The registration of a foreign company before the EFCBC

The Egyptian legislation primarily aspired to regulate and govern construction works within the Arab Republic of Egypt and for that purpose, The Egyptian Federation for Construction and Building Contractors (EFCBC) has been duly established, and its statutory provisions have been enacted.

It is well established that Law No. 104 of 1992 and its executive regulations, as amended, are deemed the exclusive jurisdiction regulating and governing construction works either for national or foreign contractors.

Pursuant to the said Law mentioned above, the EFCBC has its independent legal personality, as well as the principal aims of the EFCBC inevitably come as follows:

• Registering the envisaged contractors, regardless of being Egyptian or foreign contractors;
• Establishing a code of conduct to ensure respect for the traditions of the profession, and setting organizational and disciplinary rules that ensure the achievement of this goal;
• Studying economic and technical issues related to contracting activity, and providing members with the results of such studies;
• To participate in defending the interests of its members before courts and third parties;
• Cooperating with similar Arab and foreign organizations and authorities, strengthening ties with them, exchanging experiences, and participating in conferences that are related to the objectives of the federation.

Moreover, in accordance with the provisions of the Law, it is impermissible to assign or undertake any work within the limits of construction works, exceeding EGP50,000 or its equivalent in a foreign currency per transaction for the non-registered members.

Notwithstanding the above, the aforementioned provision shall not be applied to construction works tending to the public interest.

What is the registration before the EFCBC?

On the legal front, the registration before the EFCBC shall involve all entities practicing construction works in Egypt, furthermore, the said entities may be natural or legal persons, additionally, irrespective of the legal form of the legal persons.

Undoubtedly, Egyptian legal or natural persons shall be registered as Egyptian contractors, in return, foreign entities shall be registered as foreign correspondents.

Crucially, foreign correspondents shall observe and fulfill all provisions expressly set forth in the Law, in the same context, the Law sets out a series of requirements and terms in connection with the registration of foreign correspondents.

What are the requirements for registration in the EFCBC?

Registration as a foreign correspondent before the EFCBC entails the fulfillment of the following requirements and documentation as follows:

1. A registration request signed by the company’s legal representative and stamped with the company’s seal;
2. A recent extract of the company’s commercial register, provided that such commercial register shall be duly legalized and notarized before the Egyptian embassy/ consulate abroad and the Egyptian Ministry of Foreign Affairs along with an official translated version;
3. A certificate evidencing the classification and grade of the company abroad, provided that such certificate shall be issued by an adopted authority abroad, it shall be duly legalized and notarized before the Egyptian embassy/ consulate abroad and the Egyptian Ministry of Foreign Affairs along with an official translated version;
4. The company’s latest financial statement provided that such certificate shall be issued by an adopted authority abroad, it shall be duly legalized and notarized before the Egyptian embassy/ consulate abroad and the Egyptian Ministry of Foreign Affairs along with an official translated version;
5. An adopted statement issued by the company’s legal representative indicating the number of engineers, accountants administrative and legal personnel and the number of technical workers and craftsmen;
6. An adopted statement issued by the company’s legal representative indicating the company’s machinery that is possessed by the company;
7. An adopted statement issued by the company’s legal representative indicating the preceding construction works for the last five years that were assigned to the company.

What are the procedures for registering a foreign company in the EFCBC?

Following the submission of the aforementioned documents, the latter shall be presented before a technical committee and the said committee in its turn shall issue its decision concerning the registration of the foreign correspondent, its classification and grade.

Most importantly, upon the issuance of the said committee decision in relation to the registration of the foreign correspondent, the latter shall irrevocably follow the following terms as mentioned below:

• The submission of a duplicated version of the project’s contract;
• The foreign correspondent is obliged to extend its legal presence within the Arab Republic of Egypt through introducing a branch of a foreign company to implement the construction works in question;
• Most importantly, the foreign correspondent is obliged to contract with an Egyptian subcontractor to carry out a determined part of the project in question at the rate of 51%.

Advantages and disadvantages of registering a foreign company in the EFCBC

As a matter of law, and as mentioned above it is illegal to perform and/or assign any construction works in Egypt, without being duly registered in the EFCBC, hence, the main advantage of the said registration is averting any of the prescribed fines and penalties stated expressly in the Law.

Additionally, the registered members benefit from the EFCBC’s main role, which is safeguarding the interests of its members to the utmost extent possible.

The registration before the EFCBC allows its members to legally enter into tenders and bids, with the observance of compliance with all terms and conditions in this regard.

In this vein, Mohamed Nasser & Partners will be thrilled to assist your esteemed companies in any legal service(s) in the is respect.