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Legal Considerations When Launching an E-Commerce Business in Egypt

Introduction

The rapid growth of the digital economy in Egypt has opened significant opportunities for entrepreneurs and investors to launch and expand e-commerce ventures. Whether you’re a startup founder, an established retailer moving online, or a foreign investor eyeing the Egyptian market, understanding the legal framework that governs e-commerce is critical to building a sustainable and compliant business.

Below, we outline the key legal considerations and regulatory steps for establishing a legally sound e-commerce business in Egypt.

1. Legal Structure and Company Formation

The first step in launching an e-commerce business is choosing the appropriate legal structure. In Egypt, the most common forms are:

  • Sole Proprietorship (مشروع فردي): Suitable for small-scale businesses, but with unlimited liability.
  • Limited Liability Company (LLC): The most widely used structure, offering limited liability and flexibility in management.
  • Joint Stock Company (JSC): Often used for larger ventures or when seeking investment.

The company must be registered with the General Authority for Investment and Free Zones (GAFI), and the process involves:

  • Reserving a trade name
  • Drafting and notarizing the Articles of Association
  • Opening a corporate bank account and depositing capital
  • Obtaining a commercial registration certificate and tax card

2. Business Licensing and E-Commerce Activity Registration

While there is no separate “e-commerce license” per se, companies engaged in online retail or service provision must include e-commerce or digital activities in their commercial registration.

Additionally, for selling specific goods (e.g., cosmetics, electronics, food), you may need approvals or licenses from the relevant regulatory authorities (e.g., Ministry of Health, Consumer Protection Agency).

If you’re handling products, a VAT registration becomes mandatory when annual turnover exceeds EGP 500,000.

3. Website Terms, Policies, and Compliance

Your website is not just your storefront—it’s also a legal document. Egyptian law requires transparency and consumer protection. E-commerce businesses should implement:

  • Terms and Conditions outlining user rights and limitations
  • Privacy Policy compliant with Egypt’s Personal Data Protection Law No. 151 of 2020
  • Returns and Refund Policy that aligns with consumer protection standards
  • Clear pricing and product information

Failure to provide clear policies can expose your business to penalties and reputational harm.

4. Taxation and Electronic Invoicing

E-commerce businesses in Egypt are subject to the same tax obligations as traditional businesses. This includes:

  • Corporate income tax at 22.5% on net profits
  • Value-added tax (VAT) at 14% on taxable sales (where applicable)
  • Stamp duty on certain transactions and advertising expenses

Moreover, Egypt has introduced a mandatory electronic invoicing system for registered businesses, including online sellers. Businesses must comply with the Tax Authority’s e-invoicing platform to ensure accurate record-keeping and reporting.

5. Digital Payments and Banking Regulations

To accept online payments, businesses must integrate with licensed payment gateways and comply with Central Bank of Egypt (CBE) regulations. Considerations include:

  • Contracting with authorized payment processors
  • Ensuring PCI DSS compliance for handling payment data
  • Offering secure and traceable payment methods to protect consumers and reduce fraud risk

6. Intellectual Property Protection

Your brand name, logo, domain, and product content are valuable digital assets. To protect them:

  • Register trademarks with the Egyptian Trademark Office
  • Secure copyrights for original content, product descriptions, and media
  • Consider using IP clauses in contracts with third-party developers or suppliers

7. Consumer Protection and Dispute Resolution

The Consumer Protection Law No. 181 of 2018 applies to e-commerce transactions. Key obligations include:

  • Transparent pricing and disclosure of terms
  • Offering a 14-day return policy for most products
  • Providing clear contact information and customer service options

Businesses must also provide mechanisms for handling complaints and may be required to participate in dispute resolution through the Consumer Protection Agency if necessary.

8. Marketing and Advertising Regulations

When advertising online (including via social media), ensure compliance with:

  • Advertising Law No. 66 of 1956 and recent amendments
  • Guidelines against misleading or deceptive promotions
  • Obligations to disclose sponsored content or influencer partnerships

Conclusion

Launching an e-commerce business in Egypt presents exciting opportunities but also legal responsibilities. From registration to compliance, data protection to consumer rights, each step must be taken with careful planning and legal oversight.

Engaging legal counsel early in the process not only ensures compliance but also lays the foundation for long-term success in a competitive digital market.