How to Register a Sole Proprietorship (منشأة فردية) in Egypt

Working as an independent contractor or sole proprietor in Egypt can be very appealing. It gives you full control over your business, low overhead, and simpler compliance compared to more complex corporate structures. That said, there is still bureaucracy: multiple government bodies, forms to fill out, permits sometimes, and tax/accounting obligations. The challenges usually include navigating which legal form is right for you, ensuring filings are done properly, and understanding taxation thresholds. The benefits: flexibility, ease of starting, owning all profits, relatively low registration cost (depending on your capital), and fewer partners/shareholders to coordinate with.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Egypt?

In Egypt, there are two related legal forms: the traditional sole proprietorship (establishment by one person) (“المنشأة الفردية”) and the One-Person Company (OPC / Sole Person Company / Sole Proprietorship Company) introduced by Law No. 4 of 2018 (amending Companies Law No. 159 of 1981). Depending on context, these may be referred to in English as:

• Sole trader
• Self-employed worker
• Independent contractor

These terms describe a business run by one person without forming a multi-owner company (though the OPC does give a limited liability alternative, see below).

How does a sole proprietorship (منشأة فردية / OPC) work in Egypt?

منشأة فردية / OPC vs. other business structures in Egypt

Registering a sole proprietorship in the United States is quick and inexpensive, but understanding how it differs from LLCs and corporations in liability, costs, and taxes is essential before choosing your structure.

Step-by-step guide: How to register a sole proprietorship in Egypt

Step 1: Check your eligibility

Egyptian nationals who are at least 21 years old and legally competent can register as sole proprietors or OPC owners using their national ID. Foreign nationals may also establish a business, but they must hold a valid passport, an Egyptian residence permit, and sometimes obtain additional approvals depending on the activity.

Step 2: Choose your business name

Names must be unique and approved by the Commercial Registry via GAFI’s portal. The fee for reserving a name is 107 EGP.

Step 3: Gather required documents

You will need:

• Application form from GAFI
• National ID (for Egyptians) or passport (for foreigners)
• Proof of business address (lease agreement or property deed)
• Capital declaration (stating the starting capital — OPC must show at least EGP 1,000)

Step 4: Register with GAFI

Submit documents online or in person at GAFI. Registration is confirmed through the commercial registry.

Step 5: Pay registration fees and contributions

The costs for registering a sole proprietorship or OPC in Egypt are relatively modest. The commercial registry entry fee is about EGP 12.50. In addition, there is an annual subscription equal to 0.002% of the declared capital, with a minimum of EGP 24 and a maximum of EGP 2,000, plus a EGP 100 certificate fee. If you need a certified copy of the commercial registry, the cost typically ranges from EGP 200 to 500, depending on the company’s capital.

Step 6: Complete post-registration obligations

After registration, you must stay compliant with several obligations. First, obtain a Tax Card from the Egyptian Tax Authority and register for VAT if annual turnover exceeds EGP 500,000. Sole proprietors are also required to issue sequentially numbered invoices with their business details, and many must now use the government’s e-invoicing system, with penalties for non-compliance. Finally, you need to keep proper accounts and file annual tax returns.

Financial and tax obligations for sole proprietors in Egypt

You are responsible for:

• Income taxes: Sole proprietors pay progressive personal income tax rates ranging from 0% to 27.5% depending on their annual taxable income. Returns are filed annually with the Egyptian Tax Authority.
• Social security contributions: If you employ staff, you must register with the National Organization for Social Insurance (NOSI) and pay contributions split between employer and employee. Rates vary by wage level and are set annually by law.
• VAT (ضريبة القيمة المضافة): You must register for VAT if your annual turnover exceeds EGP 500,000. The standard rate is 14%. VAT returns are filed electronically through the Egyptian Tax Authority’s e-filing system.
• Record-keeping: You are required to maintain proper accounting books, receipts, and tax-compliant invoices. OPCs must also prepare annual financial statements in line with company law requirements. Authorities may request records during audits.
• Invoicing: Sole proprietors must issue sequentially numbered invoices that clearly show their business name, address, and tax registration number. Many businesses are now required to comply with Egypt’s electronic invoicing system operated by the Egyptian Tax Authority. Non-compliance can result in penalties.

Launch your contracting career and stay compliant with Deel

Registering a sole proprietorship gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
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• Spend your earnings in USD with the Deel Card
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FAQs

What is the minimum capital required to start a منشأة فردية / OPC in Egypt?
OPC requires EGP 1,000, while traditional sole proprietorships have no fixed minimum.

Do منشأة فردية / OPC need to register for VAT?
Yes, if turnover exceeds EGP 500,000 annually. VAT is currently 14%.

How much are the standard contributions?
The annual Chamber of Commerce subscription fee is set at 0.002% of the declared capital, with a minimum of EGP 24 and a maximum of EGP 2,000, plus an additional EGP 100 certificate fee. This fee is separate from taxes and is required to maintain your registration in the Commercial Registry.

Can a منشأة فردية hire employees?
Yes, but you must comply with social insurance and labor law requirements.

How long does it take to register?
As little as one business day with correct documents.

Can foreign nationals register?
Yes, provided they have a valid passport, usually a residence permit, and meet activity-specific conditions.

Do منشأة فردية / OPC need a separate bank account?
OPCs are strongly advised to maintain a separate account. For sole proprietorships, it is recommended for clarity.

What happens if I stop working?
You must deregister with GAFI, file a final tax return, and close any open obligations.

Are there any government incentives?
Yes, incentives exist under the Investment Law No. 72 of 2017 for SMEs, youth, and businesses in certain sectors or locations.

Can I use Deel as a منشأة فردية to get paid?
Yes. Deel supports global payments with transparent fees and compliant invoices.

Does Deel generate compliant invoices?
Yes. Deel invoices include all information required under Egyptian law and support e-invoicing needs.

Can Deel help with taxes?
Yes. Deel provides tax reports and earnings records to simplify your filings.

Does Deel offer contracts?
Yes. Deel contract templates comply with Egyptian standards.

Can I access benefits through Deel?
Yes. Deel offers optional health, retirement, and insurance benefits tailored for freelancers.