This section discusses the case of foreign entities marketing
their products to Egypt directly without the requirement of
business entity incorporation in Egypt but with the help of certain
form of representation.
There is a possibility of an individual acting as an agent
selling the products or goods on behalf of a foreign contractor.
Such an individual must be registered under the agency agreement
that involves payment of commission. Under this circumstances the
foreign supplier is not obliged to pay taxes for the sales realized
by the agent, while the taxes apply on the commission received by
the agent. Any activities required to perform after the sale of the
products, e.g. maintenance, are taxable on the net profit gained by
Any bidding process that takes place in Egypt under the
governmental supervision requires the participation of a commercial
agent for the supplier from abroad to partake.
The nationality of the commercial agent shall be strictly
A decree number 362 for the year 2005 from the Minister of Trade
has been published and states that all foreign suppliers who have
arguments with the local commercial agents should settle those
amicably. Moreover, the registration of a new agent is not possible
unless the dues of the terminated agent are cleared up.
Distributors are business entities that act as a customer for
the foreign goods and buy them only to resell them for a profit
gain. No registration for distributors is required.
The foreign producers have the option of appointing a
distributor in Egypt to purchase the products from them and resell
The employment of both the agent and the distributor is also
possible for the purpose of allocating the responsibilities of
marketing, importation and distribution. The distributor is not
obliged to hold an Egyptian nationality.
The foreign business entity has the right to form a joint
venture with the distributor or form a subsidiary and purchase its
own products from the commercial agent in order to resell those
inside Egypt. The taxation policies apply on the net profit
realized by the distributor.
Technology Transfer and Licensing Agreement
Last but not the least the foreign company is able to perform a
technology transfer and licensing agreement with a local business
with no involvement of an agent as the marketing of the produced
goods shall take place through the Egyptian enterprise.
Under the Egyptian law the fees paid to the foreign business are
taxable at a rate of 20 per cent with the reduction to 15 per cent
under certain conditions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In practice, the annual return is prepared soon after the annual general meeting at which the accounts are presented.
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