Company Formation in Egypt
Company formation in Egypt is one of the most important steps for investors seeking to conduct their business activities in a legal and organized manner. However, the incorporation procedures vary depending on the company’s legal form, the nature of its activities, and whether the activity requires prior approvals from the competent authorities.
The process of company formation in Egypt is primarily governed by Investment Law No. 72 of 2017 and Companies Law No. 159 of 1981, in addition to the relevant regulations and decisions governing incorporation and registration procedures.
Through YE Law Firm, this article provides an overview of the main steps for establishing a company in Egypt, the required documents, and the procedures that a company must complete until its incorporation and registration are finalized.
What Are the Steps for Company Formation in Egypt?
The details of the incorporation process vary depending on the legal form of the company, whether it is a joint stock company, a limited liability company, a one-person company, or another legal form.
In general, establishing a company in Egypt begins with determining the appropriate legal form and business activity, preparing the required documents, obtaining any special approvals required for the relevant activity, if applicable, and completing the procedures for preparing, notarizing, and registering the company’s incorporation documents.
First: Documents Required for Company Formation
One of the most important stages of company formation procedures is preparing the documents required by the General Authority for Investment and Free Zones (GAFI). The required documents vary depending on the legal form of the company.
1. Name Non-Confusion Certificate
A name non-confusion certificate issued by the Commercial Registry is required for joint stock companies, partnerships limited by shares, and one-person companies.
For limited liability companies, several proposed company names are submitted, and one of them is approved upon incorporation.
This step is important when selecting the company’s commercial name and ensuring that it does not conflict with the names of existing companies.
2. Capital Deposit Requirements
The capital deposit requirements vary according to the legal form of the company.
For joint stock companies and partnerships limited by shares, a bank certificate confirming the deposit of at least 10% of the issued capital must be submitted.
A certificate issued by a licensed securities depository and central registry company must also be submitted, confirming the deposit of the securities of joint stock companies and partnerships limited by shares with the central depository and registry company.
For limited liability companies, depositing the capital with a bank is optional for the investor. If the investor chooses to make the deposit, 100% of the total capital must be deposited.
For a One-Person Company, 100% of the company’s capital must be deposited, with a minimum capital of EGP 1,000.
3. Powers of Attorney Where the Company Is Established Through an Agent
Where the company is established through an agent, copies of the powers of attorney must be submitted, together with the originals for review, depending on the company’s legal form.
The power of attorney must be issued:
- By all founders in the case of joint stock companies, provided that the number of founders is not less than three.
- By all partners in the case of limited liability companies, provided that the number of partners is not less than two and does not exceed 50 partners.
- By the owner of the establishment in the case of an individual establishment.
The power of attorney must expressly authorize the agent to establish companies and sign the incorporation contracts before the Notary Public.
Where the agent is one of the partners, the power of attorney must also include the wording allowing “contracting with oneself and third parties in the establishment of companies.”
4. Identification Documents
Among the documents required for company formation are clear and valid copies of the identification documents of the founders, partners, or owner of the establishment, as well as the investor’s agent. The originals may also be requested for review.
Identification documents include:
- National ID cards for Egyptian nationals.
- Passports for foreign nationals.
5. Auditor’s Documents
An original declaration accepting the appointment as auditor must be submitted on the auditor’s official letterhead and bearing the auditor’s stamp, where the auditor is registered in GAFI’s database of auditors.
If the auditor is not registered in GAFI’s database, an original certificate evidencing registration in the Register of Accountants and Auditors must be submitted, addressed to the General Authority for Investment and Free Zones.
6. Legal Counsel Documents
For companies classified as capital companies, a recent copy of the legal counsel’s Bar Association card must be submitted, provided that the legal counsel is registered at least at the appellate level.
7. Security Clearance for Foreign Founders or Partners
Where the company includes foreign founders or partners, the required security inquiry forms must be submitted as part of the incorporation file, together with a copy on a CD.
8. Special Approvals for Certain Activities
Certain business activities may require prior approval from a competent authority before the incorporation process can be completed.
Accordingly, if any of the company’s purposes requires a special approval under applicable laws and regulations, the prior approval of the competent authority must be obtained.
Second: Preparing the Incorporation Contract and Articles of Association
Once all company formation documents have been completed, the company’s incorporation contract and Articles of Association are prepared according to its selected legal form and the applicable law.
The information relating to the incorporation contract and Articles of Association is entered into the prescribed forms.
The incorporation application is then issued, and the contract is prepared and electronically signed by the competent lawyer and the founders’ or partners’ representative, in accordance with the applicable procedures.
If the founders’ representative wishes to add provisions to the incorporation contract or Articles of Association that fall outside the standard form, such provisions are subject to legal review by the competent department.
A legal memorandum is then prepared for submission to the competent authority within GAFI. Following the response, the incorporation contract is prepared to include any approved amendments, if applicable.
Third: Approval of the Financial Regulatory Authority
For joint stock companies and partnerships limited by shares, a certificate is prepared and submitted to the Financial Regulatory Authority (FRA) to obtain its approval for the issuance of incorporation shares.
These procedures are completed as part of the company formation process in accordance with the company’s legal form.
Fourth: Notarization and Completion of the Incorporation Procedures
After completing the initial procedures, the company file is transferred to the Incorporation Follow-up Department within the Investment Services Sector to complete the procedures before the relevant external authorities in accordance with the applicable procedures.
The incorporation contract is then certified by the Egyptian Bar Association and notarized before the Notary Public.
For joint stock companies and partnerships limited by shares, the company file must also include the Financial Regulatory Authority’s approval for the issuance of incorporation shares and the preliminary registration certificate with the central depository.
Fifth: Issuance of the Company Formation Certificate and Commercial Registration
Once all required incorporation procedures have been completed, a Company Formation Certificate is issued for the relevant legal form.
The incorporation file is then referred to the Incorporation Follow-up Department to complete the company’s registration with the Investment Commercial Registry and other relevant authorities.
Electronic Company Formation in Egypt
As part of the government’s efforts to simplify procedures and facilitate the investment environment, the General Authority for Investment and Free Zones (GAFI) launched an electronic company formation service through its online portal.
The online company formation service enables investors to complete incorporation procedures electronically in cases covered by the system, helping reduce administrative procedures and facilitate access to company formation services.
GAFI also conducted a practical pilot for fully electronic incorporation through the establishment of Damietta Company for Green Ammonia Production in the General Free Zone in Damietta, which was the first company to be established electronically in Egypt as part of the first phase of the integrated electronic company formation service.
The establishment of individual establishments and partnerships, including general partnerships and limited partnerships, subject to Investment Law No. 72 of 2017, is also received through GAFI’s electronic portal only, in accordance with the applicable rules.
Electronic incorporation requires a valid electronic signature (Token) and the use of electronic powers of attorney in accordance with the applicable procedures.
GAFI Premier Unit
As part of its efforts to facilitate investor services, the General Authority for Investment and Free Zones established the Premier Unit to facilitate procedures and provide investors with expedited services.
The unit provides a range of services related to company formation and incorporation, as well as completing procedures before the relevant authorities, including:
- Egyptian Bar Association.
- Financial Regulatory Authority.
- Notary Public.
- Chamber of Commerce.
- Commercial Registry.
- Investment and corporate tax authorities.
What Services Does the Premier Unit Provide?
The services provided by the Premier Unit include a range of corporate and investment-related services, most notably:
- Company formation in all legal forms, including individual establishments, partnerships, and capital companies, as well as assistance with preparing bank certificates, name non-confusion certificates, and security inquiry forms.
- Establishment of companies operating under the Free Zone System, following the required approval from the Free Zones Administration, in addition to procedures relating to conversion, merger, and demerger.
- Approval of boards of directors and ordinary general assemblies.
- Preparation of legal memoranda for companies whose matters require submission to the legal counsels of GAFI’s CEO before approval.
- Approval of extraordinary general assemblies, as well as procedures relating to mergers, demergers, changes in legal form, and capital increases for different types of companies.
- Recommendations relating to residence permits, dependents, and work permits in accordance with the applicable procedures.
- Customs and tax recommendations.
- Share transfer and trading services.
- Services relating to commencement of activity committees and executive status committees.
Why Do You Need a Lawyer Specialized in Company Formation?
Although company formation procedures in Egypt have become more accessible with the expansion of electronic services, selecting the appropriate legal form and properly preparing the incorporation documents and contracts remain essential to ensuring a smooth incorporation process.
In addition, the nature of the company’s business activity may require specific approvals or additional legal requirements. Therefore, consulting a lawyer specialized in company formation can be an important step in identifying the applicable legal requirements and procedures.
At YE Law Firm, we assist investors and business owners in understanding the legal requirements related to company formation, selecting the appropriate legal structure, preparing and reviewing incorporation documents and contracts, and following up on the required procedures according to the company’s legal form and business activity.
Conclusion
Establishing a company in Egypt involves several legal and administrative stages, beginning with determining the appropriate legal form and business activity, preparing the required company formation documents, obtaining the necessary approvals, preparing the incorporation contract and Articles of Association, completing notarization and registration procedures, and ultimately obtaining the Company Formation Certificate.
The applicable requirements and procedures vary from one company to another depending on its legal form, business activity, and whether it includes foreign founders or partners. Therefore, it is important to review the specific legal requirements applicable to the company before commencing the incorporation process.
YE Law Firm — Providing specialized legal services to support investors and companies throughout the incorporation process and related legal procedures.
