Tax Considerations for Investors Operating Between Saudi Arabia and Egypt:
Should You Keep Your Egyptian Company After Establishing in Saudi Arabia?
Key Decision Factors
1.Saudi Requirements:
No obligation to maintain your Egyptian company
Saudi authorities won't request ongoing Egyptian documentation
Complete freedom to:
Sell the Egyptian entity
Keep it dormant
Close it permanently
2.Strategic Considerations:
Potential future need for the Egyptian legal entity if:
Saudi regulations change
Your business expands regionally
You need backup documentation
Possible tax optimization opportunities
Recommended Approach for Egyptian Company
Option 1: Formal Suspension (Best Practice)
Process:
Convene an Extraordinary General Assembly
Pass resolution to suspend operations for 3 years
File necessary paperwork with Egyptian tax authorities
Benefits:
Maintains legal entity status
Avoids full closure costs/re-establishment fees
Provides flexibility for future needs
May reduce ongoing tax obligations
Option 2: Complete Closure
When to Choose:
If certain you won't need the Egyptian entity
To eliminate all maintenance costs
If tax liabilities outweigh benefits
Process:
Liquidate company assets
Settle all tax obligations
Officially deregister with Egyptian authorities
Managing Egyptian Tax Obligations During Suspension
Tax Treatment of Dormant Companies
Corporate Tax:
Typically not due if no active business
May need to file nil returns
Other Potential Obligations:
Annual registry fees
Minimum social insurance contributions
Commercial registration maintenance
Important Note:
Your Egyptian company's status doesn't affect your Saudi tax obligations once the Saudi entity is established.
Action Plan
Immediate Steps:
Decide on suspension vs. closure
Document the decision properly
Notify Egyptian authorities as needed
Ongoing Monitoring:
Review status annually
Watch for regulatory changes in both countries
Assess reactivation needs as business grows
Documentation:
Keep all suspension/closure records
Maintain separate financials for each entity
Ensure clean audit trails
