This year’s Rise Up Summit, the second annual installment of a conference for Egyptian entrepreneurs, was a chance for home-grown start-ups to share experiences, get advice from business experts, pitch ideas and bask in a general buzz of energy and enthusiasm.

But despite the celebration of local ingenuity and local solutions, one piece of advice rang clear throughout: If you want to launch a successful business in Egypt, one that can attract investors and grow exponentially, register your company offshore.

“People are simply forced to register offshore companies,” lawyer Amir Marghany told Mada Masr.

Marghany is the managing partner of Marghany Advocates, a corporate law practice that also advises start-ups.

“The Egyptian Companies Law is, bottom-line, obsolete. It’s over-regulated. Everything in Egypt is over-regulated,” he said.

The problems caused by this over-regulation range from the burdensome to the crippling for would-be success stories. In most countries, getting a document notarized is a simple, routine process. People signing documents visit a notary public, who is authorized by the government to check identification documents and certify that the document was signed in his or her presence. In the United States, many pharmacists offer the service, as do many lawyers worldwide. In Egypt, Marghany explains, businesses have to go to a special government office, “where each employee has his own interpretation of the law.”

Added together, a collection of such inconveniences can add months to the time needed to finalize a business deal.

In addition to piling on bureaucratic headaches, Marghany says Egyptian business law is inflexible and has failed to keep up with the structure of modern businesses and investments. The Companies Law does not include guidelines for essential contractual provisions that both investors and entrepreneurs depend on, such as call options and good leaver/bad leaver clauses.

This means that if a deal goes wrong, both company founders and their investors have little recourse under Egyptian law. “The regulation does not protect you. In the eyes of the law, you’ve agreed to something that defies the laws,” said Marghany.

Legislation has also failed to adapt to the changing value structure of companies. In Silicon Valley, a company can be valued at millions of dollars while possessing little more than a brilliant idea and a prototype. In Egypt, Marghany says, there is still little recognition of intellectual or IT assets. To be valued at LE1 million in Egypt, a company would need to have cash or physical assets worth that amount.

For startups, which require a high valuation to get the investment funds they need to launch their companies, such antiquated legislation can prevent them from ever getting off the ground.

Even setting aside the specific issues of Egypt’s company law, some investors are simply wary of investing in an Egypt-based company, due to the ongoing economic and political instability.

“I’ve seen a few cases where people are simply not confident enough investing in Egypt,” he says.

It’s an unfortunate situation, Marghany says. “I would definitely be very happy to see businesses and value created in Egypt,” but, he adds that his obligation to serve his clients’ interests means he advises Egyptian entrepreneurs to register their companies abroad.

Marghany is not alone in offering this counsel. At panels on venture capital and angel investors at this week’s summit, experienced entrepreneurs, legal experts and local and international investors all echoed this advice.

When asked to distil her advice to entrepreneurs into a tweet, Heather Henyon, founder of the Women’s Angel Investment Network, simply said: “Set up offshore company.”

Registering outside of Egypt is essential for companies looking for regional and international investors, Henyon explains. International investors don’t want the liability of investing in a local company, or to face problems from regulatory authorities and censors that can add months to even a simple deal.

“We actually insist on investing in an offshore company,” she said of her own network.

During a panel offering legal advice for start-ups, Sherif Hefny of Levari law firm was equally blunt when asked about setting up anti-dilution measures for start-up cofounders.

“Don’t do it under Egyptian law,” he said.

Hefny also gave some advice about the practicalities of setting up an offshore company. Different jurisdictions are suitable for different kinds of companies, he said. Financial services companies often do well in Luxembourg, while the British Virgin Islands and the Caymans are suitable for technology companies.

Once an offshore company is set up, it can buy the Egyptian company. “You have better protection because you are considered a foreign investor and are protected under international law,” he said.

According to Hefny, setting up a company and changing ownership should take around 10 days and cost about US$3,000.

Venture capitalist Mohamed Al-Ayouti cautioned the process takes a bit longer on the Egyptian side, and that companies will usually face additional legal fees on top of the $3,000, but he still concurred with the advice. As did entrepreneur Abdellatif Olama, who noted that one recent deal he was involved with cost more than $15,000.

Despite promises from the current government to support start-ups and small businesses, experts are pessimistic that Egypt’s Companies Law will be reformed anytime soon.

“A completely new law has to be implemented here in Egypt. It has to be scrapped,” said Hefny.

“You shouldn’t be waiting for that,” added Olama. The country has other legislative priorities at the moment.

“While we wait for a totally new law to come in, incorporate overseas,” said Ayouti.