What is Company Registration in Egypt?
In Egypt, the most common form of company is the Limited Liability Company (LLC). Egyptian LLC is a legal entity which is separate and distinct from the individuals who run it.
In case of a claim against the organization, sole traders and for people in partnerships, the individual’s personal assets are at risk but in case of LLC, shareholders are only liable up to the value of the share capital to which they subscribe. In Egypt, LLC can be 100% foreign owned.
Name of Company
The name of the company in Egypt is generally derived from the object of the company and it must end with or include somewhere, ‘Limited Liability Company’ or an appropriate abbreviation.
Once the name is approved by the Registrar, the name of the company is reserved for 10 days.
Note: Certain words, such as those suggesting governmental patronage are prohibited.
Registered Office of Company
It is required for each company to have a registered office in Egypt where official documents of the company and correspondence may be legally served. It is a place where documents may be legally served on the company and where it is required to maintain a Register of Partners. Register of Partners must contain the following:
- Name, nationality, domicile, and occupation of the partners;
- Number of shares owned by each partner
- Sum paid for the shares by each partner
- Information related to assignment or transfer of shares.
For LLC only a single director is required and director can be either an individual or a corporate entity. There is a requirement of at least one director who must be a resident of Egypt but there are no restrictions on nationality or residency of the other directors. Nominee directors are allowed.
Here are the following director requirements:
- In the management of a limited liability company, there must be at least one director of Egyptian nationality. Their name must be in the Memorandum of Association but it is not required for them to be the shareholders.
- Directors may be appointed for a definite term or for an indefinite term, but in case of the definite term, it must be specified in the Memorandum of Association.
- Unless authority is limited by the Memorandum of Association, directors have full authority to represent the company.
- For a foreign owner, it is required to obtain a residence visa, and his paid-up capital should not be less than €19,000.
- It is required for LLC to form a supervisory board consisting at least three shareholders, in the case where the number of shareholders exceeds ten.
- The supervisory board has the power to check the accounting records of the company, and they can also ask from directors to provide reports and review the company's financial statements before submission to the general meeting.
In case of LLC, there is a requirement of minimum two shareholders and maximum of fifty shareholders, there is no restriction on nationality or residency.Corporate shareholders are permitted.
Under this, minimum share capital is EGP 1000 (approximately EUR 150) and the total capital must be fully paid upon the incorporation of the company.
It is required for Egyptian LLCs to file audited annual financial statements and annual tax returns.
After the submission of the necessary documentation with the Registrar, the incorporation period is one week.
Advantages of Setting up a Limited Liability Company in Egypt
- In Egypt, LLC requires only one director. Under this, there is a requirement of at least one director of Egyptian nationality.
- In this, the director can be a person or a corporation and nominee directors are allowed.
- Egyptian LLC can be 100% foreign owned.
- On shareholders, there are no nationality or residency restrictions. Shareholders can be individuals or corporate entities.
- Incorporation of an Egyptian LLC takes only one week to complete the incorporation process.
- In Egypt, Limited Liability Company has a greater ability to raise finance.
- Egyptian LLCs can raise capital by selling shares however partner can sell his shares to outsiders only if he has already offered his shares to the other partners and they have declined to buy his shares, after having being given a period of not less than one month.