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Hiring in Egypt
Background checks in Egypt
Hiring options in Egypt
Language spoken in Egypt
Corporate presence requirements and payroll setup in Egypt
Easily hire employees in Egypt with our EoR solution
Employer of record in Egypt
Hiring employees in Egypt means navigating a range of complex labour laws, tax requirements and HR processes. In most cases, it also means setting up a local business entity, which can be both time-consuming and expensive.
One alternative is to engage workers as independent contractors instead of employees, which is a less administratively taxing process. However, this could leave your business open to employee misclassification risk and potentially lead to fines, penalties, and other legal consequences. There is a better solution: hire employees through an employer of record, or EoR.
What is an employer of record (EoR)?
An employer of record (EoR) is an organisation that hires workers on behalf of other organisations. This allows employers to access talent in countries where they do not yet have a corporate presence, without the hassle and expense of setting up a legal entity. Employers of record are responsible for compliance with labour laws, tax regulations, and other legal requirements. That leaves you free to focus on the important work of managing your operations and driving business growth.
Working with an employer of record in Egypt
When you hire workers through an employer of record in Egypt, the EoR will be those workers’ employer for legal and tax purposes. However, you will maintain full control of their day-to-day management. Depending on the employer of record provider you choose, they will likely offer various HR services including benefits administration, payroll, onboarding, training, and even acquiring visas and work permits for foreign workers.
Hiring in Egypt with or without an employer of record
Whether or not you choose to work with an employer of record in Egypt, it’s a good idea to have an understanding of the rules and regulations that apply before you start your search for Egyptian talent. Read on for everything you need to know to hire compliantly and confidently in Egypt.
Hiring in Egypt
With a large, skilled workforce, a growing technology sector, and strong GDP growth, Egypt has emerged as a promising new destination for businesses seeking international expansion. But before hiring in Egypt, employers should have a thorough understanding of the labour laws, tax regulations and cultural norms that shape the world of work. We will cover some of the basics in this section.
Labour laws in Egypt
The main labour laws that employers hiring in Egypt should be aware of include:
- The 1978 Government Service Law No 47, which governs civil employees.
- Law No 48, which was enacted in 1978, and which governs public sector employees.
- Law No 203, enacted in 1991, which governs the public commercial (business) sector.
- 2003 Law No 12, which governs employees in the private sector.
The Egyptian Civil Code also contains provisions relating to employment, which those hiring in Egypt must adhere to. In addition, several ministerial decrees provide extra rules and requirements.
Employment contracts in Egypt
Employers hiring in Egypt are legally obliged to provide an employment contract for each employee. This must be drafted in Arabic and drawn up in three copies: one each for the employer, the employee, and the relevant social insurance office. Employment contracts can be either indefinite or for a fixed-term.
Taxes and social insurance contributions in Egypt
Employers in Egypt are required to deduct income tax from their employees’ earnings and remit them to the tax authorities. In Egypt, income tax is paid on a progressive scale with rates from 2.5% to 25% based on the employee’s income. Employers are also required to deduct and pay social security contributions, which cover retirement, disability, accidents, death, and unemployment.
Work permits in Egypt
Foreign employees are only authorised to work in Egypt if they have a valid work permit. These typically need to be renewed either every six months or every year. There are also limits on the number of foreign workers that companies hiring in Egypt can engage as a percentage of their total workforce.
Background checks in Egypt
Performing pre-hire checks on a potential new employee allows employers to verify information received during the recruitment process and confirm the candidate’s suitability for a role. However, there are some limitations on background checks in Egypt, which employers need to be aware of. Read on for what you need to know.
Required background checks in Egypt
Employers in Egypt are responsible for verifying that the people they hire have the right to work in Egypt. That means that checking that a candidate has a valid work permit is a required background check in Egypt.
Other permissible background checks in Egypt
Here are some other types of background checks that it may be possible to conduct in Egypt, depending on your specific circumstances:
- Criminal record checks: Checking a candidate’s criminal history is a valid type of background check in Egypt, especially for sensitive roles. This type of check is carried out through local law enforcement agencies.
- Credit checks: A credit check is a type of background check that involves looking into a candidate’s financial history. This type of check is typically only permissible for roles involving managerial duties or responsibility for a company’s finances.
- Employment history checks: Employment history checks involve verifying a candidate’s previous employment by contacting the workplace references they have provided. This can give employers insights into a potential new hire’s skills, attitude, and work ethic.
- Education history checks: Similarly, employers might conduct checks into the candidate’s education history by contacting the educational institutions they have attended. This can help confirm the veracity of information provided by the candidate and ensure they are properly qualified for the position.
- Medical checks: Employers in Egypt can ask candidates to undergo a medical screening before they start working. However, this is only possible for jobs where there is a direct safety requirement, such as working with machinery.
- Social media checks: Employers in Egypt can screen publicly available information from a candidate’s social media profiles in order to confirm alignment with the company’s values. It’s important to stick to publicly available data to protect candidates’ right to privacy.
Restrictions on background checks in Egypt
Employers conducting background checks in Egypt must ensure they are compliant with the relevant data protection laws. Background checks are generally only permissible if they are essential to the role in question. Employers should seek consent from candidates before conducting any form of background check in Egypt.
Hiring options in Egypt
If you want to hire in Egypt, the first thing to determine is the right engagement structure for your business and your situation. Depending on your needs, you might want to hire employees, engage independent contractors, or even hire workers through a temporary labour agency. We’ll go through all three of these hiring options in more detail below.
Main hiring options in Egypt
Here are the main types of workers you could engage as an employer in Egypt:
- Employee: Employees in Egypt may be engaged on an indefinite or fixed-term basis and may work part-time or full-time hours. There are specific terms of employment for certain categories of employees in Egypt, including sales representatives, remote workers, and students. Employees are engaged via an employment contract, which must be drawn up in Arabic with a copy provided to the employee.
- Independent contractor: Independent contractors are people who work for an organisation but are not its employees. In Egypt, they can be engaged directly or through a personal services company. They are generally responsible for setting their own work schedule and declaring and paying their own taxes.
While independent contractors usually enjoy a greater level of flexibility than employees, they don’t have access to the same rights, benefits, and protections. - Agency worker: Employers in Egypt can also choose to engage workers through temporary work agencies. However, there are specific conditions that need to be met for this to be permitted. For example, employers can use agency workers to temporarily replace another worker whose contract has been terminated or suspended or to meet a short-term increase in demand.
Employee misclassification risks in Egypt
Employees and independent contractors are treated differently by the Egyptian government. First, employers must withhold and pay taxes and social security contributions on behalf of their employees, while independent contractors are responsible for managing this process themselves. Employees also have access to a range of benefits, protections, and employment rights that are not typically available to independent contractors.
For these reasons, it’s important to ensure every worker you engage in Egypt is correctly classified. Keep in mind that it’s not just about the agreement that’s in place, but the actual circumstances of the working relationship. Misclassifying employees as independent contractors can have serious consequences for a business in Egypt, including fines, penalties, and mandatory back payment of benefits and taxes. It can also cause significant harm to an employer’s reputation.
Language spoken in Egypt
Egypt’s official language is Arabic, and a working knowledge of it may be required for certain jobs. Read on for some more information about the languages used in Egypt.
Language requirements for employment documents in Egypt
All employment documents in Egypt should be written in Arabic. This ensures they can be understood by a court in the case of any labour disputes. Employment contracts must also be drawn up in three copies: one for the employer, one for the employee, and one for the relevant social insurance office.
English language in Egypt
Most educated people in Egypt study English at school, meaning that it is relatively widely spoken today. Egypt was ranked 82nd out of 116 total countries and 12th out of 24 countries in Africa in EF’s English Language Proficiency Index. English proficiency may be higher in large cities and areas with high volumes of tourism.
French language in Egypt
French is another foreign language that is fairly widely spoken in Egypt, thanks to historical links between the two countries. French is commonly taught as a second language in Egyptian schools. According to some estimates, there are around three million French speakers in Egypt.
Corporate presence requirements and payroll setup in Egypt
Companies operating in Egypt must usually have commercial registration with the relevant authorities in order to operate and engage employees. It is also necessary to register with the General Authority for Investment in Free Zones (GAFI), as well as securing the necessary licences and permits.
Employers must register for taxes and social security to ensure they will be able to withhold and pay contributions from their employees’ wages. They should also ensure compliance with minimum wage regulations, adhere to labour laws and keep detailed payroll records.
Using an employer of record as an alternative to setting up payroll in Egypt
As is clear from the above, payroll setup in Egypt is not a simple process. It involves registering with several different bodies and ensuring compliance with local labour laws and tax regulations. There may also be additional requirements for foreign companies wanting to hire talent in Egypt.
Working with an employer of record (EoR) is an easier solution since it allows you to hire and pay employees with minimum administration. Instead of grappling with various registration processes, you’ll be able to focus on finding the best people for the job. Working with an EoR is the easiest way to hire workers in Egypt without a local corporate presence.
Easily hire employees in Egypt with our EoR solution
Hiring employees in Egypt usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC.
Through our EoR solution, you can confidently hire employees in Egypt, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.
Compliantly hire employees anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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