By Malak Mohamed, Corporate Lawyer | Beans Consult | 24/10/2026
The legal form decides more than capital. It decides who can invest with you, how partners enter and exit, who carries the debts, and what compliance costs every year. Choose for where you plan to be in three years, not for day one.
Quick pick
- One founder, self-funded: single-member company.
- 2 to 50 partners, no investor plans: limited liability company.
- Investors, staff equity or a later listing: closed joint stock company from day one.
- Turnover up to EGP 20m, any form: consider the simplified regime under Law 6/2025.
The core comparison
| Criterion | Single-member company | LLC | Closed JSC | General / limited partnership | Sole proprietorship |
|---|---|---|---|---|---|
| Owners | 1 | 2 to 50 | 3 or more | 2 or more | 1 |
| Minimum capital | EGP 1,000 | None | EGP 250,000 | None | None |
| Paid at incorporation | In full | Cash shares in full | 25% in cash at incorporation; rest within 5 years | As agreed | n/a |
| Liability for debts | Limited, unless funds are mixed or bad faith | Limited to the share | Limited to the shares | Unlimited for general partners | Unlimited |
| Management | The owner | One or more managers | Board of at least 3 | General partners | The owner |
| Statutory auditor | Mandatory | Mandatory | Mandatory | Not required by the Companies Law | Not required by the Companies Law |
| Adding or exiting partners | Any new partner forces a change of form within 3 months | Pre-emption right for other partners | Tradable shares; 2-year lock on founder shares | Amend the contract | Not possible |
| Preferred shares, staff equity, bonds | No | No | Yes | No | No |
| Fit for venture capital | Very weak | Weak | Excellent | Unsuitable | Unsuitable |
| Owner social insurance (21%) | The owner | Managers only | Chair, board members, managing director | General partners | The owner, if the activity is licensed |
| Annual compliance cost | Low | Medium | Highest | Low | Lowest |
True for every form
- 100% foreign ownership as a rule, with exceptions such as commercial agency, Sinai and the importers' register.
- Regular books are mandatory for every taxpayer; a temporary 8-month tax card is available during setup.
- The simplified tax regime is open to every form up to EGP 20m turnover.
- Investment Law 72/2017 adds incentives on top of a form; it is not a separate legal form.
Mistakes we see often
- Starting as an LLC, then converting to a JSC at the first investor, the worst moment to negotiate.
- Assuming a single-member company needs no auditor.
- Mixing the founder's money with the single-member company's, which removes limited liability.
- Preparing only 10% of JSC capital, when the executive regulations require 25% in cash at incorporation.
Paying up JSC capital: Article 32 of Companies Law 159/1981 requires at least 10% at subscription, raised to 25% within three months of incorporation, with the balance within five years, and it authorises the executive regulations to set the minimum paid at incorporation. Using that authority, Article 6 of the executive regulations provides that the cash paid at incorporation may not be less than one quarter of the capital. Budget 25% of issued capital in cash before incorporation: at least EGP 62,500 for a company with EGP 250,000 capital.
Regulated activities such as banking, insurance and securities need a JSC and higher capital.
Need help applying this to your company?
Beans Consult handles incorporation, accounting, tax, payroll and social insurance.
Read next
- Starting a company in Egypt? Every tax and contribution it must pay, and when
- التأمينات الاجتماعية في ٢٠٢٧: ما الذي يتغير على صاحب العمل؟
General guidance only; not tax or legal advice for a specific case.
