Company Registration in Egypt - Business Starting & Setup

The establishment of Egyptian companies and their economic activities are regulated by various laws, such as on corporations (Companies Law No. 159 of 1981), on investments (Investment Law No. 72 of 2017), on commercial law (Capital Markets Law No. 95 of 1992) and others.

A foreign investor in Egypt will be interested in the following forms of doing business:

• Single-shareholder company;
• Joint Stock Company;
• Limited Liability Company;
• Partnership Limited by Shares;
• Branch;
• Representative Office.

The registration body for companies and individual entrepreneurs in Egypt is the General Authority for Investment and Free Zones (GAFI) under the Egyptian Ministry of Investment.

The most common type of company registered in Egypt are Limited Liability Companies (LLC).

When registering a company in Egypt, the company name must be checked for availability.

The name of the LLC must derive from the company’s objectives and may include the name of one or more of its members/shareholders. The name must also include the words ‘Limited Liability Company’ (in accordance with the Ministerial Decision Implementing the Commercial Companies Law).

Incorporation of a limited liability company in Egypt includes the following stages:

1. Reserving the company name in the Trade Register (at least 3 names).

2. Obtaining a bank letter.

3. Certifying the necessary documents.

4. Registration of a company at GAFI. This will require submission on the following documents:

• Certificate of uniqueness of the company name (certified in the Commercial register);
• Manager's passport (copy);
• Power of Attorney;
• Application for "Security Clearance" for company members and foreign manager(s);
• Identification of name and address of the legal advisor of the company;
• Certificate of the company auditor;
• Document of ownership or lease agreement for the legal address of the company.

If the participant of the company is a legal person:

• Articles of Incorporation;
• Certificate of incorporation of the company;
• Certificate of operation;
• Power of attorney.

Most of the main documents must be in English and certified by the Egyptian Embassy.

5. Registration at the Egyptian Tax Authority.

6. Registration at the National Social Security Administration.

The timeframe for registering a company after providing all the necessary information, conducting an initial compliance check, agreeing on a final list of documents and paying the bill is about 5 - 7 business days.

Egypt is not a party to the 1961 Hague Convention (Apostille Convention), which abolishes the requirement of legalization for foreign official documents. Therefore, neither originals or copies of company documents cannot be apostilled.

It turns out, for the procedure of registration of a company in Egypt and the subsequent use of documents of the Egyptian Company in other countries may require legalization of documents. The legalization procedure takes place at the consulate of the country in which it is planned

A registered office in the country is mandatory.

There are no statutory requirements for Egyptian companies to have a seal.

Foreign companies and partnerships are regarded as resident in Egypt if they meet one of the following conditions:

• A legal entity is established under Egyptian law.
• More than 50% of the entity’s capital is owned by the government or state body.
• The effective place of management is in Egypt.

Egypt is regarded as effective place of management if an entity meets any two of the following conditions:

• Day-to-day management decisions are made in Egypt.
• Board members hold their meetings in Egypt.
• At least 50% of the board members or managers reside in Egypt.
• Major shareholders (holding more than 50% of shares or voting rights) reside in Egypt.
• Permanent establishment.

The management of an LLC may be entrusted to one or more managers. However, for some activities at least one manager must be an Egyptian citizen (e.g. import or export for trade purposes).

Legal persons may not be managers of a limited liability company.

The name of the manager must be mentioned in the Memorandum of Association.

The manager may be appointed for a fixed term (which must be specified in the Memorandum of Association) or for an indefinite period. He must also have full authority to represent the LLC before third parties, unless such authority is limited or stipulated in the Memorandum of Association.

A Security Clearance must be obtained for a foreign manager, as well as Work Permit and Residence Permit.

If the number of shareholders becomes less than 2, an LLC will be considered liquidated by law or converted into single-shareholder company.

Participants can be both legal entities and individuals.

If the number of shareholders becomes less than 2, an LLC will be considered liquidated by law.

An LLC must also maintain a Register of Shareholders, which is kept at the head office. The Register specifies:

• Name, citizenship, place of residence and occupation;
• Number of shares held by each member;
• Amount paid by each member; and
• Information about the assignment or transfer of shares and related information.

Egypt does not yet have a central public register of beneficial owners.

The minimum capital requirement for a limited liability company (LLC) in Egypt is EGP 1 000, except for certain activities (e.g. import for trade).

It should be divided into equal parts, the value of each of them not less than EGP 100 paid in full.

A company with a capital less than EGP 250 000 is exempt from the obligation to distribute up to 10% of its of its dividends to employees, provided that this 10% does not exceed the annual total wages paid to employees.

In Egypt, it is possible to register a company in one of the special economic zones (Free Zone, Industrial Zone, Commercial Zone, etc.) in order to get Zone, Industrial Zone, Commercial Zone, etc., to take advantage of some of the tax breaks.

Free Zone is the ability to sell products for export only, not within Egypt. What is produced or imported is not subject to customs duty and VAT on exports (1%-3% annual VAT).

Industrial Zone - the ability to produce, export and sell in Egypt. What is manufactured or imported is exempt from customs duty and VAT on exports, only VAT on sales in Egypt is refunded.

There are no factories, workers or machinery in the Commercial Zone. No import of materials, no production.