Foreign Branches

With the Egyptian government constantly seeking to attract new investment by creating a fertile investment environment, the government passed a new investment law, aimed at attracting more foreign investment to support the national economy.
The new Act speeds up all procedures by reducing bureaucracy (bureaucracy is the rule of offices), especially matters relating to new projects. It also helps to provide more power and incentives to all investors willing to invest their money in the country, the most important of which is to deduct 50% of the taxes on investments (in remote or undeveloped areas).
So if you are an investor who would like to invest in Egypt, you can establish a company in Egypt. Also, if you have already a company and you have some investments to do in Egypt for certain period of time, you can open a branch or a representative office.
A branch office is a location, other than the main office, where a business is conducted. Most branch offices consist of smaller divisions of different aspects of the company or to carry out a certain project. A branch office will typically have a branch manager who will report directly to, and answer to, a management member at the main office.
A branch of a foreign company can be only registered in Egypt to carry out construction works or generally work of contractual nature according to a contract concluded with any Egyptian entity either the Egyptian Government, Public Sector, or Private Company, it depends on the main company’s activities.
Although the branch can engage in commercial, financial, industrial, and contractual activities, limited the activities that the branch will carry out to those stated in its contract in Egypt, which means treat the branch as an Egyptian company in all matters except corporate governance.

A- REGISTRATION OF A BRANCH OF A FOREIGN COMPANY iIN EGYPT:
Any foreign company has to register the branch in the Commercial Registry and General Authority for Investment and Free Zones whatever its legal form, which carries out any commercial, financial, industrial, or contracting activity in Egypt.

B- PURPOSES:
Register a branch can undertake any form of legal activity in Egypt in the Commercial Registry provided that it has a signed contract with an Egyptian entity either the public sector or private sector to provide the services encompassed by such activity, limit the activities that the branch will carry out to those stated in its contract in Egypt.

C- MANAGEMENT:
Managing the branch of a foreign company by a foreign manager. And the branch will be under the full control of its parent company. Branch offices’ activities are subject to review by General Authority for Investment and Free Zones to ensure compliance with laws and regulations.

D- CAPITAL:
There are no requirements for the minimum capital investment for the branch. However, made and transfer the initial capital investments in foreign currency to Egypt through a registered Egyptian bank.

E- TAXES:
The net profit of a branch is subject to corporate tax at the same rate as Egyptian companies. However, there are some exceptions for some branches who carry out some sensitive projects with the government.

If you are interested in establishing a branch office and have business in Egypt, we can help you at AlZayat law firm. A full-service law firm that aims to provide our clients with distinctive quality services and innovative legal. We have professional business law legal consultants in practice areas including corporation business and we have a long list of incorporations established by us in Egypt and the Middle East.
Our team of experienced corporate lawyers will help you through the two phases of incorporation procedures; our role at the pre-incorporation phase includes the incorporation procedures, extracting a Commercial Register and a Tax Card. Then, the post-corporation phase will include but not limited to opening a bank account in Egypt so you can proceed with all your financial proceedings, recruiting foreign labor or a foreign manager as well as local labor, drafting all the needed contracts, registering at the social insurance authority, dealing with the working visas as well as all the needed licenses for the branch.
Moreover, our team of lawyers will continue to follow-up with your legal situation and also we will keep providing you with legal advice regarding all matters includes taxes and insurance.
For any further inquiries, please don’t hesitate to reach out to us.