In the last few years, the Egyptian government’s policies have focused on economic recovery, as most economic regulation changes are centered on massive infrastructural initiatives, tourism development, increasing private sector investments, and luring (FDI) foreign investments.
Moreover, The World Bank has revised its forecasts for Egypt’s real GDP growth in 2023 to 4.2 percent from 4 percent, according to the bank’s latest MENA economic update released.
Steps for Setting Up a Business in Egypt
There are laws that govern company registration in Egypt; The Egyptian Companies Law No. 159 of 1981, as amended, and its executive regulation, and the Egyptian Investment Law No. 72 of 2017, as amended, and its executive regulation, Moreover, Investment in Egypt is subject to Egyptian Commercial Law. But if the entity invests in specific fields, the Investment Law provisions and its benefits might apply.
To set up a company in Egypt, you must first head to GAFI “General Authority for Investment and Free Zones’’ regulations, which govern the establishment of all types of companies in Egypt
1- Foreign company branches: According to Egyptian Companies Law no. 159 for the year 1981 and the new investment law no. 72 of 2017, foreign companies can establish a local branch in Egypt, provided they have a contractual agreement with an Egyptian partner. The foreign company can appoint a foreign general manager. The company’s whole operation would be totally controlled by the parent company. However, the activities that it can perform will be limited to the activities mentioned in its contract with an Egyptian organization. There are certain documents should be fulfilled in order to establish foreign company branch which are:
• A general power of attorney from the foreign parent company abroad
• A decision by the foreign parent company to open a branch of the company in Egypt
• A comply of the articles of association, and commercial register, of the parent company abroad, to be translated into Arabic
• Submitting security form for the foreign parent company
• An acknowledgment from the parent company abroad that is has never opened branches of the company in Egypt
• A banck account shall be opened for the foreign company brach inside Egypt and a bank certificate shall be issued for an amount equivalent to 5000EGY
• A lease agreement and the period shall not be less than three years
• An agreement conducted between the parent company abroad and any Egyptian entity
• All documents received from abroad shall be translated into Arabic and certified by the Ministry of foreign affairs office in the foreign country where the foreign company is located, certified by the Egyptian embassy abroad, and attested by the Ministry of foreign affairs in Egypt
2-Joint stock companies:
are one of the most commonly used legal forms of companies in Egypt. It requires at least 3 shareholders, with no restrictions on their nationalities. The minimum capital is 250000EGP and 5000000EGP if the shares are offered to public subscription. The liability of the shareholder is limited to the value of his quota and is not personally liable for the company’s debts except to the extent of the shares.
3-Limited liability companies:
LLCs are closed companies in which each partner’s liability is limited to the value of their share. The minimum number of shareholders is 2 and the maximum is 50 shareholders. There is no minimum capital required but it cannot be paid in the form of work performed as the capital is determined by the partners in the article of association.
4-Sole Proprietorship incorporation:
A company owned entirely by one person, whether a natural person or a public entity, however, the public entity shall get approval from the competent minister. The minimum capital is 1000EGP, Additionally, the name of the company shall be deprived from its purpose or founder, and the liability of all shareholders are limited to the shares. However, this type of company shall not conduct any of the following actions which are:
• Incorporating a sole proprietorship
• Public subscription
• Borrowing through issuing negotiable securities
• Conducting the activities of insurance, banks, savings, deposit-taking, or investment funds for the account of a third party.
The last step is to prepare some critical documents required by GAFI and the authorities to establish your business. These are the common ones that are required by all types of companies:
o Non-Confusion certificate validated by the commercial registry (you can apply for it and get it through GAFI’s online portal)
o A banking certificate obtained through a capital deposit
o Copies of the power of attorney and the original for review
o The partners’ and Egyptian managers’ ID copies and passport copies for foreigners. You will also need the original documents for review.
o The original copy of the auditor’s report
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