The upcoming New Administrative Captial (NAC), along with a rising interest in higher education, and a strong focus on innovation, make Egypt a profitable venture for your company. This region also harbors rich resources, including a thriving import and export scene.
Review the requirements and tips for hiring in Egypt and learn how Globalization Partners’ global employment platform simplifies your international expansion process.
What to know before hiring in Egypt
Egypt is the common name for the Arab Republic of Egypt, the third most populated country in Africa — and home to more than 106.4 million individuals. If you’re eyeing this market for your company’s next point of growth, here are some facts about the region:
- Cairo is the capital city.
- The country has 27 total governates.
- Top exports include crude and refined petroleum, gold, natural gas, and fertilizer.
- Top imports include refined and crude petroleum, wheat, packaged medicine, and cars.
- Food processing, textiles, tourism, pharmaceutical, and construction are examples of leading industries.
- Egypt’s currency is the Egyptian pound, abbreviated as EGP or LE. The symbol is E£.
1. The labor market
Egypt’s labor market includes 24.113 million potential employees, many of whom have extensive industry experience and/or higher education, as Egypt’s higher-education institutions are some of the few that admit noncitizens and offer comparably low tuition for many programs. International students flock to the country, especially from places like Malaysia, Indonesia, and Nigeria. More students were enrolled in a higher education program in the 2019 to 2020 school year than ever before.
There is a robust focus on science, health and medical sciences, and technology — one report stated that, in 2019, Egypt ranked 92nd globally for innovation. The recently launched “Science Up” program supports countrywide efforts to modernize laboratories and facilities and incentivize more grants.
Officials announced an ambitious plan in 2015 to develop the NAC to move the bustle away from Cairo and create a thriving urban hub of universities, diplomacy quarters, political compounds, architecture, an amusement park, healthcare facilities, and over a thousand religious centers. The city will operate on smart technology and electronically monitored infrastructure, with solar power panels and plenty of green space allotted.
2. Languages
Arabic is Egypt’s official language, but it’s not uncommon to encounter English and French speakers as well. All legal documents, including employment contracts, should be written in Arabic. Your company should secure a translator and interpreter for all meetings and correspondence.
3. Working hours and time off
The maximum working hours are 48 hours per week. Most workers work eight hours per day. Office hours are typically Sunday through Thursday, 9 a.m. to 5 p.m. During Ramadan, the ninth month of the Islamic calendar, many offices have shorter hours to accommodate religious practices. Outside of Ramadan, many Muslim-owned or Muslim-staffed companies close on Fridays for prayer. Employees who have worked for your company for five consecutive years are eligible for one month of paid leave for a religious pilgrimage.
Employees cannot work more than 10 hours per day, and overtime payment must exceed an employee’s original salary amount. Overtime payment should be:
- Original compensation plus 35 percent more for the day working hours
- Original compensation plus 70 percent more for the night working hours
- Double the amount of an employee’s original compensation plus another rest day if the employee works overtime on their scheduled day off
Egypt celebrates 12 national holidays, and all officially recognized holidays are in addition to an employee’s required 21 days of annual vacation leave. Employees who work at your company for 10 years, or those aged 50 or older, receive an additional 30 days of vacation time. Employees in challenging industries may be eligible for an extra week of leave.
Women employees who have been with your company for 10-plus months are entitled to a paid 90-day maternity leave — note that 45 of those days are scheduled after delivery. Employers with more than 50 employees must also provide unpaid maternity leave for up to two years. Mothers are permitted regular breaks during working hours for breastfeeding or childcare purposes.
4. Employment contracts
Employment contracts largely depend on the 2003 Egyptian Labor Law No. 12 and the English Civil Code. Egyptians employed by an international, non-Egyptian entity aren’t subject to the Labor law but may be subject to Egyptian income tax.
All employers in Egypt must have three copies of the written contract, regardless of employees’ nationalities. The employee and employer should each receive a copy, written in Arabic, as well as the Social Insurance Officer or comparable labor office that’s working with your company to permit employees. All monetary amounts listed, like benefits, salary, and taxes, should be listed in Egyptian pounds.
Employment contracts can be definite or indefinite. Definite contracts could end at the employee and employer’s discretion, such as after project completion or by a specific, preset date. You can renew a definite contract up to five times before the government may consider it an indefinite contract.
Your company should have an employee handbook that you review carefully with each individual. Reference this book in the employment contract and provide translated copies for all applicable parties.
5. Compensation and benefits
President Abdel Fattah al-Sisi raised Egypt’s minimum wage to EGP 2,000 per month in 2019, with full implementation expected by 2022. The National Wages Council (NWC) also set a minimum wage of EGP 6,000 per month for private sector workers. All employees are entitled to certain benefits, including social security. Additional benefits might include overtime payment and profit-sharing, depending on the industry and employment contract.
Social security encompasses disability, pensions, sick time, paid maternity leave, unemployment insurance, and death allowances. It is not guaranteed to non-Egyptian employees. Your company is responsible for offering private healthcare insurance or partnering with the Medical Insurance Plan.
Your company should consider offering benefits beyond minimum requirements if you want to attract top-performing talent and experienced personnel to join your team, especially in competitive industries. For example, you might offer:
- Financed work equipment
- Paid mileage (when applicable)
- A monthly stipend for housing or utility costs
- Meal tickets or discounts
- Gym memberships
- More comprehensive health coverage
6. Taxes
Employees, employers, and the government each pay a share of social security. Your company is responsible for paying 15 percent of monthly contributions covered by payroll, plus an additional 2 percent of the monthly base amount — which may include things like incentives, commission, and profit-sharing — for lump-sum benefits. Employers in challenging or dangerous industries must pay more. Companies submit employee income tax by deducting the taxed amount from the salary and submitting regular payments to the Egyptian Tax Department. All employees must be on file with the Egyptian Social Insurance Authority.
Your company will also be subject to a corporate tax rate of 22.5 percent on net profits with no additional local taxes imposed. Corporations and partnerships based outside of Egypt must pay this tax on all income earned from an Egypt-based permanent establishment (PE). All resident companies are taxed on income earned globally.
The cost of hiring an employee in Egypt
As you navigate the steps to hiring in Egypt, you’ll encounter a ledger of direct and indirect costs, including — but not limited to — the following:
- Work permit verification through the Ministry of Manpower and Immigration
- Proof of prospective employment approval and any applicable employee visas
- Professional recruitment services
- Job listings on forums, hiring websites, and local agencies
- Business establishment costs
- Hiring and managing an internal hiring committee
- Applicant tracking software
- Consulting costs for in-country lawyers for labor law consultation
- Traveling and lodging expenses for interviews and in-person meetings
- Business registration fees
- Initial bank deposits
- Training and equipment for new employees
- Translators and interpreters
- Mandatory and optional benefits
Many of these factors, like working with in-country experts and third-party services, could also require extensive time and resources to ensure you hire employees while complying with the country-specific laws. Leveraging a global employment platform, like Globalization Partners, is the most effective way to check all the boxes — and save you valuable time.
Hiring practices in Egypt
Consider the following when hiring team members in Egypt:
- Probationary periods: You and your employee must agree on a probationary period in the written employment contract. This period cannot exceed three months and cannot be repeated.
- Background checks: Companies have the right to conduct background checks applicable to all employment, payment, and benefits information, as long as you avoid any type of discriminatory practice. It’s advised to keep secure files for each employee.
- Terminating contracts: Before terminating employment contracts, you must obtain approval from the Ministry of Manpower and Immigration. Employees have the right to challenge this decision and may be reinstated if found unlawfully terminated. Employees who have been with your company for less than 10 years should receive at least a 60-day termination notice, while everyone else should receive 90 days. The employee and employer are entitled to seek compensation if any harm relates to the lawful termination. Both parties can choose to terminate open-ended contracts with appropriate notice and written documentation.
- Optional bonuses: Bonuses are not legally required but are common and expected in some industries.
- Recruitment stipulations: When hiring new employees in Egypt, the Companies Law of Egypt stipulates that no more than 10 percent of the employees — 25 percent in designated free zones — can be from abroad. Non-Egyptian employees cannot have salaries that exceed 20 percent of the total wages.
- Intellectual property: All work inventions and products become the sole property of the employer, though specific restrictions may apply based on the industry, company, and stipulations you and the employee agree upon in the written contract. All employees, including terminated ones, must maintain trade secrets.
What does a company need to hire employees in Egypt?
The process for hiring and managing employees is largely dependent on the business structure you choose when establishing your company’s presence in Egypt. Options here include:
- Joint-stock companies (JSC): These are managed by a board of directors — a group of at least three members — who take care of all daily operations with required employee input for all management decisions via board, share membership, or an internal employee committee. Joint-stock companies might be closed or listed, and all liability is limited to each partner’s valued share. You must register these with the Commerical Registry.
- Branch of an international company: International branches registered in Egypt are common in construction and contract-based industries, especially those that work with the government. They are present in both private and public sectors and legally considered an Egyptian company in all aspects aside from corporate governance.
- Limited liability company (LLC): In an LLC, each partner’s input and decision power rests with the value and size of their company share. LLCs must register with the Commercial Registry and may be owned entirely by non-Egyptian partners but not by one individual alone.
- One-person company: This structure is for companies with a single owner or founder. Company capital and losses don’t exceed their personal funds, but they are responsible for any liabilities incurred while in business.
- Representative office: You might form a representative office if you’re a non-Egyptian company that wants to establish a temporary or short-term presence for market surveys and feasibility studies but lack the need or resources to become a fully commercial operation. The Companies Law or Commerical Agencies Law validates this structure.
The Labor Law applies to all employees in Egypt, regardless of the business structure, as long as that company is Egyptian-owned. Depending on your industry and business type, you will likely need a business bank account before hiring employees and registering for taxes and social security. The process varies between financial institutions but typically requires verified signatures and an initial deposit. Be sure to get translated copies of all important documents, including labor contracts, payroll information, and tax forms.
All companies must have internal organizations to help facilitate work regulations, disciplinary rules, and maternity rights under the Labor Law. An approved labor office must decree all final versions of internal regulations, and disciplinary information must list all violations and subsequent penalties.
Hiring remote employees in Egypt
If you’re hiring remote employees in Egypt, remember the following:
- Egypt’s time zone is UTC+2 — critical to remember when scheduling remote interviews and project meetings with employers, local representatives, or third-party providers.
- About 46 percent of Egypt’s residents use the internet. The country domain code is .eg.
- Set up a clear space in your office with good lighting and minimal echo for remote communication. Have your candidates and hired employees test all equipment, including video and audio.
- Egypt uses the DD/MM/YYY date format, which you should utilize when creating employment contracts and work schedules.
- Some companies give occasional allowances for technology to help solve internet issues, such as lagging connections, dropped calls, or distorted audio.
Learn how to hire in Egypt with help from Globalization Partners
Hiring in an unfamiliar international market is a complex process that could consume much of your company’s time and resources. Use our Global Growth Platform™ to hire, onboard, and set up payroll in just a few clicks. Our AI-driven technology expedites the legal, HR, and compliance tasks of global growth, so you can focus on building your international teams in Egypt and beyond.
Request a proposal to learn more about our global solution and check out our resources for more information about international hiring.
