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Granting equity in 

the 

Egypt

 

Get to know everything about your taxation and reporting obligations in 

the 

Egypt

Introduction

⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

Regular employee

✅ Yes, you can grant non-qualified stock-options (NSO) to employees in Egypt.

Note that, theoretically, it’s mandatory to have the equity award documentation into Arabic by a sworn translator.

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.
  • At exercise 👉 The spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) is taxed as regular income and is subject to income tax.

  • At sale 👉 The gains will be treated as “commercial and industrial activity” and added to the grantee’s global income (same taxation type as at the time of exercise).  

Employee via EoR

✅ Yes, you can grant non-qualified stock-options (NSO) to EoR employees in Egypt.

Note that, theoretically, it’s mandatory to have the equity award documentation into Arabic by a sworn translator.

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation.
  • At exercise 👉 The spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) is taxed as regular income and is subject to income tax.

  • At sale 👉 The gains will be treated as “commercial and industrial activity” and added to the grantee’s global income (same taxation type as at the time of exercise).  

Contractor

✅ Yes, you can grant non-qualified stock-options (NSO) to contractors in Egypt.

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

In a nutshell, what does taxation look like?

There is nothing to declare to the local authorities before the grantee exercises their stock options.

Any gain for the grantee in the lifecycle of the stock options will be treated as regular income from a commercial activity: this includes the spread at the time of exercise (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price paid by the grantee) and possible gains at the time of sale of the underlying shares.

Want to know more about equity in 

the 

Egypt

?

Discover everything you need to know about taxation and reporting obligations for you and your team in 

the 

Egypt

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