Working from Egypt for a foreign company: employee or contractor?
Working from Egypt for a company abroad: employee or contractor? Subordination decides, not the contract's title, and with it the tax and insurance position.
Executive summary
- Subordination decides, not the contract's title. Under Labour Law No. 14 of 2025 a worker is anyone who "works for a wage for an employer under his management or supervision" (article 1), and remote work on those terms is an employment relationship by the Law's own text (article 96).
- The Income Tax Law draws the same line: salary is what is due "as a result of his work for others" (article 9), and income from a non-commercial profession is what the taxpayer earns from a profession "practised by the taxpayer independently, in which work is the main element" (article 32).
- An employee pays salary tax after the personal allowance, and remits it himself where the employer has no seat or establishment in Egypt (article 16).
- A contractor registers for income tax within thirty days of starting the activity, is taxed on net income and keeps books. A service supplied to a company abroad is an exported service, and an exporter of a taxable service registers for VAT whatever the volume of his dealings.
- For social insurance, an employee is insured by an employer with an establishment file at the National Organization for Social Insurance (NOSI); a contractor who falls within the category of employers and those treated alike pays his own contributions.
The test: subordination
Labour Law No. 14 of 2025, in force since 1 September 2025, defines a worker as "any natural person who works for a wage for an employer under his management or supervision" (article 1), and its chapter on the individual employment contract applies to any contract under which a worker undertakes to work for an employer under his management or supervision for a wage (article 86). A contract is therefore characterised by its elements, work, wage, and management or supervision, and the heading written on it does not change that.
Working from home does not take the relationship outside that description. The Law treats as a "new pattern of work" any work the worker performs in a non-traditional way for the employer, under his management or supervision, for a wage, first among them "remote work, being the performance of work in a place other than the establishment's usual premises, carried out through technological means" (article 96). Those working in these patterns have the same rights and duties as those in traditional patterns, "in particular social protection and social security" and the minimum wage (article 97). By agreement between the parties, they may work for more than one employer, or for themselves alongside their employment (article 98), so having other clients does not by itself rule out an employment relationship. The relationship must be set out in a written contract, on paper or electronic, and the worker may prove it by any means (article 99).
Income Tax Law No. 91 of 2005 draws the same line:
| Salary | Income from a non-commercial profession | |
|---|---|---|
| The text | "everything due to the taxpayer as a result of his work for others, with or without a contract" (article 9) | income from the liberal and other non-commercial professions "practised by the taxpayer independently, in which work is the main element" (article 32) |
| EGP 20,000 personal allowance | Applies | Does not apply; it is given for salary income only |
| Costs | Not deducted | Costs necessary to practise the profession are deducted |
| Who pays the tax over | The employee himself where the employer has no presence in Egypt | The taxpayer, with his return |
If it is an employment contract
Tax. Salary due from a foreign source for work performed in Egypt is subject to salary tax (article 9(2)). Where the employer is not resident in Egypt or has no seat or establishment there, "the obligation to remit the tax rests on the person entitled to the income" (article 16). The salary is computed on an annual basis, the EGP 20,000 personal allowance is deducted, and the individuals' tax table is applied, as set out in Egypt's personal income tax brackets.
Social insurance. A private-sector employee is insured by the employer: the employer applies to NOSI within two weeks of starting its activity, with evidence of that activity such as a commercial register entry, company contract, lease or licence, and notifies each employee's enrolment (article 17 of the executive regulations of the Social Insurance and Pensions Law), then pays the contributions, its own share and the employee's (article 121 of Law No. 148 of 2019). Insuring someone who works from Egypt therefore requires an employer with an establishment file at NOSI. A foreign company with no entity in Egypt is left with a branch, a company or an Employer of Record for that purpose, and the conditions of each are the subject of a separate article.
The Law has a special rule for an Egyptian working under a personal employment contract in the units of international and regional organisations or foreign embassies in Egypt, to whom the Labour Law does not apply: he is treated as an Egyptian working abroad (article 2 of Law No. 148 of 2019), and may join the scheme for Egyptians abroad on his own application, membership being optional (article 4 of the Law and article 6 of the regulations).
If it is a services contract
Tax. Where the contractor practises a profession independently and work is its main element, his income is income from a non-commercial profession (article 32), and he must:
- register for income tax within thirty days of starting the activity (article 25 of Unified Tax Procedures Law No. 206 of 2020), whether the activity is carried on conventionally or online, as the Egyptian Tax Authority's guide for content creators (March 2022) puts it; registration does not wait for any income threshold;
- account for net income after deducting the costs necessary to practise the profession (article 33); costs are deducted on the basis of regular accounts supported by documents, or at a flat 10% if regular books are not kept (article 35). Keeping books is compulsory for every taxpayer carrying on a professional activity, without prejudice to Law No. 6 of 2025 (article 38 of the Unified Tax Procedures Law, its first paragraph as replaced by Law No. 150 of 2026), as set out in Mandatory and electronic books in Egypt;
- expect no personal allowance: the individuals' tax table applies to net income. That is the standard regime; those registered under the simplified tax regime are instead taxed on their turnover, at different, reduced rates (article 10 of Law No. 6 of 2025), but that regime does not apply to "professional consultancy activities at least (90%) of whose annual turnover comes from providing professional consultancy to one or two persons" (article 4 of the same Law). A consultant working for a single company abroad should check that restriction before applying;
- register for VAT whatever the volume of his dealings: a service supplied from inside Egypt to a recipient abroad is an "exported service" (article 1 of the executive regulations of VAT Law No. 67 of 2016), and an exporter of a taxable service must register however small his turnover (article 16 of the Law and article 18 of the regulations), without waiting for the general registration threshold of EGP 500,000 a year. Exported services are zero-rated on the conditions set by the regulations (article 3 of the Law and article 5 of the regulations); their VAT treatment is the subject of a separate article.
Social insurance. A contractor falls within the category of "employers and those treated alike" in two cases: where he is among those "who perform an activity or services on their own account" and the activity is governed by special laws or requires a licence from the competent authority (article 2(ii)(1)), or where he is among "those practising the liberal professions, and members of professional syndicates", the date from which each profession is covered being set by decision of the President of NOSI (article 2(ii)(4)). He must not already be insured as an employee of others, and must be at least 21 (article 2(ii) of the Law and article 5 of the regulations).
He contributes on an income he chooses between the minimum and maximum, not less than the monthly average of the annual income on which his tax was assessed for the previous year (article 54 of the regulations), pays the contributions himself (article 121), and the old-age, disability and death contribution is 21% of that income in 2026 (article 19), the rate rising by 1% every seven years from 1 January 2020 (article 57 of the regulations). The monthly average of the income on which he was taxed therefore becomes a floor for his contribution income.
What this requires of someone working from Egypt for a company abroad
- Establish the characterisation from how the work is actually done, before signing: does he work under the company's management or supervision for a wage? If so, the relationship is employment whatever the contract is called.
- If an employee: remit the salary tax himself, and agree with the company how he will be insured in Egypt.
- If a contractor: register for income tax within thirty days of starting and for VAT as an exporter of a service, keep books and the documents for every cost, weigh the simplified regime and its restriction, and contribute to social insurance if he falls within the employers' category.
- In either case: where tax has been withheld in the company's country, look at the double taxation treaty between Egypt and that country.
- The return and payment dates are in the Egypt tax and social insurance compliance calendar.
The firm's Tax Department advises on the characterisation of a contract with a foreign company, registers the tax file and computes the tax in either case.
Mahmoud Nassef, Founder Partner
Chartered Accountant, Ministry of Finance, Egypt
Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation
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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.