1. Starting a Business

Definition

This topic measures the number of procedures, time, cost, and paid-in minimum capital requirement for a small to medium-sized limited liability company to start up and formally operate in each economy largest business city.

Indicators

Procedure—men (number), time—men (days), cost—men (percent of income per capita), paid-in min. capital (percent of income per capita) (APPLIES TO BOTH MEN AND WOMEN).

Procedures

Obtain husband’s permission to leave home (APPLIES TO WOMEN ONLY), submit documents, pay the fees, receive the certificate of incorporation and tax card, and four other procedures.

Score and Rank

Score: 87.7

Rank of Egypt: 90 (above average, below Tunisia and KSA, above Jordan and Lebanon)

Recommendations for Starting a Business

From 2008 till 2020, Egypt has been working to boost its performance in starting business, yet there is still room for more improvement through enhancing time and cost. However, main efforts should be made to minimize the producers (through online or one stop shop).

2. Dealing With Construction Permits

Definition

This topic tracks the procedures, time, and cost to build a warehouse, including obtaining necessary permits, submitting all required notifications, requesting and receiving all necessary inspections, and obtaining utility connections.

Indicators

Procedures (number), time (days), cost (percent of warehouse value), and building quality control index (0–15) in STANDERDIZED WAREHOUSE.

Procedures

Apply for the site validity certificate, receive on-site inspection from the municipality, obtain site validity certificate from the municipality, obtain a geotechnical study/soil test, request, and obtain building permit from the municipality and other 16 processes.

Score and Rank

Score: 71.2

Rank of Egypt: 74 (above average, below Tunisia and KSA , above Jordan and Lebanon)

Recommendation for Dealing With Construction Permits

Almost eight months and 20 steps of producers are needed to get construction permits, but this is still all right considering the cost and building quality control index.

3. Getting Electricity

Definition

This topic measures the procedures, time, and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse.

Indicators

Procedures (number), time (days), cost (percent of income per capita), and reliability of supply and transparency of tariff index (0–8) in STANDARDIZED CONNECTION.

Procedures

Submit application to SCEDC and await estimate, obtain external inspection, and estimate of connection fees from SCEDC, and other three procedures.

Score and Rank

Score: 77.9

Rank of Egypt: 77 (above average, below Tunisia, KSA and Jordan, above Lebanon)

Recommendation for Getting Electricity

Getting electricity in Egypt can be done in five procedures within about two months, but Egypt has an issue in reliability of supply and transparency of tariff Index. It could be fixed by clearly setting regulatory monitoring of utility performance and setting a fair price of electricity.

4. Registering Property

Definition

This topic examines the steps, time, and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and is free of title dispute.

Indicators

Procedures (number), time (days), cost (percent of property value), and quality of the land administration index (0–30).

Procedures

Obtain property tax statement from the Tax Authority, check for encumbrances at the District Land Registry, and seven other procedures.

Score and Rank

Score: 55

Rank of Egypt: 130 (below average, below Tunisia, KSA, Jordan and Lebanon)

Recommendation for Registering Property

In comparison to other countries, Egypt is extremely affected because of the registration producers and quality of land administration index, so the recommendation here is to increase the efficacy to have clear geographic coverage index and avoid land dispute.

5. Getting Credit

Definition

This topic explores two sets of issues, namely the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending.

Indicators

Strength of legal rights index (0–12), depth of credit information index (0–8), credit registry coverage (percent of adults), and credit bureau coverage (percent of adults). Strength of legal rights index (0–12): detailed questionnaire, each question scored by 1.

Score and Rank

Score: 65.0

Rank of Egypt: 67 (above average, below Jordan, above KSA, Tunisia and Lebanon)

Recommendation for Getting Credits

Egypt has good facilities with respect to getting credit. There is just a need to work on increasing the number of individuals and firms listed in the credit registry as a percentage of adult population to get better credit registry coverage (percent of adults).

6. Protecting Minority Investors

Definition

This topic measures the strength of minority shareholder protection against misuse of corporate assets by directors to achieve personal gain as well as shareholder rights, governance safeguards, and corporate transparency requirements that reduce the risk of abuse.

Indicators

Extent of disclosure index, extent of director liability index (0–10), ease of shareholder suits index (0–10), extent of shareholder rights index (0–6), extent of ownership and control index (0–7), extent of corporate transparency index (0–7).

Score and Rank

Score: 64.0

Rank of Egypt: 57 (above average, below KSA, above Tunisia, Jordan, and Lebanon)

Recommendation for Protecting Minority Investors

To enhance Egypt score, we need to focus on having better access to internal corporate documents, evidence obtainable during trial, and allocation of legal expenses. This is in addition to the ability of minority shareholders to sue and hold interested directors liable to prejudicial related-party transactions. By these two points, we can help enhance the protection of minority investors.

Available legal remedies: Disgorgement of profits, disqualification from managerial position(s) for one year or more, rescission of the transaction.

7. Paying Taxes

Definition

This topic records the taxes and mandatory contributions that a medium-sized company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit).

Indicators

Payments (number per year), time (hours per year), total tax and contribution rate (percent of profit), and postfiling index (0–100).

Taxes by Type

Profit tax (percent of profit), labor tax and contributions (percent of profit), and other taxes (percent of profit).

Score and Rank

Score: 55.1

Rank of Egypt: 156 (below average, below KSA, Jordan, Tunisia, and Lebanon).

8. Trading Across Borders

Definition

This topic records the time and cost associated with the logistical process of exporting and importing goods.

Indicators

Time to export: border compliance (hours), cost to export: border compliance (USD), time to export: documentary compliance (hours), cost to export: documentary compliance (USD), time to import: border compliance (hours), cost to import: border compliance (USD), time to import: documentary compliance (hours), cost to import: documentary compliance (USD).

Procedures

Based on the mentioned indicators, we can go beyond the factor of importation and exportation.

Score and Rank

Score: 42.2

Rank of Egypt: 171 (below average, below Jordan, KSA, Tunisia, and Lebanon).

Recommendation for Trading Across Borders

Import is as important as export. Open markets attract investors to do business and enhance the relation between countries. In Egypt, there is a big issue with regard to the time and cost for documentary and border for both import and export, but the worst case is in time and cost to import: documentary compliance, and time to import: border compliance.

9. Enforcing Contracts

Definition

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court and the quality of judicial processes index. It evaluates whether each economy has adopted a series of good practices that promote quality and efficiency in the court system.

Indicators

Time (days), cost (percent of claim value), and quality of judicial processes index (0–18).

Quality of judicial processes index (0–18): court structure and proceedings (1–5), case management (0–6), court automation (0–4), and alternative dispute resolution (0–3).

Score and Rank

Score: 40.0

Rank of Egypt: 166 (below average, below KSA, Tunisia, Jordan, and Lebanon).

Recommendation for Enforcing Contracts

Enforcing contracts is a very important factor for resolving commercial disputes through a local court, and the quality of judicial processes index evaluates whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. Egypt has time and quality of judicial process issue in addition to zero court automation, so the government needs to enhance and upgrade the score and rank and to be more attractive for doing business.

10. Resolving Insolvency

Definition

This topic studies the time, cost, and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation, or debt enforcement (foreclosure or receivership) proceedings.

Indicators

Recovery rate (cents on the dollar), time (years), cost (percent of estate), outcome (0 as piecemeal sale and 1 as going concern), and strength of insolvency framework index (0–16).

Quality measures index (0–18): Commencement of proceedings index (0–3), management of debtor’s assets index (0–6), reorganization proceedings index (0–3), and creditor participation index (0–4).

Score and Rank

Score: 42.2

Rank of Egypt: 104 (above average, above Jordan, and Lebanon and KSA, below Tunisia).

Recommendations for Resolving Insolvency

Egypt has low recovery rate and reorganization proceedings index but moderate strength of insolvency framework index, so economic leaders have to work on improving the outcome of business and the present value of debt recovered.

Extra Measurable Item: Employing Workers

The indicators measure hiring , working hours, redundancy rules, and redundancy cost.

The study does not present rankings of economies with regard to these indicators nor include the topic in the aggregate ease of doing business score or ranking.

Doing Business 2020 reforms making it easier to do business in the following factors.

1. Encouraging an Economic Environment

The government should focus on enhancing market stability and potential for growth. In addition, steady GDP growth shows that consumer expenditure has been growing steadily over the years, and it shows no signs of getting down. This makes it an ideal place for you to ride on this trend of economic success. Moreover, the government considers being both willing and able to support entrepreneurship and trade. It has usually offered strong infrastructural support for such activities, mentoring, and low-cost legal advice for proprietors to structure and manage their businesses. Essentially, among other benefits for businesses, this means that no tariffs will be placed on exports and imports.

2. Straightforward Legal Requests

There is no need to worry about being bogged down by unnecessary administration and legal restrictions when it comes to starting a business. Slightly different regulations may apply to each individual, depending on which business is being started. Some of these procedures involve registering to pay the goods and services tax or registering as an employer in order to be able to operate the business. However, paperwork to set up a business can be completed online with much ease and convenience.

3. A Supportive Start-Up Community

You will need all the care you can get when you dive head first into opening a business. That is why, it is significant to have a community with resources that you can tap on. You need to find no absence whenever you need advice, a listening ear, or just someone to share ideas with.

4. A Flexible Tax System

Tax is one of the inescapable actualities of life. For small businesses, tax often is a concern given how it impacts the company income. The tax environment should be relatively flexible or include discount on taxes for individuals in self-employed positions or in partnerships as well as a number of rebates for sole trader and partners.

1. Starting a Business

This indicator measures the number of procedures, time, cost, and paid-in minimum capital requirement for a small to medium-sized limited liability company to start up and formally operate in each economy largest business city.

It uses a standardized business that is 100 percent domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities, and employs between 10 and 50 people one month after the commencement of operations—all of whom are domestic nationals.

The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It does not use heavily polluting production processes (ecosystem).

2. Dealing With Construction Permits

This indicator measures the procedures to legally build a warehouse (number), the time required to complete each procedure (calendar days), and the cost required to complete each procedure (percent of income per capita).

The dealing with construction permits indicator measures the building quality control index, evaluating the quality of building regulations; the strength of quality control and safety mechanisms; liability and insurance regimes; and professional certification requirements.

3. Getting Electricity

This indicator measures the procedures to obtain an electricity connection (number), the time required to complete each procedure (calendar days), and cost required to complete each procedure (percent of income per capita).

Additionally, the reliability of supply and transparency of tariffs index measures the reliability of supply, transparency of tariffs, and the price of electricity.

4. Registering Property

This indicator examines the steps, time, and cost involved in registering property assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. It also measures the quality of the land administration system in each economy.

5. Getting Credit

This indicator explores two sets of issues: the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending.

6. Protecting Minority Investors

This indicator measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights.

7. Paying Taxes

This indicator records taxes and mandatory contributions that a medium-sized company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit).

8. Trading Across Borders

This indicator measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance, and domestic transport within the overall process of exporting or importing a shipment of goods.

9. Enforcing Contracts

This indicator measures the time and cost for resolving a commercial dispute through a local first-instance court and the quality of judicial processes index. It evaluates whether each economy has adopted a series of good practices that promote quality and efficiency in the court system.

10. Resolving Insolvency

This indicator studies the time, cost, and outcome of insolvency proceedings involving domestic legal entities.