20 Dec 2019
EGYPT: New Foreign Investment Reporting Requirements Introduced
The reporting requirements on companies with foreign investment in Egypt have changed.
The change follows the Egyptian government’s amendment of executive regulations governing the country’s recently updated Investment Law. New reporting requirements have been introduced for Egyptian incorporated companies calculating direct and indirect foreign investment or ownership.
The decree, No. 2731 of 2019, was issued by Egyptian Prime Minister, Mostafa Madbouly, and added two articles, 126 bis and 126 bis A, to the Executive Regulations of the Investment Law no. 72 for 2017. The amendments stipulate the commitment of public and private authorities to provide the General Authority for Investment and Free Zones (GAFI) with information and data required to calculate direct and indirect foreign investment assets. The rules are effective from 7 November 2019.
Companies are required to file a financial report within 30 days from the date of incorporation, or from the date of the introduction of any amendment to the capital, objective, shareholding structure or board of directors. A quarterly report must also be submitted within 45 days of the end of March, June, September and December of each year, with key financial data and an annual report must be submitted within four months of the company’s fiscal year end.
According to international law firm, Baker McKenzie, while the reporting requirements technically appear to apply only to those companies set up under the Investment Law, the executive regulations specify that reporting requirements apply to all types of companies having foreign investment, not just those set up in accordance with the Investment Law.
Failure to comply with the reporting requirements is subject to a penalty of EGP50,000 (US$3,120). GAFI is also empowered to delay or refuse some of its services, such as issuing licences or ratifying company resolutions, until the errant company completes and submits the forms and data.