Establishing a Joint Stock Company

Establishing a Joint Stock Company in Egypt: The Legal Guide

Your definitive guide to the legal framework, capital requirements, and step-by-step process of establishing a Joint Stock Company (JSC) in Egypt.

For businesses seeking significant capital investment, establishing a Joint Stock Company (JSC) is the most robust corporate structure in Egypt. This entity allows for a broad shareholder base. It is ideal for large-scale industrial, financial, or commercial projects. However, its establishment is governed by detailed rules under Egyptian Companies Law No. 159 of 1981. This requires expert legal navigation.

Establishing a Joint Stock Company in Egypt :

At ALZAYAT Law Firm, we are Egypt’s premier international law firm. We specialize in complex corporate structures like the JSC. We transform the intricate process of establishing a Joint Stock Company into a clear, strategic path. Consequently, we ensure your venture is compliant, secure, and structured for major growth. Contact us now to have the best lawyers in Egypt set up your company.

Legal Framework for a Joint Stock Company in Egypt

A Joint Stock Company’s liability is limited to its capital. The capital itself is divided into shares of equal value. The General Authority for Investment and Free Zones (GAFI) oversees this structure.

Key Legal Requirements:

• Founder Requirement: The law requires a minimum of **three founders**. These founders can be either natural persons or legal entities.
• Board of Directors: A board of at least **three members** must manage the company. All board members can be foreigners. They do not necessarily have to be shareholders unless the company’s Articles of Association state otherwise.
• Company Name: The company’s name must derive from its purpose. Crucially, it cannot include the name of any individual founder. This feature distinguishes it from other company types.
• Shareholder Liability: The liability of each shareholder is strictly limited to the value of their shares in the company.

Capital Structure Requirements for a JSC

Understanding the capital rules is essential when establishing a Joint Stock Company.

• Issued Capital: The minimum issued capital for a JSC is **250,000 EGP**.
• Paid-up Capital Schedule: The law requires founders to pay the capital in phases:
  • They must pay a minimum of **10%** of the issued capital upon incorporation.
  • They must increase this to **25%** within three months of commercial registration.
  • Founders must pay the full **100%** of the issued capital within five years.
• Public Subscription: If the company plans to offer its shares to the public (an IPO), the minimum issued capital increases to **1,000,000 EGP**.
• Authorized Capital: This is the maximum capital the company is permitted to have. You can set it at a maximum of ten times the issued capital.

For more on Egypt’s investment landscape, resources from the World Bank and the General Authority for Investment and Free Zones (GAFI) are invaluable.

How to Form a Joint Stock Company in Egypt

The process is more detailed than for other company types. GAFI’s one-stop-shop system manages the entire procedure.

Essential Documentation Checklist:

1. Power of Attorney: All founders must provide a Power of Attorney. This authorizes a representative to act on their behalf.
2. Founder’s Identification: You will need copies of valid National IDs for Egyptian founders or valid passports for foreign founders.
3. Bank Certificate: An official certificate from an accredited Egyptian bank is required. It must confirm the deposit of at least 10% of the issued capital.
4. Company Name Inquiry: You need a certificate confirming the proposed company name is unique.
5. Security Clearance (for Foreign Founders): The government requires a mandatory background check for any non-Egyptian founders or board members.
6. Auditor’s Report (for In-Kind Shares): If capital includes assets instead of cash, a licensed auditor must provide a report evaluating these assets.

The Registration Phases:

1. Document Drafting & Submission: First, we draft the company’s Articles of Association and gather all documents. Then, we submit the complete file to GAFI.
2. Review by Authorities: GAFI facilitates the review of the file. This includes review by the Lawyers’ Syndicate and the Capital Market Authority (CMA), which must approve the formation.
3. Notarization and Registration: After all approvals, we notarize the Articles of Association. We then register the company in the Commercial Registry.
4. Post-Registration Formalities: Finally, we secure the company’s Tax Card and handle all other registrations. The entire process typically takes about one to one and a half months.

Why Partner with ALZAYAT Law Firm?

Our firm provides unparalleled expertise in navigating the complex regulatory environment. The process of establishing a Joint Stock Company can be challenging, but our guidance makes it clear. We recognize that each client’s goals are unique. Therefore, we emphasize transparent communication to build bespoke legal strategies.

Our excellence is recognized internationally. Leading legal directories such as The Legal 500, hg.org, and Global Law Experts consistently rank our team of Top corporate lawyers in Egypt as industry leaders.