There are generally no restrictions on foreign ownership. An LLC may be wholly owned by foreigners unless the company participates in any activity that is restricted for foreigners by law, for example:
The following documents are required to apply for a security clearance:
A Limited Liability Company must have a registered office in Egypt.
A Limited Liability Company must be established with at least two, but not more than 50 members. The members can be both legal entities and individuals. As mentioned above, an LLC can be fully owned by foreigners with the exceptions of some activities explicitly mentioned by law and requiring a specific percentage of Egyptian ownership.
There is no minimum capital required for company incorporation with the exception of certain activities (a minimum required capital is needed in the case of importation for trade, for example).
LLCs with a capital of less than EGP 250,000 are exempted from the obligation to distribute up to 10% of their dividends to the employees provided that such 10% does not exceed the annual total value of salaries and wages payable to the employees.
Members appoint one or more managers to manage the LLC. The managers may act individually or jointly in accordance with the terms of the company’s articles of incorporation. Legal entities may not be appointed as managers of an LLC There is no restriction on the nationality of the managers except for certain activities where an Egyptian manager is required (such as importation for trade or export).
According to the Egyptian Companies Law, if an LLC has more than one manager, the company is allowed to form a board of managers who must be in charge of running the company’s business and representing the company before third parties and government authorities. Further, the powers of the managers in relation to the representation of the company are usually incorporated in the company’s constitutional documents (and recorded in the Commercial Registry; the information contained in the Commercial Registry is accessible to the public).
As an additional layer of management, the Egyptian Companies Law allows the formation of a supervisory board if the number of company members exceeds 10. The formation of the supervisory board and its powers must be set out in the constitutional documents of the company.
There are some restrictions regarding the appointment of directors and some activities, as mentioned above, require the managers to be Egyptians (for example, importation for trade purposes and commercial agency).
A foreign manager must obtain a security clearance, as well as a work and residence permits.
After completion of the preliminary stage (provision by the client of all the necessary information* and the making of an initial compliance check, agreeing of the final list of documents and payment of the invoice), it will take approximately 5-7 business days to incorporate an LLC.
*The necessary information will include the proposed activities of the future company, regions (countries) where the activities will be conducted, origin of funds for doing business, the desired company structure, etc. To run a compliance check and compile a company file, we will also require (scanned) copies of national and international passports of beneficial owners and other persons in the company structure and (scanned) copies of corporate documents of legal entities, if there are any in the LLC’s structure (for example, as members)[1]. Further, identity verification (personal presence) will also be required in one of our company’s offices or via video call.
Documents and information required specifically for company incorporation:
In the case the company’s member is a legal entity:
Opening an account at a local bank is mandatory (the company’s manager and, in some cases, its beneficial owners are required to be personally present).
The company’s manager is the one who operates the local bank account. If necessary, it is possible to issue a power of attorney to operate the account (for example, to the company’s beneficial owner, so that he also has access to the bank account).
Documents required to open an account at an Egyptian bank:
Subsequent company maintenance costs will be divided into:
All the above services will be provided to you on a turnkey basis.
Compliance fee is payable upon incorporation of a company, renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney and in the case of other changes in the company structure, as well as for the signing of documents.
All companies are required by national law to prepare annual financial statements; these statements are subject to mandatory audit. Financial statements can only be audited by a certified auditor from the list of the Egyptian Ministry of Finance.
The financial statements of your company will be prepared, filed and audited by local specialists with our assistance (in accordance with the practice existing in Egypt, accounting services are provided on a monthly basis).
A corporate income tax return must be submitted to the tax office annually – within 4 months of the end of the financial year[3]. VAT returns are submitted monthly – within 1 month of the end of the tax period.
Speaking of taxes as such, the corporate income tax rate in Egypt is 22.5% of the company’s net taxable income. Resident companies are taxed on their worldwide income, while non-resident companies pay tax on profits derived from their permanent establishments in Egypt.
The standard rate of value added tax (VAT) is 14%; special rates of 5%, 8% and 10% may apply in some cases; there are also goods exempt from VAT.
Please note that it is possible to register an Egyptian company in one of the special economic zones (Free Zone, Industrial Zone, Commercial Zone, etc.). The setup and operation of companies in such zones (they are also called investment zones) offers certain benefits (including tax ones), but also imposes some restrictions. For example, free zones are attractive in terms of VAT and customs duties benefits, but companies registered in these zones cannot trade in Egypt itself. Whether a company can be incorporated in a particular investment zone will depend on the company’s proposed type and geography of business.
|
Services
|
Fees (USD)
|
|
Total cost of company incorporation
(including assistance with local bank account opening); translation services are not included in the incorporation cost and are payable additionally |
from 5 500
|
|
Translation services
|
depending on the volume of the document(s)
|
|
Registered office address
|
from 715 / year
|
|
Renting an office or other premises
(if necessary) |
from 550 / month
|
|
Local manager’s services
(if necessary) |
from 1 500 / year
|
|
Obtaining a work permit and a residence permit for one individual (company manager)
|
650
|
|
Local bank account opening
included in the company incorporation cost (opening an additional account is to be discussed separately) Other additional services as agreed with the client |
from 200 / hour
|
|
Preparing financial statements
(payable monthly) |
250 – 300 / month*[5]
|
|
Preparing tax returns
(payable monthly) |
400 – 450 / month*
|
|
Conducting an audit[6]
|
from 5 000 / year*
|
|
Additional assistance by GSL specialists with financial statements, tax returns and audit
(if necessary) |
100 – 400 / hour[7]
(based on time spent) |
|
Advising on legal, tax and accounting matters
|
from 200 / hour
|
|
Compliance fee
Payable in the cases of: - incorporation of a company, - renewal of a company (there is an annual compliance check), - liquidation of a company, - transfer out of a company, - issue of a power of attorney to a new attorney, - change of manager / member / beneficial owner, except the change to a local professional manager, - signing of documents. |
350 (standard rate, includes the check of 1 individual),
+ 150 for each additional individual (manager, member or beneficial owner) or legal entity (member) if such legal entity is administered by GSL, + 200 for each additional legal entity (member), if such legal entity is not administered by GSL, 450 (rate for High Risk companies, includes the check of 1 individual), 100 (signing of documents). |
[1] In the absence of any of the specified documents, the updated list will be agreed additionally with your GSL consultant.
[2] As mentioned above, if the company’s manager is a foreigner, such a manager will need to rent a place to live (with a monthly payment), as well as obtain a security clearance, a work permit and a residence permit. However, to avoid these costs, it is possible to engage the services of a local manager.
[3] In Egypt, the financial year is different from the calendar year and runs from 1 July to 30 June. However, the company may set its own financial year for reporting purposes and state it in its Articles of Incorporation.
[4] The fees are valid as of the date of sending of this offer.
[5] *These fees are indicative. The final fees will depend on the company’s operations (type and scope of activity, number of transactions, etc.).
The prices do not include local VAT (the standard VAT rate in Egypt is 14%, but reduced rates may apply in some cases).
[6] The estimated cost of the audit will be agreed with the client in advance (the cost is estimated by local experts based on a detailed description of the company’s operations). The final cost will be known after the accounting documents are provided to the auditor.
[7] The rate depends on the type of work and qualification of a specialist involved.