Egypt allows foreign investors to own companies outright in most activities, but the route to a working entity runs through several statutes at once: Investment Law No. 72 of 2017, the Companies Law No. 159 of 1981, the tax laws, and sector rules such as the Importers Register Law No. 121 of 1982 and the Commercial Agency Law No. 120 of 1982. The General Authority for Investment and Free Zones (GAFI) is the single door for incorporation, but it is not the only authority that decides whether a given activity may be carried on by a foreign-owned company. This article sets out the statutory framework, the choice of entity, the guarantees and incentives, and the points on which foreign investors most often get surprised.
The legal framework: Law No. 72 of 2017 and its amendments
Investment Law No. 72 of 2017 was enacted on 31 May 2017 and has since been amended, notably by Law No. 141 of 2019 and Law No. 160 of 2023. Clause I of the enacting law applies it to domestic and foreign investment of any size and says investment is carried out through one of four frameworks: internal investment, investment zones, technological zones or free zones. Article 1 defines investment projects across industry, agriculture, trade, education, health, transport, tourism, housing, construction, sport, energy, natural resources, water, communications and technology.
Two points frame everything else. Clause II preserves the substantive conditions that other laws set for approvals, permits and licenses, so Law No. 72 never overrides a sector regulator. And Article 3 requires fair and equitable treatment and guarantees the foreign investor the same treatment as the national investor. In our standing advice, the investment law is the starting point for incentives and guarantees, while the sector statute decides whether the activity is open to the investor at all.
Foreign ownership: what is open and what is restricted
In most activities a foreign investor may hold 100 percent of an Egyptian company. Three areas need separate review. Importation for resale is governed by Law No. 121 of 1982, which Law No. 173 of 2023 amended in October 2023 to allow companies owned by foreigners, up to 100 percent, to register as importers, for a registration period of up to ten years with possible renewal. Law No. 4 of 2026, in force from 3 April 2026, then allowed the financial thresholds to be met in freely convertible foreign currency and simplified changes to registered data, which must be notified within 60 days.
The second area is commercial agency. Article 3 of Law No. 120 of 1982 requires a company that registers as a commercial agent or intermediary to be wholly owned by Egyptian partners, with its head office in Egypt, so a foreign-owned company cannot act as a registered agent. The third is the Sinai Peninsula, which Law No. 14 of 2012 treats separately and where activity is reviewed case by case.
Choosing the vehicle: limited liability, joint stock, single-person or branch
Article 4 of Law No. 159 of 1981 defines the limited liability company as having no more than fifty partners, each liable only to the extent of its share, and bars it from public subscription and from insurance and banking under Article 5. Article 8 requires at least two founders for such a company and at least three for a joint stock company, and if the number falls below the minimum the company is dissolved by operation of law unless it is restored within six months. Article 6 of the Executive Regulations of Law No. 159 of 1981 sets the minimum issued capital of a joint stock company that does not offer shares to the public at EGP 250,000 (EGP 500,000 if it does), with at least one quarter paid in cash on incorporation.
Article 4 bis allows a single-person company owned by one natural or legal person, whose founder is liable only up to the capital allocated to it. A branch of a foreign company is the alternative when the parent wants to operate directly, and Article 21 of Law No. 72 lists branch establishment among the services of the Investor Service Center.
Incorporation at GAFI: the Investor Service Center and the timetable
Article 1 bis of Law No. 159 of 1981 makes GAFI responsible for incorporation and post-incorporation services, and Article 21 of Law No. 72 creates the Investor Service Center, where representatives of the competent bodies sit under GAFI supervision. The center handles incorporation, branches, minutes of board and general meetings, capital increases, changes of activity and liquidation. If an application is incomplete, the representatives must ask for the missing documents within two business days, after which the application is deemed complete and nothing further may be requested.
Article 24 sets the outer limit for investment applications: the competent bodies must decide within sixty days of a complete file, and silence is deemed acceptance, confirmed by an approval of GAFI's chief executive. Article 22 lets investors use Approval Offices licensed by GAFI to assess the documents. The usual file contains the shareholders' constitutional documents, passports, the auditor's acceptance, a name clearance, a bank certificate and the lease for the premises.
Investor guarantees under Articles 3 to 6
Article 4 of Law No. 72 provides that investment projects may not be nationalized and that assets may be expropriated only for public utility against just compensation paid in advance, equal to the economic value on the day before the decision and freely transferable. Projects may not be sequestrated administratively, and assets may not be seized or frozen except by court order, with an exception for tax debts and social insurance contributions. Article 5 bars suspension or revocation of a license without notice of the violations, a hearing and a reasonable grace period, after GAFI's opinion given within seven days.
Article 6 gives the investor the right to fund the project from abroad in foreign currency, to own, manage and dispose of it, to transfer profits abroad, and to liquidate and repatriate the proceeds. The State must allow cash transfers in a convertible currency and conversion without delay. A liquidated company is discharged from liabilities not notified by the administrative bodies within 120 days. Grievances against Article 5 measures go to the committee under Article 83, and investment contract disputes go to the committees under Articles 85 and 88, without excluding arbitration under the applicable treaties.
Imports, exports and the foreign workforce
Article 7 allows an investment project to import raw materials, production requirements, machinery, spare parts and vehicles that suit its business, directly or through third parties, without registration in the Importers Register, and to export without a license or Exporters Register entry. The project files a quarterly report with GAFI of quantities and types. This right covers inputs for the project, not trading in imported goods for resale, which remains under Law No. 121 of 1982 as amended.
Article 8 allows foreign workers up to 10 percent of the project workforce, increased up to 20 percent where qualified Egyptian workers cannot be found, with exceptions for strategic projects listed by decree that train national labor. Employment is governed by the new Labour Law No. 14 of 2025, in force from 1 September 2025 and replacing Law No. 12 of 2003, and by the Social Insurance Law No. 148 of 2019. Article 89 of Law No. 14 of 2025 requires the employment contract to be in writing, in Arabic, in four copies; for a foreign worker who does not read Arabic it may also be in the worker's language, and the Arabic version prevails.
General incentives (Articles 9 and 10)
Article 9, as replaced by Law No. 160 of 2023, gives the general incentives to every investment project, whether incorporated before or after the law and under any legal framework, except projects set up under the free zone framework. Article 10 exempts incorporation memoranda, credit facility contracts and pledge contracts from stamp duty, notarization and publicity fees for five years from entry in the commercial register, and the same exemption covers land registration contracts needed to form the company.
Article 10 also applies a uniform customs duty of 2 percent on machinery, equipment and devices needed to form the company, under Article 4 of Law No. 186 of 1986, and extends it to equipment imported by public utility projects.
Special incentives, the cash incentive and the GAFI certificate
Article 11 gives projects set up under the investment map a deduction from taxable net profit of 50 percent of investment costs in Sector A, the areas most in need of development, and 30 percent in Sector B, which covers listed activities such as labor-intensive projects, small and medium enterprises, renewable energy, exporting projects, the automotive industry and its feeder industries, and food industries. The deduction may not exceed 80 percent of paid-up capital and may not run more than seven years. Article 12 requires a new company with regular accounts, formed within the permitted period, that does not use the assets of an existing company.
Article 11 bis, added by Law No. 160 of 2023, offers industrial projects a cash incentive of 35 to 55 percent of the income tax they pay, if at least half of their funds are financed from abroad in foreign currency and operations start within six years of the article taking effect. The incentive period is capped at ten years and the Ministry of Finance must pay within 45 days. Article 13 allows further incentives by Cabinet decree, and Article 14 makes the GAFI certificate of incentives final and binding on all entities.
Comprehensive approval, free zones and technological zones
Article 20 allows the Council of Ministers to grant a comprehensive approval, often called the golden license, to companies launching strategic or national projects and to public-private partnership projects in public utilities, infrastructure, renewable energy, roads and transport or ports. The approval covers setting up, operating and managing the project, including building permits and land allocation, and may carry incentives. GAFI monitors compliance through a committee, and after notice and a hearing may suspend activity or incentives for up to a year.
Free zones and technological zones are separate frameworks under Clause I of the enacting law, and Article 9 excludes free zone projects from the general incentives because they follow their own regime. Their incentives, fees and permitted activities differ from zone to zone, so we compare a free zone with a domestic company for each project, looking at where the customers are, whether the goods are for export, and how profits will leave Egypt.
Tax, thin capitalization and ongoing reporting
Corporate income tax under Law No. 91 of 2005 is generally 22.5 percent, and VAT under Law No. 67 of 2016 has a standard rate of 14 percent, with changes introduced by Law No. 157 of 2025. Interest on loans above twice the average equity is not deductible, but Law No. 30 of 2023 allows transitional ratios of 4 to 1 for 2023, 3 to 1 for 2024 to 2027 and 2 to 1 for 2028. Law No. 6 of 2025 gives small businesses with annual turnover up to EGP 20 million separate reliefs. Article 15 of Law No. 72 makes donations up to 10 percent of annual profits to approved social programs deductible.
Every company with foreign shareholders must file foreign direct investment data with GAFI under Prime Minister Decree No. 2731 of 2019: within 30 days of incorporation or of any change in capital, purpose, shareholding or board, within 45 days of each quarter end, and within four months of the financial year end. Our standing advice is to put the filing dates into the compliance calendar on incorporation day, with the tax filings and the commercial register updates.
Distribution and agency without a company
A foreign supplier that wants to sell in Egypt without an entity needs a local distributor or a registered commercial agent. Article 2 of Law No. 120 of 1982 bars commercial agency activity unless the agent is registered, and Article 3 limits registration to Egyptians and to companies wholly owned by Egyptians. The Commercial Code (Law No. 17 of 1999) treats agency as remunerated, with the agent entitled to its commission when the deal is concluded or when the principal caused the failure, under Article 150, and a commission agreed in the contract is not reduced by the judge.
Egypt does protect the registered agent. Practitioners report that an agency contract may be ended only for a serious and acceptable cause, that termination without such cause triggers compensation, and that under the executive regulations a new agent will not be registered until the previous agent's entitlements are settled or sixty days pass without a claim. A plain distribution agreement that is not a registered agency may allow termination for convenience if the contract says so. We therefore draft the status of the relationship, the term and the exit terms deliberately before the first shipment.
What we review before an Egypt entry file is filed
When we review an Egypt entry file, we first test the activity against sector rules, the Importers Register conditions, the Sinai restrictions and any advance clearance linked to the investor's nationality. We then compare the limited liability company, the joint stock company, the single-person company and the branch, map the incentives under Articles 9 to 13, check the free zone alternative, prepare the Arabic documentation, set the banking route for capital and profits, and set up the foreign direct investment reporting and the tax, labor and social insurance registrations.
See also: our commercial and corporate practice in Egypt and Investment Law 72 of 2017 incentives, plus our guides on dispute resolution in Egypt and our Gulf company formation comparison.
Frequently asked questions
Can a foreigner own 100 percent of an Egyptian company?
In most activities yes. Article 3 of Law No. 72 of 2017 guarantees foreign investors the same treatment as nationals, and Article 6 protects ownership and transfers. Importation for resale, commercial agency and Sinai activity need separate checks under Law No. 121 of 1982, Law No. 120 of 1982 and Law No. 14 of 2012.
Can a foreign-owned company import goods for resale in Egypt?
Yes, since Law No. 173 of 2023 amended Law No. 121 of 1982, with registration of up to ten years and renewal possible. Law No. 4 of 2026 now lets the financial thresholds be met in foreign currency. An investment project may also import its own inputs without registration under Article 7 of Law No. 72.
What are the main incentives under the Investment Law?
Article 10 gives five years of stamp duty and fee exemption and a 2 percent uniform customs duty. Article 11 gives a deduction of 50 percent or 30 percent of investment costs, capped at 80 percent of paid-up capital and seven years, and Article 11 bis gives industrial projects a cash incentive of 35 to 55 percent of tax paid.
What minimum capital is needed?
A limited liability company under Article 4 of Law No. 159 of 1981 needs at least two partners and, according to GAFI guidance, no minimum capital. A joint stock company needs three founders and EGP 250,000 of issued capital if it does not offer shares to the public (EGP 500,000 if it does), with at least one quarter paid in cash on incorporation under Article 6 of the Executive Regulations.
How many foreign employees may the company hire?
Article 8 of Law No. 72 sets the ceiling at 10 percent of the workforce, rising to 20 percent when qualified Egyptians are unavailable. Strategic projects listed by decree may receive exceptions if they train national labor. Work permits and security clearance are separate steps.
How long does a decision take?
Article 24 of Law No. 72 gives the competent bodies sixty days from a complete file, and silence is deemed acceptance. Article 21 deems an application complete if no missing document is requested within two business days. Delay usually comes from incomplete foreign documents and, for some nationalities, advance security clearance.
Does Egypt protect distributors and agents?
A registered commercial agent under Law No. 120 of 1982 has statutory protection against termination without a serious cause, and the executive regulations delay the appointment of a replacement until the previous agent is settled. A distribution agreement outside that registration is governed mainly by its terms, which must be drafted carefully.
Can you manage the whole Egypt entry file?
Yes. Our Cairo office files with GAFI and the other authorities, while our team structures the entity, the incentives and the contracts. Contact us through the contact page and we will first test your activity against the restricted areas and recommend the vehicle.