This guide has been prepared by Matouk Bassiouny for potential investors considering investing in Egypt and is intended to provide a brief overview of some of the key legal issues in relation to conducting of business in Egypt.
Egypt is focalized in the center of Middle East and North Africa region and is the third most populous country on the African continent, with an estimated population of approx. 90 million. The official language of Egypt is Arabic, though English is widely used.
The Government of Egypt consists of three branches; the executive branch is headed by the President of the State and the Council of Ministers, the legislature is a single-chamber Parliament, while the judiciary branch is mainly headed by the Court of Cassation and the State Council, which review the disputes with governmental public bodies.
Egypt follows the free market system. The economy of Egypt is constantly planned to be diversified one, and presently depends mainly on industry, agriculture and services sectors, whereas, services sector represents half of the GDP per sector.
The Egyptian legal system is based on the civil law system. Primary inspired by the French civil codes. Egypt’s legal structure is based on the written Constitution of Egypt, as amended in 2014. According to the Constitution, the “principles of Islam (Sharia) Law are the major source of law”, however, at the legislation and regulations level, the Islamic (Sharia) Law does not has impact over commercial matters; as the full impact in this regard is made by the civil system. Nowadays, the role of the Islamic (Sharia) Law has been dwindling and now its major role is concluded to family law and personal status matters.
The judicial system consists of many divisions; the most main two divisions are the regular judiciary, which is involving the normal courts and headed by the Court of Cassation, while the other division is involving the State Council with all its sub administrative courts that headed by the High Administrative Court. The Supreme Constitutional Court solely constitute a separate division the Egyptian judiciary system. There is separate legislation developed since 1994 for arbitration in commercial and civil matters.
Egypt is a signatory to several global treaties and conventions that have impact over doing of business and Egypt has signed tons of bilateral BITs and DTTs. Egypt is member of WTO since 1995 and member of GATT since 1970.
STRUCTURE FOR DOING BUSINESS IN EGYPT
Foreign investors wishing to conduct business in Egypt have various establishment options available to them, discussed hereinafter the most prevalent options.
Joint Stock Company (“JSC”)
An Egyptian JSC is a regulated company of which its capital is divided into shares and the liability of each shareholder is limited to the paid up value of his shares. The minimum number of shareholders of a JSC is three (3) and a JSC may be wholly owned by non-nationals, with a few exceptions for certain activities that should be wholly owned by Egyptian persons, for example importation companies, commercial agencies and companies operating within the region of Sinai.