The most common types of companies in Egypt (2025): Choosing the most suitable entity

The Most Common Company Forms in Egypt… How do you choose the most suitable one for your project?

Thanks to its unique location and recent economic progress and development, Egypt has become one of the most attractive countries in the Arab region for investment. It now hosts countless investments and investors in the Middle East, and its strong leadership has made it more attractive to regional and international investments.

Before starting any project, the investor establishes a legal entity that is subject to specific legal controls and regulations. The ideal model for this is trust companies of all types, including joint stock companies, limited liability companies, and single-person companies.  In addition, branches of foreign companies and representative offices may be established to conduct business in Egypt.

Below is a brief overview of each legal entity of these companies, as stated in:

Law 159 of 1981;

Law 72 of 2017 and its executive regulations; and

Law 4 of 2018 and its executive regulations issued pursuant to Resolution No. 16 of 2018.

A company, in its legal sense, is a contract whereby two or more persons undertake to contribute to a financial project by providing a share of money or work, with a view to sharing the profits or losses that may arise from this project.

The General Authority for Investment and Free Zones (GAFI), with its branches, is the entity responsible for establishing, amending, and dissolving these types of legal entities. It is the Egyptian government agency responsible for regulating investment in Egypt, encouraging investment, and managing investor affairs.

Before commencing investment activities in Egypt, investors shall familiarize themselves with the regulations and mechanisms of establishing each legal entity so that they may determine the optimal model for the legal entity appropriate for their activities in Egypt. We will explain these regulations and mechanisms in light of the provisions of the laws mentioned above.

Joint stock companies (JSCs)

Joint stock companies (JSCs) represent the ideal model for embodying trust companies. Their capital can be equivalent to the budget of some countries. They are based on financial considerations rather than individual shareholders. Their shares can be traded on the stock exchange. JSCs are subject to supervision and control by the GAFI and the Egyptian Financial Regulatory Authority (FRA).

A JSC is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Its capital is divided into equal shares for each shareholder. Its legal personality does not expire upon the death, withdrawal, or bankruptcy of one of its shareholders. All shares of a joint stock company are negotiable, as they may be transferred to others and disposed of in all manner of ways. The number of shareholders may not be less than three, and the company's trade name must be derived from its activity.

JSCs are managed by a board of directors, which shall comprise at least three members, including the chairman. A legal entity can be a board member, provided that it appoints a representative to the board.

The board of directors of the JSC shall be responsible for its management within the delegations granted to it for achieving the company's objectives.

JSC’s Share Capital:

- The issued capital of JSC shall not be less than EGP 250,000. The paid-up capital at the time of incorporation shall not be less than 10% of the issued capital and shall be completed to 25% within 3 months. The authorized capital shall not exceed ten times the issued capital. This excludes certain activities requiring  100% of the capital to be deposited at the time of incorporation.

• It is paid in specific proportions on specific dates from the date of the company's establishment.

• 10% of the capital value upon incorporation, deposited in one of the banks authorized to receive subscriptions.
• 25% within three months of the date of registration in the commercial register.
• 100% within five years of the date of registration in the commercial register.

Documents required for establishing JSCs:

1. Certificate of non-confusion of the company name approved by the Commercial Registry.
2. A bank certificate of depositing at least 10% of the issued capital, to be completed to 25% within 3 months, then to 100% within 5 years, considering the activities requiring a certain capital by law. The capital shall not be less than 250,000 EGP.
3. If the incorporation is made by a proxy, the power of attorney, as well as the original document for review, and copies of the identity documents of the proxy, shareholders, and board members, shall be submitted.
4. An official extract of the register of accountants and auditors proving their eligibility to review and approve the financial statements of trust companies, or an acknowledgment of acceptance of appointment, may be submitted if the accountant previously submitted this certificate to the Authority. 
5. A copy of the registration card with the Bar Association for the lawyer who ratifies the MoA before the Bar.
6. Security inquiry forms for foreign founders and passport copies.
7. Stating the name and address of the company's legal advisor, whose degree of registration shall not be less than that of an appellate attorney.
8.  Approval of the competent authorities if the purposes of the company require obtaining certain approvals in accordance with the provisions of the applicable laws (prior approval).
9.  In the case of an in-kind share at the time of incorporation, the original report of the committee, formed by the GAFI, evaluating the in-kind share, shall be submitted.
10. A certificate from an authorized central depository and registration firm, stating that the securities of the JSC have been deposited with the central depository and registration company, so that the incorporation procedures can be processed.

Limited Liability Companies (LLCs):

Limited liability companies (LLCs) are companies that combine the regulations of partnerships and corporations. They are companies with no more than fifty partners and a minimum of two partners, each of whom is liable for the proportion of their share. It is not permissible to establish the company, increase its capital, or borrow on its behalf through public subscription. It may not issue negotiable shares or bonds, as the transfer of shares between partners is subject to the provisions of the company's articles of association and the law, whereby contracts for the sale of shares are concluded between partners or between a partner and a third party. Such transfer shall be approved by an extraordinary general meeting by amending the company's articles of association to allow the sale of shares. An LLC may adopt a name of its own or one derived from its activity, which may include the name of one of the partners.

The company is operated by one or more directors who are granted powers agreed upon by the company's partners. Also, foreigners can own 100% of the company, except for activities that require Egyptians to be among the partners or management.

The company's capital is divided into equal shares in terms of rights and privileges. No working shares are permitted, and the capital is not deposited with the bank upon incorporation. Instead, a bank certificate is issued when the company's capital is increased after incorporation. There is no minimum or maximum limit on the company's capital.

Documents required for establishing an LLC:

1. Certificate of non-confusion of the company name approved by the Commercial Registry.
2. If the incorporation is made by a proxy, the power of attorney, as well as the original document for review, and copies of the identity documents of the proxy, partners, and directors, shall be submitted.
3. Security inquiry forms shall be submitted in the case of foreigners, along with copies of their passports.
4. Registration card of the company's legal advisor, who is appointed in accordance with the company's articles of association.
5. Approval of the appointment of the company's chartered accountant, who is appointed in accordance with the company's articles of association.
6. A copy of the registration card with the Bar Association for the lawyer who ratifies the MoA before the Bar.
7. Approval of the competent authorities if the purposes of the company require obtaining certain approvals in accordance with the provisions of the applicable laws (prior approval).
8. In the case of an in-kind share, a report of experts and professionals as regulated by law, according to the type of each share, may only be submitted.
9. A statement indicating the company's address, share distribution and participation ratios shall be submitted. It shall also include the powers of the director and a detailed explanation of the company's activities.

-One-person Company (OPC):

A one-person company (OPC) is a company whose capital is wholly owned by one person, whether a natural or legal person, to the extent that does not conflict with its purposes. The founder of the company is only liable for its obligations within the limits of the capital allocated to it. The company shall adopt a unique name derived from its purposes or the name of its founder. The minimum capital of the company is one thousand Egyptian pounds, with no maximum capital requirement. The capital must be paid in full before the company is established, and a bank certificate of the value of the capital must be obtained from one of the banks authorized to do so. The company shall be managed by one or more directors. If the founder is a legal entity, a natural person shall be appointed as director to manage the company and shall be granted the powers approved by the founder and owner. The company may be 100% owned by foreigners, except for activities requiring the presence of Egyptians.

Some activities are prohibited for OPCs, namely:

• The founder may not be an OPC, which may not be owned by an OPC.
• The company may not conduct a public offering upon incorporation or upon increasing its capital.
• The capital of the company may not be divided into negotiable shares.
• It may not borrow by issuing negotiable securities.
• It may not engage in insurance, banking, savings, deposit-taking, or investment activities on behalf of third parties.

Documents required for establishing an OPC:

1. Certificate of non-confusion of the company name approved by the Commercial Registry.
2. If the company is established through a proxy, then the power of attorney, along with the original document for review, a copy of the identity documents of the proxy, the company founder, and the director, shall be submitted. If the founder is a legal entity, the MoA and commercial register must be submitted. The company director shall have the right to establish companies and sign before the notary public.
3. A bank certificate stating that the full capital has been deposited in a licensed bank.
4. Submit security inquiry forms if the founder or director is a foreigner, along with copies of their passports.
5. Approval of the appointment of the chartered accountant, who is appointed in accordance with the company's articles of association.
6. Registration card of the company's legal advisor, who is appointed in accordance with the company's articles of association.
7. A copy of the registration card with the Bar Association for the lawyer who ratifies the MoA before the Bar.
8. Approval of the competent authorities if the purposes of the company require obtaining certain approvals in accordance with the provisions of the applicable laws (prior approval).
9. In the case of an in-kind share, a report of experts and professionals as regulated by law, according to the type of each share, may be submitted.
10. A statement indicating the company's address, the powers of the director, and a detailed explanation of the company's activities shall be submitted.

• After clarifying the process of company incorporation, the next step is to obtain the company documents from the GAFI, after obtaining certification and approval by the Minister responsible for investment. Each company has a memorandum of association or articles of association stipulating all the legal provisions, which must not be violated, as well as the company's commercial register and investment gazette.
• The lawyer then submits copies of all these documents and the lease agreement confirming the date of the company's headquarters to the relevant tax office, to obtain the tax card bearing the company's tax registration number.

5. Choosing the most appropriate legal form for establishing the company:

Before establishing a company, several controls shall be taken into account, based on which the optimal legal form of the company is chosen. The most important of these controls are:

 Company activity: as there are activities that require a specific legal form, where the activity sometimes dictates the appropriate legal entity.

Capital value: There are large, medium, and small legal entities, which also depend on the size of the activity, such as import, export, and financial activities.

The number of partners determines the form of the company, whether it is a one-person company or a partnership.

Company management is determined based on the requirement that management be individual or shared between more than one director or by a board of directors.

• After explaining the controls necessary for choosing the optimal legal form for establishing your company in accordance with Egyptian law, there are other legal entities that can be established in Egypt, but under regulations and requirements that differ from those described above. The most important of these entities are branches of foreign companies and representative offices. We will explain the regulations and requirements that must be met in order to establish them in Egypt.

5. Foreign Company Branches:

The prerequisite for a foreign company's branch to be registered in Egypt is that there must be a contractual relationship between the foreign investor and an Egyptian entity, either an Egyptian government agency or an Egyptian company. This relationship must be in the form of engaging in a national project in the State or carrying out an activity in which the foreign investor has specialized and long-standing expertise that is not available to local investors.

This requirement is essential to begin the procedures for registering and recognizing the branch with the GAFI.

The activities carried out by the branch are limited to the contract and may not be violated. There are activities that require licenses before they can be registered with the GAFI and the Commercial Registry, such as: Construction activities shall obtain approval from the Egyptian Federation for Construction & Building Contractors (EFCBC).

The branch is managed by a foreign or Egyptian manager, who acts in accordance with the powers granted to him by the foreign company abroad.

The foreign company branch is established in accordance with the law under which it was established abroad, in compliance with the provisions of the Egyptian Companies Law.

Once the documents and requirements specified by the GAFI have been fulfilled, a letter is issued to the Commercial Registry, approving the registration of the foreign company's branch and issuing a commercial register for the branch. The branch is then registered with the Egyptian Tax Authority, a tax card is issued, and the branch is assigned a tax registration number.

Documents required for registering a foreign company branch:

1. Power of attorney.

A general power of attorney is executed by the director of the parent foreign company overseas, stipulating the right to establish branches of foreign companies in Egypt and deal with all relevant authorities for registration. The power of attorney shall be issued by the competent notary public abroad and certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

2. An application for the registration of a foreign company branch in Egypt, to the GAFI’s Head of Investment Services.
3. A resolution by the foreign parent company overseas to approve the registration of the foreign company's branch in Egypt, certified by the foreign country's foreign ministry and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.
4. A resolution by the foreign parent company abroad to appoint a branch manager in Egypt, certified by the foreign ministry of the foreign country and the Egyptian consulate, and a resolution by the Egyptian Ministry of Foreign Affairs in Egypt.

- If the manager is a foreigner, the security inquiry form shall be completed, and a copy of their passport shall be submitted.

- If the manager is Egyptian, a copy of a valid national ID card shall be submitted.

5- The security inquiry form of the foreign parent company abroad shall be submitted.

6- A resolution from the foreign parent company abroad stating that it has not previously opened branches in Egypt, certified by the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

7- The articles of association and commercial register of the foreign parent company abroad, certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

8- A date-registered lease agreement of the headquarters of the foreign company's branch in Egypt.

9- A bank certificate issued by an Egyptian bank authorized to receive subscriptions, to the GAFI, equivalent to EGP 5,000 (provided that the equivalent amount in Egyptian pounds is transferred from the parent company's account abroad).

10- Contracting agreement, consultancy agreement, or agreement concluded between the foreign parent company abroad and any Egyptian entity, whether a government entity or an Egyptian company, signed and stamped by both parties, shall be submitted.

11. Documents incoming from abroad must be translated into Arabic, certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

• After examining these documents and ensuring that they meet all the requirements, an approval letter is issued by the Head of Investment Services to the Commercial Registry Office, requesting the registration of the branch with the Commercial Registry. A tax card is then issued by the relevant tax authority.

5. Representative offices of foreign companies in Egypt:

Before investing in Egypt, some companies may wish to conduct market research and study production processes.

The Egyptian lawmakers have given foreign companies the right to establish representative offices in Egypt, but they can only study the Egyptian market and production possibilities without doing any business for a set period of time.

To ensure that representative offices comply with the provisions of the law, the lawmakers granted the competent administrative authority the right to inspect such offices and examine their books. The competent administrative authority also has the right to instruct the representative offices to notify the competent administrative authority of all the work they have carried out and studied, the results they have reached, in addition to the details of their employees, including names, positions, nationalities, and salaries.

Representative offices are required to comply with Resolution 222 of 2023, issued by the GAFI, as follows:

1. The foreign representative office in Egypt shall submit to the GAFI at the beginning of each year a statement with the names of its employees, their positions, nationalities, salaries, total wages, the percentage of Egyptian wages, the work undertaken during the year, the information sent to the parent company, and the decisions taken by the parent company regarding its work during the respective year.
2. The representative office shall submit a schedule of completed and pending studies and a statement of the practical studies that have been completed.
3. The work of foreign representative offices is examined every three years, to ensure the seriousness of their continued market research and the extent to which the foreign parent company has decided to establish a company or open a branch in Egypt.
4. The representative office shall be granted a registration certificate for a period not exceeding three years, for the entity specified by the office. However, such a period does not exceed the term of the office (three years). The certificate shall be renewable throughout the term of the office.
5. If the office violates the provisions of Article 319 of the Executive Regulations of the Joint Stock Companies Law, the office shall rectify its position and remove the causes of the violation within six months from the date of notification of the violation.

Documents required for registering foreign representative offices:

1. Power of attorney:

A general power of attorney is executed by the responsible director of the parent foreign company abroad, stipulating the right to establish representative offices and deal with all relevant authorities. The power of attorney shall be issued by a competent notary public abroad and certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

2. Application for registration of a foreign representative office, to the GAFI’s Head of Investment Service.

3. The security inquiry form of the foreign parent company and the office manager shall be submitted.

- If the manager is a foreigner, a security inquiry form shall be completed, and a copy of their passport and all relevant information shall be submitted.

- If the manager is Egyptian, a copy of a valid national ID card shall be provided.

4. The original memorandum of association of the foreign parent company, translated into Arabic, certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

5. The original resolution issued by the board of directors of the foreign parent company, approving the opening of an office in Egypt and appointing a manager for the office, translated into Arabic and certified with the seal of the foreign country's foreign ministry and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.

6. A date-registered lease agreement of the headquarters of the foreign company's representative office in Egypt.
7. A bank certificate issued by an Egyptian bank authorized to receive subscriptions, to the GAFI, equivalent to EGP 5,000 (provided that the equivalent amount in Egyptian pounds is transferred from the parent company's account abroad).
8. A statement from the foreign parent company acknowledging Resolution 222 of 2023. The statement shall be translated into Arabic and certified with the seal of the foreign country's Ministry of Foreign Affairs and the Egyptian consulate, and ratified by the Egyptian Ministry of Foreign Affairs in Egypt.
9. A copy of the payment receipt of the office’s registration fee, i.e., EGP 1,000, which will be refunded if the office is not approved for opening, as well as a copy of the payment receipt of the office’s registration certificate fee, i.e., EGP 2,000 per certificate.

5. The lawyer's duties in establishing a company are as follows:

Lawyers play a fundamental and effective role in establishing a company, as their role is not limited to performing just legal work, but includes advice and avoiding future problems. This role can be summarized as follows:

1. Determining the most appropriate legal form for the company:

The lawyer examines the company's activities, capital, number of partners, and nature of management in order to propose the optimal legal form.

2. Drafting contracts and regulations:

The lawyer drafts the company's contracts and the provisions of the agreement between the partners, stipulating their rights and duties.

3. Reviewing documents and ensuring their legal validity:

Ensuring that all documents required for establishing the company meet the requirements specified by the GAFI or the competent authority.

4. Completing the process before government agencies:

The lawyer follows up on the incorporation procedures before the GAFI, the Commercial Registry, Social Insurance, the Egyptian Tax Authority, and other relevant authorities.

5. Ensuring compliance with laws and regulations:

The lawyer ensures that the company's activities and procedures comply with Egyptian law, including the Investment Law, Companies Law, Social Insurance Law, and Tax Law.

The lawyer also provides all legal consultations and legal support, including the establishment of the company until it is effectively operating, assisting in resolving disputes, drafting contracts and agreements, and making amendments to the company's articles of association.

 In conclusion, the regulations and provisions related to the establishment of companies and the most common types of companies in Egypt, we, Al Saadani & Partners Law Firm, affirm our full commitment to providing professional legal services to our valued clients.

We work hard to:

• Guide our clients towards the optimal legal path for establishing a business in Egypt.
• Provide full support, including the establishment of the legal entity up to the actual commencement of activities.
• Provide professional legal services and advice, enabling our clients to make informed decisions.

We keep striving to provide integrated legal solutions, keeping pace with regulatory and legislative changes, serving our clients' interests, and protecting their rights.