Egyptian Business Structures

As stated above, many companies in Egypt operate according to Islamic, rather than secular law and this can impact in a number of key areas of business structure and performance.

One key issue is that, due to Islamic strictures on avoiding usury, the difference between companies and banks are less defined than in western economies. Companies tend to be financed through a combination of equity capital and short-term loans where the lenders do not charge interest but take a share of profits or losses (PLS loans.) Thus all risks are shared equally amongst the shareholders and lenders.

In addition, many companies have a religious Supervisory Board comprised of Islamic jurists whose role is to ensure that the company’s operations comply with the strictures of Sharia law. Thus employees must be Muslims and work stops for the regulatory prayer sessions every day. Firms are expected to make reasonable, but not excessive, profit and managers have a social as well as corporate responsibility – they are expected to balance the interests of the company with the interests of society at large.

None of the above applies to the workings of those firms that are non-Islamic in orientation (remember that 10% of the Egyptian population are Coptic Christians) or joint-ventures with overseas organisations.

A brief overview of some key concepts to consider when doing business in Egypt

Written and Produced by Keith Warburton

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This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Egypt. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.

With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Egypt and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.

Therefore this briefing note is broken into short, bite-sized sections on the following topics:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips