Doing business

(Last updated: 05 Nov 2008)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

Business people in Egypt are generally friendly and open and personal relationships are an important factor in business success in Egypt.

It is recommended that appointments be made for any meetings. Meetings will usually go much later than planned and it is considered rude to try and hurry a meeting.

For business occasions, it is customary to wear suits and ties in the major cities. Lighter clothing is acceptable for business purposes in other cities. Jackets and ties are also recommended when dining at the better hotels and restaurants.

It is worth noting that the written contract is not generally considered in Egypt to be the end of the deal. Egyptians will often want to continue to negotiate better terms throughout the business relationship. Provided you are comfortable with bartering, and allow for this in the original deal, this process can significantly enhance your chances of an ongoing business.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Since 1991, tariff rates in Egypt have been reduced to a maximum of 40 per cent - except cars, alcoholic beverages, and certain luxury items. Tariffs on many items are lower - the average tariff rate is still in excess of 25 per cent.

In addition the government levies a service fee on the value of imported shipments. The surcharge is two per cent or four per cent depending on the customs duty of the imported item:

• Two per cent for commodities subject to customs duties between 5 per cent and 30 per cent.
• Four per cent for those subject to custom duties over 30 per cent.

Alcoholic beverages, larger cars, tobacco and tobacco products are subject to duties up to 3000 per cent.

Duty reductions apply to goods imported for domestic processing and assembly.

Non-tariff barriers

Egypt has consistently supported reductions in trade barriers and the concept of open and multilateral trading systems. The government has encouraged free trade by active participation in the General Agreement on Tariffs and Trade (GATT) and similar forums.

Import restrictions

The General Authority for Exports keeps a registry of all importers and Imports Control who issue an import card to registered importers. The import card must be presented when an import transaction is undertaken. All import transactions require a letter of credit to be issued from an officially registered bank (see also 'Pro-forma invoice').

A wide range of imported products is subject to inspection and approval by the General Authority for Exports and Imports Control upon arrival and after payment of established duties All kinds of foodstuffs are subject to health and quality inspection by the three Ministries: Health, Supply and Agriculture. A health certificate is delivered if consignments comply with the regulations.

Certificates of specifications are issued for consignments which satisfy established conditions and specifications. These products are subject to inspection fees, assessed in Egyptian piasters per specified measure. Conditions and specifications must meet the standards issued and approved by the Egyptian Organisation for Standardisation and Quality Control.

A wide range of goods are conditionally restricted or prohibited for economic or industrial considerations.

Customs authority contact details:

Director General of Customs
Customs Administration
El. Nasar St, Gate 10
Alexandria
Tel: +20 3 481 0037
Fax: +20 3 486 8315

Product certification, labelling and packaging

Labelling and marking

Specific regulations apply to the labelling of foodstuffs. Labels must be in Arabic (foreign languages may also feature) and must indicate:

• Complete details of the manufacturer including country of origin
• Details of the product, including the name, quality and ingredients in proportions (including additives and preservatives). (See also 'Public health requirements')
• Production and expiry dates
• Instructions for usage and storage
• Net and gross weights
• The name and address of the importer
• The phrase Islamic Slaughter on packages containing animal products (except seafood)

Other goods, imported in the form in which they are to be sold to the public, must bear a label in Arabic indicating:

• The producer's name and trademark (if applicable)
• The kind of product and its style
• The product's specifications and instructions for usage
• The handling and transportation instructions
• The country of origin
• The production and expiry dates where applicable
• The goods must be shipped from country of origin ports

Packaging

Goods should be securely packed, having due regard to the nature of the goods, means of transport and likely climatic conditions during transit and delivery.

Vine leaves, cotton, wool and any other packing matter, which may contain injurious organisms are not to be used as packing material.

Outer containers should bear the consignee's mark and port mark and should also be numbered (to accord with packing list) unless their contents can be otherwise readily identified.

Wooden containers must be treated with material effective against borers (eg. Chyrozat) to avoid infestation. Each container must be accompanied by a health certificate issued by the approved authority in the country of origin. In Australia this authority is usually the Australian Quarantine and Inspection Service, Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture.

Methods of quoting and payment

Quotations should be by pro-forma invoice in either Pound Sterling or preferably in US dollars and payment terms include both FOB and C&F (Incoterms 1990) or CIF if applicable. Payment may be made by any method of payment recognised by the Egyptian banking system.

Documentary requirements

Commercial invoice

There is no prescribed form. A minimum of three copies is required. It must indicate all details normally provided and include a full description of the goods, all price details (including freight, packing and other charges and discounts) and the country of origin. Consular legalisation is not required unless stipulated in the L/C or by the consignee.

Bill of lading/airway bill

No special requirements. To Order bills are acceptable provided that the name of the bank which opened the letter of credit is indicated as well as the name of the importer of the goods.

Packing list

A packing list is not compulsory, but is recommended and will facilitate clearance..

Certificate of origin

Must be issued and attested by an approved authority.

Must bear a statement that the information given is true and correct and the goods being shipped are of Australian origin and were manufactured in Australia. If the goods contain any foreign components, the country of origin and percentage of the foreign components must be indicated. The full name and address of the Australian manufacturer must also be included.

Must be legalised by the Consular section of the Egyptian Embassy. The number of copies will be specified by the importer. Each copy must bear the original seal of the issuing authority.

All goods must be shipped from country of origin ports.

Public health requirements

Livestock, animal products, plants and plant products are subject to strict health controls.

Fresh and canned meat, plants and plant products are subject to specific health certification.

The precise chemical composition of food additives and other materials used in food processing must be provided by the competent inspection services in the exporting country.

Edible oils and greases (of either animal or vegetable origin), processed tomato products, molasses, salt and soap must conform to specific quality standards. Butter and butter substitutes must not contain boric acid or other injurious preservatives.

Imported foodstuffs, meat, oils and fats, live animals, seeds, seedlings and crops for human consumption, animal feeds, milk substitutes and tobacco are subject to radiation inspection.

Alcoholic beverages are subject to quality and content control.

Pharmaceutical and veterinary products must be registered and are subject to specific and detailed regulations. A complete chemical analysis (legalised by the Egyptian Consulate) is required for registration.

Insecticides require a special permit; importers should provide details of specific requirements.

Insurance

Usually arranged by importer.

Weights and measures

The metric system.

Taxation

Sales tax at various rates, levied on the duty-paid value, is levied on most products, whether imported or domestically produced. Rates of 10 per cent to 20 per cent apply to most goods. A reduced rate of five per cent applies to a limited range of goods.

Duties on machinery needed for establishment of investment projects are reduced to five per cent. Duties on most unprocessed foodstuffs, raw materials, capital goods and farm machinery are five per cent.

Major taxes imposed in Egypt include:

• Corporate income tax – 40 per cent. There are specific variations, for example petroleum companies that are subject to 40.55 per cent tax rate. Companies involved in specified industrial and export activities are subject to special rate of 32 per cent
• Real estate tax
• Manufactured goods and some services are subject to the sales tax. The taxpayer is the importer or the manufacturer of goods. The tax is paid upon the sale of goods that are produced locally or used for private purposes by the producer, and on all imports. Goods that are exported are exempted from the sales tax.
• Customs tax are paid on imported goods as determined by the customs tariff
• Stamp duty is levied on most types of documents and bills, and some types of debentures and bonds
• The inheritance tax has been totally abolished in July 1996 by Law 277 of 1996. Egypt has enacted a Unified Income Tax Law instead
• A progressive income tax scale applies to all personal income. Included in taxable income are salaries, wages, overtime, bonuses, and other benefits. The system is quite complex and companies intending to employ either foreign or local workers in Egypt should seek specific advice.
• Social insurance contributions
• Interest from bank deposits, government debentures and treasury bills are exempt from the tax on movable capital, which is at a rate of 32 per cent. Capital gains and income on debentures of companies listed on the stock exchange are also tax exempt, within the prevailing interest rate on bank deposits for debenture income.

Tax exemption for approved projects

Austrade works in conjunction with the Australian Taxation Office ('ATO') to administer the income tax exemption available under section 23AF of the Income Tax Assessment Act 1936 ('Tax Act').

Section 23AF should assist the international competitiveness of Australian companies and governmental organisations competing to win international tenders. Further information is available.