How to Register a Business in the US from Egypt

Step 1: Benefits of starting your US business from Egypt

Starting a US business from Egypt presents numerous advantages that can significantly enhance the prospects of your entrepreneurial endeavors. One of the primary benefits is gaining access to a vast and diverse market. The US economy is one of the world's largest and most dynamic, offering a plethora of opportunities across various industries. By tapping into this market, Egyptian entrepreneurs can leverage their unique products or services to cater to a broad customer base, thereby substantially increasing their potential for growth and profitability. Additionally, the robust legal framework and business-friendly environment in the US provide a solid foundation for businesses to thrive, minimizing risks and fostering innovation.

Another significant benefit is the access to advanced technological infrastructure and a highly skilled workforce. The US is renowned for its technological innovation and educational excellence, which means businesses have the opportunity to collaborate with top-tier professionals and utilize cutting-edge technologies. This can lead to improved operational efficiency, enhanced product development, and innovative business solutions. Furthermore, being based in Egypt while running a US business can also offer cost advantages. With lower operational costs in Egypt, entrepreneurs can manage their business more economically compared to having a physical presence in the US, thus optimizing resources and maximizing profitability.

Step 2: How to start your US business from Egypt

Starting a US business from Egypt involves several key steps that cater to both US and Egyptian regulations. The first step typically involves selecting the right business structure for a US-based entity, such as an LLC or Corporation. Each structure has its own legal and tax implications. For non-US residents, an LLC is often a preferred choice due to its flexibility and favorable tax treatment. Once the structure is chosen, the next step is to register the business in a suitable state. Many foreign entrepreneurs opt for states like Delaware or Wyoming due to their business-friendly laws and tax advantages.

After registration, obtaining an Employer Identification Number (EIN) from the IRS is crucial as it will be necessary for opening a US bank account and handling taxes. You will also need a US mailing address; this can be achieved through various services that provide virtual addresses. Depending on your business type, complying with local licensing requirements and understanding tax obligations are critical. Consulting with a legal professional who specializes in international business can provide valuable insights and ensure compliance with both US and Egyptian laws. Lastly, leveraging online platforms and digital tools can facilitate easier management and expansion of your US business from Egypt.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Egypt

Understanding Compliance Requirements for Running a US Business in Egypt

Operating a US business in Egypt requires adhering to a variety of compliance requirements unique to the Egyptian business environment. Here are some key considerations to help navigate these requirements effectively:

1. Legal Structure and Registration

1. Company Formation: Determine the most suitable legal structure for your business, whether it's a branch office, representative office, or a new entity.
2. Registration Process: Register your business with the General Authority for Investment and Free Zones (GAFI). This involves submitting necessary documentation and complying with local regulations.

2. Taxation

1. Corporate Tax: Understand the corporate tax rates and ensure timely filing of tax returns. Egypt has a flat corporate tax rate, but the specifics can vary based on business type and sector.
2. Value Added Tax (VAT): Register for VAT and ensure compliance with VAT laws, including accurate invoicing and regular payment schedules.

3. Employment Laws

• Hiring Practices: Comply with local labor laws, including those related to hiring practices, employment contracts, and termination procedures.
• Work Permits: Secure work permits for expatriate employees and ensure all necessary visas and immigration requirements are met.

4. Intellectual Property

• Trademark Registration: Protect your brand by registering trademarks with the Egyptian Trademarks Office.
• Patents and Copyrights: Follow the regulatory framework to secure patents and copyrights to safeguard your intellectual property.

5. Business Practices and Ethics

• Anti-bribery and Corruption: Ensure compliance with US regulations such as the Foreign Corrupt Practices Act (FCPA) and local anti-corruption laws.
• Corporate Governance: Implement strong corporate governance practices to maintain transparency and ethical standards.

6. Trade Compliance

1. Import/Export Regulations: Familiarize yourself with Egypt's import and export regulations, tariffs, and duties.
2. Free Zones: Consider operating within one of Egypt’s Free Zones, which offer various incentives and benefits for foreign businesses.

Understanding and adhering to these considerations is essential for ensuring that your US business operates smoothly and compliantly within Egypt. Consulting with local experts and legal advisors can provide further clarity and assist in navigating the complexities of the Egyptian business landscape.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Egypt

Understanding Tax Obligations for Running a US Business in Egypt

Expanding your US business into Egypt can open up new opportunities, but it also introduces various tax obligations that you must understand to ensure compliance. Here are several key considerations to keep in mind:

1. Business Registration and Structure

Before diving into tax specifics, it's essential to correctly register your business in Egypt. The chosen business structure (branch, subsidiary, or representative office) will impact the applicable tax rates and obligations.

2. Corporate Income Tax

Egypt imposes a corporate income tax on the profits generated by businesses operating within the country. As of the current fiscal laws, the standard corporate tax rate in Egypt is 22.5%. Understanding how to calculate taxable income and adhering to local accounting standards is crucial.

1. Profits are subject to tax after deducting allowable expenses.
2. Ensure all accounting records are precise and match Egyptian legal requirements.
3. Regularly consult with a local tax advisor to stay updated with changes in laws.

3. Value-Added Tax (VAT)

Egypt has implemented a VAT system with a standard rate of 14%. Businesses must:

• Register for VAT with the Egyptian Tax Authority if your turnover exceeds the set threshold.
• Maintain accurate records of VAT collected from customers and paid to suppliers.
• Submit regular VAT returns, typically on a monthly basis.

4. Withholding Taxes

Withholding taxes apply to various payments made to non-residents including dividends, interest, and royalties. These tax rates can vary and may be subject to reduction under applicable double taxation treaties between the US and Egypt:

• Dividends: 5%-10% depending on conditions.
• Interest: 20%.
• Royalties: 20%.

5. Double Taxation Avoidance Agreement (DTAA)

The US and Egypt have a DTAA in place to prevent double taxation of income. This agreement facilitates tax credits and exemptions, ensuring that your business is not taxed twice on the same income. Always reference the DTAA to optimize tax planning and compliance.

6. Employee Taxes and Social Insurance

When hiring employees in Egypt, be aware of the obligations concerning payroll taxes and social insurance:

• Employer must withhold income tax from employees' salaries and remit it to Egyptian authorities.
• Contributions to social insurance funds are mandatory for both employers and employees.
• Stay informed about current rates and regulations regarding employment taxes.

Consulting with a local tax specialist fluent in both US and Egyptian tax laws can help mitigate risks and ensure full compliance while operating your US business in Egypt.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country