A company in Egypt answers to the Companies Law No. 159 of 1981, the tax laws, and the registry authorities. This guide explains the core duties of a joint stock company and the main VAT rules, from the texts published by the Egyptian Tax Authority. Article numbers refer to the law named in each section. We assist clients with Egypt from our Cairo office. Related guides are linked at the end of this article.
The legal framework
- Companies Law No. 159 of 1981, as amended (including by Law No. 3 of 1998), applies to joint stock companies, partnership limited by shares companies and limited liability companies, and repealed the earlier Laws No. 26 of 1954, No. 244 of 1960 and No. 137 of 1961.
- Value Added Tax Law No. 67 of 2016, as amended, including by Law No. 206 of 2020 (the unified tax procedures law, which repealed several procedure articles and moved them into that law) and Law No. 3 of 2022.
- Income Tax Law No. 91 of 2005, as amended.
Financial year and statements
Under Article 39 of the Companies Law, the company has a financial year fixed by its articles of association, and financial statements are prepared according to the accounting standards issued by a decision of the Minister of Economy. The articles may call for periodic statements covering no less than three months. A company that exists to take part in founding other companies, or to take part in them, must also prepare consolidated statements.
Article 40 deals with profit. The board sets aside at least one twentieth of net profits for the legal reserve before any distribution. The general assembly may stop this when the reserve reaches half the capital. The reserve may be used to cover losses or increase capital. The articles may allow a further ratio for a regular reserve.
The general assembly
Under Article 61, the general assembly meets at least once a year, within three months after the end of the financial year. The board must call it if the auditor asks, or if shareholders representing at least 5 percent of the capital ask, giving their reasons and depositing their shares at the company's seat or an approved bank. Under Article 62, the auditor or the competent administrative authority may call the assembly if the board delays for a month after the date it was obliged to call it.
For an extraordinary general assembly, Article 70 sets out the conditions. The board must call it if shareholders representing at least 10 percent of the capital ask, with the same deposit of shares. If the board does not call it within a month of the request, the applicants may go to the competent administrative authority. The meeting is valid only if shareholders representing at least half the capital attend, and if not, a second meeting within 30 days is valid with at least a quarter of the capital. Decisions need two thirds of the shares represented, except that a decision to increase or reduce capital, dissolve the company early, change its purpose, merge it or divide it needs three quarters.
The auditor
Article 103 requires a joint stock company to have one or more auditors who meet the conditions in the law governing the accounting and auditing profession. The general assembly appoints them and fixes their fees. If there are several, they are jointly liable. The founders appoint the first auditor, who serves until the first general assembly. The board may not be authorized to appoint the auditor or fix his fees without a maximum. If the company has no auditor at any time, the board must take steps to appoint one at once and report to the general assembly at its first meeting. The assembly may change the auditor on a member's proposal, with at least 10 days' notice to the company, and the auditor may answer in writing and before the assembly. Any resolution on the appointment or replacement of the auditor that goes against Article 103 is void.
Under Article 104, the auditor's work may not be combined with taking part in founding the company, board membership, or permanent technical, administrative or consultancy work for it. The auditor also may not be a partner or employee of such a person, or related to him up to the fourth degree. Under Article 105, the auditor may at any time examine the company's books, registers and documents, check its assets and liabilities, and the board must make his task easier.
VAT
Under Article 2 of the VAT Law, tax is charged on goods and services, local or imported, at all stages of transactions, unless a special provision says otherwise. Under Article 3, the standard rate is 14 percent from the beginning of fiscal year 2017/2018, with 1 percentage point allocated to social justice programs. Article 3, as amended by Law 149 of 2026, sets a 5 percent rate for machinery, equipment and medical devices used to produce goods or provide services, excluding buses and passenger cars; devices used for medical purposes are treated as medical devices. Article 28 bis, as amended in 2026, provides a separate suspension and exemption route for qualifying industrial production machinery, equipment and medical devices. Eligibility, permitted use, the suspension period and disposal restrictions must be checked before applying the general 5 percent rate. Exports that meet the conditions in the Executive Regulations are zero-rated.
Under Article 16, a person who sells taxable goods or provides taxable services and whose total sales of taxable and exempt goods and services in the previous 12 months reach EGP 500,000 must apply to register within 30 days of reaching the threshold. A person below the threshold may apply to register voluntarily (Article 18). A non-resident that sells taxable goods or services to non-registered persons in Egypt without a permanent establishment must register under a simplified system the Executive Regulations set out (Article 17).
For the 5 percent rate on machines, the Minister of Finance's Decision No. 115 of 2023 sets the documents a producer must show, including a certificate from the competent technical authority and proof of VAT registration.
Income tax
Income Tax Law No. 91 of 2005 taxes company profits at a flat 22.5 percent of annual net profits, with higher rates for the Suez Canal Authority, the Egyptian General Petroleum Corporation and the Central Bank (40 percent) and for oil and gas exploration and production companies (40.55 percent).
A practical roadmap
- Review the registry file and the articles of association, including the financial year and the reserve provisions.
- Prepare financial statements under the accounting standards that apply.
- Appoint the auditor through the general assembly, and check he meets the independence rules in Article 104.
- Hold the annual general assembly within three months of year end, and record the resolutions.
- Check VAT registration against the EGP 500,000 threshold, and use the right rate for machines and equipment.
- File and pay income tax and VAT on time.
Read also: Egypt Investment Law: Guarantees and Incentives for Investors | Mergers and Acquisitions in Egypt: Competition Approval | Compliance and Regulatory Law in Egypt
Frequently asked questions
Who appoints the auditor in an Egyptian joint stock company?
The general assembly, which also fixes his fees (Article 103). A resolution that goes against that article is void.
How soon after year end must the annual general assembly meet?
Within three months (Article 61).
What is the VAT rate in Egypt?
Fourteen percent under Article 3, 5 percent for machinery, equipment and medical devices used in producing goods or services (subject to the qualifying industrial suspension and exemption rules), and zero for qualifying exports.
When must a business register for VAT?
When its sales in the previous 12 months reach EGP 500,000 (Article 16), within 30 days.
How do you help companies with Egypt?
From our Cairo office we review corporate and tax obligations and organize compliance files.