Is Egypt a hidden gem? (tax-free foreign income)

[scooterguy]

Apparently, Egypt does not tax non-employment foreign-sourced income (including investment income and capital gains) of those who do not engage in professional or industrial activities inside the country. You can read more here, specifically section 2.10: https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2023/01/TIES-Egypt.pdf.coredownload.inline.pdf.

Egypt also has tax treaties with many countries, including the US, which withholds dividend income at 15% to residents of Egypt.

Getting residency is relatively easy, and so is citizenship, which can be purchased.

It's cheap, safe, and close to Europe, although it's dirty and underdeveloped.

I'm surprised, however, that it is never really discussed as an option. It seems ideal tax-wise.

Thoughts? Experiences?

 

[daniels27]

There are others claiming dividends are taxed
https://ecpa-eg.com/en/articles/tax-on-dividends

 

[scooterguy]

There are others claiming dividends are taxed
https://ecpa-eg.com/en/articles/tax-on-dividends

In general they are, but only for those whose centre of professional, commercial or industrial activity is in Egypt.

PwC summaries also states this:

Individual income tax is imposed on the total net income of the resident individuals for income earned in Egypt, as well as the income earned outside Egypt for resident individuals whose centre of commercial, industrial, or professional activities is in Egypt. Also, tax is imposed on the income of non-resident individuals for their income earned for work provided in Egypt, regardless of the source of payment, as well as the income earned from an Egyptian source.

More here: https://taxsummaries.pwc.com/egypt/individual/income-determination.

 

[JustAnotherNomad]

"Income earned" does not sound like dividends. You don't "earn" dividend income.

But it seems like dividends are indeed taxable, the link posted by @daniels27 seemed very clear.

 

[scooterguy]

"Income earned" does not sound like dividends. You don't "earn" dividend income.

But it seems like dividends are indeed taxable, the link posted by @daniels27 seemed very clear.

Dividends are taxable but not in the situation I specified (check my first link on section 2.10 for a complete FAQ related to this).

 

[daniels27]

The problem is that you want to live in Egypt and be taxable there to benefit from no tax. But at the same time, you must claim that your centre of economic interest is not in Egypt.

If you ask me that case you talk about applies in cases where you are registered in Egypt and Germany and work and pay taxes in Germany.

I am not very keen to believe that such a loophole works better than living in much better countries while hoping on not getting caught.

 

[sknomad]

What is the easiest way to obtain residence permit in Egypt?

 

[daniels27]

What is the easiest way to obtain residence permit in Egypt?

Just 50k USD
https://www.imidaily.com/program-up...ence-by-investment-program-starts-at-us50000/

For citizenship 250k USD investment with a tiny ¹⁰k USD fee
https://immigrantinvest.com/blog/egypt-citizenship-by-investment-en/

 

[Offshore Traveller]

Just pay $150 at the Immigration Office (Abasseya in Cairo) for a 6 months tourist visa extension.
That fee is lower or waived in the red sea area, where some Russians have been staying for years as "tourists"

 

[scooterguy]

The problem is that you want to live in Egypt and be taxable there to benefit from no tax. But at the same time, you must claim that your centre of economic interest is not in Egypt.

If you ask me that case you talk about applies in cases where you are registered in Egypt and Germany and work and pay taxes in Germany.

I am not very keen to believe that such a loophole works better than living in much better countries while hoping on not getting caught.

Good points, but I believe it's about activities, not interest. If one has no economic activities in Egypt (no job there, no company, etc.), the exemptions on foreign income tax apply.

 

[mytoofood]

Only if you find it great living in Egypt one would consider the setup you suggest OP. I don't see Egypt in anyway as a hidden tax heaven.

 

[Offshore Traveller]

A bureaucratic hell, anything that you will try to do will he deemed illegal for foreigners, and you will end up paying hefty fees for a lawyer or under the table loads of money.
No CRS, but you can only transfer foreign currencies out of the country and you can't buy foreign currencies ( black market and crypto bans strictly enforced), so your local income wil
be trapped ( as in Algeria) with a 5 to 8% interest at the bank and a 35% inflation, waiting for the next devaluation.
Even making a foreign transfer can take months in some banks as they will pretend waiting for the central bank green light, asking for a proof of why you want this money out ( overseas real estate purchase contract on your name for example). You will need to travel. Can be avoided by using HSBC or french bank Credit Agricole, among other foreign banks.
If you re still interested for some reason, my english/french lawyer can help with an affordable and fair service, which is a rare find. But you ve been warned!
Most foreign investors pack back after some time. Mostly overseas based Egyptians know how to swim, and their connections and double nationality is a big advantage for overriding the endless regulations. They primarily come for family purpose anyway.

 

[daniels27]

Good points, but I believe it's about activities, not interest. If one has no economic activities in Egypt (no job there, no company, etc.), the exemptions on foreign income tax apply.

Yes and without those activities, you most likely also aren't paying taxes there but somewhere else.

 

[sknomad]

Just pay $150 at the Immigration Office (Abasseya in Cairo) for a 6 months tourist visa extension.
That fee is lower or waived in the red sea area, where some Russians have been staying for years as "tourists"

Tourists are not considered to be a resident nor tax resident. There are absolutely no advantages. No foreign tax office nor bank will see you as egyptian resident or tax resident as long as you will have a tourist status. And income will be taxed in other country where you have a real CVI.

 

[daniels27]

Tourists are not considered to be a resident nor tax resident. There are absolutely no advantages. No foreign tax office nor bank will see you as egyptian resident or tax resident as long as you will have a tourist status. And income will be taxed in other country where you have a real CVI.

Thanks! So, how to get legal residency there? Anybody ever bought the passport?

 

[Offshore Traveller]

Individuals are resident if they are present in Egypt for more than 183 days in a fiscal year, or deemed to have a permanent abode in Egypt.

 

[daniels27]

Individuals are resident if they are present in Egypt for more than 183 days in a fiscal year, or deemed to have a permanent abode in Egypt.

You did this?

 

[JackAlabama]

Thanks! So, how to get legal residency there? Anybody ever bought the passport?

No nor have I ever met anyone irl who bought that one, but in retrospect Ive met many Egyptians living and working in exile.
So im vary of this passports value prop.
Ive met a bunch of new-carribeans tho, seems the better option.

Residency is very easy to get. You basically just show up.

 

[Armani]

Is there good business to be made in egypt these days?

 

[daniels27]

Is there good business to be made in egypt these days?

Yes, definitely.