The total costs of opening a company can vary greatly depending on the profile of the company, whether it is going to import or export goods, and depending on the goals of the activity, various forms of legal entities are needed. In Egypt, you can open a “company for one person” – this is the cheapest option for opening a company, but such a company is limited by the maximum annual turnover. Also, in such a company it is impossible to add founders or sell a share. The authorized capital for such a company must be at least 1000 EGP, but for some types of activities, regulations provide for other values of the minimum authorized capital. If you open a Limited Liability Company, you will need to immediately have at least two founders. The requirements for the authorized capital are like the previous example.
For a limited liability company and a “company for one person” there is a requirement to hire one manager from among the citizens of Egypt, therefore, you must immediately lay down the employee’s expenses 6-12 months in advance. The average salary in Egypt is 5,000 EGP, therefore, 30,000-60,000 EGP minimum for the salary fund must be included in the budget for opening a company. In addition to an employee, you will need an office to get the legal address of the company, on average, office rent costs from 15,000 to 50,000 EGP per month, but you need to have capital for rent at least 6-12 months in advance, then you get at least 90,000 EGP for office rent you need to lay to the budget. The maximum cost of legal support for opening, if there is no desire to run around with documents on your own, will cost around 2000 USD. If an import license is required, the cost for a company with one person will be 50,000 EGP, for companies with other forms of ownership, the cost will be 200,000 EGP. Please note that a license is not required for all types of imported and exported goods, it is advisable to study this issue in Egyptian law.
You can also open a joint-stock company, which provides a few advantages, but also creates a few difficulties. Among the advantages is the absence of the need to hire a local manager in the company. Also absent in the case of high turnover for the year, to share part of the company’s profits with employees, which is provided by law for a company with one person and LLC. Joint-stock companies are divided into CJSC, OJSC and OJSC with the possibility of active sale of shares and investments. Authorized capital for CJSC 250,000 EGP minimum, for OJSC at least 500,000 EGP, OJSC for the purposes of operations with shares and investments, the minimum authorized capital is 5,000,000 EGP. The last option is for very large companies.
Based on an approximate calculation, the minimum budget for starting a business in Egypt can be estimated at 120,000 Egyptian pounds, which is approximately 4,000 US dollars + 2,000 US dollars for legal support for opening a company in Egypt. If you open a company on your own, without involving intermediaries, you can meet only $ 4,000.
If you want to start a business in Egypt, then you should study the local legislation. Do not neglect the need to study local laws, take the time to understand all the risks and opportunities that may lie ahead.
Laws with which it is desirable to familiarize everyone who wants to open a company in Egypt:
– The Constitution of Egypt – general concepts and legal regime;
– The Code of Rules of the International Chamber of Commerce (ICC) – in case there are arbitration clauses when considering cases in courts;
– Law No. 27 of 1994 and amendments thereto (9/1997 and 08/2000) – international issues of arbitration in civil and commercial matters;
– Commercial Register Law No. 34 of 1976 and its amendments (98/1996) – the procedure for opening companies and branches in Egypt (;
– Antitrust Law no. 3 of 2005 – laws on the observance of fair competition;
– Law No. 15 of 1963 and as amended by Law No. 104 of 1985 – provide that foreigners, whether individuals or legal entities, may not acquire agricultural land;
– Law No. 143 of 1981 – and its amendments 55/1988, 205/1991 and 96/1995 – governs the acquisition and ownership of desert lands. Certain limits are placed on the number of feddans (one feddan equals approximately one hectare) that individuals, families, cooperatives, partnerships and corporations can own. Partnerships are allowed to hold 10,000 feddans, provided that an individual cannot hold more than 150 feddans. Joint stock companies are allowed to own 50,000 feddans;
– Law No. 230 of 1996 – allows foreigners to own real estate, whether it is built or vacant, subject to certain conditions specified in the Law;
– Customs Tariff Law No. 66 of 1963 and Import and Export Regulations Law No. 118 of 1975, the laws regulating international trade activities in Egypt;
– Law on the Central Bank, Banking Machines and Exchanges no. 88 of 2003 – regulate foreign exchange transactions in Egypt;
– Law No. 156 of 1998 and Decree No. 45 of 1999 – supervision and control of the Egyptian insurance sector;
– Law No. 88/2003 – regulates the banking sector in Egypt;
– Labor Law No. 12 of 2003 – regulates the Egyptian labor market.
