Formation

• According to Article 2 of the Commercial Companies Law, a Joint Stock Company is defined as “a company whose capital is divided into shares of equal value, which shares are negotiable in the manner prescribed by law. The liability of a shareholder is limited to the value of the shares subscribed for by him. The company name shall be derived from the objects for which it is to be incorporated and may not include the name of one or more of the shareholders.”
• JSC must have at least three founding shareholders.
• The name of the company must be related to the company’s business activity.
• Once the company is given the approval by the authority, it is listed in the Commercial Register and must pay at least 25% of its cash equity.

Capital

• In case of JSC offering its shares to the public, the minimum share capital should be EGP 500,000 compared to only EGP 250,000 if it is private. Capital must be divided into shares of equal value, with a nominal value between EGP 5 and EGP 1,000. Additionally, all shares must be registered.
• A shareholder’s liability is limited to the value of his shares.
• Share certificates are issued in the name of each shareholder.

Management

• JSC is managed by a Board of Directors, which can be an odd or even number of directors (3 is the minimum).
• Directors shall be appointed for three years, except for the initial directors who shall be appointed for five years.
• The majority of the Board of Directors must be Egyptian nationals. This requirement does not apply to JSCs incorporated under the Investment Law, whose business activity are among the ones specified in Article 1 of the Investment Law.
• If the JSC has to do with the management or business of a public utility, the Minister in charge must approve the directors to the Board.

Requirements

• The Law urges a certain degree of personnel involvement. The Articles of Association must clearly state the management personnel.
• Not less than 10% of the JSC’s profit must be distributed among its employees.
• A 9:1 ratio of Egyptian employees is required. Only if it is impossible to find the requisite number of qualified Egyptian employees, a Ministerial permission can be obtained to hire more foreign staff.

In case a foreign investor decides not to have a permanent presence in Egypt, other business structures are offered instead, such as setting up a branch or representative office.

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