Written by Gregory Unruh and Fernanda Arreola

The Arab Republic of Egypt is thought of by many executives as an exotic business destination. It is a country built on literally thousands of years of recorded history, with the most famed period belonging to the Pharaonic Dynasties of the Nile River valley that produced the monumental Pyramid of Giza. Egypt’s culture has felt the imprint of great civilizations including Greco-Roman and Islamic traditions. The beginning of Modern Egypt is conventionally associated with British influence in the early 20th century. Since the assassination of Anwar Sadat in 1981, the country has been headed by Hosni Mubarak who, for nearly 30 years, provided stable, though autocratic, leadership. However, Mubarak formally resigned in 2011. Today, Egypt’s 80 million inhabitants are leveraging their pragmatic occidental vision with a reserved cultural tradition to take advantage of the country’s unique opportunities at the business crossroads of the Middle East and Africa.

The Ethical Climate for Commerce
Egypt is geographically connected to Israel, the Gaza Strip, Libya, Rwanda, Tanzania, Uganda, Sudan and Ethiopia. Although Egypt is a secular state, the fact that 90 percent of its population is Sunni Muslim means that public decisions tend to reflect religious precepts. Business people are attracted by the fact that Egypt’s economy is the most diverse in the Middle East with important tourism, agriculture and industrial sectors. The country has a large diversity of trading partners, including the U.S., India, Italy, Spain and Saudi Arabia. The Suez Canal provides Egypt with command over one of the most important trading channels in the world. In addition to the Canal’s business attractiveness, the cities of Cairo, Gisa and Alexandria, as well as the resort areas around Al- Shaik, offer interesting entrepreneurial prospects.In spite of its rapidly growing economy, Egypt still suffers from challenges of under-development and poverty. The lack of employment opportunities is exacerbated by corruption (Egypt places 111 out of 180 on Transparency International’s 2009 ranking). While the country has some anti-corruption governance regulations, enforcement is lackluster. These realities make compliance an important consideration for companies seeking opportunities in Egypt.

BRIBERY
Within both the public and private sectors, bribery allegations and investigations are current topics in both political and business circles. Discussions include claims of corruption in the sales of government-owned land and allegations of bribery among large corporations including Siemens, Ferrostaal, Daimler AG and the Egyptian Petroleum Corporation. A recent study conducted by Al-Ahram Centre for Political and Strategic Studies also found that 47 percent of small businesses are subject to bribery demands during bureaucratic processes like licensing.

DEAL WITH IT
Although the number of scandals in recent years may be alarming, analysts claim this situation indicates Egyptians are no longer willing to ignore corruption. Watchdogs such as “Egyptians Against Corruption¨ and “Egyptians Transparency Network” have been active in educating the population about the risks. In response, the courts have begun challenging government agencies and public purchasing decisions in an effort to expose corrupt officials and agents. Business leaders in Egypt can alleviate some of the root causes of corruption in the private sector by offering competitive salaries to employees and building an effective compliance and training program. For addressing corruption in government relations it is advisable to avoid direct encounters between senior managers and government decision makers. Joining in collective action efforts to control corruption and using care when choosing business partners can help companies advance their own anti-corruption efforts as well as the efforts of society.

TERRORISM
Despite programs to reduce the number of radical groups in the country, terrorism still impacts Egypt. The recent explosion of several devices in the resort town of Sharm el-Sheikh that killed at least 88 people is a reminder of the country’s exposure. An emergency decree currently allows authorities to conduct arrests and hold prisoners under the provisions of martial law. Use of this decree has become a concern to human rights organizations like Human Right’s Watch which claim that up to 10,000 people may be currently held without charge. Although business is not seen as a driver of terrorist activity, private companies have served as enablers of terrorist cells in the past so care is required.

DEAL WITH IT
Dealing with terrorism is obviously a complex task that requires expert advice. However, understanding the basic elements of terrorists’ operations is a useful starting point. For in-stance, terror groups are often funded through illicit activities like money laundering and drug trafficking. When operating in Egypt, due diligence with business partners and service providers is critical. Care must also be taken to stay within legal procedures and accounting limitations to avoid government action associated with the emergency decree. Again, expert advice should be sought out early on.

EMPLOYMENT
According to the 2006 International Labor conference report, the average Egyptians worker receives around 4 cents an hour and may work up to 48 hours a week. With a minimum wage unchanged since 1984, many companies fail to pay a living wage even when following the law. Under these circumstances, protests are becoming more commonplace. For example, workers from the state-owned Petroleum Trading Service Company recently held a strike that lasted for more than two weeks. Rising prices and the modernization of the country are forcing people to join the labor market sooner, exacerbating the problems of illiteracy, child labor and a lack of technical skills.

DEAL WITH IT
When it comes to salary, the official mini-mum monthly wage (around $6 USD per month) provides little guidance for an international company. When hiring locals, managers should consider their company’s fair salary practices and the organization’s traditional benefits such as training and health services.

RED TAPE
Foreign business people find some legal procedures in Egypt frustratingly complex. For instance, simple tasks such as renewing a driver’s license may include presenting medical certificates. The number of procedures involved with many permits is so arduous that the Daily News Egypt reported that up to 90 percent of all building projects may be operating without the appropriate licenses. The World Bank considers construction permits, paying taxes, and enforcing contracts to be the most challenging procedures.

DEAL WITH IT
The Egyptian government has begun to recognize the problems of its bureaucracy and has taken some steps. These improvements are reflected in Egypt’s rising five spots in the World Bank’s “Doing Business” Report to place 94 out of 183 countries. When it comes to red tape, companies should avoid hesitance in following an established bureaucratic process. Most companies will need to use the services of accounting, licensing, construction and law firms, so due diligence is required to find pro-viders that meet the company’s standards.

WOMEN IN SOCIETY
Although Egypt is in general an open and modern country, women are still subject to practices that would be considered unfair in most global companies. Harassment is an ongoing concern, for example. A study led the Egyptian Center for Women’s Rights concluded that more than 98 percent of foreign women and 83 percent of local women experience some form of sexual harassment in the workplace. In general, work opportunities for women are open, but accessing higher ranks is difficult and frustrated by non-spoken rules like not challenging men in public.

DEAL WITH IT
Since the 1990s, Egyptian leaders have given more focus to encouraging greater access to work opportunities and education for women. However, the internationalization and westernization of Egypt has led some conservative groups to become stricter about traditional views on women’s roles. While international managers should respect local beliefs and traditions, it is important to protect female employees in the workplace and demonstrate support for their well-being. Whistle-blowing mechanisms should be made available.

GREETINGS
Business in Egypt is usually developed in a friendly manner where status, titles and personal relationships play important roles. The first time you meet your business counterparts you should refer to them by title until asked otherwise. Shaking hands is the most common way to greet people, although you may also witness warmer greetings amongst familiar colleagues. As a rule of thumb, only shake a woman’s hand if she offers it first, other-wise just nod and smile. Egyptians will appreciate you being familiar with some common introductions in their own language. You may be welcomed to Egypt with “nawwart maSr,” which literally means “You have lit up Egypt” to which you can reply “maSr menawwara bīk”, meaning “Egypt is lit up by you.” You may also hear the more standard Arabic salutation “Asalamu alaikum.”

BUSINESS MEETINGS
When doing business in Egypt you should set up appointments in advance and con-firm them a couple of days before they are scheduled. Foreigners will be expected to arrive on time, so be aware that business hours usually run from 9 a.m. to 5 p.m. Sunday to Thursday. However, if you are doing business during the summer, you may be surprised by the amount of activity that takes place after sunset, when temperatures drop. Formal business at-tire is expected and required to make a good first impression. Women should pay special attention to wearing conservative clothes with both knees and elbows covered. When negotiating you should bring your own translator to avoid misunderstandings. Usually, business discussions begin with polite inquiries about personal lives or one’s family. During negotiations people are likely to raise their voices, which you should interpret as an enthusiastic way of discussing issues. Patience and clarity about expectations will ensure that progress is made. Remember that trust, relationships and the idea of mutual benefit are considered the keys to a successful outcome.

BUSINESS CARDS
In Egypt, business cards are exchanged without any specific ritual, but it is polite to spend sometime reviewing the information before tucking the card away. It is also appropriate to have your business cards translated into Egyptian Arabic.

GIFT GIVING
Gift exchanging in Egypt is not expected and you are likely to give a better impression if you instead host lunch or dinner. Always bear in mind that alcohol is for-bidden in Islam traditions and therefore should be kept outside of initial business engagements. If invited to an Egyptian’s home, it is appreciated if you bring pas-tries or sweets. Men giving a gift to a woman should say it is from a female relative. As always, business people need to be careful with gifts to avoid the perception of bribery.

DINNER AND SOCIAL EVENTS
Business in Egypt revolves around relationships and therefore social events and dinners are a vehicle for getting to know each other better. If invited to a colleague’s home, you should accept the invitation as turning it down will be seen as rude. In general, meals are large, and to show consideration for your host it is customary to leave some food on your plate to signal you have eaten well. In conversation, it is best to avoid topics of religion and politics. During the Muslim holy month of Ramadan, avoid inviting anyone for lunch or eating and drinking in front of others.