How can an Umbrella Company Help with Contracting in Egypt?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Egypt. Even better, most are experts in Egyptian and expat tax law, meaning they’ll also help you optimise your earnings in Egypt.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Egypt.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Egypt, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Egypt and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Egypt
One of the most consistently challenging aspects of contracting in Egypt is complying with the country’s tax system. As well as paying tax in Egypt, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Egypt
If you’re working in Egypt under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Egypt for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Egypt, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Egypt through PAYE is left with the prospect doing everything themselves.
Do you know much about Egyptian Tax Law? Does Egypt have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Egypt can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Egypt
| When Do You Need to Lodge Your Tax Return? | 1 January (for non-residents) |
| Tax Filing Deadline | 1 January (for non-residents) |
| Can you file it online? | Yes, https://www.incometax.gov.eg/e-services.asp |
How to File Taxes in Egypt as a Contractor
Step 1: Register
Within 30 days of employment, you need to be registered with the Egyptian tax authorities. This is the responsibility of your employer and you may be required to provide them with the following documents:
- Identification
- Education certificates
- Form (1) for social insurance
- Birth certificate
- Valid passport
- Work permit
Step 2: File Taxes
Your employer is responsible for filing quarterly tax returns, one month after the end of each quarter. They are also required to file an annual salary tax reconciliation, and remit any tax differences, if any, to the Egyptian tax office.
If you are a resident, your employer will withhold your employment income tax on a monthly basis and remit it to the tax office within the first 15 days of the following month.
If you are a non-resident, you are required to file a tax return within 4 months after the end of the financial year or within 30 days after the cessation of your employment. This can be done here(link is external). A translator is recommended.
Tax Figures in Egypt
| Currency | Egyptian pound (EGP) | ||||||||||||
| Tax-free Threshold in Egypt | EGP6,500 | ||||||||||||
| Income Tax Rates |
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| Notes | The tax rates above apply to both residents and non-residents. |
Tax Residency in Egypt
When do you become a tax resident in Egypt
You become a tax resident in Egypt when:
- Egypt is your place of habitual abode i.e. (i) you are present in Egypt for most of the year whether in an owned or leased residence; or (ii) you have a commercial, professional, industrial or other place of business in Egypt;
- You are resident in Egypt for more than 183 days whether continuously or non-continuously in a 12-month period; or
- You are an Egyptian citizen who performs your services overseas and receives your income from an Egyptian treasury.
Does the 183 day rule apply in Egypt
Yes
Am I taxed on my global income in Egypt
Residents are taxed on their global income in Egypt. Non-residents are taxed on their Egypt-sourced income only.
Can you set up your own Limited Company in Egypt?
| How long does it take to set up | 8-9 days |
| How much does it cost | EGP125 |
| Is it easy? | Starting a Business Rank: 103/190 |
Tax Calculator in Egypt
If you are a contractor and want a calculation on your tax and net retention in Egypt, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Egypt
Contractors in Egypt are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Egyptian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Egyptian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Egyptian tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Egypt
We work with numerous umbrella companies in Egypt, many of whom are experts in tax and immigration laws. If you have any questions about tax in Egypt, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Egyptian work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Egypt but without the overhead of directly dealing with the Egyptian tax authorities. Get in touch with us today for some reliable advice on tax in Egypt!
A Contractor’s Guide to Work Permits in Egypt
Immigration is one of the primary concerns for any contractor hoping to start working in Egypt. Permanent employees will find it easy to get their Egyptian work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Egyptian work permit, known more commonly as the Egyptian work permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Egypt is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Egypt (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Egypt. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Egypt and match contractors with the right company for them. If you’ve already secured a contract in Egypt, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
