Egypt Key Points
- Time – 3 weeks to incorporate your company
- Director – one director must be of Egyptian nationality – we can provide you with a nominee
- Shareholders – two shareholders are required with no restriction placed upon nationality
- Share Capital – the minimum issued capital of a limited liability company is 1000 EGP
- Support – using our 20 years experience we guide you throughout every step of the company formation process
- 100% foreign ownership of companies
The Egyptian limited liability company is a closed company where the liability of each of its shareholders is limited to the value of his or her shares.
Documents and Information
To incorporate a company in Egypt we require the following:
- The name of the company
- Name and address of the directors
- Name and address of the shareholders
Documents you are required to provide:
- Proof of identity. Either passport, national identity card, photographic driving licence
- Proof of residential address. Gas/electricity bill or credit/debit card bank statement dated within the last 3 months
Incorporating your LLC
The founding shareholders of the company must submit an application requesting permission to incorporate a limited liability company. The ministerial decision implementing the Commercial Companies Law outlines the mandatory provisions that must be included in the Memorandum of Association.
The company is incorporated once it is registered in the Commercial Register. The company must also maintain a Register of Partners in its head office, which must contain the names, nationalities, domiciles and occupations of the partners; the number of shares owned by each partner; the sum paid by each; and the assignment or transfer of shares and related relevant information.
The trade name of the limited liability company is usually derived from its object, but may also include the name(s) of one or more of its partners. Additionally, the words ‘Limited Liability Company’ must be included in the name. Certain words are prohibited such as names suggesting the patronage of any Government or country.
- At least one director must be of Egyptian nationality.
- Only one director is required.
- There are no nationality or residence restrictions on other directors.
- The director can be a person or a corporation.
- Shareholders may be of any nationality and may reside anywhere
- Two shareholders are required.
- No more than 50 shareholders.
- The shareholder can be a person or a corporation.
The minimum share capital of a limited liability company is 1000 EGP . The capital should be fully paid up on foundation. The nominal value of the share cannot be less than 1000 EGP. The shares cannot be traded in the stock exchange, however, any partner can sell his or her shares to outsiders, given that he has already offered them to the other partners and they declined to buy them. If a foreign partner(s) in a limited liability company wishes to repatriate his or her capital out of Egypt, he or she has to sell his or her shares or liquidate the company (if he or she actually owns all or most of it), deposit the proceeds of sale or liquidation in an account at one of the accredited banks in Egypt, and the bank will realise the required repatriation of the funds, free of any taxes or duties. A limited liability company which has a share capital equal to or exceeding the minimum share capital of a closed joint stock company (i.e. 250,000 EGP, appoximately €32,000) has to allocate at least 10% of the profit to be distributed among its partners to its employees as profit sharing, but with a maximum of 100% of their annual salaries.
You must have a registered office in the Egypt. Formacompany provide these services.
The management of a limited liability company may be assigned to one or more directors. At least one director must be of Egyptian nationality. The director(s) must be named in the Memorandum of Association but need not be a shareholder(s). The director(s) may be appointed for a definite term (which must be specified in the Memorandum of Association) or for an indefinite term. The director(s) shall have full authority to represent the company; unless such authority is limited by the Memorandum of Association. The director of the limited liability company has the same legal status of the director of the joint stock company. A foreign owner, to be the sole director, must obtain a residence visa and his paid up capital should not be less than €19,000.
If the number of the shareholders of a limited liability company exceeds ten, the appropriate bodies should form a supervisory board consisting of at least three of them. The supervisory board has the right to check the accounting records of the company, ask the directors to provide reports upon request, count the compan’s cash and other assets, and review the company’s financial statements before being submitted to the general meeting.
Limited Liability Companies
The Egyptian limited liability company has a minimum of two shareholders and a maximum of fifty. It may not raise its capital from the public or issue negotiable shares or bonds. It also may not engage in the activities of insurance, banking, savings, deposit taking or the investment of funds on behalf of third parties. No member may transfer an interest in the company to third parties without first offering it to existing members who have a period of one month in which to purchase that interest.
Choice of Legal Business Form- There are two investment regimes under which a foreign company may incorporate:
- Law 230 (the Investment Law).
- Law 159 (the Companies Law).
The more privileged of the two regimes has been Law 230 of 1989 which has less restrictions on the operation of joint stock companies.
The most common forms of incorporation are joint stock companies and limited liability companies. In order for a company incorporated under the Companies Law (Law 159) to be converted to a company subject to the Investment Law (Law 230), an application must be submitted to the Investment Authority. Approval is conditional on an increase of the capital invested by an amount which is equal to the value of the assets of the Law 159 company.
Egyptian Limited Liability Companies
- The minimum share capital of a LLC is 1000 EGP – the share capital must be fully paid up at incorporation
- Shares must be of equal value and cannot have a nominal value, no share certificates are issued for LLC
- At least one of the directors must be of Egyptian nationality.
- A minimum of two founding shareholders is required and a maximum of fifty shareholders is permitted (shareholders may be individuals or legal entities)
- A LLC may not carry out insurance, banking or savings activities, deposit taking, security brokerage, portfolio management or investment of funds on behalf of third parties
- The company name may refer to its activities and may include the name of one or more shareholders
- LLC may not issue bonds
- Shareholders wishing to transfer their shares in a LLC must first offer them to existing shareholders
- The Statutes of a LLC may prohibit any transfer of shares unless approved by the other shareholders