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Legalities of Doing Business in Egypt: The Pillar’s guide for Startups

By:

Mazen El Omdah - Partner - m.elomdah@the-pillar.com

Vienna Willms - Trainee-Associate - v.willms@the-pillar.com


Congratulations! You have an amazing idea and finally decided to invade the market. By doing so, you already have completed the first step of becoming a successful entrepreneur!

The good news is: you are also in the second step by reading this report: It will show you the most essential aspects to start your business irrefutably regarding the legal matters and we will gladly be of help.

It is important that you do everything accurately from the very beginning. The consequences of not taking the necessary steps or not doing business legally can be immense. But don’t worry!


In this report we will illustrate all necessary information concerning how to do business in Egypt legally.




0. Are you a lone wolf or a pack?

The first important step before starting is to consider whether you will work alone or together with Co-founders. If you don’t work alone, make sure to keep them on board about the following steps.

1. Let’s talk finance

An idea itself, regardless of how good it is, will not miraculously turn into gold. For that you need to bring your product to the market. Every step of the upcoming procedures, like incorporation and production, will need to be financed. If you and potential Co-founders are not able to do so with private assets you will need to look for funding.


One option is to get a loan either from a bank or private investors. To get a loan, investors will want to know everything about your product, its potentiality in the market, costs of production and much more. Hence you will not only need to be able to pitch your idea perfectly but also a bulletproof business plan. Another option is to find investment partners. Those will likely strive for another type of deal like the obtaining shares from your company/ startup in return for money. In that case you will need a shareholders agreement.

But be careful: Don’t start pitching your idea to people without having your intellectual property protected by copyright, patent or trademark in advance. Protected IP will assure that they can’t copy your idea and steal potential market share.


Ideally you should find yourself a trusted start-up lawyer from the very beginning. By doing so you can be assured that every contract, starting from NDAs to shareholder agreements, is solid. Most importantly you will save yourself a lot of time and invest it in further development of your project. When the financial aspects are covered, you can proceed with the next step.

2. Things get real: Incorporation

You are now able to incorporate the company that will later sell your product. You can choose between a limited liability company, a joint stock company and a single member limited company.


In most cases the first two options will fit your needs the best. LLCs are best fit for small to medium enterprises. They are characterized by a simple structure and don’t have a minimum capital. JSCs on the other hand have a minimum capital of EGP 250.000, hence they are best fit for medium to big companies with a high growth potential. Talk to your trusted legal adviser and they will give you the best advice depending on how you want to operate in the future.

3. Be safe and don’t forget about the insurance

You are now ready to operate. Nevertheless you need to pay social insurances both for yourself and for your employees, because violations can be punished with up to EGP 20.000.

4. Do your Company books

Congratulations! The company is established and you started to operate upon proper legal basis. Still it is not the time to relax just yet.

Keeping the company books up to date is a commonly forgotten step. We advise you to have one for shares, one for general assembly meetings, and two for taxes.

5. Set up contract templates

It is important to set up a sufficient number of contract templates. It might be tempting to get them for free online. Nevertheless you need to be aware that there is not a “one-size-fits-it-all”- contract.


In order to avoid having to go to court later because of trusting in a contract that left out something important, consult a trusted legal adviser to draft these for you. They are specialized and experienced in doing just that. The money spent on well drafted contracts is money you will save later.


Last but not least , the strength of your business legality will crucially shape the stability , prosperity and success of your business or will result in unpleasant consequences.

The choice is always yours and the future belongs to those who dream and plan.

Good luck!

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