Doing Business With Egyptppt

8/3/2019 Doing Business With Egyptppt

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Doing business withEgypt

Business culture in Egypt

(differences between Latvia, business negotiations,

cooperation formsagents, representatives etc.)


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Looking for a business counter-part

Contact the business Associations registered in Egypt:

EBA, CAF, BEBA, The American Chamber in Egypt, The Chamber ofCommerce.

Contact your Embassy for recommendations.

Dont only count on the internet.

Dont enter blindly into a deal with an unknown

Partner!, investigate his reputation and check forrecommendations .

A visual contact and meeting is necessary before

going into financial deals.


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Forms of Cooperation in joint venturesSecure options available:

Establishing a joint stock company

Establishing a limited liability Company

Note: The company can be fully owned by foreigners according to theEgyptian Law

Warning!

Never work through a partnership company

As you will be liable with all your belongings.

Choose a reputable Law office to establish for you the company using the

most adequate law


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Setting up a permanent operationYou have two options for opening an office:

A representative office: Its the easiest way to pursue, but that office is

not permitted to carry out any commercial activities or agency operations.

It can carry out feasibility studies or market surveys. No taxable activitiesexcept payment of salaries.

A branch office: if the company has a contract with either a private orpublic sector client to carry out work in Egypt. The branch office canengage in commercial work including financial, industrial and contracting

activities although limited to the projects described in the branchregistration. The accounts of the branch are audited annually and thereare restrictions on the number of local and foreign employees. Taxinspectors are liable to descend upon the office at any time.


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Setting up a permanent operation (2)Government approval is necessary to open a branch office, also approval

must be obtained from the Ministry of trade and industry also the

ministry responsible for the particular activity of the foreign company.

Involved with.

The Investment Authority (GAFI) must approve the branch which must be

registered in the Commercial registry.

The branch office must comply with all Egyptian laws governing taxation,

labor, foreign exchange and social insurance.


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Appointing an agent /agents or sole distributors/

distributors

On the basis of:

Geographic distribution

Product distribution

Client distributionNote: Egyptian business people request exclusivity

when handling a subject


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Secure payments for your goodsBy receiving a documentary letter of credited issued and confirmed

by a 1st class bank and payable at sight.

Sending documents for collection can be used after a successful

history of dealing with your client/partner and knowing each other.

You wouldnt want your goods or services provided to be lost and

unpaid for


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Study the market wellThe Egyptian market is a price market and importers/traders are

looking for very low prices.

The Chinese goods are already being imported on a big scale in different

sectors.

Study the market requirements and their specifications very carefully,

dont send a product unless it is required and contracted for.


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Government purchases (1)All government companies and organizations are using public tenders fortheir purchases:

1) You need to purchase the tender book.

2) Prepare and submit your technical and financial offers in separateclosed envelopes in due time.

3) Issue a bid bond through a 1st class bank (usually ranging from 2 to5% of your offer value and submit it with your offer.

4) Attend the tender date and opening of all bids.

5) If successful you will be required to submit a performance bondthrough a 1st class bank for up to 10% of the contract amount validtill the completion of all your contract obligations.


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Government purchases (2)

Having an efficient registered commercial agent when dealing with

Governmental bodies is necessary as he would provide you with the

right information and recommendations to win the order.The agent will also follow up your due payments under the contract and

assist in solving any problems or disputes arising during the execution

of the contract.

Agents get paid on commission basis and are paid on pro-rata with

payments that the supplier receives from the client .

Agency agreement can be signed for individual tenders or for specific

clients or for the Egyptian territory in general depending on the

situation, and are valid for a minimum period of six months which could

be renewed subject to the approval of the Supplier.


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Technical support for goods sent to Egypt

For vehicles, household equipment, machinery and any

products that require technical service, the supplier isobliged to provide technical support and service for all his

goods sold in the territory of Egypt, during the guarantee

period and secure availability of spare parts and service

(payable) for the period after the guarantee expires.

This obligation can be arranged using his appointed agentor distributor.

The government established The Authority for Consumers

Protection to protect the rights of the buyers.


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Some useful hints (1)Join business councils established to be aware of updates and market

changes.

Participate in exhibitions in Egypt.

Invite potential customers to visit your stand in exhibitions in Riga orany other country where you would be displaying your products.

Subscribe to economic publications in Egypt: Egypt Today, Business

today.

Join trade missions visiting Egypt.

Try to have presentations done in Arabic language to access a bigger

segment of the market.

Take into consideration the traffic and parking problems when renting

or buying an office in Cairo, also the easy access to highways and the

airport. Recommended locations are Maadi, Heliopolis, the smart

villages around Cairo and New Cairo (East of Cairo)


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Some useful hints (2)In Egypt people work in average from 10.00AM and end 09.00 PM with

a break for lunch and rest between 3.00PM to 6.00PM, so dont be

surprised to be advised of a meeting at 7 or 8.00PM.Egypt has many holidays and Egyptians enjoy these holidays and do

their best to attach to it the days around the weekend.

You would be offered to drink a lot of tea and or coffee during all your

meetings in Cairo and your hosts would be offended if you refuse.

Cairo is an open modern society and people are accustomed to meetwith foreigners, while in the country side and small towns people are

more conservative, nevertheless Egyptians are very friendly and

helpful.

Doing Business With Egyptppt

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