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Egypt is in north Africa on the Mediterranean Sea, between Israel and Libya. Egypt has Africa’s second largest economy. The economy is diverse, but it seeks to further diversify markets and energy infrastructure. Its main economic sectors include manufacturing, energy, and services. Egypt has a labor force of around 32 million people.
Employment contracts in Egypt must be written in Arabic. They are based either on duration or work completion. Duration-based contracts are either definite or indefinite. Definite contracts have a designated period, while indefinite contracts are continuous until an employer or employee initiates termination. Work completion-based contracts have a designated completion of specified work.
The minimum wage in Egypt is currently set at 6,000 EGP.
The standard working week in Egypt consists of 8 hours a day and 40 hours per week.
Overtime
All working hours above 48 hours per week are subject to overtime pay at a rate of 135.00% of their regular salary rate of pay during daylight hours and 170.00% of their regular salary rate of pay for work at night. For work performed on non regular working days, the rate is twice the daily wage plus another day off during the following week; working on days off must be mutually agreed upon in advance.
An employee is entitled to up to 6 months of paid sick leave covered by social security. The employee must provide a professional medical certificate confirming the sickness.
For the first 90 days of sick leave, the employee is entitled to 75% of the regular salary rate. After that, this increases to 85% of the normal rate of pay for 90 days.
Maternity Leave
Female employees who have been employed for ten consecutive months are entitled to 90 days of paid maternity leave. Maternity leave pay is 100% of salary, covered by Egyptian social security at 75% of the social insurance salary (10,900*75%) and by the employer for 25% of the salary . It is common for the employer to cover the whole 100% for the entire 3 months.
Employees are entitled to take three periods of maternity leave during their total employment service.
Upon return to the workplace, the woman is entitled to two thirty-minute nursing breaks or a combined one-hour nursing break each day for up to two years after the date of birth.
Paternity Leave
There are no provisions in the law regarding paternity leave.
Parental Leave
There are no provisions in the law regarding parental leave.
In Egypt, employees are entitled to 21 working days of paid annual leave per year if employed for at least six consecutive months.
It increases to 30 days of paid annual leave for employees who have completed ten years of consecutive employment or employees over 50 years of age.
Unused vacation days carry over into the next year.
Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, on approval of the employer and employee for the following:
Casual leave. Employees are entitled to up to six days off from work per year and are not required to state a reason for taking the leave. Employees are allowed to take a maximum of two days per leave. Casual leave counts as part of annual leave.
Each year the government may decide if public holidays falling on weekends will be moved to a weekday or will be lost.
Certain religious holidays are determined by the lunar cycle and will be confirmed nearer the date of the holiday.
Date Day Holiday Notes
7 Jan 2024 - Sunday - Coptic Christmas Day
25 Jan 2024 - Thursday - Revolution Day
9 Apr 2024 -Tuesday - Eid al-Fitr Holiday
10 Apr 2024 - Wednesday - Eid al-Fitr Holiday
11 Apr 2024 - Thursday - Eid al-Fitr Holiday
12 Apr 2024 - Friday - Eid al-Fitr Holiday
13 Apr 2024 - Saturday - Eid al-Fitr Holiday
14 Apr 2024 - Sunday - Eid al-Fitr Holiday
25 Apr 2024 - Thursday - Sinai Liberation Day
5 May 2024 - Sunday - Labour Day
6 May 2024 - Monday - Sham el Nessim
16 Jun 2024 - Sunday - Arafat Day
17 Jul 2024 - Wednesday - Eid al-Adha - Tentative
18 Jul 2024 - Thursday - Eid al-Adha Holiday - Tentative
19 Jul 2024 - Friday - Eid al-Adha Holiday - Tentative
20 Jul 2024 - Saturday - Eid al-Adha Holiday - Tentative
30 Jun 2024 - Sunday - June Revolution Day
8 Jul 2024 - Monday - Islamic New Year - Tentative
23 Jul 2024 - Tuesday - July Revolution Day
16 Sep 2024 - Monday - Prophet Muhammad’s Birthday
6 Oct 2024 - Sunday - Armed Forces Day
Egypt offers universal healthcare.
The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination.
One Project Base contract: Can be ended by the end of the project, the employee will get paid for his last month salary & PTO & Notice period (if mentioned in the contract)
Definite Contract: The rest of the contract & PTO & Notice period (if mentioned in the contract).
Indefinite Contract: Severance Pay, 2 Months notice period, PTO.
An employer who wishes to terminate an employee must go before a committee with judicial powers at the Ministry of Manpower and Migration. The committee has 15 days to decide whether to grant the request. The employer may then dismiss the employee, who retains the right to challenge the dismissal in court.
The court can be involved if the employee doesn’t agree on the Indefinite contract cancellation and the compensation package, or if the employer terminated the employee without giving him his rights.
Notice Period
In Egypt, the periods of notice are determined according to the employment agreement/contract and collective agreement in place and the length of service by the employee. If the employee has completed less than ten years of service, the notice period is two months increasing to three months for employees with more than ten years of service. No notice is required during the probation period.
Severance Pay
For a definite or indefinite contact type, there is no statutory severance pay unless the employee’s termination is unjustified or the employer has voluntarily provided it. For a project-based contract, there is no statutory severance pay unless the employer voluntarily provided it.
Probation Period
In Egypt, the probation period is fixed by the employment contract and by law, cannot exceed three months.
Employer Payroll Contributions
18.75% (21% for Members of the Board of Directors) - Social Security (Minimum taxable wages is 2,000 EGP and maximum is 12,600 EGP annually )
1.00% - Emergency Relief (ER) Fund- 1.00% of the basic social insurance salary (2,370 EGP)
19.75% - Total Employment Cost
Employee Payroll Contributions
11.00% - Social Security (Minimum taxable wages is 2,000 EGP and maximum is 12,600 EGP annually)
11.00% - Total Employee Cost
Employee Income Tax
Net income not exceeding 600,000 EGP
0.00% - Up to 40,000 EGP annually
10.00% - 40,001 EGP – 55,000 EGP annually
15.00% - 55,001 EGP – 70,000 EGP annually
20.00% - 70,001 EGP – 200,000 EGP annually
22.50% - 200,001 EGP – 400,000 EGP annually
25.00% - Over 400,000 EGP annually
Net income more than 600,000 EGP and not exceeding 700,000 EGP
10.00% - Up to 45,000 EGP annually
15.00% - 45,001 EGP – 60,000 EGP annually
20.00% - 60,001 EGP – 200,000 EGP annually
22.50% - 200,001 EGP – 400,000 EGP annually
25.00% - Over 400,000 EGP annually
Net income more than 700,000 EGP and not exceeding 800,000 EGP
15.00% - Up to 60,000 EGP annually
20.00% - 60,001 EGP – 200,000 EGP annually
22.50% - 200,001 EGP – 400,000 EGP annually
25.00% - Over 400,000 EGP annually
Net income more than 800,000 EGP and not exceeding 900,000 EGP
20.00% - Up to 200,000 EGP annually
22.50% - 200,001 EGP – 400,000 EGP annually
25.00% - Over 400,000 EGP annually
Net income more than 900,000 EGP and not exceeding 1,200,000 EGP
22.50% - Up to 400,000 EGP annually
25.00% - Over 400,000 EGP annually
Net income more than 1,200,000 EGP
25.00% - Up to 1,200,000 EGP annually
27.50% - Over 1,200,000 EGP annually
Foreigners are strictly prohibited from carrying on any work in Egypt without a valid work permit. A work permit for Egypt is granted by the Ministry of Manpower in Egypt and is usually for one year.
Before the authority issues a work permit for foreigners, a labor market test must prove that there are no local residents eligible for that position. When a work permit is finally granted, the applicant must train at least two local Egyptian nationals to work in the same position. Applying for a work permit in Egypt typically takes one to three months until the applicant can enter Egypt. It may take a further two to four months before the process is completed.
Egypt offers several types of visas, including the following:
Work visa: Once a foreign national gets a work permit, their visa, such as a temporary/tourist visa, will be converted into a work visa.
Temporary/tourist visa: This option is a renewable single-entry 30-day tourist visa that individuals can get when arriving at Egyptian airports. It’s also the visa individuals obtain for a job.
Ordinary visa: An ordinary visa is valid for three to five years and allows an employee’s spouse to have a resident permit for the amount of time identified on their work permit.
Special visa: The special visa is for expats born in Egypt before May 26, 1952, or individuals who have lived in Egypt for more than 20 years from that date. It’s valid for ten years and can be renewed.
The standard rate of VAT in Egypt is 14.00%.
Setting up a legal entity
The process of setting up a limited liability company is as follows
Sign up on the General Authority for Investment and Free Zones website here.
Submit several company name proposals, one of which will be approved upon incorporation.
Submit the following documents:
A copy of the power of attorney (from all 2-50 partners in the case of a limited liability company): This stipulates the establishment of companies and the signing of the articles of incorporation before the real estate registry.
Photocopies of identification (valid and clear) for founders or partners: This will be a national number for Egyptians and a passport for foreigners.
An official extract from the register of accountants and auditors: This should be addressed to the Investment Authority stating the eligibility of the company’s auditor to review and approve the budgets of the money companies for the first time, or the original declaration of acceptance of an appointment in the event that this certificate was previously submitted to the Authority.
A copy of the registration card in the Bar for the lawyer who ratifies the contract before the Bar Association.
For foreign shareholders, investor identification forms: This should be in the form of a document and a copy should also be provided on CD.
A specification of the name and address of the company’s legal advisor: This is provided that the degree of registration is not less than that of an appeal attorney.
Photocopies of the identity proof for the agent: This will be a national number for Egyptians and a passport for foreigners (a valid residence permit is required).
Approval of the competent authority if any of the company’s purposes requires obtaining special approval in accordance with the provisions of the applicable laws.
It is legally required to put a written employment contract in place in Egypt, in triplicate, and in Arabic. The contract should spell out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Egypt should always state the salary and any compensation amounts in Egyptian pounds rather than a foreign currency.
Employers in Egypt are encouraged to give jobs to locals rather than employing foreigners, which can impact work permits. Egypt also has a quota system, so limits on work permits could impact your workers.(e.g. non-Egyptian workers in any company should not exceed 10% of the total staff of semi-skilled or unskilled workers. The limit for skilled workers is 25%. The total compensation of foreign employees must not exceed 35% of your total payroll).
Fixed-term contracts are allowed for up to 5 years and employees who continue to work after 5 years will be considered to have indefinite-term contracts.
Employers must register employees with the National Authority of Social Insurance prior to their start date
Employers must register employees with the National Authority of Social Insurance prior to their start date
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