On the 29th of October 2023, an amendment has been introduced with respect to the requirements for the registration of companies with the importers’ registry.
In light of the above, the Egyptian official gazette has published Law No. 173 of 2023 (“the New Importer Registry Law”) which has made an amendment to Article (2) of Importer Registry Law No. 121 for 1982 (“the Importer Registry Law”) as follows:
Original Article (2) of Law No. 121/1982:
“Joint stock companies, companies limited by shares, limited liability companies, and personal companies can register with the importer registry, provided that the shares or quotas are owned by at least 51% of Egyptians.”
Amended Article (2) as per the Law No. 173/2023:
“Joint stock companies, companies limited by shares, limited liability companies, and personal companies can register with the importer registry even if the shares or quotas are not owned by Egyptians or are owned by Egyptians for less than 51% of the capital.
Further, the registration duration shall not exceed ten (10) years from the date of issuance of the New Importer Registry Law and can be extended for only one (1) period, which does not exceed ten (10) years by virtue of the approval of the Egyptian Cabinet after presenting the issue before the Minister of Foreign Trade.”
Does the Recent Amendment Have an Impact on the Egyptian Manager Requirement?
As per Article (2) of the Importer Registry Law, companies cannot register with the importer registry unless they have an Egyptian manager under their Commercial Registry.
We understand that the amended article applies such an exception to the companies only; it does not extend this exception to the Egyptian manager requirement. That being said, companies still cannot register with the importer registry unless they have an Egyptian manager under their Commercial Registry.
Registration Procedures and Requirements:
The amended article only provides an exception to Article (2) of the Importer Registry Law; however, it does not clarify the documents which shall be submitted or the procedures and requirements which shall be followed by the companies in order to register with the importer registry if such companies meet the said exception. That being said, we are awaiting further clarifications on the said requirements and procedures to be published.
Does the Recent Amendment Have an Impact on the Foreign Investments?
As the Importer Registry Law sets out a limitation on the registration with the importer registry for companies whose shares or quotas are owned by at least 51% of Egyptians; such a limitation was a bureaucratic requirement that hinders the attraction of foreign investors to the Egyptian economy.
Therefore, in order to effectively solicit foreign investment in the future, it has become necessary for the governmental authorities to interfere and simplify the registration procedures of such foreign investors with the importer registry and thus give the foreign investors a greater opportunity to participate in the Egyptian economy.
Accordingly, such simplifications in the registration procedures with the importer registry will pave the way and ease the process for foreign investors to enter the Egyptian market.
In light of the above, the recent amendment of Article (2) of the Importer Registry Law brings with it a myriad of benefits via attracting foreign investments, especially with respect to the change in ownership structure of the companies and the expansion of the mergers and acquisitions transactions in the Egyptian economy.