Register a branch of a foreign company in Egypt

Investment policies are one of the economic policies that aim to attract and encourage local and foreign private investments, through setting and adapting the institutional, regulatory, and legislative framework to create a competitive climate supportive of investment.

The participation of the private sector in economic activity is one of the important factors for achieving the economic goals of the state in terms of increasing employment opportunities, stimulating economic growth, increasing tax revenues, promoting exports, and increasing consumer welfare.

In order to ensure the continuity of the private sector’s contribution to supporting development plans, it requires the state to take supportive measures for direct investment, especially in times of international crises and their local repercussions.

What is the foreign branch?

A branch of a foreign company can be registered to carry a certain project in Egypt by a contract concluded with any Egyptian entity, whether an Egyptian government, a public sector or a private company.

Although a branch can engage in commercial, financial, industrial, and contractual activities, the activities allowed to be carried out are limited to those stipulated in the contract concluded in Egypt with one of the Egyptian entities.

A foreign branch maybe registered in Egypt to engage in commercial, financial, industrial and contracting activities, such activities shall be limited to those stipulated in the contract made in Egypt, meaning that the branch is considered an Egyptian company in all aspects, except for corporate governance.

Although, foreign company may be registered in Egypt only to carry out work of a contractual nature. If it is construction work, the approval of the Egyptian Federation of Construction and Building Contractors shall be obtained, according to a contract concluded with any Egyptian entity, whether the Egyptian Government, the public sector or the private company.

The manager of a branch for a foreign company or for a representative office may be Egyptian or foreigner. The branch will be under the full control of the foreign company “its parent company”, and the branch’s activities are subject to the reviewal and supervision by General Authority for Investment and Free Zones to ensure compliance with laws and regulations.

Register a branch of a foreign company in Egypt

Foreign companies are allowed to open branches in Egypt to carry out construction works, hotels management, commercial, financial and industrial activities or generally to execute works of contractual nature.

Article No. 166 of companies law No 159 of 1981 states that Foreign Companies which have centers in Egypt for exercise of business, must observe the formalities of commercial registration laid down, and should present to the sections mentioned in the executive regulation, the requisite data and the documents prescribed by it.

The branches of foreign companies must have an auditor of accounts on the conditions and forms defined in this regulation.

• Following approval of the registration application, all foreign companies conducting activities in Egypt must register their office in the Commercial Register. Once registered at the Commercial Register, the foreign branch must also be registered at the centralized register of foreign companies kept at the Companies Department.
• A manager should be appointed by the foreign company to manage its branch in Egypt, and to legally represent it in all matters related to its activity and existence. The manager can be of a foreign nationality. The manager may delegate others who are professionals or specialists to handle matters of a complicated or specialized nature, such as taxes, and legal disputes.
• If the manager is of Egyptian nationality, then he or she should enroll himself or herself in the state social insurance system as an employee. Enrolling in the social insurance system applies also to foreigners whose countries have reciprocal social insurance arrangement with Egypt.
• The foreign branch should keep proper books of account as required by law, and should issue annual financial statements, which should be audited by a certified Egyptian auditor.
• In order for a foreign company to open a branch in Egypt, such foreign company must be awarded a contract, such as a construction contract, to carry out a specific scope of work in Egypt.
• At least 10% of the net profit of the branch should be allocated to employees as profit-sharing, but the amount of profit-sharing should not exceed 100% of the annual salaries of the employees.
• The net profit of the foreign branch can easily be repatriated abroad if the branch has acquired enough foreign currency to do so. This also applies to the capital of the foreign branch.
• Establishing a branch of a foreign company in Egypt requires registration in the Commercial Registration Office. To register a branch of a foreign company, this company should first be awarded a contract to perform works in Egypt, such as a contract for construction works, hotel management, oil exploration, and the like.

Documents to register a branch of a foreign company in Egypt

1. A copy of the contract awarded to the foreign company to perform works in Egypt, with a recognized Arabic translation thereof.
2. A legalized copy of the memorandum and articles of association of the foreign company, with a recognized Arabic translation thereof.
3. A legalized copy of the foreign company’s board of directors’ resolution to establish a branch in Egypt, with a statement that the company has no other branches in Egypt.
4. Appoint a manager for the branch.
5. A certificate from one of the accredited banks in Egypt stating that the foreign company has transferred to the bank an amount in a foreign convertible currency equal to at least L.E. 5000 to be the branch’s capital, and that this amount is deposited in a blocked account.
6. A copy of the lease agreement of the office of the branch in Egypt.
7. In case of construction works, a document indicating that the foreign company has been registered in the Egyptian Federation for Erection and Building Contractors as a correspondent.

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.