# Business ownership



## michele (Jan 16, 2010)

Hi. Im hoping that there is someone out there that can help with questions i have regarding setting up a hostel and travel agency in Egypt.

I have read that foreign ownership is not allowed and if i were to set up with an Egyptian partner i would still only be allowed to own 49%, even though i would be financing it !! 
I have emailed and phoned the Embassy here in Aus and Egypt and are still waiting for a reply!!
I plan on renting the premises in the beginning with the possibility of buying in the future, also are there auction houses over there were you can buy new furnishings at are reduced price?

Any information or help would be very much appreciated....

Thanks Michele


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## MaidenScotland (Jun 6, 2009)

Hi Michelle and welcome,

Sorry I can't help... but really if you have read you have to finance a project to own 49% why the hell would you want to do it??????


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## DeadGuy (Jan 22, 2010)

Hi there, I don't know much about these laws concerning your issue, but I don't think they'd stand in your way, the "government" in here is trying to bring money to the country, not to drive it away, so I don't think you'd get much trouble getting your plans happening in here.

Don't know if the Egyptian embassies are the same as any Egyptian governmental agency in here or not, but if they are? that means you won't get enough help from there if you could get any in the first place! so I think you should contact the Australian embassy in here in Egypt.

Good luck in here!


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## Sam (Aug 27, 2009)

michele said:


> Hi. Im hoping that there is someone out there that can help with questions i have regarding setting up a hostel and travel agency in Egypt.
> 
> I have read that foreign ownership is not allowed and if i were to set up with an Egyptian partner i would still only be allowed to own 49%, even though i would be financing it !!
> I have emailed and phoned the Embassy here in Aus and Egypt and are still waiting for a reply!!
> ...


Hi,

Think we've talked before 

Professionally speaking I have not been trained to give legal advice and should not at the risk of giving wrong advice and my company reputation affected. As we are now in the forums, socially speaking I have a surprising amount of knowledge of Egyptian law, and for things I don't know I can source very easily (but my source is not here right now so I'm going to have to try to remember as much as I can until I ask again about this).

When it comes to company establishment in Egypt there are two types of companies: Joint Stock Company or Share Recommendation Company (Limited Liability Company). In the first case at least one of the owning partners should be of an Egyptian nationality, in the second case this is not true.

I am really struggling with my memory in this as it's not something I am asked regularly, so before I talk too much nonsense I will stop, check my facts, and come back to you with more solid information. 

What I can tell you with confidence though it that you do not NEED to have an Egyptian partner to be able to establish a company, but having one reduces the costs significantly and makes the whole thing much easier.

Now (again I will have to check my facts and confirm later) if you are looking at setting up a hostel alone, I think there may be legal ways to do so without actually establishing a company. Many people let their properties, pay the necessary taxes and generate an income without setting up any business, even a single owner with multiple properties and the rental generated being their sole income can operate legally with no officially Egyptian registered business. A hostel I think could be a grey area, which I would need to check on and may or may not be able to be approached in either of the following ways. If the hostel was to be viewed like a small hotel, then the land plot in which the building stands would need to have the correct license to support a commercial touristic use and (probably) be subject to a different tax system and therefore need to be set up like a company (like a hotel). If on the other hand the building was licensed as residential use then (probably) you could host guests in the same way as people host holiday lets in Sharm, and given that you pay the necessary taxes you do not need a company.

I should also mention that a foreign purchaser in Egypt cannot own by freehold rights more than two real estate properties, the sum of which also cannot exceed 4000m2. In this case you can also not resell within 5 years (as well as a few other conditions). This, however, can be avoided by not registering your property but opting for the next highest level of legal protection called signature validation.

I really hope I have not given any misleading information, and as soon as I can I am going to check all I have said here and get back to you with facts rather than vague memories and assumptions (in the case of potentially not needing to establish a company at all). 

When it comes to the travel agency side of things, I can tell you that approximately two years ago a new law was created to protect the larger travel agencies in Egypt, which stated that unless you brought the tourist to Egypt you could not sell for them any excursion. This meant that only the local handling agencies of the international travel companies were legally allowed to sell to their clients excursions, and the street sellers etc were legally only allowed to sell to people who have arranged their holiday independently. It was mentioned that any company proven to have sold to a tourist that they did not bring to the country would be shut down immediately. Practically speaking I have never seen this law enforced and as far as I can see the independent companies are still active. However, this is another thing you should take into consideration before setting up this kind of company (unless this law has since been abolished, which is unlikely).

I hope I have given you a bit of insight. When I am more sure of what I am saying I will either confirm these points or tell you otherwise. If you are serious in proceeding with something of this nature in Egypt though I strongly advise you to consult a lawyer who can give you immediate and accurate information and good advise.

Sam


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## ArabRose (May 14, 2009)

Go onto the US embassy, Cairo and you will find helpful information on setting up a company here in Egypt. Hope this helps!


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## MensEtManus (Jul 30, 2009)

Google "AmCham Egypt" and search under the tab "doing business in Egypt" 

I am not familiar with NGOs type of businesses, but you can establish a company in Egypt with all foreigners (as a joint stock company but it has quite a strong financial requirement - 250k LE).


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## GM1 (Sep 30, 2008)

a foreigner can't get an import license. I don't know if that include an export license.


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