Types of Companies That Can Be Established in Egypt

Companies in Egypt are divided into three main categories, with each category encompassing several legal forms that differ in their characteristics and establishment requirements. All these companies are subject to the Companies Law No. 159 of 1981 and the Investment Law No. 72 of 2017.

Partnerships (Companies Based on Personal Consideration)

These companies are based on personal relationships between partners, with a strong personal connection and prior acquaintance. This group includes three types:

1. General Partnership (Sharikat Tadamun)

Number of Partners:Two or more, with no maximum limit.

Required Capital:Up to 300,000 EGP maximum, with no mandatory bank deposit.

Advantages:

• Easy procedures and establishment.
• High level of agreement among partners due to personal relationship.
• Flexible decision-making.
• No need for an auditor or legal advisor.

Disadvantages:

• Unlimited liability for partners, who are responsible for company debts with their personal assets.
• Dissolution upon the death or bankruptcy of a partner.
• Share transfer requires unanimous approval of all partners.
• The company name must include the name of at least one partner, followed by “& Co.”

2. Simple Limited Partnership (Sharikat Tawsiya Basita)

Number of Partners:At least two, no maximum.

Required Capital:

• Within the Investment Authority: Minimum of 300,000 EGP.
• Outside the Authority: No minimum capital required.

Advantages:

• Simple establishment and procedures.
• Capital can increase with more partners.
• Clear division of roles between general and limited partners.
• No need for an auditor or legal advisor.

Disadvantages:

• General partners have unlimited liability.
• Limited partners cannot manage or sign for the company.
• The company name must include the name of a general partner.

3. Joint Venture (Sharikat Muhasa)

Number of Partners:Two or more.

Required Capital:No minimum.

Advantages:

• Secret company, no registration or public announcement required.
• Highly flexible in establishment and management.
• Suitable for temporary projects or specific deals.
• Easy to create and operate.

Disadvantages:

• No legal personality.
• Lack of sufficient oversight.
• Short lifespan.
• Liability falls only on the apparent partner.

Corporations (Companies Based on Financial Consideration)

These companies are based on financial contributions, not personal relationships, and allow the trading of shares or quotas.

Joint Stock Company (Sharikat Mosahama)

Number of Shareholders:At least 3 founders.

Required Capital:

• Not less than 250,000 EGP as issued capital.
• 10% paid at establishment, to be increased to 25% within 3 months.

Advantages:

• Shares can be traded on the stock exchange.
• Limited liability for shareholders.
• Ability to raise large amounts of capital.
• Company continuity regardless of shareholder changes.

Disadvantages:

• Complex establishment procedures.
• High setup and maintenance costs.
• Higher taxes.
• Requires at least 3 shareholders to continue.

Hybrid Companies

These combine characteristics of both partnerships and corporations:

1. Limited Liability Company (LLC)

Number of Partners:2 to 50.

Required Capital:No legal minimum, but practically 5,000–10,000 EGP is preferred.

Advantages:

• Limited liability for partners.
• Flexible management.
• No need for an auditor.
• Continuity despite partner changes.

Disadvantages:

• Cannot offer shares to the public.
• Restrictions on share transfer.
• Registration procedures required.

2. Partnership Limited by Shares

Number of Partners:Two groups—general partners and limited partners.

Required Capital:Similar to joint stock companies.

Advantages:

• Combines partnership flexibility with corporate strength.
• Limited partners can trade their shares.

Disadvantages:

• Complex management structure.
• Unlimited liability for general partners.

Sole Proprietorship

One-Person Company

Number of Partners:Only one.

Required Capital:

• Reduced from 50,000 to 1,000 EGP.
• Must be fully deposited at establishment.

Advantages:

• Easy to establish and manage.
• Full control over decisions.
• Limited liability.
• Flexible taxation.

Disadvantages:

• Owner bears all risks alone.
• Difficult to obtain large loans.
• Psychological and financial pressure on the owner.

Summary and Recommendations

The options for establishing companies in Egypt are diverse to suit various investor needs and capital sizes. The choice depends on available capital, business nature, number of partners, and acceptable risk level. It is important to consult legal and accounting experts before making a decision to ensure the most suitable legal form for the project.