Raising capital in Egypt—or expanding from a GCC holdco into Cairo—means your tax story will be scrutinised in due‑diligence. The good news: Egypt’s framework is predictable if you know the rules. Here’s a founder‑friendly guide to corporate tax basics, common traps, and an audit‑ready checklist tailored to VC‑backed startups.

1) Who’s in scope (and where)

Start with residency and permanent establishment. An Egyptian‑incorporated company is taxed on worldwide income. A foreign parent becomes taxable in Egypt if it creates a permanent establishment (PE)—for example, a fixed place of business, dependent sales agent, or local execs concluding contracts. If you operate a Cairo dev hub that executes core activities for a foreign holdco, assume Egypt may seek a PE.

2) Headline rate and base

The standard corporate income tax rate is 22.5% on net taxable profits. Taxable income is accounting profit adjusted for tax rules (e.g., disallowables, depreciation schedules, provisions). Keep tax and management books reconciled from day one.

3) Withholding tax quick tour

Expect withholding on outbound payments:

• Dividends: typically 10% (5% for listed shares and certain treaty cases).

• Interest and royalties: commonly 20% absent a treaty.

• Services to non‑residents: check treaty and “service PE” risk before withholding or gross‑up clauses.

Treaty relief can reduce rates—build it into contracts up‑front and keep residency certificates on file.

4) Losses, interest and group issues

• Loss carryforward: generally up to 5 years; watch change‑of‑ownership and activity‑change restrictions.

• Thin capitalisation: Egypt applies debt‑to‑equity limits; overly leveraged structures risk interest disallowance.

• Group relief: Egypt does not operate a fiscal consolidation regime; plan intercompany charges and pricing with care.

5) Transfer pricing for related‑party deals

VC‑backed startups often centralise costs (engineering, brand, leadership) in a holdco and recharge to Egypt. Egypt follows the three‑tier documentation model (Master File, Local File, CbCR). If your related‑party transactions exceed local materiality thresholds, expect to file annually and defend arm’s‑length pricing for management fees, IP, and intercompany loans. Put robust intercompany agreements in place early; don’t wait for the audit letter.

6) Free zones, incentives and substance

Free‑zone and investment‑zone regimes exist under the investment law. They can reduce frictional taxes and fees, but substance matters: board control, headcount, and where decisions happen. If your revenue or key people sit in Cairo, expect Egypt to tax the local value creation regardless of where the parent is incorporated.

7) Compliance timeline (founder version)

• Monthly/Quarterly: payroll taxes and VAT/e‑receipt where applicable; reconcile bank to books.

• Quarterly: provisional tax estimates; investor KPI pack should tie to management accounts.

• Annually: corporate tax return with financial statements and TP documentation; prepare an audit‑ready tax pack (trial balance, lead schedules, WHT certificates, treaty docs).

8) Term‑sheet landmines to avoid

• Paying founders or sister companies without contracts, benchmarking, or board approval.

• Unpriced IP developed in Egypt but booked offshore.

• Intercompany loans with no interest policy, repayment schedule, or FX treatment.

• Missing WHT on outbound royalties or services.

These are the gaps that drag diligence for weeks—or trigger valuation haircuts.

Founder checklist (save this)

1. Map your structure and identify any Egypt PE risks.

2. Keep a single source‑of‑truth cap table and intercompany matrix.

3. Execute intercompany service and IP agreements; document pricing.

4. Track losses and interest limits; avoid surprise disallowances.

5. File TP documentation on time when thresholds are met.

6. Collect treaty residency certificates before paying cross‑border.

7. Build an audit‑ready tax pack alongside your financial close.

Final word

Price follows proof—and tax follows substance. Align your legal structure with where value is created, document related‑party flows, and keep a tidy tax trail. You’ll raise faster, with fewer surprises.

Need a rapid Egypt tax health check before your next round? E Advisory helps VC‑backed teams prepare investor‑grade tax packs and TP files.