Company Registration in Egypt- Overview Due to its strategic location, Egypt is one of those countries which is highly favoured for investment purposes. Egypt offers great investment environment which has attracted many investors whether big or small to establish a company in Egypt. Egypt offers wide range of options to choose from as far as types of business structure is concerned. The business entities can choose the appropriate structure that suits their need. One can establish permanent presence by incorporating LLCs or Joint Stock Companies or for temporary presence you may opt for Foreign Branch offices or Representative office. Company Registration process involves analysing some crucial factors such as eligibility requirements, business structure, capital requirement, post-registration compliances, documentation and so on. Enterslice can guide you through the complete checklist required for Company Registration in Egypt. Benefits of registering your company in Egypt In a few years’ time, Egypt has transformed into a rapidly growing economy. It has become a hub for businesses across Middle East and North Africa. Variety of investment opportunities have attracted people from around the world to come and invest in Egypt. Below we have discussed few factors which makes Egypt conducive for Company Registration. Positive outlook aided by FDI and infrastructure spending Egypt has a great potential especially for companies that wishes to expand beyond the developed markets of the northern hemisphere. Egypt has the third largest economy in this region and it was one of the only few economies that grew despite the pandemic wreaking havoc across the globe. Egypt is also one of the largest recipients of FDI in the region. This is due to Egypt's massive domestic market, sound GDP growth, strategic location etc. Moreover, its government has invested heavily in public infrastructure with the help of IMF and World Bank. Better Security Few years ago the image of Egypt had been tarnished due to security concerns however this situation has seen considerable improvement in the last few years or so. With government’s security measures, safety and security of people have improved. This has improved the international image of Egypt and investors have felt safe in investing in Egypt. Growing Population Egypt has a growing population which serves as one of the main reasons for forming a company in Egypt because it provides large access to labor and the significant opportunities and potential that a much larger market can offer. The population of 100 million in Egypt is rising by about 2 million people every year. This provides investors to tap into a growing market. Types of Business Structure under Egyptian Law Under the Egyptian Law, the following types of business structure can be opted: One-person company (OPC) Limited Liability Company (LLC) A company limited by shares Joint-stock Company Partnership Company Limited Partnership Company Sole proprietorship Branch Office Representative Office One Person Company One Person Company refers to a company that is held entirely by a single individual, whether neutral or legal, for a specific purpose. The liability of the company owner shall be restricted to the company’s capital. The limited liability nature of the company owner indicates that they have designated a portion of their inheritance for business purposes and shall be liability to the extent of their shares in the company’s capital. Limited Liability Company A Limited Liability Company (LLC) is one of the most popular and common type of business entity in Egypt. As per the country’s company formation rules, LLCs in Egypt may engage in any business or industrial activity. At the time of company’s formation, you need to designate minimum two shareholders. Moreover, the partners’ obligation is restricted to the value of their equity. Company Limited by Shares In a company limited by shares there are two types of partners- shareholder- the liability of the shareholder will be limited to the value of their share; Acting or Active partner- The liability of this partner will not be limited in its share in the company but shall extend to include their own money and it will be owned by one shareholder and one active partner at least. Joint Stock Company As per Egyptian rules and regulations, a joint stock company in Egypt may engage in any commercial activity. They are required to submit yearly financial accounts, once they have been established. This must be audited by an Egyptian auditor. A Joint Stock Company in Egypt should be at least 3 shareholders and the liability of the partners shall be limited to the shareholders’ value. The Joint Stock Company shall be either closed or publicly traded. Partnership Company A partnership Company, comprises of two or more people who combine their resources to establish a company and agree to share risks, profits and losses. The liability of the partner will not be limited to his/her share in the company but will extend to include his/her own money. Limited Partnership Company In case of a limited partnership company, there are two types of partners- active partner- The liability of active partner will not be limited to its share in the company but shall extend to include their private money; Dormant partner: The liability of this partner shall be limited to its share in the company and it shall not extend to include his private money. Sole Proprietorship Sole Proprietorship is a type of business structure which is owned and controlled by an individual. There are no partners in this business entity. The liability of the owner of this establishment will not be limited to the capital of the entity but shall extend to include his private money. Branch Office A branch office may undertake any form of legal activity in Egypt for which it is registered in the Commercial Registry. There are no requirement for the minimum capital investment for the branch office. Representative Office A foreign company can establish a, “representation, liaison, scientific, or other office and the sole purpose of such office shall be to carry out market surveys or to study the feasibility of production without carrying out any commercial activity. Eligibility Requirements to register a company in Egypt In order to register a company in Egypt, a business entity must fulfil certain basic eligibility requirements. These requirements may vary as per the type of business structure. Here we have taken the example of LLC. LLC Shareholders- A LLC can be formed in Egypt with a minimum of two shareholders and a maximum of 50 shareholders. In case the number of shareholders fall below minimum limit of two at any time, then such LLC will be deemed wound up by operation of law. Capital- The minimum share capital required to form an LLC is £E 50,000 and each partner/shareholder shall be liable to the extent of the value of his/her shares. Management- The management of the LLC can be vested in one or more managers. Minimum one manager should be of Egyptian nationality. Objects- An LLC can carry out a variety of business activities, with the exception of insurance, banking, receiving deposits or investing funds on others behalf. Registered Office- All companies must have a registered office in Egypt for official communication purposes and maintenance of documents and records. Documents required for Company Registration in Egypt The documents required for registering Joint stock and limited by shares companies are as follows: Certificate certifying name approval by the commercial registry; Bank certificate of depositing minimum 10% of the issued capital; Copy of POA from all founders; Copy of valid ID proof of founders; Name and Address proof of the company’s legal consultant. The documents required for registering an LLC: Notarised POA from all partners; copies of valid ID or passports of founders; Original certificate from the register of accountants and auditors; certificate certifying name approval by the commercial registry; Name and Address proof of the company’s legal consultant. Procedure for Company Registration in Egypt Once you have decided the type of business structure, you may proceed for company registration process. The process is as follows: Business name clearance Before a company can commence its business, it should obtain name clearance from the commercial registry. The proposed name of the business should be unique and should not conflict with any other already existing name. Application and Documents Submission Application for company registration along with documents need to be submitted to the Companies Establishment Department, under GAFI. The documents and application are reviewed by the authority. Obtain Incorporation Certificate If the application filed and documents submitted are ratified by the authority then the authority shall issue the incorporation certificate for company establishment. Post-Registration Compliances Once the company has been incorporated there are a few more things that you must undertake before you can start your business activity. Corporate bank account You will be required to open a corporate bank account in the name of the company. All financial dealings of the company can be done through this bank account. Tax Registration Once the company has been incorporated, it may be registered at the Tax Office at the GAFI. Obtain Permits/Licenses You might require some permits/license in order to operate. The type of license may depend upon the business activity that you want to carry out. Therefore obtaining permits/licenses is a crucial exercise.