How to Start a FinTech Company in Egypt: Legal Structure & Licensing Essentials

Egypt’s fintech sector is undergoing a remarkable transformation, making the country one of the fastest-growing financial technology hubs in the MENA region. In the past five years alone, the number of fintech startups in Egypt has grown more than fivefold. This rapid growth has been fueled by several factors: Egypt Vision 2030’s emphasis on digital transformation, widespread adoption of mobile technology, and the government’s ambition to position Egypt as a fintech powerhouse for Africa and the Middle East.

The Egyptian government, through the Central Bank of Egypt (CBE) and the Financial Regulatory Authority (FRA), has rolled out progressive policies to encourage digital financial inclusion. According to recent reports, more than 60% of Egypt’s population is under 30, with high smartphone penetration but relatively low access to formal banking. This creates a fertile environment for fintech solutions such as mobile wallets, digital lending, peer-to-peer payments, and Buy Now, Pay Later (BNPL) platforms.

However, with opportunity comes regulation. Any entrepreneur planning to launch a fintech venture in Egypt must navigate a complex legal framework, particularly under the FinTech Law (Law No. 5 of 2022). This law empowers the FRA to regulate all non-banking fintech activities and establishes strict requirements for licensing, compliance, and corporate structure. Understanding these requirements is not just a legal formality—it is essential for ensuring long-term success and avoiding heavy penalties.

This guide provides a comprehensive overview of how to establish a fintech company in Egypt, covering the legal framework, corporate structure, licensing process, compliance obligations, and potential risks. By the end, entrepreneurs will have a clear roadmap to launching a compliant fintech business that can thrive in Egypt’s booming digital economy.

Egypt’s FinTech Legal Framework

1-The FinTech Law (Law No. 5 of 2022)

The cornerstone of Egypt’s fintech regulation is Law No. 5 of 2022, which was enacted to bring clarity, security, and structure to the fast-growing fintech industry. Prior to this law, fintech activities operated in a fragmented regulatory environment, with overlapping rules between the CBE, FRA, and various financial service laws.

The FinTech Law consolidates authority under the Financial Regulatory Authority (FRA) for all non-banking financial activities. This includes lending, leasing, factoring, microfinance, insurance technology, consumer finance, and crowdfunding. Banking-related fintech (e.g., digital banks, payment service providers) falls under the jurisdiction of the Central Bank of Egypt (CBE).

The FRA now has broad powers to:

• Issue licenses to fintech operators.

• Set minimum capital and ownership requirements.

• Regulate digital platforms and technological infrastructure.

• Enforce compliance with anti-money laundering (AML) and consumer protection laws.

• Supervise ongoing operations through audits, reporting, and inspections.

2-Licensing Requirement

Under the FinTech Law, no company may engage in non-banking fintech activities without first obtaining an FRA license. Operating without a license can lead to imprisonment (minimum 6 months) and fines ranging from EGP 200,000 to EGP 1 million.

3-Regulatory Sandbox

One of the most innovative features of the new framework is the Regulatory Sandbox. This allows startups to test their fintech products and services under FRA supervision for up to two years. The sandbox reduces entry barriers by requiring only EGP 250,000 in minimum capital, compared to the much higher thresholds for a permanent license. During this period, companies can experiment, collect data, and refine their models while building credibility with regulators and investors.

4-Corporate Object Restriction

The FinTech Law requires that companies strictly limit their business activities to FRA-approved fintech services. This means that a company licensed for digital lending cannot simultaneously operate unrelated businesses such as e-commerce or logistics under the same legal entity. This restriction ensures that the FRA can maintain clear oversight over fintech operators.

Required Corporate Form – Joint-Stock Company (JSC)

The FRA mandates that all licensed fintech companies must operate as Egyptian Joint-Stock Companies (JSCs). This legal structure is considered the most robust and transparent corporate form in Egypt, aligning with international best practices.

1-Key Features of JSCs

Ownership: A JSC is owned by shareholders, with capital divided into tradable shares.

Minimum Founders: At least three founding shareholders are required.

Capital Requirements: For ordinary JSCs, the minimum issued capital is EGP 250,000, with at least half paid-up at incorporation. However, fintech companies face higher capital thresholds depending on their licensed activity.

Limited Liability: Shareholders are liable only up to the value of their shares, providing a safeguard for entrepreneurs.

Credibility: The JSC structure signals compliance and seriousness to both regulators and investors.

2-Why JSC over LLC for fintech companies in Egypt?

Unlike Limited Liability Companies (LLCs), which are common among SMEs, JSCs are better suited for fintech because:

• They allow for easier fundraising and share transfers.

• They provide a stronger governance framework through a board of directors.

• They meet the FRA’s requirement for transparency and capital adequacy.

3-Incorporation Steps

To establish a JSC in Egypt, entrepreneurs must:

• Draft Articles of Association specifying the fintech activities.

• Deposit the initial capital in an Egyptian bank.

• Register the company with the General Authority for Investment (GAFI).

• Appoint a board of directors in line with FRA requirements.

Key Licensing Requirements for Fintech in Egypt

Obtaining a fintech license from the FRA requires meeting several stringent conditions. These are designed to ensure that only credible, well-capitalized, and technologically competent companies operate in Egypt’s fintech space.

1-Permissible Activities

Companies are restricted to FRA-approved fintech services, such as:

• Digital lending

• Peer-to-peer financing

• Consumer finance

• Microfinance

• Factoring

• Crowdfunding

• InsurTech solutions

2-Minimum Capital

The FRA requires a minimum issued capital of EGP 15 million per licensed activity. For companies operating across multiple fintech verticals, the capital requirement increases proportionally.

3-Technology Ownership

At least 25% of the company’s shares must be owned by shareholders with technical or fintech expertise. This ensures that companies are not merely financial ventures but are led by teams with genuine technological capabilities.

4-Business & Compliance Plans

Applicants must submit detailed business and compliance plans, including:

• Electronic KYC (e-KYC) procedures.

• Cybersecurity frameworks to protect consumer data.

• AML and CFT (Combating the Financing of Terrorism) measures.

• Data protection policies aligned with global standards.

5-Local Presence

• A physical office in Egypt is required.

• At least one Egyptian national must serve as a board member.

6-Timeline Commitment

Companies must commence operations within two months of receiving preliminary approval. Failure to do so can result in revocation of the provisional license.

7-License Validity

The FRA issues an initial two-year license, after which companies must demonstrate compliance and financial stability to obtain permanent approval.

Licensing Process for fintech in Egypt

Step 1: Incorporate a JSC

• Draft Articles of Association tailored to fintech services.

• Deposit the required capital in a local bank account.

• Register with the General Authority for Investment (GAFI).

Step 2: Prepare FRA Application

• Submit incorporation documents.

• Provide a detailed business plan.

• Submit technical and compliance frameworks.

Step 3: Apply to the FRA

• File the application online or through the FRA’s designated channels.

• Pay the licensing fees (some startups may qualify for waivers under the sandbox program).

Step 4: Obtain Provisional Approval

FRA grants preliminary approval allowing the company to begin operations under supervision.

Step 5: Secure Final License

Within two years, companies must meet all compliance conditions and submit periodic reports to convert the provisional license into a permanent one.

Risks & Compliance

1-Penalties for Operating Without a License

• Imprisonment: Minimum of 6 months.

• Fines: Between EGP 200,000 and EGP 1 million

2-Non-Compliance with License Terms

• Fines: Ranging from EGP 50,000 to EGP 500,000.

• Possible suspension or revocation of the license.

3-Ongoing Compliance Obligations

• Submission of annual audited financials.

• Regular reporting to the FRA.

• Implementation of cybersecurity audits.

• Updating of AML/KYC procedures in line with evolving regulations.

4-FRA’s Supportive Role

The FRA encourages innovation through:

• The Regulatory Sandbox.

• Digital legal tools for streamlined reporting.

• Public-private collaboration initiatives.

Conclusion

Egypt’s fintech sector offers extraordinary opportunities, driven by high demand for digital financial services and strong government support. However, compliance with the FinTech Law and FRA regulations is not optional—it is the foundation of a sustainable fintech venture.

To succeed in Egypt’s fintech market, entrepreneurs must:

• Establish a Joint-Stock Company (JSC) compliant with FRA requirements.

• Meet strict capital and ownership thresholds.

• Secure an FRA license before commencing operations.

• Maintain robust compliance and governance systems.

At ByLaw, we specialize in guiding fintech entrepreneurs through every stage of the process—from incorporation and licensing to compliance and scaling. With the right legal foundation, your fintech startup can confidently navigate Egypt’s regulatory landscape and unlock the full potential of this booming market.