How to Set Up a Limited Liability Company in Egypt?
Limited Liability Company (LLC)
Establishing a limited liability company (LLC) is one of the most common concerns in the business world. It depends on the partnership between a certain number of individuals, not less than two and not more than 50.
It is worth mentioning that LLCs may be wholly owned by foreigners as there are generally no restrictions on foreign ownership. They include many procedures, measures, contracts, and guarantees that protect the rights of their owners and investors. In this article, we will explain everything you need to know about establishing a limited liability company (LLC) in Egypt.
How to Establish an LLC in Egypt?
Thanks to Companies Law No. 159 of 1981, characterized by complete flexibility, the steps for establishing an LLC are now more accessible than before. Here are the steps:
1- Registration
An LLC must be registered in the commercial register at the General Authority for Investments and Free Zones (GAFI) as it is subject to its supervision. Any amendments to the articles of incorporation must be reported to GAFI and approved by it. The LLC is incorporated once it is registered in the Commercial Register.
Steps for Registration:
- Fill out the primary contract form that contains all the data and information related to the company, which is written manually before being re-entered electronically. This contract includes several clauses, including the company’s name and address, the purpose of incorporation, and its specified period.
- Fill out the security inquiries form used if the company’s partners are of foreign nationality. It is obtained from the Security Information Office at the Investment Authority. Its data is filled out and then handed over to the Investment Authority to enter data electronically.
- The certificate of non-repetition of the trade name is issued from the General Investment Authority within a week.
2- The Scope of Activities
The LLC is prohibited from carrying out activities in insurance, banking, saving, investing money for others, and Investment management. Apart from these areas, it can carry out commercial activity similar to other business entities, subject only to the general limitations of applicable laws and regulations.
3- Management & Control
There are no minimum Egyptian partners required to form an LLC. It may be formed with a minimum of two partners and a maximum of 50.
The managers may be appointed for a definite term or an indefinite term. They shall have full authority to represent the LLC before third parties unless such authority is limited or qualified by the Memorandum of Association.
4- Capital
There is no minimum capital for establishing a domestic limited liability company in Egypt. Shares can be issued for non-cash consideration with the approval of the partners’ meeting.
5- Taxes
LLCs are subject to taxes on companies’ profits.
6- Supervisory Board
If the no. of partners in the LLC exceeds 10, a supervisory board of at least 3 partners must be created. This board has the right to access all accounting records, requires reports from the managers, verifies all available cash and assets, and reviews all of the LLC’s financial statements.
Other Significant Information
There is other significant information that can help you while establishing an LLC in Egypt, including:
- It is not requested to open a bank account in establishing a limited liability company.
- Establishing this type of company requires withdrawing the company file follow-up form to be used in concluding the company contract. This form includes the signature of all partners and their approval of all its terms.
- The costs for establishing an LLC vary according to the documents required, company activity, and capital amount, which starts from approximately 4000 EGP to 33,000 EGP according to the Law of Joint Stock Companies, Companies Limited by Shares, and Liability Companies No. 159 of 1981 for 1981 and 4000 to 43,000 EGP according to investment law 72 for 2017.
- The payment receipts must be photocopied into three copies to be used in the establishment procedures.
Documents Required for Establishing an LLC in Egypt
There are many documents required to establish an LLC in Egypt, including:
- Non-confusion certificate for the name of the company authenticated by the Commercial Registry.
- Copy of the manager’s passport.
- Copies of relevant Powers of attorney from all founders.
- Security clearance application for the company’s members and foreign managers.
- Certificate of the Auditor of the company.
- Title deed or the lease contract for the company’s headquarters.
- Articles of Incorporation in the English language authenticated by the Egyptian embassy.
- Company registration in the English language authenticated by the Egyptian embassy.
- Certificate of practicing the activity.
And now, we have shown everything you need to know about establishing an LLC. For more information, click here or seek advice from AHG, the best-chartered accountant in Egypt.