What is the best type of company to set up in Egypt?
It depends on the nature of the business, the number of partners, and considerations of management and legal liability.
Can a non-Egyptian set up a company in Egypt?
Yes. Non-Egyptians may incorporate companies in Egypt in accordance with the applicable rules and requirements.
Do the requirements differ depending on the business activity?
Yes. Certain requirements and procedures vary with the nature of the business and the authorities involved.
Does the cost of setting up a company in Egypt vary?
Yes. The cost of incorporation varies with the type of company, the nature of the business, the number of partners, and the considerations and requirements of each case.
Are the required licences and requirements explained before the procedures begin?
Yes. The applicable considerations, procedures, required licences and related costs are explained, according to the nature of the business, before the incorporation stages begin.
What documents are required to set up a company in Egypt?
The required documents vary with the type of company, the nature of the business and the partners involved, and they are explained to you at the outset.
One Person Company
The most recent legal form of company under Egyptian law. By way of exception to Article 505 of the Civil Code, which requires a company to consist of at least two partners, any natural person, or any legal person within the limits of the purposes for which it was established, may alone incorporate a one person company, which shall be a limited liability company.
Business setup in Egypt rests on determining the capital and the documents required for each legal form. The requirements for a one person company are set out below.
Capital
The capital shall not be less than EGP 1,000 (one thousand Egyptian pounds).
The documents required for business setup in Egypt vary with the capacity of the founder and the company’s activity. For a one person company, they are as follows.
Required Documents
- A certificate of non-duplication of the company name, certified by the Commercial Registry. Applications for the non-duplication certificate may be submitted through the Digital Egypt platform — click here.
- A bank certificate evidencing the deposit of the entire capital, bearing in mind that the capital shall not be less than EGP 1,000.
- Where the one person company is incorporated by a legal person, the following documents shall be submitted:
— A power of attorney issued by the legal representative of the legal person.
— A recent commercial register extract of the legal person (the original to be sighted).
- Where the founder is a public-law person, the approval of the Prime Minister or the competent Minister, as the case may be, must be obtained.
- A power of attorney to incorporate the one person company, whether the founder is a legal or a natural person. The power of attorney shall expressly authorise the incorporation of companies and the execution of incorporation contracts before the Real Estate Publicity Department (Notary Office).
- Investor identification forms for the company owner or the foreign manager, submitted as a hard-copy document and on CD.
- The original official extract from the Register of Accountants and Auditors, addressed to the General Authority for Investment, confirming that the company’s auditor is entitled to audit and approve the financial statements of capital companies for the first time, or the original declaration of acceptance of appointment where the auditor has previously submitted that certificate to the Authority.
- Copies of the founder’s identification documents (valid and legible), after the originals have been sighted:
— National ID for Egyptians.
— Passport for foreigners.
- Copies of the attorney-in-fact’s identification documents (valid and legible), after the originals have been sighted:
— National ID for Egyptians.
— Passport for foreigners (a valid residence permit is required).
- A copy of the Bar Association membership card of the lawyer attesting the contract before the Bar Association (the lawyer must be admitted at least before the Courts of First Instance, and the membership card must be valid as at the date of attestation).
- The name and address of the company’s legal counsel, who must be admitted at least before the Courts of Appeal.
- The approval of the competent authority where any of the company’s objects requires a special approval under the applicable laws (prior approval).
- Where an in-kind contribution is made at incorporation:
— A valuation report on the in-kind contribution prepared by experts from professions regulated by law, according to the nature of each contribution, together with the founder’s declaration approving the accuracy of the valuation.
- Where the one person company is incorporated to operate under the public free zones system in accordance with Investment Law No. 72 of 2017, the same documents listed above are required, in addition to:
— Obtaining the Authority’s approval prior to incorporation, such approval being issued by the board of directors of the free zone in which the project is to be established.
These documents are submitted to the competent authority and may vary according to the business activity or the investment regime. Business setup in Egypt begins with identifying the appropriate legal form before any procedural step is taken.
Limited Liability Company
Under Article 4 of Law No. 159 of 1981, it is: “A company whose partners do not exceed fifty in number, each of whom is liable only to the extent of his share. The company may not be incorporated, nor may its capital be increased or loans be raised for its account, by way of public subscription, and it may not issue negotiable shares or bonds. The transfer of partners’ shares is subject to the partners’ right of redemption in accordance with the special conditions set out in the company’s contract, in addition to the conditions prescribed by this Law. The company may adopt a special name, which may be derived from its objects, and its title may include the name of one or more partners.” (Unofficial translation)
The number of partners may not be fewer than two; the company may not offer its shares by way of public subscription, and it is not listed on the Egyptian Exchange.
As a result of these restrictions, business setup in Egypt in this form requires the number of partners and the capital to be determined before the procedures are initiated.
Capital
The number of partners may be no fewer than two and no more than fifty.
The documents required by the competent authority for business setup in Egypt must then be completed. For this form, they are as follows.
Required Documents
- Obtaining a certificate of non-duplication of the company’s trade name.
- Copies of computerised powers of attorney from all partners, in the case of limited liability companies (no fewer than two and no more than 50 partners).
— The power of attorney shall expressly authorise the incorporation of companies and the execution of incorporation contracts before the Real Estate Publicity Department (Notary Office). Where the attorney-in-fact is one of the partners, the power of attorney shall include the phrase “contracting with oneself and with third parties in the incorporation of companies” (التعاقد مع النفس والغير في تأسيس الشركات).
- Copies of the identification documents (valid and legible) of the founders or partners:
— National ID for Egyptians.
— Passports for foreigners.
- The original official extract from the Register of Accountants and Auditors, addressed to the General Authority for Investment, confirming that the company’s auditor is entitled to audit and approve the financial statements of capital companies for the first time, or the original declaration of acceptance of appointment where the auditor has previously submitted that certificate to the Authority.
- A copy of the Bar Association membership card of the lawyer attesting the contract before the Bar Association (the lawyer must be admitted at least before the Courts of First Instance, and the membership card must be valid as at the date of attestation).
- Investor identification forms for foreign shareholders, submitted as a hard-copy document and on CD.
- The name and address of the company’s legal counsel, who must be admitted at least before the Courts of Appeal.
- Copies of the attorney-in-fact’s identification documents (valid and legible):
— National ID for Egyptians.
— Passport for foreigners (a valid residence permit is required).
- The approval of the competent authority where any of the company’s objects requires a special approval under the applicable laws (prior approval).
- Where an in-kind contribution is made at incorporation:
— For a limited liability company: it is sufficient to submit only a report prepared by experts from professions regulated by law, according to the nature of each [text incomplete in source — to be verified]
- Where the company is incorporated to operate under the free zones system in accordance with Investment Law No. 72 of 2017, the same documents listed above are required, in addition to:
— For a public free zone: obtaining the Authority’s approval prior to incorporation, such approval being issued by the board of directors of the free zone in which the project is to be established.
— For a private free zone: obtaining the approval of the Cabinet prior to incorporation.
- Where a capital company is formed by converting a partnership established under the Trade Law into a capital company under Laws No. 72 of 2017 and No. 159 of 1981, the same documents listed above are required, in addition to:
— A valuation report on the in-kind contribution (the net assets and liabilities of the partnership), issued by the committee formed for that purpose by decree of the Chairman of the Authority.
— The partnership’s formation contract and its summary, together with all subsequent amendment contracts and their summaries, duly registered with the court.
— Minutes of the partners’ assembly approving the change of legal form prior to the valuation.
— Minutes of the partners’ assembly approving the valuation result and approving the principal terms of the company after conversion (capital and its allocation among the partners, business activity, etc.).
— A preamble setting out the company’s history from its formation contract, through its amendments, up to the minutes of the partners’ assembly, to be provided on CD.
— A recent commercial register extract of the partnership.
- Where one or more capital companies are formed by dividing an existing company into more than one company:
— The decree of the Chairman of the Authority approving the division.
— The valuation report on the in-kind contribution.
— The commercial register extract of the dividing company, annotated with the division.
— A copy of the minutes of the company’s extraordinary general assembly approving the division, as approved by the Authority.
— A copy of the minutes of the company’s extraordinary general assembly approving the valuation result, as approved by the Authority.
— The draft division contract, as approved by the Authority.
These documents vary with the capacity of the partners, the investment regime and the conversion route. The cornerstone of business setup in Egypt remains the choice of a legal form suited to the nature of the business, the number of partners and the scope for expansion.
Joint Stock Company – Partnership Limited by Shares
Article 2 of Law No. 159 of 1981 defines the joint stock company as: “A company whose capital is divided into shares of equal value that are tradeable in the manner set out in the law. A shareholder’s liability is limited to paying the value of the shares for which he has subscribed, and he shall not be liable for the company’s debts except to the extent of the shares for which he has subscribed. The company shall have a trade name derived from the purpose of its establishment, and the company’s trade name may include the name or title of one or more of its founders.” (Unofficial translation)
Its shares may be offered for public subscription and it may be listed on the Egyptian Exchange, and its shares must be registered with the central depository and registry companies. It is incorporated with the Authority in accordance with Investment Law No. 72 of 2017 or Law No. 159 of 1981.
Business setup in Egypt in this form requires satisfying basic requirements relating to the number of founders and the issued capital.
Basic Requirements
A joint stock company must have no fewer than three founders. As a general rule, its issued capital shall not be less than EGP 250,000, of which 10% is to be paid up upon incorporation.
The documents required for business setup in Egypt are determined by the capacity of the founders, the nature of the contributions and the investment regime. For a joint stock company, they are as follows.
Required Documents
- A certificate of non-duplication of the company name, certified by the Commercial Registry. Applications for the non-duplication certificate may be submitted through the Digital Egypt platform — click here.
- A bank certificate evidencing the deposit of at least 10% of the issued capital for joint stock companies and partnerships limited by shares, to be increased to 25% within 3 months and to 100% within 5 years. Regard must be had to activities for which the governing law prescribes a minimum paid-up capital, and the issued capital shall not be less than EGP 250,000.
- A certificate from Misr for Central Clearing, Depository and Registry (MCDR) confirming completion of the shareholder coding procedures.
- Copies of powers of attorney (the originals to be sighted) where incorporation is effected through an attorney-in-fact:
— From all founders, in the case of joint stock companies (no fewer than three founders).
— The power of attorney shall expressly authorise the incorporation of companies and the execution of incorporation contracts before the Real Estate Publicity Department (Notary Office). Where the attorney-in-fact is one of the partners, the power of attorney shall include the phrase “contracting with oneself and with third parties in the incorporation of companies” (التعاقد مع النفس والغير في تأسيس الشركات).
- Copies of the identification documents (valid and legible) of the founders or partners (the originals may be requested for sighting):
— National ID for Egyptians.
— Passports for foreigners.
- The original official extract from the Register of Accountants and Auditors, addressed to the General Authority for Investment, confirming that the company’s auditor is entitled to audit and approve the financial statements of capital companies for the first time, or the original declaration of acceptance of appointment where the auditor has previously submitted that certificate to the Authority.
- A copy of the Bar Association membership card of the lawyer attesting the contract before the Bar Association (the lawyer must be admitted at least before the Courts of First Instance, and the membership card must be valid as at the date of attestation).
- Investor identification forms for foreign shareholders, submitted as a hard-copy document and on CD.
- The name and address of the company’s legal counsel, who must be admitted at least before the Courts of Appeal.
- Copies of the attorney-in-fact’s identification documents (valid and legible) (the originals to be sighted):
— National ID for Egyptians.
— Passport for foreigners (a valid residence permit is required).
- The approval of the competent authority where any of the company’s objects requires a special approval under the applicable laws (prior approval).
- Where an in-kind contribution is made at incorporation:
— For joint stock companies or partnerships limited by shares: the original report of the committee formed by the General Authority for Investment and Free Zones to value the in-kind contribution shall be submitted.
- Where the company is incorporated to operate under the free zones system in accordance with Investment Law No. 72 of 2017, the same documents listed above are required, in addition to:
— For a public free zone: obtaining the Authority’s approval prior to incorporation, such approval being issued by the board of directors of the free zone in which the project is to be established.
— For a private free zone: obtaining the approval of the Cabinet prior to incorporation.
- Where a capital company is formed by converting a partnership established under the Trade Law into a capital company under Laws No. 72 of 2017 and No. 159 of 1981, the same documents listed above are required, in addition to:
— A valuation report on the in-kind contribution (the net assets and liabilities of the partnership), issued by the committee formed for that purpose by decree of the Chairman of the Authority.
— The partnership’s formation contract and its summary, together with all subsequent amendment contracts and their summaries, duly registered with the court.
— Minutes of the partners’ assembly approving the change of legal form prior to the valuation.
— Minutes of the partners’ assembly approving the valuation result and approving the principal terms of the company after conversion (capital and its allocation among the partners, business activity, etc.).
— Where the partners wish to add a cash contribution, a bank certificate evidencing the deposit of 10% of the cash contribution must be submitted.
— A preamble setting out the company’s history from its formation contract, through its amendments, up to the minutes of the partners’ assembly, to be provided on CD.
— A recent commercial register extract of the partnership.
- Where one or more capital companies are formed by dividing an existing company into more than one company:
— The decree of the Chairman of the Authority approving the division.
— The valuation report on the in-kind contribution.
— The commercial register extract of the dividing company, annotated with the division.
— A copy of the minutes of the company’s extraordinary general assembly approving the division, as approved by the Authority.
— A copy of the minutes of the company’s extraordinary general assembly approving the valuation result, as approved by the Authority.
— The draft division contract, as approved by the Authority.
These documents vary with the investment regime and the incorporation or conversion route. The legal form remains the starting point of business setup in Egypt, as it determines the obligations and requirements that follow.
Partnerships (General Partnership – Limited Partnership)
Partnerships are companies founded on personal consideration (intuitu personae), which is the principal factor in dealings with the company. They usually consist of a small number of persons connected by a particular relationship, such as kinship or friendship, each of whom trusts the others and their ability and competence. Accordingly, as a general rule, the death, interdiction, bankruptcy or withdrawal of a partner results in the dissolution of the company.
Partnerships are divided into:
- General partnerships.
- Limited partnerships (the number of partners may not be fewer than two).
They are incorporated with the Authority in accordance with Investment Law No. 72 of 2017.
Business setup in Egypt in this form rests on mutual trust between the partners, not on capital alone, and this is reflected in the requirements prescribed for it.
Basic Requirements for Incorporating a Partnership
The number of partners may not be fewer than two, and the company’s minimum capital shall not be less than EGP 300,000.
The prescribed documents for business setup in Egypt must then be completed. For partnerships, they are as follows.
Documents Required to Incorporate the Company
- Copies of computerised powers of attorney from all partners where incorporation is effected through an attorney-in-fact.
— The power of attorney shall expressly authorise the incorporation of companies and the execution of incorporation contracts before the Real Estate Publicity Department (Notary Office). Where the attorney-in-fact is one of the partners, the phrase “contracting with oneself and with third parties in the incorporation of companies” (التعاقد مع النفس والغير في تأسيس الشركات) shall be added.
- Copies of the partners’ identification documents (valid and legible):
— National ID for Egyptians.
— Passports for foreigners.
- A copy of the Bar Association membership card of the lawyer attesting the contract before the Bar Association (the lawyer must be admitted at least before the Courts of First Instance, and the membership card must be valid as at the date of attestation).
- Investor identification forms for foreign partners, submitted as a hard-copy document and on CD.
- Copies of the attorney-in-fact’s identification documents (valid and legible):
— National ID for Egyptians.
— Passport for foreigners (a valid residence permit is required).
- The approval of the competent authority where any of the company’s objects requires a special approval under the applicable laws (prior approval).
- Where an in-kind contribution is made at incorporation:
— A valuation report on the in-kind contribution prepared by experts from professions regulated by law, according to the nature of each contribution.
- Where a partnership is incorporated to operate under the public free zones system in accordance with Investment Law No. 72 of 2017, the same documents listed above are required, in addition to:
— Obtaining the Authority’s approval prior to incorporation, such approval being issued by the board of directors of the free zone in which the project is to be established.
- Where a (de facto) partnership is formed as a result of the death of the owner of a sole proprietorship, the same documents listed above are required, in addition to:
— A recent commercial register extract of the sole proprietorship.
— The death certificate of the owner and an inheritance determination (i‘lam wiratha) identifying the owner’s heirs.
- Where the heirs include minors, the court’s approval authorising the minor to participate in incorporating a company out of the minor’s own inherited property shall be submitted.
- A valuation report on the tangible physical assets of the sole proprietorship (land, real estate, buildings, machinery, equipment, inventory), approved by experts according to the nature of those assets and supported by documents evidencing ownership.
- The original minutes of the partners’ assembly of the company under incorporation, approving the valuation report and the distribution of the valuation result among the heirs in accordance with the inheritance determination, as well as any other particulars of the company under incorporation.
These documents vary with the reason for incorporation and the investment regime. Personal consideration among the partners remains what distinguishes business setup in Egypt in this form from the other legal forms.
Establishing a Sole Proprietorship
A sole proprietorship is an establishment owned by a single individual who manages it personally and receives all of its profits, while bearing all of its liabilities. It constitutes an individual trader within the meaning of Articles 10 and 11 of Trade Law No. 17 of 1999. It is established with the Authority in accordance with Investment Law No. 72 of 2017.
A sole proprietorship differs from the other forms covered by business setup in Egypt, as it does not involve multiple partners and does not separate the owner’s financial estate from that of the business.
Key Requirements for Establishing the Proprietorship
- The capital of a sole proprietorship is determined at the owner’s discretion.
The prescribed documents must then be completed; they are fewer than those required for the other forms of business setup in Egypt, given the absence of multiple partners.
Documents Required to Establish the Proprietorship
- A copy of a computerised power of attorney from the owner where the proprietorship is established through an attorney-in-fact.
— The power of attorney shall expressly authorise the incorporation of companies.
- Copies of the owner’s identification documents (valid and legible):
— National ID for Egyptians.
— Passports for foreigners.
- Copies of the attorney-in-fact’s identification documents (valid and legible):
— National ID for Egyptians.
— Passport for foreigners (a valid residence permit is required).
- An investor identification form for a foreign owner, submitted as a hard-copy document and on CD.
- The approval of the competent authority where any of the proprietorship’s objects requires a special approval under the applicable laws (prior approval).
- Where an in-kind contribution is made at establishment:
— A valuation report on the in-kind contribution prepared by experts from professions regulated by law, according to the nature of each contribution.
- Where a sole proprietorship is established to operate under the free zones system in accordance with Investment Law No. 72 of 2017, the same documents listed above are required, in addition to:
— For a public free zone: obtaining the approval of the Authority prior to establishment, such approval being issued by the board of directors of the free zone in which the project is to be established.