Establishing a sole proprietorship in Egypt. Do you dream of starting your own project and achieving your ambitions? You can do this with ease and simplicity by establishing a sole proprietorship in Egypt, as it opens up broad horizons for you to embody your ideas on the ground and transform them into a tangible reality. However, the procedures, establishment steps, and the like may become an obstacle to achieving that dream. Therefore, many companies have recently emerged that work to take over all the affairs of establishing sole proprietorships in Egypt, perhaps the most prominent of which is Diwan Company. We will learn through our next article about all the details related to this matter.
What does it mean to establish a sole proprietorship in Egypt?
Establishing a sole proprietorship company in Egypt
In principle, a sole proprietorship is a type of company that is owned and managed by only one person, who has full responsibility for all its affairs. This company is characterized by ease of establishment and management, and is suitable for emerging entrepreneurs and owners of small projects.
In fact, establishing a sole proprietorship in Egypt is your opportunity to enter the world of business and transform your ideas into tangible projects. With the ease of procedures and low costs, the sole proprietorship allows you to benefit from many advantages, such as:
- Complete control: You are the sole decision maker in all aspects of your work.
- FlexibilityYou have complete freedom to manage your company and adapt it to the needs of the market, as the company owner controls all decisions himself.
- Profit: Where you benefit from all the company’s profits without sharing with any other party.
- TaxesThese individual companies established in Egypt enjoy some tax exemptions and some advantages and facilities
- Ease of establishment: It does not require complicated procedures or much paperwork.
- Low costs: It does not require large capital to start the activity.
- Avoid potential risks: He is the only one responsible for managing the capital, making appropriate decisions, and avoiding conflicts in the decisions of partners in other multilateral companies, such as general partnerships, for example.
See also: Fees for establishing an individual company in Egypt
What are the requirements for establishing a sole proprietorship in Egypt?
Establishing a sole proprietorship in Egypt is your first step towards independence and success, and sole proprietorships are considered one of the most common forms of companies in Egypt, due to their ease of establishment and management.
But before embarking on the journey of establishing your company, make sure that you meet the following conditions and requirements:
- Legal adulthood:You must be at least 21 years old.
- Nationality: You must be Egyptian or possess a valid residence permit.
- the biography: Must be free of criminal record or judicial convictions.
- Experience: Some activities may require a license or prior experience in that field.
The most important official papers and documents required to establish a sole proprietorship company in Egypt
Establishing a sole proprietorship company in Egypt
After completing all the requirements for establishing a sole proprietorship in Egypt, it is the turn to prepare the official papers and documents required by the competent authorities.
In fact, some people may face difficulty in completing all the papers in person, so you can instead seek help from one of the largest company establishment services companies in Egypt, which is Diwan Company, as it provides you with an elite group of certified legal advisors to facilitate the procedures and prepare the important documents and documents, which are: Below:
- The original and a copy of the ID card. The original is reviewed and a copy is taken, which must be clear and valid.
- Declaration not to work in the government, submitted by government employees.
- General power of attorney document in case of establishment through an agent.
- Approval from the competent authorities for some activities, such as:
- Security approval.
- Environmental approval.
- Approval of the Ministry of Health.
What are the steps to establish a sole proprietorship in Egypt?
Below are the steps to establish a sole proprietorship company in Egypt:
- Choose an activityDetermine your company's field of work and the type of services or products you will provide.
- Choose a company nameTry to choose a unique name that is easy to remember and fits your field of work.
- Obtain a commercial registerGo to the Commercial Registry Authority in your city to submit an application for a commercial register, and you can seek help from Diwan Company, as it will provide you with this item with ease.
- Diwan Company has an experienced and efficient team to meet all customer requirements, given that it has a long history of 13 years of experience in the field of establishing individual companies in Egypt.
- Obtaining a tax cardRegister with the Value Added Tax Authority to obtain a tax card. It is worth noting that Diwan Company can follow up on the company’s tax status for you from all sides.
- This starts from obtaining the tax card in the beginning to submitting tax returns regularly, as it includes an elite group of certified accountants.
- Obtaining the necessary licenses: Make sure to obtain all licenses and permits required to practice your activity, according to the requirements of each activity.
- In fact, Diwan Company provides you with the service of obtaining a license in record time without waiting for long periods of time. Diwan Company has gained the trust of 99% clients with regard to company establishment services.
- Opening a bank account for the companyOpen a bank account in the name of your company to complete your financial transactions with regard to your company easily and conveniently.
- Join the Chamber of CommerceRegister your company in the Chamber of Commerce of your governorate. You can seek the assistance of Diwan Company, the best company formation lawyer office in Egypt, in this regard. It will carry out all the procedures required for joining.
- Payment of feesYou must pay the fees for establishing your company, and the fees vary according to the activity and region to which your individual company belongs. If you do not have time, you can seek the assistance of a legal affairs lawyer from within the Diwan Company’s staff after appointing him as an attorney, and he will handle the financial and legal transactions for you at the same time.
Read also: Learn everything about establishing a sole proprietorship company in Egypt
Advantages of establishing a sole proprietorship in Egypt
Establishing a sole proprietorship company in Egypt
Establishing a sole proprietorship in Egypt comes with many unique advantages that make this option attractive to many entrepreneurs and small investors. These advantages include the following:
Ease of establishment and simplified procedures
Establishing a sole proprietorship is one of the easiest and simplest legal procedures in Egypt, as the founder can fill out the necessary form and submit some basic documents, however, he can start his business legally and quickly.
Low costs
Establishing a sole proprietorship in Egypt requires lower financial costs compared to other types of companies, including legal fees and company registration fees, making it an excellent option for individuals starting out on limited budgets.
Flexibility in management and decisions
A sole proprietorship means that the founder is the only person responsible for management and daily decision-making. This gives the company owner great flexibility in changing, developing, and making decisions quickly without having to refer to other partners.
Keep all profits
Since the company is owned by one individual, that individual retains 100% of the profits generated from the business, which is a great incentive for many entrepreneurs to increase their efforts and investments in the company.
Confidentiality and Privacy
In a sole proprietorship, financial and administrative information remains with the founder, which helps to keep business and financial details private and out of public view.
Easy to close or adjust
If the owner of a sole proprietorship decides to close the company or modify its activity, the procedures are much simpler and relatively easier compared to larger companies whose procedures are more complicated and require approvals from multiple parties.
Entrepreneurship motivation
Providing a flexible and easy environment for establishing sole proprietorships greatly helps in stimulating entrepreneurship and encouraging young people to enter the labor market with complete freedom and simplicity.
Tax benefits
In some cases, there may be tax benefits for sole proprietorships compared to other types of companies, which can be an additional incentive to move towards this legal form in order to reduce the tax burden and maximize net profits.
Disadvantages of establishing a sole proprietorship
Establishing a sole proprietorship in Egypt is a suitable option for many entrepreneurs who want to start their own project quickly and easily, but this legal form is not without some drawbacks that must be taken into consideration, which are as follows:
Full personal financial responsibility
In a sole proprietorship, the founder has full financial responsibility for all of the company's debts and obligations, which means that the entrepreneur's personal property, such as a home or car, may be at risk if the company defaults financially.
Difficulty raising funds
Sole proprietorships often have difficulty raising financing compared to companies with other legal structures, because banks and investors typically prefer limited liability companies or joint stock companies, where the financial risks are lower.
Total dependence on the founder
Since the company is associated with only one person, the success of the company depends entirely on the health and abilities of that person, and if the founder suffers from a health problem or other personal circumstances that prevent him from managing the company, the future of the company may be threatened.
Less tax benefits compared to larger companies
Sole proprietorships may not benefit from some of the tax benefits and deductions that are available to companies with more complex structures, and this can increase the tax burden on the sole proprietorship.
Limited experience
In a sole proprietorship, the founder has to manage all aspects of the business, from finance to marketing and production, which can lead to a lack of specialized expertise and a higher risk of errors.
Sustainability and continuity of the company
If the founder dies or wishes to retire, the sole proprietorship may find it difficult to continue, and the company may be forced to liquidate or sell.
See also: Tasks and services of Egypt company incorporation lawyers
Government support for individual companies in Egypt
Establishing a sole proprietorship company in Egypt
Government support for individual companies in Egypt is a good step towards encouraging entrepreneurship and developing the economy. This is part of the current state strategy to strengthen the private sector and create new job opportunities. The support methods are as follows:
Encouraging entrepreneurship and small projects
The private sector and individual businesses are key drivers of economic growth. Therefore, the government provides a conducive environment for startups by providing financial and training support, and promoting a culture of innovation and entrepreneurship.
Legal and regulatory facilities
The Egyptian government has simplified the legal procedures for establishing sole proprietorships. These facilities include reducing the time and costs associated with registering companies, making the process of starting a business easier and faster.
Financial support and soft loans
Through various financing programs, the government works to provide soft loans to individual companies, as these loans are provided through government banks and investment funds with the aim of supporting small and medium enterprises.
Training and skills development
The government realizes that the success of individual companies depends largely on the ability of their owners to manage and innovate, so it provides specialized training programs to raise the efficiency of business owners in areas such as management, marketing, and finance.
Laws and regulations governing the establishment of a sole proprietorship in Egypt
Establishing a sole proprietorship in Egypt is an excellent option for an entrepreneur who wants to experience a simple and incorporative business model. However, there are several laws and regulations that must be adhered to to ensure full compliance with legal and regulatory procedures, such as the following:
First: Laws and regulations related to establishment
Egyptian Commercial Law No. 17 of 1999 regulates matters related to the establishment of sole proprietorships, including permitted business activities and procedures required for registration.
Investment Law No. 72 of 2017 provides additional guidance on establishing companies, and aims to encourage investment by providing incentives and guarantees to investors.
Second: Administrative procedures for establishing a sole proprietorship
Choosing a trade name: The founder must choose a trade name for the company that is distinctive and not previously registered. A request to inquire about the availability of the name is submitted to the General Authority for Investment and Free Zones.
Defining the business activity: Defining the business activity of the company is essential, and must be specified in the company’s articles of association.
Preparing the necessary documents: which include (a copy of the company owner’s national ID card, a lease or ownership contract for the company’s headquarters, and the company registration application form available through the General Authority for Investment and Free Zones).
Capital Deposit: The paid-up capital is deposited in an approved bank and a certificate is obtained to that effect.
Registration with the relevant authorities: such as the General Authority for Investment and Free Zones. Here, an application for establishing the company must be submitted and the required fees paid.
Also register in the commercial register and obtain a commercial register number for the company.
In addition to registering with the Tax Authority: opening a tax file and obtaining a tax card.
Finally, registering for social insurance: registering the company with the National Social Insurance Authority to pay insurance dues.
Third: Compliance with financial and tax regulations
Preparing periodic financial reports in accordance with Egyptian accounting standards and submitting them to the relevant authorities.
If the company's activity requires VAT registration, it must register and pay the taxes due.
Individual companies operating in certain sectors may need to comply with environmental and health regulations in force in Egypt, including obtaining the necessary licenses from the competent authorities.
Protecting workers’ rights as the individual company is committed to providing a safe work environment and complying with Egyptian Labor Law No. 12 of 2003, including paying wages and insuring workers.
See also: Information of interest to you about the sole proprietorship
Important guidelines for establishing a successful sole proprietorship in Egypt
The journey to establishing a sole proprietorship in Egypt is considered a relatively easy journey, provided that the required procedures are carefully followed, and the assistance of a distinguished company in the world of business in company establishment services, such as Diwan Company.
Diwan Company undertakes the task of establishing the company on your behalf, and takes care of all matters related to establishment and post-establishment as well, such as legal papers, obtaining licenses, and completing all transactions, in addition to taking care of all accounting and general budget matters, as well as taking care of tax returns and submitting them on time and the like.
With good planning and hard work, you will be able to achieve success and achieve your goals. Here are the most important guidelines for establishing a successful sole proprietorship in Egypt:
- Create a thoughtful business plan: Define your goals and strategies for success.
- Find suitable financing: Determine your financial needs and search for appropriate financing sources.
- Market your company effectively: Use various marketing channels to attract customers, and you can benefit from Diwan Company’s expertise in this regard
- Develop your management skills: Continue learning and gaining experience in business management.
- Adhere to laws and regulations: Ensure compliance with all laws and regulations governing business in Egypt.
For more information about how to establish a sole proprietorship in Egypt, and the most important procedures and documents required, you can contact: Diwan Company provides company establishment services The individual through its official website.
In conclusion, at the end of our article, it can be said that establishing a sole proprietorship in Egypt has become easy and not a difficult matter, and you can open the doors of success and distinction for yourself by following the steps mentioned above, and seeking the help of a distinguished company such as Diwan Company, the leading company in the field of establishing companies that contribute to the development of the Egyptian economy.
