Types of Companies in Egypt: Legal Structures, Registration, and Foreign Ownership

Egypt’s business entities are governed by a combination of laws: the Commercial Code (Law No. 17 of 1999) regulates general trade and commercial contracts; the Companies Law (Law No. 159 of 1981, as amended) sets out corporate forms and procedures; and the Investment Law (No. 72 of 2017) provides incentives and a streamlined one-stop incorporation process. The General Authority for Investment and Free Zones (GAFI) is the central body administering these laws and facilitating company formation. In particular, GAFI serves as a “one-stop shop” for new businesses, handling name reservation, registration, and licensing, and promotes foreign investment through guarantees and free-zone incentives. Together, these frameworks aim to make Egypt an attractive market for both local entrepreneurs and foreign investors.

Major Company Types and Their Features

Egyptian law recognizes several business forms. The most common include Limited Liability Companies (LLCs), Joint Stock Companies (JSCs), and One-Person Companies (OPCs). Other structures are Sole Proprietorships, partnerships (general and partnerships limited by shares), and vehicles for foreign businesses such as branches and representative offices. The Capital Market Law also governs investment funds (mutual funds, equity funds, etc.). The following summarizes each type:

• Limited Liability Company (LLC) An LLC (Sharikat Mahdūdah al-Mas’ūliyah) is a closed corporation whose partners’ liability is limited to their capital shares. Key features:

  • Shareholders: Minimum 2, maximum 50. (No minimum Egyptian partner is required – foreign investors may fully own the LLC.)

  • Capital: Nominally very low (typically EGP 1,000). In practice, each share must be at least EGP 10, and GAFI generally expects paid-in capital (see below).

  • Liability: Limited to the value of shares contributed by each partner. Partners are not personally liable for corporate debts beyond their capital.

  • Governance: Managed by one or more managers (appointed internally). No board of directors is required, though multiple managers may convene as a board if the articles so provide.

  • Activities: Generally broad, except that LLCs cannot undertake banking, insurance, investment management for others, or financial deposit-taking.

  • Foreign Ownership: Fully allowed. An LLC can be 100% foreign-owned. It is, in fact, the most common form used by foreign investors.

• Joint Stock Company (JSC) A JSC (Sharikat al-Musaḥamah or Sharikat ṣaḥh wa’īdah) is akin to a corporation whose capital is divided into transferable shares. There are two subtypes: private (non-listed) and public (listed). Key features:

  • Shareholders: Minimum 3 required. (Shares can be held by individuals or companies, Egyptians or foreigners.)

  • Capital:

    • Private JSC: Minimum issued capital EGP 250,000. At least 10% must be paid at incorporation (25% within 3 months).

    • Public JSC (offering shares): Minimum capital EGP 500,000, with 25% paid at outset.

  • Liability: Shareholders’ liability is limited to their subscribed shares.

  • Governance: Managed by a Board of Directors with at least 3 members. Board members may be Egyptian or foreign, though the first board may serve up to 5 years. Major decisions (e.g. capital changes, mergers) require approval by the General Assembly of shareholders.

  • Reporting: A public JSC must register its share ownership with the Misr Central Depository (MCDR) and is subject to capital markets regulation and audit requirements. Private JSCs follow similar rules, minus stock exchange disclosure.

  • Foreign Ownership: Generally unrestricted. (Foreign investors may own 100% of a JSC unless the law specifically reserves an activity for Egyptians.) However, certain sensitive sectors (e.g. national security, defense) may require local participation or screening.

• One-Person Company (OPC) or Sole-Shareholder Company Introduced in 2018, an OPC allows a single founder (natural or corporate) to own an LLC outright. It functions like a small LLC:

  • Founder: One individual or legal entity. The company’s name must reflect its limited liability status.

  • Capital: The Companies Law nominally sets a minimum of EGP 1,000, but GAFI typically requires that the full capital (often EGP 50,000) be paid in at incorporation.

  • Liability: Limited to the company’s capital. The sole owner is not personally liable beyond this amount.

  • Management: The single owner has all the powers of shareholder assemblies and boards. (The owner may appoint managers, but often acts directly.)

  • Activities: Cannot alter its legal form unless it adds partners. Like an LLC, an OPC cannot do banking, insurance, or act as a financial intermediary for others.

  • Foreign Ownership: The owner can be a foreign national or company, subject to general investment rules (e.g. security clearance).

• Sole Proprietorship A sole proprietorship is not a corporation but an individual doing business. It is governed by commercial law (not the Companies Law). Key points:

  • Ownership: One person (Egyptian or foreign resident). The owner is fully personally liable for debts (no liability shield).

  • Capital: The law requires a minimum capital of EGP 100,000 for registration. (This large threshold ensures only serious business owners register as merchants.)

  • Age/Qualities: Owner must be at least 21 and legally competent.

  • Registration: Registered with GAFI (Commercial Register) and obtains a tax card. It can usually be established within one business day if paperwork is complete.

  • Foreigners: A foreigner may register a sole proprietorship if they hold a valid residence permit; however, the process is less typical than opening an LLC.

• Partnerships (General and Limited) General Partnership: Under the Commercial Code, two or more persons (individuals or companies) can form a general partnership. All partners jointly and severally (unlimitedly) guarantee the firm’s obligations. They share management control unless agreed otherwise. No minimum capital is specified (partners contribute as agreed). The partnership itself is not a separate legal entity from the partners in a general partnership structure. Partnership Limited by Shares (PLS): Governed by Companies Law 159, a PLS is a hybrid form where capital is divided into shares, but there must be at least one general partner with unlimited liability and one or more shareholders (like a JSC). (This is rarely used in practice.) Its governance and capital rules largely mirror those of a JSC, except its shares are typically not publicly traded and it often has fewer governance formalities.

• Foreign Company’s Branch Office A branch office allows a foreign company to do business in Egypt. It is not a separate legal entity (it’s legally part of the parent), but it must register with GAFI/Commercial Registry:

  • Activities: Restricted to those in the contract between the parent and an Egyptian entity. A branch cannot freely vary its scope – it can only carry out projects or services specifically awarded to the parent company in Egypt. For example, a construction firm might open a branch to execute a particular project under contract.

  • Capital: No significant capital is needed, though the branch must open an Egyptian bank account and deposit at least EGP 5,000 as a token balance.

  • Management: The parent appoints a manager (foreign or Egyptian) to run the branch. That manager is subject to security screening.

  • Tax/Reporting: The branch is taxed as an Egyptian resident company, filing Egyptian tax returns. It must comply with same reporting as any local company.

• Foreign Company’s Representative Office A representative office is a limited liaison entity with no independent legal personality. It is used for market research and promotion only; it cannot engage in any sales or revenue-generating activities.

  • Purpose: Conducts market surveys, product promotion, feasibility studies. It must register with GAFI as a representative office and operate under restrictions.

  • Duration: A representative office may operate for up to 3 years (extendable to 4 in special cases) during which it must set up a branch or subsidiary if it wants to continue business.

  • Liability: All liabilities fall on the foreign parent company (since the office has no separate legal status).

  • Setup: Requires application to GAFI including a power of attorney and parent company documents. There is no share capital requirement. If the representative office later wishes to trade, it must register a branch or local company within the allowed period.

• Investment Funds and Vehicles Collective investment vehicles (mutual funds, closed-end funds, private equity funds, etc.) are established under the Capital Market Law No. 95 of 1992. By law, investment funds take the form of joint-stock companies dedicated to investing in defined assets. Key points:

  • Types: Open-ended and closed-ended funds (equity, fixed-income, balanced, money market, etc.) exist, typically managed by licensed fund managers regulated by the Financial Regulatory Authority (FRA).

  • Capital: The law sets various requirements (often millions of EGP) for specific fund categories (e.g. real estate funds, private equity), and all fund companies must register with the FRA.

  • Governance: Operate with a board of directors and a custodian bank. They must provide detailed disclosure of holdings, fees and performance to investors and regulators.

  • These funds are specialized vehicles and are regulated separately from ordinary companies. Foreign investors can participate in Egyptian funds, subject to any FRA rules, but we note that starting a fund is considerably more complex than an LLC or JSC.

Comparison of Key Features

Entity Type	Min. Capital (EGP)	Owners / Shareholders	Liability	Governance	Setup / Notes
LLC (Mahdudah)	EGP 1,000 (≥1, fully paid)	2–50 partners (no Egyptian nationality required)	Limited to share value	1+ managers (no board required)	Registered at GAFI; quick to form
Joint Stock (Musaḥamah)	EGP 250,000 (private) EGP 500,000 (public)	≥3 shareholders	Limited to share value	Board of ≥3 directors	Listed or unlisted; must register with stock registry
One-Person Co. (Munfaridah)	EGP 1,000 (nominal) (often 50k practically)	1 founder (natural/legal)	Limited to share value	Owner as sole director / manager	All powers by single owner; approval needed if founder is government entity
Sole Proprietorship	EGP 100,000	1 owner (natural person)	Unlimited (owner personally liable)	Owner-operated	Registered at GAFI/Commercial Register; simple license
General Partnership	None (partners’ agreement)	≥2 partners (individuals or companies)	Unlimited, joint & several	Partners manage (per agreement)	Governed by Commercial Code; less commonly used for large projects
Partnership limited by shares (PLS)	Often EGP 250,000+ (like a JSC)	≥1 general partner (unlimited) + ≥1 shareholder	Gen. partner unlimited; others limited to shares	Similar to JSC (board or managers)	Regulated by Companies Law
Branch of Foreign Co.	EGP 5,000 (token deposit)	Foreign parent company (no local partner)	Parent company liable for branch debts	Foreign parent appoints manager	Acts in name of parent; must contract with Egyptian entity
Representative Office	None (no capital)	Foreign parent (no local partner)	Parent company liable	One local manager (appointed by parent)	Cannot trade; must convert to branch/subsidiary in 3 years
Investment Fund (JSC form)	Varies widely (often millions)	Investors via fund (open or closed units)	Limited to fund assets	Board of directors; fund manager	Regulated by FRA under Capital Market Law

Establishing a Company in Egypt (General and Foreign Investors)

Step 1: Choose the Legal Form and Name. Decide whether an LLC, JSC, OPC, etc. suits your needs. Reserve a unique trade name by obtaining a “non-confusion” certificate from the Commercial Registry. This ensures your proposed name is not already in use.

Step 2: Prepare Incorporation Documents. Draft the Memorandum and Articles of Association (usually using GAFI templates). Include details of shareholders (or partners), capital, purpose, head office, and management. If applicable (e.g. JSC), prepare a feasibility or capital subscription certificate.

Step 3: Open a Bank Account. In the name of the new company (under formation), deposit the required capital. For JSCs and OPCs, banks must certify that the minimum paid-in capital is deposited. (LLCs do not need a bank certificate on incorporation.) Even branches must deposit at least EGP 5,000.

Step 4: Obtain Security Clearance (Foreigners). If any shareholders, directors or investors are non-Egyptian, the company must submit their names and passports to GAFI for a security check. In practice, most cases are approved quickly, but certain nationalities (e.g. Chinese, Russian, Israeli) still require pre-clearance. (Failure to obtain clearance can halt registration.)

Step 5: Notarize and Legalize Documents. All incorporation documents and powers of attorney from foreign principals must be notarized in Arabic. Foreign documents (e.g. company forms, board resolutions) need Egyptian consular legalization and Ministry of Foreign Affairs attestation.

Step 6: Submit to GAFI and Complete Registration. File the incorporation bundle at a GAFI Investor Service Center (or online portal). The submission should include: Articles of Association; the non-confusion certificate; bank deposit certificate (if applicable); auditor appointment; and any licenses. GAFI reviews and forwards to the Commercial Registry. In practice, registration is swift – often completed within 1–2 days. Once approved, you receive the Commercial Registration certificate, tax card, and VAT registration (if needed). The company gains full legal personality upon registration (and JSC shares are later registered with the MCDR).

Step 7: Post-Incorporation Formalities. After registration, the company must notify the Chamber of Commerce, obtain any special licenses (depending on activity), and register with Social Insurance (if hiring). Foreign-owned companies must also submit periodic FDI data reports to GAFI.

Ease of Setup: Egypt has significantly streamlined business formation. Under the Investment Law, a company can be registered electronically in a single day if all paperwork is ready. GAFI’s one-stop system and recent reforms (e.g. Prime Ministerial Decree 982/2022) require government agencies to respond to investor applications within 20 working days. In effect, incorporation is quite efficient: as one guide notes, “any company established in Egypt…is subject to [the law] and can be established after one working day of completing the documents”. (Of course, the real-world speed also depends on readiness of paperwork and approvals.)

Foreign Investors: Foreigners face no general ownership quota under the Companies Law. The easiest approach for a foreigner is typically to form an LLC or OPC, which allows 100% foreign ownership, requires minimal capital, and involves straightforward filing. In fact, the LLC is “the most common entity” chosen by foreign investors in Egypt. A one-person LLC (OPC) is especially attractive for solo entrepreneurs: it requires only one founder (Egyptian or foreign) and essentially mirrors an LLC with a simplified structure. In contrast, branches and representative offices involve more bureaucracy (security clearances, contractual restrictions) and are best for established foreign firms entering specific projects.

General Authority for Investment & Free Zones (GAFI)

The General Authority for Investment and Free Zones (GAFI) is the government agency that administers Egypt’s company and investment laws. It facilitates the entire incorporation process (name approval, registration, licensing) and operates the electronic portal for e-registration. GAFI also promotes investment through free-zone licenses and incentive programs under the Investment Law. Importantly, all companies (Egyptian or foreign) that are incorporated or wholly carry on business in Egypt fall under GAFI’s oversight. GAFI collects data on foreign investment flows (requiring non-Egyptian-owned companies to report their foreign capital periodically) and enforces the Investment Law’s guarantees (e.g. repatriation of profits, bankruptcy protections). In short, GAFI is the one-stop regulatory authority: any investor seeking to start or expand in Egypt will interact with GAFI for registration, investor services, or dispute resolution.

Foreign Ownership and Sector Restrictions

While Egypt generally permits 100% foreign ownership of companies in most industries, there are notable restrictions in a few areas:

• Import Trading (Importers Register): To import goods for resale or distribution, the Importation Registrar Law requires that the company be majority-Egyptian (at least 51% Egyptian ownership) or have an Egyptian manager. This can be a hurdle for foreigners wanting to hold 100% stakes in import businesses. (However, Law 173/2023 allows fully foreign-owned companies into the importers register for up to 10 years under certain conditions.)

• Commercial Agencies: Under the Commercial Agencies Law, any company acting as a local agent or distributor must be wholly owned by Egyptians. Foreign companies can operate agencies, but they typically need an Egyptian-owned partner or use specific structuring to effectively control the operation.

• Sinai Peninsula: Companies carrying out business in the Sinai region are subject to security clearance and may not be fully foreign-owned. This is treated as a national security matter.

• Other Sensitive Sectors: Certain sectors (e.g. defense manufacturing, firearms, media, and some utilities) may require government permission or a local partner by law. The Investment Law and related decrees generally list the restricted activities.

Outside these areas, foreign investors enjoy equal treatment with locals. There is no blanket foreign-ownership cap under the Companies Law. Moreover, recent policy shifts (e.g. lifting caps on land ownership for investors and removing nationality restrictions in free zones) have liberalized ownership rules. In practice, any foreigner can fully own and manage an LLC or JSC in Egypt, subject only to the standard approval and clearance process.

Conclusion

Establishing a company in Egypt is governed by a clear legal framework – primarily the Commercial Code, Companies Law 159/1981, and Investment Law 72/2017 – and facilitated by GAFI’s one-stop service. Businesses can choose from a variety of entity types (LLCs, JSCs, OPCs, etc.) each with its own capital, management and liability features. For most entrepreneurs (especially foreign investors) an LLC or OPC is ideal, offering full liability protection and relatively simple setup with minimal capital. With the right planning and legal guidance, incorporation can be achieved quickly and with confidence. BYLAW Law Firm’s corporate team is ready to assist at every step – from advising on the optimum structure to handling all registration formalities – ensuring compliance with Egyptian laws and a smooth entry into this dynamic market.

Frequently Asked Questions

• Is establishing a company in Egypt easy? Thanks to GAFI’s one-stop system and recent reforms, company formation is quite straightforward. If all documents are in order, GAFI can complete registration in a couple of days and grant full legal status within about two weeks. Entrepreneurs can even file electronically and obtain all licenses together (the so-called “golden license” simplifies multi-department approvals). In fact, official guidance states that a properly documented application can be processed on the same day. That said, the process still requires careful preparation (especially translating and legalizing foreign documents) and patience for any bureaucratic steps. Overall, though, most businesses find company setup much more efficient than in previous decades, thanks to digital services and investment incentives.

• What is the easiest company to establish for a foreigner? In practice, a Limited Liability Company (LLC) is the easiest choice for foreign entrepreneurs. It has low capital requirements (just EGP 1,000 nominally), requires only two founders (which can even both be foreign nationals), and allows full foreign ownership. An One-Person Company (OPC) is similarly easy for a sole investor: it requires just one founder and minimal paperwork. Both LLCs and OPCs fall under the same streamlined GAFI process, without the need for a large board or complex share issuance. By contrast, branches require a contract with an Egyptian party and a fixed deposit, and representative offices cannot generate revenue. Therefore, for a foreign individual or startup wanting to enter Egypt, forming an LLC/OPC is typically the fastest and least burdensome route.