December 5, 2018

GAFI New Decree for Representative Offices

A recent decree was issued by GAFI (General Authority for Free Zones and Investment) providing new compliance requirements for representative offices in Egypt (“Decree 742 for 2018” or the “Decree”).

According to the Egyptian Companies Law No. 159 of 1981 (“Companies Law”), foreign companies are permitted to establish representative offices for the purpose of carrying out market surveys or studying the feasibility of production without entering into any commercial operations activities.

Article One of the Decree provides that representative offices should submit to GAFI an annual report showing the following:

  • list of all its employees, their jobs, nationalities, salaries relative to the total amount of the salaries paid by the office;

  • the studies performed during the last year and any amendments thereto, and an evidence that the representative office sent these information to its parent company and the decisions taken by the later in this respect.

  • Timeline showing the completed part of the studies and what is remaining and the results achieved.

Representative offices will be granted a registration certificate for a period not to exceed one year. The certificate can be renewed taking into consideration the office’s compliance with the requirements stipulated in Article One of the Decree.

The Decree provides thatthe parent company has to take a decision to open a company or a branch office in Egypt within three (3) years from the date of registering the representative office. This period can be extended by virtue of a decision from the CEO of GAFI upon submitting acceptable reasons.

Article Three of the Decree reconfirmed what is stipulated under the Companies Law that a representative office is allowed to conduct market studies only and not to perform any other commercial activities. A representative office which violates this mandate has to comply with the law by opening a company or a branch office within 6 months from being notified with the violation or otherwise its registration will be canceled.

How can we help?

Our team of corporate compliance experts would be delighted to assist you in relation to the following:

  1. Advising on the Effect of Decree 724 for 2018 on your representative office’s activities.

  2. Assisting you in regard to how to comply with the Decree.

  3. Advising you on the upcoming executive regulations.

  4. Provide you with advice with respect to the required data for the valid registration of your representative offices and submission of the annual report.
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