Do I Need a Local Entity to Hire in Egypt?

In Egypt, a "local entity" typically refers to a legally recognized business presence, such as a subsidiary or branch office, allowing you to act as an employer. This setup is crucial for fulfilling local payroll and employment obligations, ensuring compliance with Egyptian labor laws.

Without a local entity, you cannot effectively manage payroll, register as an employer, or comply with mandatory employee protections. An alternative is to use an Employer of Record (EOR), which allows you to hire employees without establishing a local entity.

What is Required to Employ Someone in Egypt?

• Local employing entity required to directly employ? Yes (required for payroll and compliance with labor laws)
• Payroll registration required? Yes (must register with the Egyptian Tax Authority)
• Withholding/tax remittance required? Yes (employers must withhold income tax from salaries)
• Social contributions required? Yes (mandatory contributions to social insurance funds)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (includes annual leave, sick leave, and social insurance)
• Works council/collective agreements considerations? Usually (certain sectors may have collective agreements)

Best Options If You're Hiring in Egypt

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but it’s essential to ensure that the contractor relationship is genuinely independent.

While hiring contractors can be a flexible option, misclassification can lead to legal issues if the contractor is treated like an employee. In Egypt, labor laws protect workers, and authorities may scrutinize the nature of the relationship. To mitigate risks, ensure that:

• The contractor has multiple clients and is not exclusively working for your company.
• You do not control their work hours, location, or methods.
• The work is project-based and does not resemble a permanent employment relationship.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Egypt, depending on the type of business and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 5,000–15,000 EGP per month ($160–$480)
• Payroll provider: Estimated 1,000–3,000 EGP per employee per month ($32–$96)
• Employer registrations and recurring compliance: Estimated 10,000–30,000 EGP per year ($320–$960)
• Corporate tax filings and annual reporting: Estimated 15,000–50,000 EGP per year ($480–$1,600)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions, typically around 26% of gross salary)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Egypt

Hiring in Egypt can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Egypt quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.