LLC Formation in Egypt 2025 | Step-by-Step Legal Guide

Limited liability companies (LLCs) are among the most common types of companies in Egypt, due to their flexibility and suitability for all small and medium-sized (SMEs) activities. Law No. 159 of 1981 and its Executive Regulations, as enacted by the Egyptian lawmakers, distinguish LLCs because the liability of their partners is limited to their share in the capital without extending to their personal funds. LLCs can be established with at least two partners and at most fifty partners. They are also required to have articles of organization and articles approved by the General Authority for Investment and Free Zones (GAFI).

This legal form allows investors to protect their personal funds, as well as giving them flexibility in managing their businesses, investing, and expanding in the Egyptian market.

In this article, we will outline all the controls and requirements for establishing, managing, and modifying LLCs as follows:

LLCs are a type of trust company that is flexible and has financial liability independent from its partners. They consist of at least two partners and at most fifty. There are no restrictions on the company's capital. The liability of the partners is limited to their shares. Shares may not be offered for public subscription and may be easily transferred between partners in accordance with the company's articles of organization. The company may be managed by one or more managers from among the partners or from outside the company. Foreigners may own 100% of the company, excluding certain activities that require the presence of Egyptians.

Can the number of partners in an LLC be less than two or more than fifty?

Article 60 of the Executive Regulations of Law 159 of 1981 stipulates that:

If the number of partners is less than two, the company shall be deemed dissolved by operation of law, unless the company takes steps within a maximum period of six months to complete this quorum and regularize the situation.

If the number of partners exceeds fifty, such as in the case of inheritance, bequest, or compulsory auction sale of shares, the partners shall regularize their situations within one year from the date of the increase, or decide to change the legal form of the company to a JSC. If the partners fail to do so, any interested party may request the dissolution of the company by court order.

LLCs’ Prohibited activities:

1. LLC may not engage in insurance, banking, savings, deposit-taking, or investment activities on behalf of third parties.

2. LLCs may not engage in any activity that is restricted by law to companies of another type.

The basic requirements for establishing an LLC are as follows:

1. Company trade name: The trade name is an essential part of the company's data to avoid confusion with other companies. The company shall have a unique name, which may be derived from the company's purpose and may include the name of one or more partners. The name shall include the phrase “limited liability company”.

A certificate of non-confusion with the company name is obtained from the Commercial Registry Administration.

2. Purpose of the Company: Each company has specific commercial, industrial, or service activities carried out in a legitimate and specific manner. This is also important information on which the legal entity is determined, as there are activities that require licenses from the competent authorities as well as preliminary and final approvals, such as transportation, tourism, information technology, and import and export activities.

3. Company capital: There are no restrictions on the capital of LLCs; there is no minimum capital requirement, but the capital shall be divided into equal shares. These shares are transferable but may not be offered for subscription.

4. Company partners: The number of partners shall not be less than two nor exceed fifty. Each partner shall have a share proportional to the number of their shares, and each partner's liability shall be limited to their share in the capital.

5. Company management: The LLC's management is flexible, as it's run by one or more managers, partners, or third parties. The manager's powers are set out in the company's articles of organization.

Is a bank deposit a mandatory requirement when increasing the capital of an LLC?

When the LLCs' capital is increased in cash, the increased amount shall be deposited in the company's bank account, a bank certificate shall be issued, and the certificate shall be submitted with the documents approving the extraordinary general assembly's decision to increase the company's capital. These documents shall be submitted to the GAFI.

If the increase is in kind (such as real estate or assets), it shall be valued by a certified expert or a certified assessment committee and duly documented.

Is it permissible for a legal entity to become a partner in an LLC?

A legal entity may become a partner in an LLC, and shall be treated as a natural person in terms of participation in the capital and ownership of shares. However, the legal entity shall submit all the following documents: articles of organization, commercial register, General Assembly approving entry as a partner in a new company and determining the legal representative. If the legal entity enters into the management, it shall appoint a representative to the management.

Documents required for establishing an LLC in accordance with the provisions of Law 72 of 2017 and Law 159 of 1981:

1. A certificate of non-confusion of the company’s name, approved by the commercial register.

2. Power of attorney from all partners to the principal, stipulating the establishment of an LLC and the signing of the articles of organization before the notary public, with proof of identity of the founders and principal (passports - national ID cards). In the case of foreigners, a security inquiry about them shall be submitted.

4. Approval of the appointment of an auditor on JSCs and approval of the budgets of trust companies.

5. Registration card of the lawyer who obtains certification of the company’s articles of organization before the Bar Association with at least an appeal degree.

6. Approval of the relevant authorities, if any of the company's purposes require special approval under the law.

7. In the event of an in-kind share at the time of incorporation, the original report of the committee formed by the GAFI shall be submitted with an assessment of the in-kind share.

Decisions to amend an LLC:

The decision to amend the articles of organization of an LLC shall be taken either by administrative resolution or by the ordinary general assembly or the extraordinary general assembly, as follows:

1. Administrative Resolution: It is a resolution made by managers within the limits of their powers as authorized by the company's articles of organization and commercial register, such as:

• A resolution to open a branch of the company, and appointing, dismissing, or replacing the branch manager, or closing a company branch.
• Appointing and dismissing employees, imposing penalties, etc.
• Appointing an auditor and accepting the resignation of the previous auditor.

2. Ordinary General Assembly: It is continuously convened during the three months following the end of the fiscal year. Under OGA, the following decisions are made:

• Discussion of the adoption of the financial statements and the auditor's report for the fiscal year ended.
• Discussion of the reappointment of the company's auditor for the fiscal year.
• Discussion of declaring dividends and approval of donations.

3. Extraordinary General Assembly: An extraordinary general assembly shall be held when necessary to amend the company's articles of association, including, but not limited to, increasing the company's capital, amending the company's purpose, relocating the headquarters, dissolving the company before the end of its term, or placing the company in liquidation.

In conclusion, LLCs are among the most important legal forms of investment in Egypt, given the flexibility they offer in terms of establishment and business management, while maintaining the concept of limiting the liability of partners to their shares only. The Egyptian lawmakers are keen to establish a balanced legal framework that protects partners and creditors while encouraging investment and simplifying procedures. Therefore, knowledge of all the basic regulations for establishing this type of company is essential for every investor or legal practitioner. This ensures the establishment of a commercial legal entity capable of keeping pace with continuity and growth in the Egyptian business environment.

At Sadany & Partners Law Firm, we are dedicated to providing the most effective legal services to our valued clients.

We are working hard on:

• Guiding our clients on the optimal path and legal means to establish and manage their JSCs, and how to set up the company's organizational structure.
• Providing full legal support at all stages of establishing and modifying the company, conducting business activities, and obtaining all necessary licenses to conduct your business.
• Providing professional legal services and advice, enabling our clients to make informed decisions.
• We always strive to provide comprehensive legal solutions that keep pace with regulatory and legislative changes, thereby serving the interests of our clients and protecting their rights.