eg-formation

Egypt — Business Formation & Registration for the Self-Employed

This skill walks a self-employed person in Egypt through getting legally set up: obtaining a tax card (البطاقة الضريبية) and opening a tax file (ملف ضريبي) with the Egyptian Tax Authority — ETA (مصلحة الضرائب المصرية), entering the commercial register (السجل التجاري) where required, joining a professional syndicate (نقابة) for regulated professions, choosing a tax regime at the point of registration, registering for VAT and e-invoicing, registering for social insurance (التأمينات الاجتماعية), and — if it makes sense — forming a limited liability company (شركة ذات مسؤولية محدودة) through GAFI (الهيئة العامة للاستثمار).

Respond in the user's language. If the user writes in Arabic, reply in Arabic and keep the native legal terms (e.g. البطاقة الضريبية = tax card, السجل التجاري = commercial register, منشأة فردية = sole proprietorship / individual establishment, نقابة = professional syndicate, الهيئة العامة للاستثمار = GAFI).

1. Quick Reference

Quick Reference table

Field	Value
Country	Egypt (EG)
What this covers	Registering as a self-employed individual / sole proprietor and (briefly) forming an LLC
Currency	EGP (Egyptian Pound)
Authorities	ETA (Egyptian Tax Authority — tax card, tax file, VAT, e-invoicing); GAFI (companies / LLCs); Commercial Register (السجل التجاري / GAFI); NOSI (National Organisation for Social Insurance — التأمينات الاجتماعية); relevant professional syndicate (نقابة)
Tax card	البطاقة الضريبية — mandatory ETA tax identification document
Income tax law (general)	Income Tax Law No. 91 of 2005 (as amended)
Simplified regime	Law No. 6 of 2025 turnover-based system for turnover ≤ EGP 20,000,000 (see eg-sme-tax)
VAT law	VAT Law No. 67 of 2016 (as amended) — standard rate 14%
VAT registration threshold	Historically EGP 500,000 turnover; lowered to EGP 250,000 effective 1 Jan 2026 per Resolution No. 281 of 2025 — verify current value with ETA
Social insurance	Law No. 148 of 2019 — self-employed contribute (commonly cited) ~21% of a chosen reference wage — verify current rate/bands
Quality tier	Research-verified — pending sign-off by an Egyptian accountant
Version	1.0

Conservative defaults

• Default to registering, not waiting. Operating without a tax card / tax file is non-compliant. If income is at or near any threshold, assume registration is required and confirm with ETA.
• Default to the lower VAT threshold. Treat EGP 250,000 (effective 2026) as the trigger to register for VAT and e-invoicing, and flag "verify current value" — do not assume the old EGP 500,000 figure still applies.
• Default to "syndicate first" for regulated professions. Lawyers, doctors, engineers, accountants and similar professions generally cannot practise lawfully without syndicate (نقابة) membership — treat it as a prerequisite, not optional.
• Default to sole proprietorship (منشأة فردية) for a solo freelancer unless there is a specific reason for an LLC (see Section 5). Do not recommend an LLC by default.
• Never present a fee, threshold, rate, or procedure as final without an Egyptian accountant's sign-off and a same-day check against ETA / GAFI portals. Fees and thresholds change frequently by decree.

2. Sole-proprietor registration step-by-step

A self-employed individual in Egypt typically operates as a منشأة فردية (individual establishment / sole proprietorship) or simply as a registered individual taxpayer / professional. There is no separate legal entity — the individual and the business are the same person, with unlimited personal liability.

Step 1 — National ID and eligibility

• Eligibility requirements — Egyptian nationals: a valid national ID (الرقم القومي), age 21+ and legal capacity. The national ID number is the backbone of the tax and registration records. Foreign nationals: valid passport, residence permit, and sometimes activity-specific approvals — escalate; foreigners are out of the simple default path. Verify current procedure.

Step 2 — Proof of place of activity

• Proof of place of activity — A lease/rental contract (عقد إيجار) or ownership document for the business address. Many activities require a registered address even for home-based work. Verify whether the specific activity permits a residential address.

Step 3 — Open a tax file and obtain the tax card (البطاقة الضريبية)

• Tax file and tax card procedure — Register with the ETA to open a tax file (ملف ضريبي) at the competent tax office (المأمورية) for the business address, or via the ETA e-services portal (eservice.incometax.gov.eg / eta.gov.eg). Verify which steps can be done fully online vs in person. Typical documents: national ID copy, proof of address (lease), and a description of the activity. Verify the current document checklist with the local tax office. ETA issues the tax card (البطاقة الضريبية) — the tax identification document carrying the Tax ID Number (TIN). This is mandatory and is required to invoice clients, contract with companies/government, and register for VAT.

Step 4 — Commercial register (السجل التجاري) — for commercial/industrial activity

• Commercial register requirement — The commercial register is required for commercial and industrial activities (e.g. trading, retail, manufacturing, most goods-based businesses). Pure liberal/professional activities (المهن الحرة) — e.g. a lawyer, doctor, engineer, accountant practising their profession — are generally registered via their syndicate and may not require a commercial register entry. Verify per activity — the line between "commercial" and "professional" determines which register applies. Commercial register entry for a sole proprietorship is administered via the commercial registry office / GAFI. Fees reported as nominal (e.g. an entry fee in the low tens of EGP, a small annual subscription scaled to declared capital, a name-reservation fee, and a certificate fee) — all amounts must be verified, as they change and vary by office.

Step 5 — Professional syndicate (نقابة) — for regulated professions

• Syndicate membership requirements by profession — For regulated professions, syndicate membership is a legal precondition to practise: Lawyers → Bar Association (نقابة المحامين). Doctors / dentists / pharmacists → respective medical syndicates. Engineers → Engineers Syndicate (نقابة المهندسين) — regulated under Law No. 66 of 1974. Accountants / auditors → Syndicate of Commercial Professions / registration with the Ministry of Finance accountants & auditors register and the relevant society (e.g. ESAA). Verify the exact body and registration path for public accounting practice. Membership usually requires the relevant degree, fees, and sometimes training. Verify current requirements and fees with the specific syndicate. (Law No. 66 of 1974 (Engineers Syndicate))

Step 6 — Choose the tax regime (see Section 3) and register for VAT / e-invoicing / social insurance (see Section 4)

• Order of operations — At or around the time of opening the tax file, decide between the simplified turnover-based regime (Law No. 6 of 2025) and the general system, then complete VAT, e-invoicing, and social insurance registrations as applicable. > Order of operations (typical): national ID → proof of address → ETA tax file + tax card → (commercial register or syndicate, per activity) → regime choice → VAT / e-invoicing if over threshold → social insurance. Verify the exact sequence, as some offices require the commercial register or syndicate card before issuing the tax card for certain activities.

3. Choosing the regime at registration (simplified vs general)

At registration the taxpayer is, in effect, choosing how their income tax will be computed. The integrated simplified regime under Law No. 6 of 2025 taxes a flat percentage of turnover (رقم الأعمال), while the general system (Income Tax Law No. 91 of 2005) taxes net profit under progressive brackets.

Full simplified-regime mechanics, band rates, eligibility, exclusions, and the 5-year lock-in live in eg-sme-tax. Use this section only for the registration-time decision.

Decision table

Decision table — Simplified vs General

Factor	Lean Simplified (Law 6/2025)	Lean General (Law 91/2005)
Annual turnover	≤ EGP 20,000,000 (eligibility cap)	Any; required if over the cap
Profit margin	High margin — turnover tax (0.4%–1.5% of turnover) beats profit tax	Thin margin / loss-making — % of turnover can exceed tax on small/zero profit
Bookkeeping appetite	Wants simpler filing & quarterly VAT	Can maintain full accounts and substantiate expenses
Deductible expenses	Few real, documentable expenses	Large documentable expenses that lower net profit
Stability	Comfortable with a 5-year commitment	Wants flexibility year to year
Activity status	Eligible activity (not excluded/regulated-out)	Excluded from the simplified regime

Rule of thumb

Rule of thumb: a low-cost solo freelancer with a high margin usually pays less under the simplified turnover regime; a low-margin reseller or a business with heavy documentable costs may pay less under the general system. Model both and get accountant sign-off before electing — the simplified regime is a 5-year lock-in and enrolment is not automatic (a request to ETA must be submitted and accepted). See eg-sme-tax.

4. VAT, e-invoicing and social insurance registration

These are separate from income tax and from the tax card — registering for a tax file does not by itself register a person for VAT, e-invoicing, or social insurance.

4.1 VAT registration (VAT Law No. 67 of 2016)

• Standard VAT rate — 14% percent (special/table rates apply to some goods/services — out of scope here) (VAT Law No. 67 of 2016)
• VAT registration threshold — Historically EGP 500,000 of annual taxable turnover; under Resolution No. 281 of 2025, lowered to EGP 250,000 effective 1 January 2026, with a registration deadline reported as 31 March 2026 for those who exceeded EGP 250,000 in 2025. Verify the current value and deadline with ETA before relying on it. EGP (⚠ verify current value and deadline with ETA) (Resolution No. 281 of 2025)
• VAT threshold measurement and registration process — The threshold is measured on gross revenue (turnover), not profit. Register via the ETA portal once turnover crosses (or is expected to cross) the threshold. Voluntary registration below the threshold may be possible — verify. Within the simplified regime, VAT returns are filed quarterly (vs monthly in the general system). See eg-sme-tax.

4.2 E-invoicing / e-receipt registration (ETA portal)

• E-invoicing/e-receipt system and obligations — Egypt operates a mandatory electronic invoicing (الفاتورة الإلكترونية) and electronic receipt (الإيصال الإلكتروني) system on the ETA platform. Resolution No. 281 of 2025 is reported to expand e-invoicing/e-receipt obligations to smaller businesses in step with the lowered EGP 250,000 threshold, with B2C e-receipt obligations expanding through 2025–2026. Verify the exact phase-in dates and who is in scope. Registration requires an ETA portal account and (typically) a digital signature / e-seal and onboarding of an invoicing solution. Verify the current technical onboarding steps. Penalties for non-registration/non-compliance are significant — sources cite fixed fines plus daily penalties and, ultimately, loss of the ability to issue valid invoices. Verify current penalty figures with ETA. (Resolution No. 281 of 2025)

4.3 Social insurance registration (التأمينات الاجتماعية — Law No. 148 of 2019)

• Social insurance registration for self-employed — Law No. 148 of 2019 extended social insurance to the self-employed (أصحاب الأعمال / المهن الحرة), sole-proprietor owners, freelancers of specified trades, craftsmen, merchants, and others. Register with the National Organisation for Social Insurance (NOSI / الهيئة القومية للتأمينات الاجتماعية). Self-employed contributions are commonly cited at ~21% of a chosen contribution (reference) wage, selected from a statutory reference table, between a minimum and maximum contribution wage that is uplifted annually. Verify the current rate, the reference-wage table, and the min/max caps — these change each January. This is separate from income tax and VAT and is not covered by the simplified turnover tax. See eg-social-insurance for the detailed computation. (Law No. 148 of 2019)

5. Sole proprietor vs LLC comparison

Most solo freelancers should default to a sole proprietorship (منشأة فردية). An LLC (شركة ذات مسؤولية محدودة) formed through GAFI adds cost and compliance but provides limited liability and a separate legal personality.

Sole proprietor vs LLC comparison table

Factor	Sole proprietor (منشأة فردية)	LLC (ش.ذ.م.م) via GAFI
Legal personality	None — same as the individual	Separate legal entity
Liability	Unlimited personal liability	Limited to capital contributed
Owners	One individual	One+ (single-member LLC is possible — verify)
Set-up authority	ETA + commercial register / syndicate	GAFI (الهيئة العامة للاستثمار)
Minimum capital	N/A	No statutory minimum reported (verify)
Set-up cost	Low (nominal register fees)	Higher — GAFI incorporation fees, notarisation, bank account, lawyer/accountant
Compliance	Lighter; can use simplified regime	Heavier; audited accounts, corporate filings
Income tax	Personal income tax (general) or simplified turnover regime	Corporate income tax (the SME turnover regime may apply if eligible — verify)
Best for	Solo freelancers, professionals, small traders	Businesses wanting liability protection, partners/investors, larger contracts, scaling

When an LLC makes sense

• You want limited liability (e.g. higher-risk contracts, debt exposure).
• You have or plan partners or outside investors.
• Clients/tenders require a company rather than an individual.
• You are scaling beyond a one-person practice.

Forming an LLC via GAFI (overview only)

• LLC formation steps via GAFI — 1. Create an account on the GAFI e-portal and reserve a company name. 2. Submit the incorporation application with the articles of association, founders' IDs/passports, and required approvals; pay incorporation fees. 3. Obtain the commercial register entry and the company tax card / tax file from ETA. 4. Register for VAT/e-invoicing (if applicable) and social insurance for the company and any employees. > Incorporation fees are reported in the low hundreds of USD range depending on entity type, plus professional fees. Verify all current GAFI fees, capital rules, and the document checklist — these change. Forming an LLC should be done with a credentialed Egyptian lawyer/accountant.

6. Worked examples

All figures illustrative. Verify current thresholds, fees, rates, and procedures before relying on any output.

Example 1 — Freelance graphic designer, EGP 180,000/year, solo

• Path: Register an individual tax file + obtain the tax card at ETA. Likely no commercial register (a service/professional activity) — verify. No syndicate (unregulated profession).
• VAT: Turnover below the EGP 250,000 (2026) threshold → no mandatory VAT registration yet. Watch the threshold; e-invoicing may still be encouraged — verify scope.
• Income tax: Eligible for the simplified turnover regime; high margin → likely cheapest. Compare with general system. See eg-sme-tax.
• Social insurance: Should register with NOSI as self-employed at a chosen reference wage — verify rate/bands.

Example 2 — Software developer/contractor, EGP 900,000/year, one big client

• Path: Tax file + tax card. Service activity — check commercial register vs professional treatment. No syndicate.
• VAT: Above EGP 250,000 → must register for VAT (14%) and for e-invoicing on the ETA portal; verify the 31 Mar 2026 deadline if 2025 turnover exceeded the threshold.
• Income tax: Eligible for simplified regime (≤ EGP 20m). Flag client concentration — single-client dependence can raise exclusion/abuse questions in the simplified regime; escalate to eg-sme-tax.
• Social insurance: Register with NOSI; choose reference wage.

Example 3 — Licensed engineer starting a consultancy

• Path: Engineers Syndicate (نقابة المهندسين) membership is a precondition to practise (Law No. 66 of 1974). Then ETA tax file + tax card. Professional activity → likely registered via syndicate rather than the commercial register — verify.
• VAT / e-invoicing / social insurance: as per thresholds in Section 4.
• Regime: Compare simplified vs general; engineering services are typically high margin. Confirm the activity is not excluded from the simplified regime.

Example 4 — Two founders launching a product company, expecting investment

• Path: Form an LLC (ش.ذ.م.م) via GAFI — limited liability, room for partners/investors, credibility for contracts. Reserve name → articles of association → incorporation → company tax card + commercial register → VAT / e-invoicing / social insurance.
• Why not sole proprietorship: multiple owners and outside capital make a sole proprietorship unsuitable. Use a credentialed lawyer/accountant for incorporation.

7. Tier 2, Reference, and checklist

Tier 2 — escalate to a credentialed Egyptian accountant/lawyer when

• The activity may sit on the commercial vs professional line (which register/syndicate applies).
• A regulated profession is involved (syndicate licensing nuances).
• The taxpayer is a foreign national or has cross-border / free-zone / SEZ considerations.
• Turnover is near the VAT threshold or the EGP 20m simplified-regime cap.
• The taxpayer is choosing between sole proprietorship and an LLC, or forming an LLC at all.
• There is single-client concentration or business fragmentation (simplified-regime exclusion risk — see eg-sme-tax).
• Prior-year non-registration, back taxes, or penalty exposure exists.

Reference (verify each before relying on it)

• Income Tax Law No. 91 of 2005 (as amended) — general system.
• Law No. 6 of 2025 — integrated simplified turnover-based regime (≤ EGP 20m); see eg-sme-tax.
• Law No. 152 of 2020 — MSME Development Law (size definitions/incentives).
• VAT Law No. 67 of 2016 (as amended) — 14% rate; registration threshold (historically EGP 500,000; EGP 250,000 from 1 Jan 2026 per Resolution No. 281 of 2025 — verify).
• Resolution No. 281 of 2025 — lowered VAT/e-invoicing threshold and expanded e-receipt obligations — verify scope, dates, and penalties.
• Law No. 148 of 2019 — social insurance (incl. self-employed); see eg-social-insurance.
• GAFI (gafi.gov.eg) — LLC incorporation, name reservation, fees, document lists.
• ETA (eta.gov.eg; eservice.incometax.gov.eg) — tax file, tax card, VAT, e-invoicing portals.
• Professional commentary used for this skill: EY, WTS, Andersen Egypt, Deel, and Egyptian law-firm alerts (2025–2026).

Registration checklist (verify each item before filing)

• National ID (or passport + residence permit for foreigners).
• Proof of business address (lease/ownership) — confirm activity allows it.
• ETA tax file opened + tax card (البطاقة الضريبية) issued.
• Commercial register entry (commercial/industrial activity) or confirm professional/syndicate path applies.
• Syndicate (نقابة) membership secured (regulated professions).
• Regime chosen — simplified (Law 6/2025) vs general — modelled and signed off.
• VAT registration done if over the (verified) threshold.
• E-invoicing / e-receipt onboarding done if in scope.
• Social insurance (NOSI) registration done; reference wage chosen.
• (LLC only) GAFI incorporation, articles of association, name reservation, company tax card, bank account.

Deregistration / closing down

• Deregistration process — To stop activity, notify the ETA and close the tax file, settle any outstanding income tax / VAT and file final returns, cancel the commercial register entry and/or syndicate membership, and stop social insurance contributions with NOSI. For an LLC, follow the GAFI liquidation/strike-off procedure. Deregistering for VAT requires meeting ETA conditions. Verify the current step-by-step deregistration procedure and any clearance requirements — closing badly leaves dormant liabilities and penalties.

PROHIBITIONS

• Do NOT tell anyone they can operate without a tax card / tax file — that is non-compliant.
• Do NOT state the VAT threshold as EGP 500,000 without flagging the EGP 250,000 (from 1 Jan 2026) change and "verify current value" — do not present either figure as settled without an ETA check.
• Do NOT quote any fee, threshold, rate, penalty, or deadline (commercial register fees, GAFI incorporation fees, social-insurance rate/bands, e-invoicing penalties) as final without same-day verification — flag with "verify current value/procedure".
• Do NOT tell a member of a regulated profession they can practise without the relevant syndicate (نقابة) membership.
• Do NOT assume an activity is "professional" vs "commercial" (and thus which register applies) — verify per activity.
• Do NOT recommend an LLC by default; recommend a sole proprietorship for a solo freelancer unless there is a clear reason (Section 5).
• Do NOT advise splitting/fragmenting a business to stay under a threshold (abuse risk).
• Do NOT treat foreign-national registration as the simple default path — escalate.
• Do NOT present any registration plan as final without sign-off from a qualified Egyptian accountant/lawyer.

Disclaimer

This skill is research-verified against the Egyptian Tax Authority (eta.gov.eg), GAFI (gafi.gov.eg), and reputable Egyptian and international tax/legal publications (EY, WTS, Andersen Egypt, Deel, and Egyptian law-firm alerts), current to May 2026. It is not a substitute for professional advice and has not yet been signed off by a qualified Egyptian accountant. Egyptian registration procedures, fees, the VAT rate/threshold (notably the EGP 500,000 → EGP 250,000 change for 2026), e-invoicing scope and penalties, social-insurance rates/bands, and GAFI rules are subject to change by decree. Always verify current figures and procedures with ETA, GAFI, the relevant commercial registry, the relevant syndicate (نقابة), and NOSI, and obtain sign-off from a credentialed Egyptian tax/legal professional before registering, filing, or relying on any output. Provided by openaccountants.com as open-source guidance, without warranty.