Opening a BRANCH in Egypt for a Foreign Company

The Regulatory Framework:

The General Authority for Investment and Free Zones is the main regulatory body that is responsible for establishing the most common types of business vehicles in Egypt. The Companies’ law No. 159 of 1981, the New Investment Law No. 72 of 2017 and the Capital Market Law along with their executive regulations are the governing laws that regulate and manage the business vehicle starting from its establishment till its dissolution.

According to Law No. 159 of 1981, there are many kinds of business vehicles that can be formed in Egypt; one of the most common legal vehicles used by investors in Egypt is a branch of a foreign company.

Scope of activity

A branch of a foreign company can be only registered in Egypt to carry a certain project in Egypt according to a contract concluded with any Egyptian entity either the Egyptian Government, Public Sector or Private Company. Although the branch can engage in commercial, financial, industrial and contractual activities, the activities that the branch will carry out will be limited to those stated in its contract in Egypt.

Management and control

A branch can be managed by a foreign manager. A branch is under the full control of its parent company. Branch offices’ activities are subject to review by General Authority for Investment and Free Zones to ensure compliance with laws and regulations.

Capital Branch offices

They are not subject to a requirement of a minimum capital investment. However, initial capital investments must be made in foreign currency transferred to Egypt through a registered Egyptian bank.

Profit-Sharing

Branches are bound to distribute at least 10 % of their annual net profits to their employees (not exceeding the total annual wages and salaries paid to workers and employees of the branch.

The required documentary

1- An application submitted in the name of the GAFI attached with two copies of the power of attorney issued by the Mother Company.

2- A copy of the Mother Company’s Bylaws and/or a copy of the commercial register of the mother company.

3- A copy of the resolution issued by the Mother Company to open a branch in Egypt.

4- A statement from the Mother Company states that (“It has not opened a BRANCH before in Egypt”).

5- Opening a Bank Account in the name of the BRANCH.

6- A banking Certificate provides transferring, in a dollar currency, an amount equals to 5000 EGP.

7- A number of two copies of the lease contract or the ownership deed of the Branch’s location with the following conditions:  

1. It has to be stamped from the Notary Public Office with having a date proven;
2. Bring the original for reviewing purposes; and
3. The contract shall state that the objective is to using the place as a branch for the company.

8- A number of two copies of the contract concluded with any Egyptian entity.

9- A number of two copies of the commercial registry of the Egyptian company the Mother Company contracted with.

10- Filling in the security checks made for the Mother Company and the manager of the branch in case s/he will be a non-Egyptian.

Notes:

(1)- All the above mentioned documents shall be a certified Arabic Translation, authenticated and notarized from the Egyptian Consulate and the Egyptian Ministry of Foreign Affairs; and

(2)- Certain Activities need the approval of the related competent authorities before registering the Branch at the GAFI (“General Authority for Investment and Free Zones”).