With its glorious past and vibrant modernity, Egypt has become an interesting country for entrepreneurs from different parts of the world. For many who wish to establish a legal entity in this part of North Africa, the Limited Liability Company (LLC) is a preferred option.
So, who does not want to own a company in a beautiful country like Egypt? This guide will look at the detailed procedure of registering a limited liability company in the country, giving you useful information and steps to follow.
Reasons for Choosing an LLC in Egypt
Limited Liability: The stand-alone liability of its members is perhaps, the biggest advantage to LLC. If at all, it has to face any lawsuit or declare bankruptcy all members’ assets are protected.
Flexibility: The ownership of the members and the management of LLCs is very flexible. Either one person or some persons can form an LLC, management can be centralized or decentralized.
Tax Benefits: Depending on the nature and activities of the business, the company might be able to enjoy some of the tax reliefs, provided for in some of Egypt’s tax laws for LLCs. This is something that would be very helpful for any business person, but it is wise to get an expert’s advice on tax.
International Business Opportunities: Egypt’s unique geographic situation and increasing economic development backup the reasons why international businesses are attracted here. It is possible to commence cooking business by establishing a limited liability company, which will in turn assist in widening the scope of operations to Egyptian markets.
Documents Required to form an LLC in Egypt
Certificate of Incorporation: This certificate shows that the company is officially registered and contains information about the location, contact, and resources of the company such as name, purpose, and capital.
Memorandum of Association: This document essentially discusses the purpose and goals of the company from the context of the documents and the troika of the law firm, outlining the contract that is made between the company and the general public, including its investors.
Articles of Association: This document covers the internal affairs of the company including the subject of the appointment of directors, the organization of shareholders’ meetings, and the distribution of profits.
Shareholders’ Agreement: This is a contract between shareholders of the company that defines the rights and obligations of shareholders and the relations between the shareholders including issues of conflict resolution and processes of making decisions.
Bank Certificate of Deposit: It is ensured that with the provisions of the Companies Act in Egypt, this certificate serves as evidence that the initial contribution has been placed in a financial institution’s account in the name of the company.
Tax Certificate: This document, obtained from the authorities responsible for taxation, certifies that the entity has been duly registered with the taxation unit, thereby giving the entity the standing to undertake tax activities in the domestic arena.
Power of Attorney: To enable an agent or representative to handle the registration process, a power of attorney must be provided which gives them the legal standing to represent the particular company founders.
Step 1: Choose a Business Name
Uniqueness: Every business must operate under a different name and this prohibits any other corporation from using the business name once registered. This is to avoid problems with the law and set your company apart from the rest.
Compliance: Verify that the business name is following the laws of Egypt regarding business names, so no forbidden terms or phrases are included.
Reservation: It is advisable to reserve the proposed company name with The General Authority for Investment and Free Zones (GAFI) to prevent its loss. This can protect the name for a certain period while you source other requirements to effect the registration.
Step 2: Prepare the Required Documentation
As far as forming your LLC is concerned, arranging the required paperwork is necessary. Other important documents are as follows:
Articles of Association: This document describes the name of the company, its objectives, the amount of capital, and the information regarding the shareholders. This document is considered to be the framework of the internal organization and business processes of your company.
Identification Documents: To affirm authenticity, please obtain national ID cards or passport copies of all shareholders. This is mandatory to prove legitimacy.
Proof of Address: Get a lease agreement or a title deed for the registered office of the company in Egypt. This guarantees that your business has a proper place of operation.
Step 3: Sketch out A Memorandum of Association (MOA)
Drafting: Make a detailed MOA that consists of the company name, objectives, subscribed capital, duration, and the duties and roles of each partner. It is the document which bears legal weight to your organization.
Notarization: The MOA should be signed by a public notary who shall notarize it. Every one of the partners or some legal person on their behalf should sign this document in the presence of the notary to make it valid for legal purposes.
Step 4: Capital Requirements
There is a legal minimum capital requirement to set up an LLC in Egypt of 50,000 pounds. This is the capital structure of the company.
It should be noted that not less than 10% of the paid-up capital is required to be paid upon incorporation of the company with others being settled within a maximum period of 5 years. This staggered payment keeps the management boards in check on their finances.
Step 5: Make A Submission in A physical form To the General Authority for Investment (GAFI)
Registration Application: Application forms that have been properly filled with the desired information, MOA that have been properly notarized, bank certificate, and any other documents required should be submitted to GAFI.
Additional Documents:
- National Identity Cards or Passport copies for all the partners.
- Proof of the site such as utility bill or rental Contract and business registration proof showing the registered offices of the business.
- Lease or ownership documents for the premises from where the said business activity will be conducted.
Fees: Registration with GAFI comes with applicable registration fees as appropriate. In registration fees, it can depend on your business’s size and nature.
Step 6: Apply for the Tax Identification Number
Tax Office Registration: To commence performing this function, it would be appropriate to go to one of the offices of the Egyptian Tax Authority which is nearest to you. Incorporate your business with the relevant authorities by registering it with the relevant documents, Articles of Incorporation, and Commercial Register.
That registration will enable you to obtain a tax identification number (TIN), which is required for tax compliance within the limits of the structure of the law. This step is considered necessary to carry out all business activities in Egypt legally and also makes sure your company is taxable in the country.
Step 7: Open a Corporate Bank Account
Bank Selection: Choose a bank that meets y
our business needs, considering factors like account fees, available services, and branch accessibility. It’s important to establish a strong banking relationship for financial transactions.
Account Setup: Open a corporate bank account by submitting the required documents such as the company’s registration certificate, arithmetic of the organization, and identification. This account will enhance the operating and financial management of the company.
Step 8: Adhere to Employment Laws
Social Insurance Registration: Enroll your employees with the Social Insurance Authority to practice the employment law.
Legal Employment Terms and Conditions: Understand the labor laws in Egypt such as hours of work, minimum wage, and employee benefits.
Conclusion
Registering an LLC In Egypt includes knowing the various local regulations and procedures available within the HC, which can be challenging. By following the prerequisite guidelines and communicating with relevant local stakeholders and legal practitioners, the proper and legally recognized formation of an LLC will be realized.
Create the business of your dreams now. As taking the steps advised, be prepared to implement your ideas addressing the business opportunity in Egypt.
Frequently Asked Questions (FAQs)
Are there restrictions on foreign ownership?
In general, there are no restrictions on foreign ownership of an LLC in Egypt. As a foreigner, you can own up to 100% of an Egyptian LLC except where the activities of the company are restricted due to the aversion of a few industries.
What is the requirement of minimum capital for the establishment of an LLC company in Egypt?
The minimum capital requirement is generally 50,000 Egyptian pounds. Nevertheless, this range is dependent on the nature of the business and its industry.
What are the compliance requirements that should be observed on an ongoing basis?
Every other year LLCs in Egypt must prepare the annual sets of accounts, and tax returns, and uphold the necessary statutory registers as required under the relevant laws of Egypt. This also includes well-held regular shareholder meetings and proper records.
Nabin Adhikari
