Mixed legal system based on Napoleonic civil and penal law, Islamic religious law, and vestiges of colonial-era laws; judicial review of the constitutionality of laws by the Supreme Constitutional Court.

Country overviewEgypt flag


109,262,178 (as of 2021)


Abdel Fattah Saeed Hussein Khalil el-Sisi

Capital city


Other major cities

Alexandria and Giza

Major industries

Consumer Goods, textiles, food processing, tourism, construction and healthcare

Legal information

Foreign Direct Investment

The government of Egypt is a party to more than 100 bilateral investment treaties, with, most of the European Union Member States, the United States, and some African, Middle Eastern, and Asian countries. Generally, the investment treaties provide broad incentives, protections, and fair and equitable treatment for investors from the contracting states, standard in the investment treaty in accordance with international law. However, the host state must be equal in treatment, similar to its national investors or to investors from a more favored nation. Further, for any expropriation to be fulfilled lawfully, it must meet certain requirements provided by an investment treaty, including but not limited to, that it must be for public interest and must be decided without discrimination.

As part of the legislative reforms agenda to improve Egypt’s business, on 31 May 2017, Investment Law No. 72 of 2017, as amended (“Investment Law”) was issued to replace the former Investment Law No. 8 of 1997. Further, the Executive Regulations of the Investment Law were issued on 28 October 2017 to provide more guidance with respect to its implementation.

Investment Law provisions govern local and foreign investments within Egypt with respect to the companies established according to such law while setting out several guarantees, tax, non-tax incentives, unified customs, and free lands for investors.

The General Authority for Investment and Free zones (“GAFI”), the Egyptian companies’ regulator, and the Financial Regulatory Authority (“FRA”) are the main foreign direct investment regulators, supervisors, and implementers of the national laws and international treaties with investors. Promoting foreign investment in Egypt through the enhancement of its governmental bodies.

Pursuant to Law No. 141 of 2019, which amended the Investment Law permitting GAFI to request information and data necessary for calculating foreign investment assets from companies for statistical purposes. In addition, the Prime Minister’s decisions No. 2731 and No. 2732 of 2019, which amended the Executive Regulations of the Investment Law, which necessitate all companies operating in Egypt to periodically complete the statistical quarter forms within forty-five (45) days of the end of each financial quarter.

The governmental authorities are not allowed to issue any administrative decrees that impose additional financial obligations, extra fees or duties on projects subject to the Investment Law unless the prior opinion of GAFI’s board of directors, and the approvals of the Cabinet and the Supreme Investment Council are obtained.

The Law regulating the Administrative Supervision Authority No. 54 of 1964, as amended, provides the functions of the Administrative Supervision Authority, which include following up on the implementation of laws within the governmental authorities and investigating any administrative, financial and criminal errors committed by such civil servants within said authorities. Recently, the Administrative Supervision Authority has been very active in conducting inspections and imposing penalties on public servants who are not implementing the laws correctly or that are appropriating a personal benefit by virtue of their position.

Security And International Background Checks. Egyptian national security competent authorities undertake background checks for the relevant foreign persons as a customary procedure. If any of the provided information was falsely made, a negative result will be made. Accordingly, the Egyptian entity will be prohibited to undertake certain procedures before GAFI except after rectifying the false information.

Pursuant to the Ministerial Decree No. 41/2020, which amended the Executive Regulations of Commercial Register Law No. 34/1976, stipulates that entity registered before a commercial registry are obligated to create a special register for the real beneficiaries of said entity (“Real Beneficiaries Register”). The Real Beneficiaries Register shall include the names and details of person(s) (natural and/or juristic) who have actual ownership or control over the commercial establishment. The Real Beneficiaries Register is to be updated as soon as a change(s) occurs to the to the registered data. Further, the relevant commercial registry is to be notified with the change in data as soon as it takes place.

Entry Strategies and Common Corporate Structures

Egyptian Companies’ Law No. 159 of 1981, as amended, and its Executive Regulations (“Companies’ Law”) governs all capital companies (Joint Stock Companies, Partnership Limited by Shares, Limited Liability Companies, and Sole Proprietorship). It also governs branches of foreign companies and representative offices registered in Egypt.

Capital Companies. Generally, capital companies take the form of any foregoing four (4) types of companies:

(i)    Joint Stock Companies (“JSC”). Such companies are among the most used legal vehicles in Egypt and are usually used in those cases where there is a manufacturing project to be established in Egypt that requires major investments. 

(ii)    Limited Liability Companies (“LLC”). Such companies are among the most used legal vehicles in Egypt. Such companies may not undertake certain activities such as insurance business, banking, savings or interest funds on behalf of a third party.

(iii)    Partnership Limited by Shares. Companies whose capital comprises of partner-owned interests, who are jointly liable. Also, it has equal value of shares that can be subscribed for by one or more shareholders and traded accordingly.

(iv)    Sole Proprietorship. The sole proprietorship company was introduced in 2018 in the amendments of the Companies’ Law No. 4 of 2018. This Company has the same feature as an LLC. A company that has its capital being wholly owned by one (1) person (i.e., natural, or juristic). The partner may be foreigner or Egyptian unless the activity of the company requires a certain percentage of Egyptian national ownership. However, this type of company must have its headquarters in Egypt or carry the majority of its operations therein.

Persons’ Companies: Such types of companies are mainly tailored by the persons associated to it, which means all partners have equal rights, liabilities, powers, and are jointly and severally liable for the debts coupled with the companies. Persons’ companies are comprised of (i) General Partnership; and (ii) Limited Partnership.

In light of the above, foreigner investors are entitled to undertake activities in Egypt through establishing a company, branch, or representative offices.

Branches. A branch may only be established to execute a specific contract or contracts concluded by the holding company and an Egyptian entity. The branch is not permitted to conduct the business of procuring (directly from the market or from intermediary suppliers), distributing, supplying, selling directly in the wholesale, retail market, exporting and importing of the goods for trading purposes, instead such activities can only be executed if determined under the scope of the said contract.

Representative Offices. Foreign companies can establish representation, liaison, or scientific offices. The object of such offices is limited to studying and exploring the Egyptian market further to conducting market research without performing any kind of commercial or income generating activities. If such office exercises any other activity conflicting with its purpose, it must be written off the register.

Generally, under Egyptian law, there is no limitation on the foreign shareholding percentage in Egyptian companies with the exception to specific sectors and activities.

Commercial Joint Ventures between Foreign Investors and Local Firms

For a foreign investor to conduct business in Egypt, or to partner with a local entity, the establishment of a formal legal presence is required (directly or indirectly through a duly registered Egyptian agent) in Egypt through any of the following means:

(i)    incorporating a local entity (e.g., JSCs, or LLCs);

(ii)    registration of a branch or representative office of a foreign company; or

(iii)    entering a commercial agency relationship.

Establishing a legal presence in Egypt, in the forms stipulated under (i), and (ii) are generally governed and regulated by:

(i)    Companies Law, which recognises joint ventures, partnerships, and limited liability partnerships, which can be deployed by foreign investors;

(ii)    Investment Law; and/or

(iii)    Capital Market Law No. 95 of 1992, and its executive regulations both as amended ("Capital Market Law"). Capital Market Law is only applicable to JSCs, which could be listed and traded on via the Egyptian Stock Exchange and to companies carrying out securities activities, such as brokerage, asset management and venture capital companies. The incorporation of such a company under Capital Market Law requires the approval of the FRA.

Entering a commercial agency agreement. Foreign investors may collaborate with local firms, without establishing presence in Egypt, through conclusion of commercial agreements that are governed by the civil and commercial laws, such commercial agencies, distribution, and franchising.

It is worth noting that commercial agencies in Egypt are only permissible for Egyptian persons, thus foreign ownership is prohibited.
A foreign investor company, which intend to conduct agency activities, can merely enter a commercial agency relationship with a local agency. According to Article 147 of the Egyptian Civil Code No. 131 of 1948 (“Civil Code”), the contract makes the law of the parties.

With few exceptions, the Egyptian law grants the parties to a contract the right to choose the applicable law and exclusive jurisdiction, provided that, there is no violation to the public policy and mandatory norms. Reference to Article 135 of the Civil Code, the agreement shall be null and void if its object or obligation is contrary to public order or morality (e.g., Article 227 of this Code provides that the parties may not agree upon an interest rate exceeding seven percent (7%)). The Civil Code provides that when a part of a contract is void or voidable, that part alone shall be annulled, unless it is revealed that the contract would not have been entered into without that part, in which case the contract as a whole shall be annulled.

Regulating Activities by Foreign Investors

Activities. Some of the most regulated industries in Egypt are natural resources, energy, and telecommunications. Pre-approvals, operational licenses from the appropriate authorities are necessary in these sectors; however, no restriction exists on foreign investment in said sectors.

Generally, under Egyptian law, there is no limitation on the foreign shareholding percentage in Egyptian companies. Thus, 100% of the capital of an Egyptian company can be owned by foreign shareholders with the exception to specific sectors that require certain Egyptian shareholding that includes, inter alia:

(i)    commercial agencies must be fully owned by Egyptian nationals or by companies that are fully owned by Egyptian nationals;

(ii)    companies which undertake importation activity for commercial purposes must be owned by at least fifty-one percent (51) % of Egyptians; and

(iii)    companies undertaking activities of safeguarding and transport of funds (i.e., physical transport and safeguarding) must be fully owned by Egyptian nationals or by companies that are fully owned by Egyptian nationals.

Real-estate. Law No. 230 of 1996 governs the foreign ownership of property for residential purposes. Nevertheless, foreign ownership of property for non-residential purposes (i.e., commercial, offices or agricultural purposes) is regulated by other separate laws.

Law No. 143 of 1981 on Desert Lands, as amended regulates ownership of desert land in Egypt. According to this law, any company owning desert lands must be at least owned by fifty-one percent (51) % Egyptian nationals and an individual shall not own more than twenty percent (20) % of the capital. Moreover, any Arab country national may be given reciprocal treatment (equal to that of Egyptian nationals) with respect to the ownership of the desert land, by virtue of a presidential decree upon obtaining the approval of the Cabinet Ministers.

Agricultural lands are exclusively reserved to Egyptians. Law No. 15 of 1963 on the Prohibition of Foreign Ownership of Agricultural lands, as amended by virtue of Laws No. 138 of 1964, No. 104 of 1985 prohibits the acquisition of agricultural lands by foreigners, whether by way of freehold ownership, usufruct rights for agricultural, arable, and nonarable lands, or any other type of real property right. The ownership of real estate property in some areas in Egypt is restricted regardless of the nationality of the proposed owner. Ownership of land in these areas is limited to the State for public security reasons.

In addition, ownership in the Sinai Peninsula of land plots and real estate is restricted to Egyptian nationals and companies that are fully owned by Egyptian nationals. Projects operating in specific areas inside the Sinai Peninsula require at least fifty-five percent (55) % of their shareholding to be held by Egyptian nationals. Said prohibition applies to all entities regardless of their nationalities or the percentage of foreign ownership therein according to the Integrated Development Law in Sinai No. 14 of 2012 (“Integrated Development Law”), and the applicable decrees. Please note that the Presidential Decree No. 128 of 2022 excludes Sharm el-Sheikh, Dahab and Gulf of Aqaba located in South Sinai Governorate from being subject to the provisions of the Integrated Development Law.


The provisions of the Labour Law No. 12 of 2003 and relevant Decrees (“Labour Law”) apply to local and foreign employment in Egypt. The Labour Law is considered public policy and shall govern all employment matter in Egypt and provides that any agreement contrary to the provisions thereof is considered null and void.

Pursuant to Article 31 of the Labour Law, an employment contract is defined as the contract by virtue of which the employee undertakes to perform his/her job obligations under the supervision and the subordination of the employer in return of receiving a consideration (salary). Article 32 of the Labour Law states that employers are obliged to conclude written employment contract in Arabic, drawn up in three counterparts, an original for each party and the third one shall be submitted to the competent social insurance office. The employment contract shall embody the following: (i) name of employer and place of business; (ii) name of employee; (iii) employee’s profession; (iv) employee’s social insurance number; (v) employee’s place of residence; (vi) all documents needed for proving employee’s identity; (vii) job description; (viii) probation period, if any; and (ix) salary agreed upon between the parties.

Additionally, employment contracts in Egypt can be drawn up for a definite period or an indefinite period or for accomplishing a specific work/project.

Pursuant to Article 28 of the Labour Law, foreign employees shall not practice any work in Egypt unless necessary work permit issued by the Ministry of Manpower and Immigration is obtained to enter the country and to reside there for employment purposes. The Central Administration for Employment at the Ministry to allow the foreign employee to enter and reside in Egypt for work purposes. Afterwards, the foreign employee will be granted two (2) months at most, from the date of entering Egypt, to submit a request to the competent authority. The competent authority will then issue a temporary permit, which grants the foreigner a temporary residence to work in Egypt until the competent authority receives the security clearance. The work permit will be issued after the security clearance is completed.

All the requirements, data, fees and the procedures of obtaining the aforesaid license/work permit is regulated by Ministerial Decree No. 485 of 2010 issued by the Ministry of Manpower and Immigration.

The number of foreign employees in an establishment, including its branches, should not exceed more than ten percent (10) % of the number of insured Egyptian employees (i.e., a ratio of ten (10) local employees: one (1) expat). In addition, the salaries of the Egyptian employees must not be less than Eighty percent (80) % of the total payroll paid by the relevant company to its employees. Nevertheless, companies may be authorised by the competent minister to exceed the percentages provided that the necessary qualifications are not offered by Egyptian workforce.

There are certain cases where small enterprises are exempted from the above ten (10) local employees: one (1) expat ratio rule.

Capital Constraints

With regards to private JSCs, the minimum capital required in EGP 250,000 (two hundred and fifty thousand Egyptian pounds), ten percent (10) % of which must be paid upon incorporation, with a licensed Egyptian bank, to be followed by a payment of fifteen percent (15) % within three (3) months following incorporation and the remaining seventy five percent (75) % must be paid within a maximum of five (5) years. The minimum share capital of a JSC may vary depending on the company’s activity.

As of mid of February 2021, a requirement has been announced, regarding the incorporation of JSC, which provides that the shareholders of a JSC should be coded and should have a written bookkeeping/ custodian agreement concluded with a custodian prior to the incorporation of the JSC. Accordingly, please note that certain required documents shall be submitted to Misr for Central Clearing, Depository and Registry ("MCDR”) in order to obtain its approval on the incorporation of the JSC. The approval shall be part of the incorporation documents that will be submitted to GAFI.

Nevertheless, there is no minimum capital requirement for an LLC. In practice, GAFI allows an LLC to be incorporated without the actual deposit of the capital of the company as the same may take place, post incorporation. Upon the deposit of the LLC’s capital, the same shall be made in full and divided into quotas of equal value in the manner set out in the Articles of Association/ Articles of Incorporation /Preliminary Agreement of the LLC.

The Companies Law stipulates an obligation on JSCs to distribute ten percent (10) % of the profit to its employees.

If the capital of an LLC is not less than EGP 250,000 (two hundred and fifty thousand Egyptian pounds), then the employees of the LLC shall be entitled to a share in the profits distributable by company capped at (i) ten percent (10) % of the distributed profits; or (ii) the aggregate annual salary of the employees, whichever is lower.


Without prejudice to the incentives granted to companies registered in the free zones which are subject to special regimes, the sale of assets shall be subject to capital gains tax (“CGT”) at the rate of tax of twenty-two and a half percent (22.5)% of the CG realized on the seller, unless the seller/purchaser is resident of the unlisted country that has a Double Taxation Treaty (“DTT”) with Egypt, and such DTT provides exemption/reduction of the CGT.

Further, the Minister of Finance issued a guideline on the tax treatment of the capital gains realized from the sale/disposal of unlisted shares on the Egyptian Exchange (“EGX”) over-the-counter system by non-residents (the “Guideline”).

It should be mentioned that, until 30 September 2020, Article 56 (bis) of the Egyptian Income Tax Law, issued by Law No. 91 of 2005 (the “ITL”), provided explicit provision that sale of unlisted shares by non-resident persons shall be subject to CGT. Nevertheless, by 30 September 2020, the provisions of Article 56 (bis), along with other provisions of the ITL, have been amended by Law No. 199 of 2020.

In December 2020, the Minister of Finance issued its Decree No. 610 of 2020 for publishing the Guideline where Egyptian Tax Authority (“ETA”) levies CGT on capital gains achieved by non-resident entities from sale of unlisted shares. 

As per the Guideline, the non-resident companies shall be subject to CGT at the rate of twenty-two and a half percent (22.5) %, unless an exemption or reduction is provided under DTT with Egypt and confirmed by the ETA.

The capital gains realised by non-resident shareholder from the disposal of listed shares on the EGX should not be subject to CGT in Egypt.

Article 56 (bis) provides that the distribution of dividends by an Egyptian taxpayer shall be subject to a unified rate of ten percent (10) % the withholding tax ("WHT”) on dividends, if it is an unlisted company. Conversely, if the company is listed in the EGX, the WHT on dividends shall be at the rate of five percent (5) %. However, the WHT on dividends could be exempted/reduced if there is a benefit provided under a relevant DTT.

According to Article 56 of the ITL, WHT at the flat rate of twenty percent (20) % applicable, on amounts paid by a resident entity to a non-resident entity, including amounts paid as consideration for services fees, interest, or royalties. The fees paid of the following services shall be exempted from the twenty percent (20) % WHT applicable: (i) transportation or freight; (ii) shipping; (iii) insurance; (iv) training; (v) listing in international stock exchanges; (vi) direct advertising; and promotion.

Value added tax (VAT) is applicable on all local and imported goods. The general VAT rate is fourteen percent (14) % for goods and services, unless specifically exempted. 

Intellectual Property

The Intellectual Property Right Law No. 82 of 2002 and its Executive Regulations, as amended (“IP Law”) is the relevant law in Egypt in respect of the protection of Intellectual Property in Egypt.

Egypt has been a member of the World Trade Organisation (“WTO”) since June 1995, under the umbrella of which comes Trade Related Aspects of Intellectual Property Rights ‘TRIPS’. Further, Egypt is a member in Bern for the Protection of Literary and Artistic Works; and is a signatory to several other conventions.

A trademark is defined as any sign distinguishing products or services including names, signatures, words, letters, numerals, designs, symbols, signposts, stamps, seals, drawings, engravings.

In order for a trademark to receive protection in Egypt, it is recommended to register said trademark in the relevant register at the commercial registration authority. The protection period of the trademark registered in Egypt is ten (10) years. Said period may be renewed for additional period(s) upon the request of the trademark owner.

Any natural or juristic person, Egyptian or foreigner, belonging to, domiciled or active in a country that is a member of the WTO or that applies reciprocity to Egypt, has the right to apply for a trademark at the relevant registration authority, and shall be able to enjoy whatever rights derived therefrom, in conformity with the provisions of the IP Law. In addition to the protection for registered trademarks, the owner of an international and Egyptian well-known trademark shall have the right to enjoy the protection provided by the IP Law even if such trademark is not registered in Egypt.

The right of the trademark owner to prevent third parties from importing, using, selling or distributing the products distinguished by said trademark shall lapse when the owner markets the trademarked products in any country or authorizes a third party to do so.

The ownership of the trademark may be transferred, pledged, subject to any in-rem right or seized. Said rights shall not be enforced vis-à-vis third parties unless after the annotation of the same in the relevant register.

The trademark owner may license one or more person to use its trademark. Such license does not prevent the owner from using the trademark, unless otherwise agreed. It is worth highlighting that if the trademark has been licensed to a third party, the owner of the trademark may not cancel or refuse the renewal of the license agreement without valid reason.

Further, the license agreement may not include any provisions which may unnecessarily restrict the licensee from using the licensed trademark. However, a license agreement may include conditions pertaining the duration of the license; the requirements to ensure that the trademark owner controls the quality of products identified by the licensed trademark; and obligations on the licensee to refrain from any action that would result in the disparagement of products marked with the trademark.

Dispute Resolutions

Both Arbitration and Litigation are means of dispute resolutions that provide fair and equitable treatments to foreign investors, neither the Arbitration Law no. 27 of 1994, as amended, nor the Egyptian Civil and Commercial Procedures Code No. 13 of 1968 or any other law regulating a local court provide for discrimination against foreign and local investors. Egyptian courts have jurisdiction over all claims against Egyptian citizens and foreign persons domiciled in Egypt (excluding claims related to property abroad). General jurisdiction could be decided based on (i) the value of the dispute; (ii) the nature of the dispute; and (iii) the territorial jurisdiction of the court.

Both domestic and foreign arbitral awards are enforceable in Egypt. Egypt is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Accordingly, foreign arbitral awards are enforceable in Egypt in accordance with the provisions of said convention.

Consequently, the Egyptian courts recognise the enforcement of foreign awards issued in Egypt. However, the application for the enforcement of an arbitral award rendered in Egypt or which have been subject to Egyptian law will not be admissible before the lapse of the limitation period of the award annulment claim (i.e., while the award is still challengeable) and will be rejected in the event that said award contradict the Egyptian public policy or precedents of the Court of Appeal and Court of Cassation.

Pursuant to Prime Minister Decree No. 2592 of 2020, contracts concluded between governmental authorities or public entities and foreign investors containing an arbitration clause must be first reviewed by the high committee for arbitration and international disputes prior to the approval of the competent minister otherwise the arbitration clause will be held null and void.

Foreign judgments can be enforced in Egypt pursuant to the Egyptian Civil and Commercial Procedures Law No. 83 of 1969 (“Procedures Law”), Egyptian jurisprudence and judicial precedents, the enforcement of foreign court judgments is subject to the principle of reciprocity and the satisfaction of certain minimum conditions.

The Egyptian law recognizes two kinds of reciprocity, legislative and diplomatic reciprocity. With respect to diplomatic reciprocity, Article 301 of the Procedures Law permits the recognition and enforcement of foreign judgments in accordance with bilateral or multilateral treaties to which Egypt and the foreign country (where the foreign judgment was issued) are parties. This bilateral or multilateral treaties would supersede the rules and procedures of the Procedures Law and would be applicable even if it is contradictory with said rules and procedures.

As for the legislative reciprocity, Article 296 of the Procedures Law provides that, subject to the principle of reciprocity, Egyptian courts may order the enforcement of the foreign judgments in Egypt with the same conditions and requirements for the enforcement of Egyptian judgments in the foreign country where the foreign judgment is issued as stated in the foreign country’s law.

Public Procurements and Financing

Public Procurement. The Public Procurement Law No. 182 of 2018 (“Public Procurement Law”) was enacted to improve efficiencies and provide value for money to contracts entered into by public entities, whilst fighting corruption and institutionalising the principles of transparency, fairness and equal opportunity. The Public Procurement Law has a wide scope as it regulates the conclusion of contracts tendered by most public bodies. For instance, it applies to contracts concluded by ministries, as well as most governmental agencies.

The Public Procurement Law allows the administrative authority to conduct a prequalification check for interested bidders to verify their technical, financial, administrative and human resources capabilities as well as granted said authority the right to restriction bidders who do not qualify from participating. This tender process is potentially both more efficient for and cost effective to the private sector.

Further to the above, the Public Procurement Law introduced a rigorous definition of when direct agreements can be used, along with the financial cap for each specific type of transaction.

According to the Public Procurement Law, all tenders, including those procured by direct agreement, must be published online on the Public Procurement Portal, except for transactions that have national security implications. The publication must include the procurement method, its conditions and reasons for following that particular tender process, the technical and financial evaluation methods, and any other data specified by the Executive Regulations.

In the event of a dispute, the Public Procurement Law encourages the administrative authorities and public entities to consider alternative dispute resolution mechanisms such as mediation, reconciliation and arbitration if the contract was approved by the competent minister.

Finance. Whilst the Central Bank of Egypt (“CBE”) supervises banks operating inside of Egypt and their branches abroad, foreign exchange entities and the other entities licensed to deal in foreign currency and money transfers, the FRA supervises other companies such as companies, which undertake non- banking financial activities, financial lease and factoring activities as promogulated by virtue of Law No. 176 of 2018, and in accordance with the FRA regulations.

The project finance market in Egypt has witnessed several reforms including but not limited to the issuance of the new Banking Law No. 194 of 2020.

Egyptian laws recognise the concept of pledges, as per the below.

Movables’ Pledges. On November 15, 2015, Egypt passed Law No. 115 of 2015 regulating the taking of security over movable assets, as amended (the “Movables Security Law”). The Movables Security Law is considered a major reform in the area of secured transactions in Egypt. Egyptian Collateral Registry is a centralized electronic register for the declaration of security rights on movables, which are restricted to certain creditors.

Real-estate Mortgages. Law No. 114 of 1946 regulating the Notary Public Authority, as amended is the applicable law.

Shares’ Pledges. Shareholders may pledge their shares, which are dematerialised and registered at MCDR, as a form of security for financing, according to the Central Depository Law No.95 of 2000 promulgating the law of depository and central registry for securities.

Commercial mortgages. May be granted in favour of local and foreign banks licensed by the CBE, as well as international financial institutions as security for the facilities injected in Egypt, subject to the prior approval of the CBE. Law No. 114 of 1946 regulating the Notary Public Authority, as amended as well as Law No. 34 of 1976 of the Commercial Registry, as amended, apply for the annotation of the commercial mortgage.

Corruption / Transparency

Whistle blower System. Investors should abide by the relevant and applicable rules in general and avoid undertaking corrupt practices. Investors should implement a reporting system ‘Whistle blower System’ for actions committed against the Antibribery, Anti-Money Laundering, Antitrust, and Anticorruption internal policies, etc. adopted by the entity. Reporting channels must be open to employees and may also be made available to third parties (e.g., suppliers, customers) to ensure the competent regulators’ rules apply.

We would like to shed the light below on some of the areas, which may lead to the occurrence of corrupt activities in companies.

Bribery. Bribery in Egypt is governed by the provisions of the Egyptian Penal Code No. 58 of 1937, under Articles 103 to 111 provisions, which address bribery in both public and private sectors.

Anti-trust practices. Investors should abide by the Anti-trust practices in Egypt, which are regulated by the Egyptian Competition Law No.3 of 2005, as amended.

Consumer Protection. Investors should adhere to the Consumer Protection Law No. 181 of 2018, and its Executive Regulations in relation to contracts made directly with consumers.

Data Privacy. The law governing protection of personal data and privacy was promulgated and entered into force and become legally binding on 16 October 2020 ("Data Protection Law”). The Data Protection Law sets obligations on data controllers and processors to report any security breaches that occur to their server or data base within a course of seventy-two (72) hours and sets out the procedures and guidelines for reporting. The controllers and processers are also under the obligation to inform the data subject of any breach of their data.

Cybercrimes. Pursuant to Cybercrime Law No. 175 of 2018, the service providers and their affiliated marketing agents and distributors may obtain the users’ data shall be obliged to protect and refrain from disclosing any stored data except by virtue of a reasoned decision issued by the competent judicial bodies; these include investigation authorities, (e.g., general prosecution) and competent courts. Service providers are also required to secure and protect the stored data against hacking or destruction.

Anti-Money Laundering. The Anti-Money Laundering Law No. 80 of 2002, as amended regulates anti-money laundering in Egypt, and its Executive Regulations was issued by virtue of the Prime Ministerial Decree No. 951 of 2003, as amended.

Article 8 of the Anti-Money Laundering Law stipulates that companies are obligated to immediately notify the Money Laundering Combating Unit, which is an independent unit functioning within the CBE, of any transactions that they suspect to constitute proceeds or involve money laundering or terrorism financing, or attempts to carry out such operations, whatever their value, and procedures related to combating money laundering and terrorist financing issued by the Money Laundering Combating Unit, in accordance to the Executive Regulations.

Competition Regulation

The Egyptian Competition Law No.3 of 2005, as amended (“Competition Law”) provides for a pre-merger control regime, whereby a transaction must be filed to the Egyptian Competition Authority (“ECA”) and approved prior to closing in case the following requirements are satisfied:

(1)    The transaction involves an Economic Concentration:
The Competition Law defines the Economic Concentration as any change in the control of a person or several persons resulting from (a) a merger, (b) direct or indirect acquisition of the capacity to control a person(s) by virtue of an agreement or through the purchase of financial securities, assets, shares or any other means, or (c) the establishment of joint venture which would exercise its economic activities independently from the entities having established the same and on a long-lasting basis.

Further, the Competition Law defines “Control” to be the capacity of a person(s) to exercise effective influence on another party by guiding the economic decisions of the said party either based on the majority of the voting rights or based on the capacity of the controlling person to prevent another person from taking an economic decision (veto rights), or any other method. Furthermore, Control includes any event, agreement or ownership of shares (regardless of the number of owned shares) that results in the effective control of the management or decision making of another person.

Additionally, the Competition Law provided a definition of “Material Influence” to be the capacity of a person(s) to influence the policy of another person either directly or indirectly. This includes its strategic decisions or commercial objectives as determined by the to be issued Executive Regulation of the Competition Law.

(2)    Financial thresholds: the envisioned transaction must satisfy one of the following financial thresholds: 

Threshold no. (1): This threshold consists of two sub-thresholds that must be satisfied collectively as follows:

  • Local threshold in relation to all the Concerned Parties: The achieved combined annual turnover or the combined assets in Egypt pertaining to the Concerned Parties of the last year as reflected in their audited consolidated financial statements pertaining to such year exceed EGP 900 million; and
  • Local Threshold in relation to Each of at least two of the Concerned Parties: The combined turnover of each of at least two of the Concerned Parties achieved in Egypt, as reflected in their latest audited consolidated financial statements, exceeds EGP 200 million.
    Threshold no. (2): This threshold consists of two sub-thresholds that must be satisfied collectively as follows:
  • Worldwide Threshold: the worldwide combined annual turnover or combined assets pertaining to the Concerned Parties of last year, as reflected in their audited consolidated financial statements pertaining to the said year, exceed EGP 7.5 billion;
  • Local Threshold: the combined turnover of at least one of the Concerned Parties achieved in Egypt, as reflected in its latest audited consolidated financial statements, exceeds EGP 200 million.