Due to its unique location, Egypt is a focal point for all investors globally. Limited Liability, Joint Stock, One Person, and Branch Companies are the most prevalent legal kinds of corporations in Egypt. A corporation whose capital is divided up into shares of equal value is referred to as a joint stock company (JSC). The shareholder’s liability is limited to the value of the shares he subscribes to, and he is not responsible for the company’s debts outside of the scope of those shares. It might be a closed or publicly traded firm.
Registration
A joint stock company is governed by GAFI and is required to be registered with the Commercial Registry. Any time stocks or bonds are issued, the Egyptian Financial Supervisory Authority (EFSA) must be notified and must not object within three weeks after the notification. The EFSA oversees public problems. A license from EFSA is further needed for companies registered in industries like securities or factoring. Shares of every joint stock company must be registered with Misr for Central Clearing, Depository, and Registry.
Spectrum of activities
Except for agency and importing activities, a joint stock company may engage in all commercial activities, subject to the restrictions imposed by applicable laws and regulations.
Administration and control
At least three partners are required. A board of directors, made up of at least three people chosen by the partners for a three-year term, is responsible for managing the company.
Shares of capital
A corporation that does not sell its shares to the public must have LE 250,000 in minimum issued capital. Upon incorporation, the minimum share capital is to be paid in 10 percent increments, increasing to 25 percent after three months. The remaining portion of the shares’ nominal value must be paid up within five years. A joint stock corporation must have LE 20,000,000 in fully paid-up capital to make its shares available for public subscription. The minimum capital requirement is LE 5 million, of which at least 25% must be paid at incorporation, in the case of holding companies created for stock dealing and investment purposes.
Taxes
Profits from the corporation are taxed for joint stock companies. Employees are entitled to receive at least 10% of the net profits, provided that the amount given does not exceed the total yearly value of wages and salaries paid to the company’s employees. Legal arguments exist over the foreign employees’ eligibility for such a dividend. Foreign employees, according to the Labor Office, are not eligible for such a dividend.
Documentation needed for the formation of a company
- a bank certificate stating that at least 10% of the issued capital has been deposited
- a certificate of non-confusion of the business name certified by the Commercial Register
- copies of pertinent powers of attorney from each founder
- copies of the founders’ legal personal identification documents
- Original Register of Accountants and Auditors certificate allowing the company’s auditor to approve budgets
- the company’s legal consultant’s name and address, who must be a Court of Appeal-admitted lawyer
- a copy of the attorney’s card from the Bar Association
- a security check on foreign founders
- The original GAFI report valuing in-kind shares at incorporation
Free Zones System
The necessary documents must be presented along with the following when forming a business to operate under the Free Zones System in compliance with Law No. 72 of 2017: Before incorporation, GAFI’s consent is required about public free zones. Before incorporation, the Cabinet’s consent is required for private free zones.
