.
4. What is the registration process for a one-person company in Egypt?
The process to register a one-person company in Egypt can be overwhelming at times. It starts by applying to the authority. This type of establishment should have:
- Company name.
- Purpose of the company.
- Personal information of the founder.
- Head office address.
- Capital amount.
- Liquidation rules.
- The Intended duration of the company and any other documents that the Executive Regulations require.
If the founder of the one-person company is an individual of the public law, they must obtain the approval of the Prime Minister. The sole owner needs to pay the company’s capital before establishing the company. In any region, foreigners need to be compliant. For example, if they are looking to establish a business in Kuwait, they need to obtain the necessary permits.
To register a one-person company, you need to meet the minimum requirements of one shareholder, one director, and one nominee. The shareholder and the director can be the same person, but the nominee needs to be someone different. Nominees are not frequently involved with the company. They are just holding a placement in case they need to succeed the director at any point.
5. What are the required documents to register a One-Person Company in Egypt?
Once you decide to register a one-person company in Egypt, you will need to file the necessary documentation. First, you need to issue the clearance of your trading name with the Commercial Registry. Second, you have to obtain a certificate from an authorized Egyptian bank stating that the required capital for the company has been fully deposited.
Third, you need a copy of your national ID or passport, this also includes a valid residence visa if necessary. Fourth, you must require a notarized power of attorney, a security check application for the business owner, and the Certificate of the Auditor of the company. Ultimately, you need to present a possession deed of where you will be conducting your company.
If your company’s annual revenue is more than AED 118.000 you will have to obtain a VAT certificate. VAT means Value-added Tax, and the standard rate in Egypt is 14%. The requirements are:
- Commercial Registration
- Articles of Association
- A Power of Attorney
- A lease contract valid for at least a year from the Notary Public and a Tax Card
6. How can EOR Middle East help you?
EOR Middle East provides a wide variety of services to help individuals register a one-person company in Egypt. With our support and expertise, you will establish your company in no time. Allowing it to grow fast and, eventually, expand to other regions such as:
We offer the highest technology and the required tools to cover all your necessities. EOR Middle East has years of experience in the Egyptian market. More than 800 satisfied ratings, a 98% success rate, and a team full of professionals make us the paramount consultancy agency in the Middle East.
Our company is the best option to develop your business. We offer a tailored selection of services such as remote workers hire to increase your workforce at a low cost, employer of record to streamline operations, and so much more.
Would you like to register a one-person company in Egypt with EOR Middle East? If you want to hire our business consultancy services, you can always call us at 00 971 433 16 88. We invite you to reach us via email too at [email protected]. Our agents will be more than glad to clear any of your doubts.
In the same way, if you are interested in being part of our team of experts you can go to thetalentpoint.com and submit your CV or resume. You can also send it through our email at [email protected] and we will be reviewing your job application.
