INVESTING IN EGYPT

Investment Guarantees, Incentives and the Incorporation of Companies

Legal Memorandum | Tahoun Law Firm | July 2026

1. Introduction and Scope

This memorandum sets out the legal framework governing foreign investment into the Arab Republic of Egypt, the guarantees and incentives available to investors, and the requirements and procedures for the incorporation of a Limited Liability Company (LLC), a One-Person Company (OPC) and a Joint Stock Company (JSC). It also addresses the principal requirements for obtaining an importation licence and the key tax obligations applicable to companies operating in Egypt.

The information set out below is based primarily on the provisions of Egyptian Companies Law No. 159 of 1981, as amended, Investment Law No. 72 of 2017 as amended by Law No. 160 of 2023, Income Tax Law No. 91 of 2005, and the Importers Register Law No. 121 of 1982, together with their respective executive regulations and current administrative practice before the competent authorities.

2. The Case for Egypt

2.1 Scale, Location and Demand

Egypt is the most populous country in the Arab world, with a population in excess of 105 million, and the third-largest economy on the African continent. It is a single-language, single-regulator domestic market of a size that most regional jurisdictions cannot offer, and it sits at the junction of Africa, Asia and Europe, controlling the Suez Canal, through which a material share of global seaborne trade passes.

For an investor, this translates into two distinct value propositions which can be pursued together: a large and young domestic consumer base, and a competitively-costed manufacturing and services platform for export into surrounding markets.

2.2 Macroeconomic Position

Following the exchange rate liberalisation of March 2024 and the associated programme with the International Monetary Fund, Egypt has moved into a stabilisation and growth phase. Real GDP growth has recovered to approximately 4.5% to 5%, with growth of roughly 5% recorded in the January to March 2026 quarter. Headline inflation has fallen from a peak above 35% to the mid-teens, permitting successive reductions in policy interest rates by the Central Bank of Egypt. Foreign exchange availability, which was the principal operational constraint on foreign investors during 2022 and 2023, has materially normalised.

2.3 Preferential Market Access

Goods manufactured in Egypt benefit from an unusually wide network of preferential trade arrangements. Production in Egypt is therefore not merely production for Egypt:

Cumulatively, an Egyptian manufacturing base provides preferential entry into markets representing well in excess of one billion consumers, from a jurisdiction with competitive labour and energy costs.

3. Statutory Investment Guarantees

Chapter II of Investment Law No. 72 of 2017 confers a set of guarantees which apply to foreign and Egyptian investors alike. These are statutory protections, not contractual undertakings, and they are among the most significant features of the Egyptian framework from a risk perspective:

Ownership. Subject to a limited number of sector-specific restrictions (notably certain activities in Sinai, and specified regulated sectors such as importation for trading purposes, security services and commercial agency), foreign investors may hold 100% of the share capital of an Egyptian company. There is no general requirement for an Egyptian partner or sponsor.

4. Investment Incentives

The Investment Law establishes three tiers of incentive — general, special and additional — supplemented by the Golden Licence regime and by the separate free zone and economic zone frameworks.

4.1 General Incentives

Following the amendments introduced by Law No. 160 of 2023, the general incentives are available to all investment projects falling within the scope of the Investment Law, irrespective of their date of establishment. They comprise principally:

• A unified customs duty of 2% on the value of imported machinery, equipment and plant required for the establishment of the project;
• Exemption from stamp duty and from notarisation and registration fees on the constitutive documents of the company, on facility and loan agreements, on mortgage and pledge contracts, and on the registration of land, for a period of five years from the date of entry in the Commercial Register;
• Exemption from registration fees on land contracts required for the establishment of the project.

4.2 Special Incentives (Article 11)

The special incentives take the form of a deduction from taxable net profits calculated by reference to the investment cost of the project. The rate depends on the geographic zone in which the project is established and, in Zone B, on the nature of the activity:

4.3 Cash Investment Incentive

Law No. 160 of 2023 introduced a cash incentive for projects and expansions in specified industrial activities. Qualifying projects are entitled to a refund of between 35% and 55% of the corporate tax paid on income generated from the activity, payable within 45 days of the filing of the tax return. The principal conditions are that:

• not less than 50% of the project’s financing is in foreign currency transferred from abroad through an Egyptian bank; and
• the project commences operations within six years of the date on which the incentive is granted.

4.4 Additional Incentives (Article 13)

The Cabinet may, on the recommendation of the competent Minister, grant further incentives to qualifying projects. Following the 2023 amendments these include:

• The establishment of dedicated customs outlets for the project’s imports and exports;
• State assumption, in whole or in part, of the cost of extending utilities to the project site, and of up to 50% of infrastructure and public utility costs;
• State contribution of up to 50% of the project’s public utility consumption costs for a period of up to ten years;
• Exemption from usufruct fees on allocated land for up to ten years from the commencement of operations;
• Refund of 50% of the value of land allocated to industrial projects where production commences within two years of delivery of the land;
• Free allocation of land for certain strategic activities;
• State contribution to the cost of technical training of personnel.

4.5 The Golden Licence (Single Approval)

The Golden Licence is a single, consolidated approval covering the entire life cycle of a project — its establishment, the allocation of the necessary land, building permits, and the operation and management of the project — issued without the need for the multiple sequential approvals otherwise required from separate authorities. It is available for projects in Cabinet-designated strategic sectors, which as at January 2026 comprised electricity and renewable energy, petroleum and mineral resources, transport, industry, information and communications technology, housing, utilities and urban communities, and tourism.

The Golden Licence is, in practice, the single most valuable procedural incentive available to a substantial project, and eligibility should be assessed at the structuring stage rather than after incorporation.

4.6 Free Zones, Investment Zones and the Suez Canal Economic Zone

Investors whose activity is predominantly export-oriented should consider establishment under the free zone regime rather than the inland regime. Free zone projects are exempt from customs duties, value added tax and general taxes and duties on their activity, and instead pay an annual fee calculated at 1% of the value of goods (for storage projects) or 1% of value added (for manufacturing and assembly projects). Free zone projects do not, however, benefit from the general incentives described at paragraph 4.1 above.

The Suez Canal Economic Zone operates under its own governing framework and offers a one-stop-shop authority, dedicated port infrastructure and an integrated logistics proposition, and is designated as a Sector A area for the purposes of the special incentives.

5. Choice of Corporate Vehicle

The three vehicles most commonly used by foreign investors establishing an operating presence in Egypt are the Limited Liability Company, the One-Person Company and the Joint Stock Company. The LLC and the OPC are the standard operating vehicles where the shareholding is and will remain closely held. The Joint Stock Company is the appropriate vehicle where the investor contemplates external equity, an eventual listing, or a board-level governance structure, and it is the mandatory corporate form for a number of regulated activities.

5.1 Comparative Overview

5.2 Limited Liability Company — Incorporation Requirements

The following documents and information are typically required for the incorporation of an LLC before the General Authority for Investment and Free Zones (GAFI):

1. Preparation and execution of the Articles of Incorporation before GAFI.
2. Reservation and approval of the company name with the competent authority.
3. Determination of the company’s objects and activities, subject to regulatory approvals where applicable.
4. Lease agreement or title deed for the company’s registered premises in Egypt.
5. Powers of Attorney issued by the partners in favour of the incorporation representative, duly legalised before the Egyptian Consulate if issued abroad.
6. Where a partner is a legal entity: its certificate of incorporation or commercial register extract, its constitutional documents, and a board resolution approving participation in the Egyptian company.
7. Letter of acceptance from a registered Egyptian external auditor.
8. Identification documents for the partners and managers (national identity card or passport).

5.3 One-Person Company — Incorporation Requirements

The incorporation of an OPC requires the following:

1. Preparation and execution of the Articles of Incorporation before GAFI.
2. Power of Attorney from the founder in favour of the incorporation representative, duly legalised before the Egyptian Consulate if issued abroad.
3. Copy of the founder’s identification documents (national identity card for Egyptians, passport for foreign nationals).
4. Where the founder is a foreign legal entity, the following documents legalised before the Egyptian Consulate: articles of incorporation; certificate of incorporation or commercial register extract; and a board resolution approving the establishment of the company in Egypt.
5. Reservation and approval of the company name.
6. Founder’s resolution approving the incorporation and appointing the manager(s).
7. Bank certificate confirming deposit of the company’s capital with an authorised Egyptian bank.
8. Lease agreement or title deed for the company’s premises.
9. Letter of acceptance from an Egyptian external auditor.

5.4 Joint Stock Company — Incorporation Requirements

The incorporation of a JSC before GAFI requires the following:

1. Preparation and execution of the statutes (Articles of Incorporation) on GAFI’s model form by not less than three founders.
2. Reservation and approval of the company name, and determination of the company’s objects, together with the prior approval of the competent regulatory authority where the intended activity is regulated.
3. Bank certificate evidencing deposit of not less than 10% of the issued capital with an authorised Egyptian bank, blocked until entry in the Commercial Register. The paid-up proportion must be raised to 25% within three months of incorporation and the balance settled within five years.
4. Where any part of the capital is contributed in kind, a valuation report prepared by the competent valuation committee and approved in accordance with the Companies Law.
5. Powers of Attorney from the founders in favour of the incorporation representative, duly legalised before the Egyptian Consulate if issued abroad.
6. Where a founder is a legal entity: its certificate of incorporation or commercial register extract, its constitutive documents, and a board resolution approving subscription in the Egyptian company, legalised and translated into Arabic.
7. Constitution of the board of directors of not less than three members, with acceptance letters, identification documents and declarations of non-disqualification from each director, and designation of the chairman and the managing director(s).
8. Letter of acceptance from a registered Egyptian external auditor.
9. Lease agreement or title deed for the company’s registered premises in Egypt.
10. Identification documents for the founders (national identity card or passport).
11. Where the shares are to be offered for public subscription, the prior approval of the Financial Regulatory Authority, publication of the prospectus, and compliance with the founders’ minimum subscription requirement.

Ongoing obligations. A JSC carries governance requirements which do not apply to an LLC or an OPC: an ordinary general assembly must be convened within the three months following the end of each financial year; 5% of net profits must be transferred to a statutory reserve until that reserve reaches 50% of the issued capital; and employees are entitled to a share of distributed profits of not less than 10%, capped at the total annual payroll. These should be modelled at the structuring stage where the JSC form is selected.

5.5 Process and Timing

Incorporation is effected through GAFI’s one-stop-shop. GAFI has since 2025 operated an electronic Investment Licensing Platform through which the licensing process is completed online, and indicates that licences are issued within 20 working days where the file is complete. In practice, the critical path for a foreign investor is not the Egyptian filing itself but the preparation and consular legalisation of the foreign corporate documents and powers of attorney, which should be commenced at the earliest opportunity. Where a Joint Stock Company is used, the deposit of the initial capital instalment, the constitution of the board and any valuation of in-kind contributions should be programmed into the same timetable.

6. Importation Licence (Importers Register)

Companies intending to import goods into Egypt for trading purposes must be registered in the Importers Register maintained by the General Organization for Export and Import Control (GOEIC). The principal requirements typically include:

• Registration with the Commercial Registry and the Egyptian Tax Authority;
• Compliance with the capital requirements prescribed for importation activities;
• Appointment of an Egyptian manager responsible for importation procedures;
• Submission of corporate documents and financial records evidencing the company’s operational capacity.

Additional administrative requirements may apply depending on the nature of the imported goods and the applicable regulatory approvals.

Note on structuring. Importation for trading purposes is one of the activities subject to Egyptian ownership and management conditions. Where a foreign group wishes both to import and to manufacture or distribute, the activities are frequently separated across two vehicles. We would advise on the optimal structure once the intended activity mix is settled.

7. Tax Framework

Companies incorporated in Egypt are generally subject to the following principal tax obligations.

Treaty network. Egypt maintains approximately sixty double taxation treaties, covering its principal trading and investment partners in Europe, the Gulf, Asia and Africa. Treaty relief is not applied automatically at source: Ministerial Decree No. 771 of 2009 requires deduction at the domestic rate, with the recipient claiming a refund of the differential. Holding structure selection should therefore take account of both the treaty rate and the practical refund process.

Small and medium enterprises. Law No. 6 of 2025 introduced a permanent simplified tax regime for projects with annual turnover not exceeding EGP 20 million, applying rates from 0.4% to 1.5% of turnover, with the first tax audit deferred for five years and reduced filing frequency. This regime is relevant to pilot or start-up phase operations.

8. Practical Considerations

In the interest of a balanced assessment, the following matters should be factored into the investment case at the planning stage. None is, in our experience, an obstacle to a well-structured project, but each carries a cost or timing implication:

9. Conclusion and Next Steps

Egypt combines the scale of a domestic market of over one hundred million people with preferential export access to Europe, the Arab world and Africa, a competitive corporate tax rate, and a codified set of investment guarantees backed by ICSID and New York Convention adherence. The incentive framework under Investment Law No. 72 of 2017, as amended, is capable of removing a substantial proportion of the effective tax cost of a qualifying project during its first seven years of operation.

The incorporation of companies in Egypt is carried out through the General Authority for Investment and Free Zones and requires compliance with the provisions of Egyptian corporate, tax and regulatory laws. In our view the sequence which best protects an investor’s position is as follows:

1. Confirm the intended activity mix and assess sector-specific licensing and ownership requirements.
2. Determine the optimal regime — inland, free zone, investment zone or economic zone — and the geographic zone for special incentive purposes.
3. Assess Golden Licence eligibility before, rather than after, the corporate structure is fixed.
4. Select the vehicle and holding jurisdiction with regard to the applicable double taxation treaty.
5. Commence consular legalisation of foreign documents immediately, given the establishment window for the Article 11 special incentives.

Tahoun Law Firm would be pleased to assist with the structuring analysis, the preparation and filing of the incorporation documents, the incentive and Golden Licence applications, and the subsequent registrations before the competent authorities.

Best regards,

Tahoun Law Firm

This memorandum is provided for general information and does not constitute legal advice on any specific matter. Rates, thresholds and incentive windows stated are current as at the date of this memorandum and are subject to change, including by Cabinet decree. Formal advice should be obtained before any investment decision is taken.