With Egypt being a densely populated country with a total of 85 million people, one is almost assured of a readily available market for his or her product (World Bank Group, 2014). Being an attractive market owing its perfect mix of commercial and demographic links, Egypt is arguably the most apposite destination four our jewellery company. In essence, Egypt has demonstrated to be the most suitable destination for any kind of business particularly our jewellery business. Owing the fact that it is strategically located, has attractive market size for any product, it has apposite legal and political avenues for conducting business (World Bank Group, 2014). With the above said, this paper will examine the procedures of establishing a business in Egypt in regards to the aforementioned company. Essentially, this paper will focus on tax incentives, shipping benefits, Egypt's current unemployment rate, and their labour costs. Additionally, insightful analysis of how this company can work with the mining industry will be scrutinised.
The government that brought stability to Egypt is acknowledged for having formulated policies regarding foreign investments that are conducive and favourable for foreign investors. Apparently, the jewellery company that will be established in Egypt subsequently is predisposed to earning additional tax benefits and incentives. Owing the fact that Egypt has a total of 50 tax treaties that are in essence favourable and attractive to foreign investors (World Bank Group, 2014). By adhering to the policies attached to the treaties of foreign investment, it is of utmost importance to denote that the jewellery company will prevail and succeed. Additionally, considering that the highest tax rate in Egypt is 25% the company is assured that much of its revenue will be obtained in the aftermath. In addition, Egypt is seeking to revise legal policies regarding foreign investment. In an effort to enhance the country’s attractiveness to investors by reviewing tax incentives, tax rates, and other exemptions to attract more investor to the country.
Considering that the jewellery business that will be established subsequently will involve shipping activities, it is imperative to examine the shipping benefits in Egypt. Shipping policies in Egypt requires that a commercial shipment greater than $1000 must have a Certificate of Origin (COO) (World Bank Group, 2014). This policy is not costly to business as it may seem. Owing the fact that treaties between foreign companies and the foreign affairs ministry of Egypt exempt some companies, once they establish their loyalty and willingness to adhere to the terms in the treaty. Apparently, Egypt has been established to be lenient in regards to its shipping policies consequent to the fact that it omits many restrictions that in essence shun away investors.
The unemployment rate in Egypt stands t 13.4 percent; this rate has been persistent for quite a long time (World Bank Group, 2014). With this rate, it is imperative to note that a considerable number of people in Egypt are looking for jobs. With the above said, the jewellery company is almost assured of available professional and qualified manpower for the jobs that will be created subsequent to the launch of this company. Though unions have been formed with an effort to increase the minimum wage in Egypt, it is of utmost significance to note that the cost of labour in this country is meticulously cheap. The current minimum wage in Egypt stands at 700 Egyptian pounds ($102) per month (World Bank Group, 2014). The above in itself establishes the nature of labour cost in Egypt. The above in essence will foster the returns of the jewellery company that will be established.
Apparently, majority of the mining companies in Egypt were established many years ago, and most of them have since been affected negatively by the political instabilities that shook this country a few years ago(World Bank Group, 2014). It will be much easier to make connections with the mining industry because most of the companies are still recollecting from the losses they incurred.
In a nutshell, Egypt is a favourable and conducive for the jewellery company that is yet to be established because Egypt has favourable tax incentives, friendly shipping costs and benefits, cheap labour and professional manpower. By merging and utilising the aforementioned benefits, the jewellery company will succeed in the aftermath.
Reference
World Bank Group (Ed.). (2013). Doing Business 2014: Understanding Regulations for
Small and Medium-Size Enterprises. World Bank Publications. Retrived from http://www.doingbusiness.org/~/media/GIAWB/Doing%20Business/Documents/Subnational-Reports/DB14-Egypt.pdf
