Establishing a sole proprietorship is a crucial step in building a successful business, and when you decide to launch and begin this important step, you must choose a specialized office that is reliable and provides the services of establishing sole proprietorships accurately and quickly to its clients, while clarifying the legal procedures necessary to establish the company and register it in the commercial registry, and on our part. We nominate Diwan office Because he has experience in establishing companies of various types for several years, and he is staffed by a group of the best legal experts.
Steps to establish a sole proprietorship in Egypt
Establishing a sole proprietorship
If you want to establish a sole proprietorship in Egypt, you must follow some steps that we will mention in detail in the following lines:
- Determine the business activity: You must first determine the business activity you wish to practice, and you must ensure that the chosen activity does not conflict with Egyptian laws and legislation.
- Choosing a name for the facility: You must choose a suitable name that has not been used previously for your individual facility.
- Preparing the necessary documents: You must prepare the necessary documents to establish the facility. These documents include the ID card, a copy of it, a civil status statement (birth certificate), and a lease contract if the facility is not owned.
- Visiting the Real Estate Registry: You must visit the Real Estate Registry to register the contract if you do not own the place and submit a copy of the contract if you do.
- Determine the tax form: You must go to the Tax Authority to determine the appropriate tax form for the business activity that you carry out.
- Submitting a registration application: An application to register the sole proprietorship must be submitted in the commercial registry of the Egyptian Ministry of Trade and Industry.
- Obtaining a tax permit: You must visit the Tax Authority and obtain the tax permit for the individual establishment.
- Payment of fees: You must pay the fees required to register the sole proprietorship and obtain the necessary tax declarations.
- Receiving registration: After meeting all conditions and paying fees, the registration process for the sole proprietorship will take place and its tax declarations will be submitted.
See also: Steps to establish a one-person company
What should you know before starting the process of establishing a sole proprietorship?
Before establishing a sole proprietorship, the person wishing to do so must be aware of some matters that we will explain in detail below:
- Understand the type of business: If the establishment will be a café, retail store, travel agency, or any other business, the person must determine the main type of activity that he or she will be conducting.
- Market Study: A person should conduct a market study to understand competitors, customer needs, and potential growth opportunities.
- Determining commercial identity: There must be a clear vision of the facility’s commercial identity, including the trade name, company logo, and distinctive colors.
- Preparing a Business Plan: Preparing a business plan is crucial before starting the process, outlining goals, established strategies, marketing plan and financial funding.
- Legal registration: The person must register the facility with the competent authorities such as the Ministry of Commerce and the General Authority for Investment, and determine the legal structure of the facility.
- Taxes and licenses: You must ensure that the facility complies with all taxes and licenses required when starting work.
- Financial accounts: A system of financial accounts must be prepared to track revenues and expenses, and determine profits and losses.
- Necessary insurance: The necessary insurance should be purchased to protect the facility from potential risks, such as property insurance and professional liability.
See also: Everything related to services for establishing individual companies
What are the documents required to establish a sole proprietorship in Egypt?
The process of establishing a sole proprietorship in Egypt requires submitting some necessary documents to the competent authorities, and here is a list of the basic documents that you may need as follows:
- A copy of the national ID card of the project owner.
- Application form for establishing the establishment (available in the competent authorities).
- Fill out an application form to open a commercial register (submitted to the local Chamber of Commerce).
- A copy of the building license or leasing of the facility’s main headquarters.
- A statement of marriage status (if marital status is necessary).
- Statement of tax liability status (from the local tax administration).
- A certificate from the bank proving the opening of a bank account in the name of the establishment.
How to fulfill all legal requirements for establishing a sole proprietorship
Establishing a sole proprietorship
Establishing a sole proprietorship requires following certain legal procedures and obtaining the necessary licenses and approvals. Below are general steps that will help you meet all the necessary legal requirements, including the following:
- Choosing the type of company: You must determine the type of company you intend to establish; Whether it is a sole proprietorship, limited liability company, or other.
- Determine the business activity: You must determine the business activity that your sole proprietorship will conduct.
- Choosing a company name: You must ensure that the company name you choose is not similar to any other previously registered company.
- Determine the workplace and headquarters: You must specify the business location and the official address of the facility.
- Obtaining the necessary licenses: You may need permits and licenses from the competent authorities, such as the Ministry of Commerce and the Ministry of Labour, depending on your work activity.
- Tax identification: Your facility must be registered for taxes and obtain a tax number.
- Opening a bank account: You must open a commercial bank account in the name of the individual establishment.
- Submitting legal documents: You must submit all necessary documents to the relevant government authorities to obtain your licenses and permits.
- Registration in the commercial registry: After meeting all conditions and licenses, you must register your facility in the relevant commercial registry.
- Compliance with legal regulations and legislation: You must adhere to all legal regulations and legislation related to your business activity.
Fees and costs related to establishing a sole proprietorship in Egypt
Establishing a sole proprietorship in Egypt requires paying some fees and costs, which we will explain in some detail below:
- Company registration: An application to register the company must be submitted to the competent authorities, and this step may require paying a registration fee.
- Administrative fees: You may need to pay an administrative fee to obtain a work permit and other permits.
- Necessary capital: You must determine the capital that you will invest in the facility.
- Taxes: You may have to pay local taxes and income taxes on company profits.
- Renting the space: If you need a place to operate the business, you may need to pay for renting the space.
- Business Licenses: You may need to obtain special licenses to operate your business.
- Insurance costs: You may need insurance to protect against potential risks.
See also: Establishing companies in Egypt
How to calculate the initial costs required to start a sole proprietorship
Calculating the initial costs required to start establishing a sole proprietorship depends on the type of activity and the size of the project. Here are some steps that can be followed to estimate the initial costs:
- Economic feasibility study: Prepare an economic feasibility study to determine the cost of starting the project and estimate expected revenues.
- Determine fixed costs: Identify fixed costs such as rent, insurance, wage costs, and the costs of necessary equipment and supplies.
- Estimate variable costs: Identify variable costs that change based on the volume of production or services provided, such as raw material and marketing costs.
- Estimate hidden costs: There may be indirect costs such as research and development, and marketing costs. Estimate these costs and add them to the accounts.
- Determine reserve capital: Determine an additional amount to be used as reserve capital to face any emergency that may occur in the project.
- Calculating administrative costs: Do not forget to calculate management and supervision costs that may be hidden in other costs.
- Estimate the costs of the first months: Estimate the expected operational costs for the first months to ensure your ability to operate the project without financial problems.
In conclusion, we have mentioned all the steps for establishing a sole proprietorship in Egypt, and explained all the information that the company owner must be aware of before starting the establishment procedures, mentioning the most important documents required, knowing that the documents may vary depending on the type of activity and special legal conditions. Therefore, it is always preferable to contact the local competent authorities or a legal advisor to carry out this task correctly and professionally.
