Author: Alaa Zakaria
On March 1st, 2020, the Egyptian Minister of Supply and Internal Trading issued the Ministerial Decree No. 41 of 2020 (the “Decree”) amending the Executive Regulations of the Commercial Register Law No. 34 of 1976 (the “Law”).
Under the said Decree, all existing companies in Egypt are required to maintain a register showing the Ultimate Beneficial Owners (the “UBOs“) of their companies (the “Register”) and such Register shall be frequently updated in case of any changes and such updates should be notified to the Commercial Registry. Further, the Register shall be kept throughout the entire term of the company’s operations and for a period of five (5) years after the company ceases operations or in the case of deleting the registration of the company from the Commercial Registry. The Decree is issued in consideration of the Anti-Money Laundering Law No. 80 of 2002 and its Executive Regulations as issued by the cabinet decree No. 951 of 2023 (the “AM Law”).
In December 2022, the Internal Trade Development Authority (“ITDA“) has announced that the Decree is now activated, and it is currently receiving applications for maintaining such a Register.
According to the ITDA regulations, the Register is subject to the same formality requirements in connection to the commercial ledgers such as (i) that the Register shall not include any scrapes or unnecessary spaces, (ii) each page of the Register should be stamped by the seal of ITDA, and (iii) that the new Register will not be authenticated from ITDA until the previous Register has been presented to indicate the end of its pages after the last entry. In practice, and as per GAFI’s initial clarification, the UBOs registration at this stage is done manually by filling a certain template issued by ITDA to be presented to the competent Commercial Registry Office, until the issuance of a special platform (the date of its launch is still unknown to date).
The standard template of the Register as issued by ITDA, requires the disclosure of
- the company’s general information,
- the contact details of the legal representative of the company; and
- the natural persons who own 25% or more of the capital of the company or the voting rights; or
- the natural persons who have control on the company in the case that the information referred to in item (iii) does not exist; or
- the information of the natural persons who exercise an actual management in the company in the case that the information referred to in item (iii) & (iv) does not exist; and
- an undertaking from the chairman of the company that all the information filled under the Register are valid and that the company shall notify ITDA with any updates thereon.
In light of the above, ITDA does not require the disclosure of the corporate UBOs of the Egyptian companies. This means that the companies with corporate UBOs will not be required to comply with such disclosure for the time being. However, we expect that such disclosure might be required by ITDA in the future. Moreover, neither the Decree nor the ITDA regulations specify specific sanctions for the non-compliance, including, delaying in registering the UBOs, nor providing incorrect information. Yet, these issues might still fall under the general sanctions provided for under the provisions of the Law.
