Online Incorporation Updates in Egypt



Online company formation was first introduced in Egypt within Investment Law No. 72 of 2017 and its executive regulations (the “Law”). Chapter three of the Law regulates incorporating companies online, and specifies the steps to be followed for those wishing to establish new companies, and lists in Article 33 of the Law all documents needed to be submitted for completing this process.

The first step as clarified in Article 32 of the Law provides that those wishing to establish companies online must create an account on the electronic portal of the General Authority for Investments and Free Zones (“GAFI”), through which individuals obtain electronic incorporation services.

The second step is to complete the incorporation form, which specifies the form and legal system to which the company is subject to, and all data and documents necessary to obtain the service.

The third step is to submit electronically the incorporation application, or to complete all amendments (if any).

The fourth step is to pay the incorporation fees electronically in one payment to the account of the entities related to the provision of incorporation and post-incorporation services.

The fifth and final step is electronically signing all forms, and the authority expresses its opinion on the approval for the name of the company when submitting the application for incorporation.

So, what is new?

Egypt’s President directed the incorporation of companies through digital notification via a platform established for this purpose, in the context of removing all obstacles for start-ups and entrepreneurs, and allowing the opening of virtual companies without being bound by the necessity of having a physical headquarters, with the aim of saving expenses and facilitating those companies, which will eventually lead to attracting more and more investments in Egypt.

President El Sisi also directed facilitating the requirements for establishing single-shareholder companies, expanding the establishment of free technology investment zones, as well as expanding tax exemptions for start-ups, in addition to activating white lists to import electronic components for specialized companies.

The decree has not been officially published yet, but the spokesperson for the meeting that was held on Sunday the 15th of May 2022, declared very promising statements, which will make life easier for start-up companies and entrepreneurs.

Feel free to reach out to us at mail@eldib.com for all queries related to company incorporation around Africa, the Middle East and Turkey.

Eldib & Co jointly hosted a webinar on Maritime Law and Investment Law in North African Region

   

May 9, Beijing

China Council for the Promotion of International Trade (CCPIT) Hunan Sub-Council, China-Africa Chamber of Commerce (CACC), China Chamber of International Commerce (CCOIC) and Eldib & Co jointly hosted a webinar on ‘Maritime Law and Investment Law in North African Region’.

Ms. Zhao Jianying, vice president of CCOIC Bilateral Collaboration Department and Mr. Deng Luoxing, vice president of CCPIT Hunan Sub-Council delivered opening speech. Mr. Amr Eldib (managing partner) and Mr. Mohamed Eldib (Partner) attended as keynote speakers, sharing legal aspects and practical guidance covering Egyptian Maritime Law, March 23 Suez Canal Incident, cargo strand due to the pandemic, investment and trading of North African regions. The webinar attracted 150+ attendees from infrastructure, logistic, manufacturing, auto, energy and international trade sectors.

North Africa has strong potential and relatively more opened up FDI policies. As one of the biggest firms in the region, Eldib & Co continues its effort to assist global investors with this regard.

UAE guide for Egyptian start-ups and corporations



The United Arab Emirates is considered as one of the most ideal places to set up your business as it is popular with its sturdy economic growth worldwide. It is also considered to be one of the largest financial centers in the world. There is also no need to be concerned because the UAE government has set strict laws against illegal activities and fraud in the country.

In the UAE, companies can be formed in three different jurisdictions (Mainland, Free Zone, and Offshore);

Mainland Companies:
  • No restrictions on doing business outside the UAE.
  • Licenses issued by the Department of Economic Development (DED)
  • Different types of licenses (Professional, Commercial, and Industrial)
  • Professional licenses cover professions, services, and craftsmen.
  • Commercial licenses cover all kinds of trading activities.
  • Industrial licenses cover manufacturing.
Free Zone Companies:
  • No UAE national shareholding required.
  • No currency restrictions.
  • Exemption of import and export tax.
  • Exemption of corporate tax for 15 years and eligible for renewal for additional 15 years.
  • Only operate within the free zone.
Offshore Companies:
  • Exemption of corporate, personal, and capital tax.
  • International Invoicing.
  • Multi-currency bank accounts.
  • No minimum share capital.
  • Full foreign ownership is allowed.
General steps for incorporating a business in UAE:
  1. Reserving the name of the business and submitting the application to Department of Economic Development (DED) and paying the fees.
  2. Obtaining preliminary approvals on the type of business, trade name, and identity of the partners.
  3. Drafting the Memorandum of Association and a local agent agreement if required.
  4. Acquiring business premises.
  5. Opening a bank account.
  6. Obtaining a trade license.
  7. Obtaining a company registration certificate from the Ministry of Commerce.
The most common legal form of companies in the UAE is the Limited Liability Company (LLC) as it is the preferred choice for entrepreneurs when the main basis of the business is to make sales in the region. Even though other types of companies allow 100% of foreign ownership, foreign investors are permitted to only hold up to 49% of quotas in LLC companies.

Once you determine the structure of the business and local partners, you will need to:
  1. Choose the name of the business and reserve it at the Department of Economic Development (DED).
  2. Draft the Memorandum of Association and have it signed at the Notary in the presence of all partners.
  3. Obtain the regulatory approvals and arrange a lease agreement.
  4. Obtaining a trade license.
  5. Register the company with the authorized industry and commerce department.
Eldib & Co helps companies comply with UAE compliance requirements with a full suite of services In addition to our global portfolio of services; we provide extra support, tailored to specific local requirements.

Contact us at mail@eldib.com to find out how we can help establish or grow your business.

DELAWARE GUIDE FOR EGYPTIAN START-UPS AND CORPORATIONS



  Incorporating your offshore company in Delaware comes with great benefits. The number of startup and offshore company incorporations has increased tremendously in Delaware due to the flexibility that the state provides to company shareholders.
There are certain steps and requirements to ensure the validity of the incorporations process;
 
  1. Determining the structure of the business:
Just like any other jurisdiction, you need to begin with choosing the structure that best fits your business and its activities. In Delaware, there are three popular types of company structure:  

Doing Business As “DBA”

A business has both “Legal Name” and “True Name” whereas the name of the business may be different from its registered or legal name.

  Limited Liability Company “LLC”
  • The simplest to establish.
  • Flexible and requires minimal maintenance.
  • Tax benefits and implications.
  • Requires fewer administrative formalities and procedures.
  • The liabilities of the members are limited to their investment.
  • Does not require a minimum capital.
 

Corporation
  • The ownership of the company is in the form of shareholder stocks.
  • Managed by directors who are elected through an annual stockholder meeting.
  • Mandatory for certain occupations such as architects, lawyers, doctors, etc.
 
  1. Choosing The Business Name:
When choosing the name for your business, you must first make sure that it is not already registered with the Delaware Secretary of State. You can check your proposed company name within Delaware’s business name database. According to Delaware law, the name must include for Company, Corporation, Association, Co., Inc., etc. which can be amended in the future.  

 
  1. Appoint a Registered Agent:
Delaware corporations are required to have a registered agent in Delaware who can either be an individual or an entity and is authorized to conduct business in the state of Delaware. The list of Registered Agents is on the Delaware Division of Corporations website. The Registered Agent will receive all legal documents on behalf of the company. You may act as your own registered agent if your startup is physically located in Delaware.  

 
  1. Obtaining Federal EIN:
The Federal Employer Identification Number must be obtained before opening the bank account. The EIN protects the business owner from identity theft, as it acts as a social security number.  

 
  1. Submitting The Forms:
  “Doing Business As”
DBAs paperwork is submitted by the county.  

LLC and Corporation:
Forms and certificates are filed with the Delaware Department of State Division of Corporations.  

 
  1. The Cost of Registration:
The cost to register depends on the structure of the business. For example, In the case of LLC, the filing fee is $90, and a certified copy of the filing is $50. In the case of registering as a corporation, the filing fee depends on the amount of stock you wish to offer which will average $300.  

 
  1. Ongoing Requirements:
  • DBAs need to be renewed every 5 years.
  • LLCs are taxed $300 a year and do not file an annual report.
  • Corporations must file an annual report and a franchise tax.


Eldib & Co helps companies comply with Deleware compliance requirements with a full suite of services In addition to our global portfolio of services; we provide extra support, tailored to specific local requirements.  

Contact us at mail@eldib.com to find out how we can help establish or grow your business.  

Egypt’s New Fintech Law and Regulations



Egypt’s first Fintech Law No. 5 of Year 2022 regulating and developing the use of financial technology in non-banking financial activities (the “Law”) aims to enhance financial inclusion and expand the base of beneficiaries from the non-banking financial activities and reduce the costs to benefit from these services and activities.

The Financial Regulatory Authority (“FRA”) is the sole authority responsible for the execution of this law as it is entitled to:
  1. Take the procedure of incorporating Fintech companies subject to this law.
  2. Grant the necessary license and approvals.
  3. Use technological applications to ensure compliance with the laws.
  4. Use technological applications to collect digital data to investigate it.
  5. Establish control over Fintech application whether by itself or through a third party.
  6. Establish data and hardware security controls.
  7. Supervise and control over Fintech companies.
  8. Receive complaints from those who deal with Fintech companies.
  9. Prepare and publicize the necessary studies and statistics to enhance Fintech activities.
  10. Spread awareness on Fintech activities.
Non-banking financial activities that are subject to the supervision and control of the FRA include:
  • Insurance
  • Real-estate financing
  • SMEs financing
  • Finance leasing
  • Factoring
  • Consumer finance
  • Microfinance
Fintech companies must reconcile their status in accordance with the provisions of this law within 6 months from the date of the issuance of its executive regulations. This duration may be extended to not exceed two years by the board of the FRA. It is permissible by a decision of the Prime Minister based on the proposal of FRA, to extend the period for another two years.

In order to receive the license to practice Fintech activities, the following criteria must be fulfilled:
  1. The company’s operations are limited to practicing the licensed activities.
  2. Specifically determining the structure of direct and indirect ownership and the related parties.
  3. The company shall have the equipment, technological infrastructure, information systems, security, and insurance necessary to carry out the activity in accordance with the requirements issued by the board of the FRA.
Companies may use the following digital applications to achieve the license or FRA approval:
  1. Electronic application for financial consultant
  2. Electronic application for microfinance
  3. Electronic application for insurance
  4. Electronic application consumer finance
 
Sanctions:
  • Imprisonment no less than 6 months and a fine not less than EGP 200,000 and not exceeding EGP 1,000,000 or either of these sanctions, for practicing, establishing, or operating any of the activities stated in this law without obtaining the necessary approvals and license.
  • A fine not less than EGP 50,000 and not exceeding EGP 500,000 for violating article 7 of this law which entails the rules and regulations by the FRA for Fintech companies.
  • Imprisonment no less than 1 month and a fine not less than EGP 20,000 and not exceeding EGP 100,000 or either of these sanctions, for preventing any of the FRA employees from performing their duties and/or intentionally hiding required data or documents.
  • Imprisonment no less than 3 months and a fine not less than EGP 200,000 and not exceeding EGP 1,000,000 or either of these sanctions, for violating article 13 of this law which entails maintaining complete confidentiality.

Eldib & Co helps international and local companies comply with Egyptian laws and regulations. Contact us at mail@eldib.com to find out how we can you establish your own fintech company.  

THE NETHERLANDS GUIDE FOR EGYPTIAN START-UPS AND CORPORATIONS



With its open economy, the Netherlands is renowned as one of the world’s leading financial centers and a jurisdiction that hosts a sizable international business community. The country boasts sophisticated infrastructure and a well-educated populace that is widely considered to be pragmatic, tolerant and open-minded. In addition to an attractive tax climate, these features make the Netherlands one of the most open economies in the world for entrepreneurs, starts ups international corporations. The Netherlands offers a wide tax treaty network, a competitive corporate income tax rate, a full participation exemption for capital gains and dividends from qualifying participations and branches, and beneficial measures for highly skilled migrants.

The country’s competitive fiscal climate and friendly business environment make it an attractive location for Egyptian start-ups, corporations and asset- and -fund managers to establish their legal structures and to place their European or global headquarters.

UBO-register
Companies in the Netherlands will be required to register their ultimate beneficial owner (UBO). In short, the UBO of the company is the natural person who holds a direct or indirect ownership of more than 25% of all shares, voting rights or ownership interest, including bearer shares. In case no UBO can be designated based on abovementioned criteria, or if there is any doubt as to whether the individual designated as the UBO is the ultimate owner or ultimately controls the entity, the ultimate beneficial owner will be each natural person that is part of the higher management personnel of the company (also referred to as ‘pseudo-UBO’).

Business Vehicles
Business activities can be undertaken in the Netherlands through a company or partnership or by an individual. A Dutch company can generally be incorporated in a few days. A foreign person (individual or legal person) can also perform business activities. The Netherlands does not levy capital tax or stamp duty on the incorporation of an entity or on capital contributions thereafter.

Corporation
There are two types of corporations in the Netherlands. The more common and used by many Egyptian start-ups and corporations is a private limited liability company (BV). The capital of a BV is divided into shares. There are practically no minimum capital requirements (i.e., €0.01 is sufficient). The founders of the BV will determine the issued capital (at least one share) and required paid-up capital. The shares of a BV are privately owned. Different types of shares are possible to vary the voting rights of shareholders and/or to vary their dividend rights.

The other type of corporation is a public limited liability company (NV). The capital of a NV should amount to at least €45,000 and is divided into shares. In principle, the shares are freely transferable and cannot be issued without voting rights or profit rights. The NV is mainly used for corporations that are very large and/or will be listed on the stock exchange.

Both the NV and the BV are incorporated by the execution of a notarial deed, and the liability of the shareholders is in principle limited to the capital contributed. The NV and BV are also both subject to corporate income tax and their dividend distributions are subject to dividend withholding tax.

Steps for Incorporating in the Netherlands
Starting a business in The Netherlands is a relatively straightforward process and can typically be completed within a few days. The most common types of business entities when entering the Dutch market include a private company with limited liability (BV) and a public limited liability company (NV), among other types. For a BV, no initial minimum capital investment is required at the time of incorporation. Shareholders and directors can be Dutch or non-Dutch or even corporate entities.

The required steps for incorporating a corporation in the Netherlands are as follows:
  1. In the case of a public limited liability company (NV), depositing the minimum capital required in the bank
  2. Checking the company name for appropriateness and validity on the website of the Netherlands Chamber of Commerce (KvK)
  3. Drafting and signing the company’s deed of incorporation, including the company’s Articles of Association, executed by a civil law notary
  4. Registering the company in the commercial registry at the local Chamber of Commerce, and obtaining a registration number
  5. Registration with the local tax authorities and the social security authorities
Within five days of filing the incorporation documents, the Chamber of Commerce will send an official copy of your excerpt from the Commercial Register, which verifies that the company has been officially registered as a legal entity.

Opening a Bank Account
As in many jurisdictions, opening of a bank account in the Netherlands is necessary for conducting business in the country, but can present challenges. To conduct business in the Netherlands, an IBAN, or international bank account number, is required. If a relationship with a bank in the Netherlands already exists, opening a bank account may be less complex; however, if there’s not yet a relationship, it can take anywhere from a few weeks to up to two months to open an account, as banks may scrutinize an applicant’s funding sources and business plans. As an alternative, a bank account can be opened with one of the various Netherlands-based fintech banks. We have cooperated with a number of fintech banks and can assist in fulfilling the client acceptance process.

For companies operating in the Netherlands it’s essential to keep up with changing regulatory requirements and take the necessary steps to stay fully compliant.

Eldib & Co helps international companies comply with Dutch compliance requirements with a full suite of services In addition to our global portfolio of services; we provide extra support, tailored to specific local requirements.

Contact us at mail@eldib.com to find out how we can help establish or grow your business.

 

Doing Business in China: Company Incorporation



With a population of approximately 1.4 billion people, China is a dynamic market with immense potential. In recent decades, China’s business environment for foreign investors has continued to improve, and China has been one of the most favored investment destinations for companies from around the world for many years. Going forward, China’s policies to create a favorable environment for foreign companies will continue to develop positively. Therefore, foreign investors will have many opportunities to share a slice of the economic cake.

Despite its huge market potential, China is still a complex market for foreign investors considering legal and cultural challenges. Choosing the right company structure, when incorporating a company in China, is essential for smooth business operation as well as for time and cost management. The three main company types in China for foreign investment are outlined hereunder:

– Representative Office (RO) – An RO serves as a liaison office representing its parent company overseas, and does not have its own legal entity. The function of an RO is limited to nonprofit-generating business activities such as marketing and research. While ROs are not permitted to hire local staff directly, a qualified labor dispatch agency may be engaged accordingly.
– Wholly Foreign Owned Enterprise (WFOE) – Owned by one or more foreign investors, a WFOE has its own legal entity. It is often established as a limited liability company, where each investor bears the liability limited to the amount of capital contributed. A WFOE is more flexible in terms of business activities engagement, foreign ownership and management control.
– Sino-foreign Joint Venture (JV) – A JV is a company formed by at least one foreign investor and one Chinese investor. It is a new legal entity with the structure of Equity Joint Venture (EJV).

The registered capital of an EJV shall keep consistent with the scale and scope of production and operation of the company. The parties shall share the profits and bear risks and losses according to the proportion of registered capital. Foreign investors who want to invest in restricted industries or those who aim for Chinese partner’s channels often choose to form a EJV. According to the World Bank, China ranks 27th from 190 worldwide economies for starting a business, which indicates that the country offers relatively convenient and fast procedure for foreign businesses to enter the market. The most common legal form for foreign investors is limited liability companies which require registered capital only; no paid-in minimum capital is required. Each city across China has different requirements for company incorporation; however, below are the basic documents to be submitted to local Administration for Market Regulation (AMR):

– Application form;
– Articles of Association;
– Shareholder’s personal IDs;
– Authorization Letter;


Copy of real estate certificate for the office / lease agreement (signed and sealed by the property owner); Other supplementary materials required by AMR. After all materials are submitted, it takes between 2 to 4 weeks for AMR review before the investor can obtain a business license and company seals, following with tax registration and the opening of a bank account, which may take between 1 to 2 months. It is also worth mentioning that since 2020, China made paying taxes easier by implementing a preferential corporate income tax rate for small enterprises, reducing the value added tax rate for certain industries and enhancing the electronic filing and payment system.

With an office in Shanghai, Eldib & Co would be happy to assist your plan to enter the country. For more information and inquiries, please contact us at china@eldib.com.

Egyptian Patent Office – Transitional period to shift from the paper system to the electronic system

Please find below resolution No. 16 of 2022 dated 23 January 2022 issued by the President of the Academy of Scientific Research and Technology to set the Transitional period to shift from the paper system to the electronic system to all procedures submitted to the Egyptian Patent Office.


Resolution No. (16) of 2022 On 23/01/2022

The President of the Academy of Scientific Research and Technology

After perusal of:

• The provisions of Law No. 82 of 2002 on the Protection of Intellectual Property Rights;
• Presidential Decree No. 377 of 1998 on the reorganization of the Academy of Scientific Research& Technology;
• Prime Minister Decree No. 1366 of 2003 promulgating the Implementing Regulations for Law No. 82 of 2002 on the Protection of Intellectual Property Rights;
• The statements presented by Dr. Mona Yahia, President of Egyptian Patent Office;

Decided as follows:

(Article I)
The period from 01/01/2022 to 28/02/2022 shall be deemed a transitional period to shift from the paper system to the electronic system. This Resolution shall apply to all procedures contained in the applications submitted to the Patent Office, to include the procedures with legal deadlines.

(Article II)
The provisions of this Resolution shall be applied by all the competent departments.


(Article III)
This Resolution shall come into force as of 01/01 2022, the date set for the start of work at the Patent Office electronically.


(Signed by)

President of the Academy of Scientific Research and Technology

(A handwritten signature appears on this side)

Prof. Dr. Mahmoud Sakr


OAPI 2022 New Trademark Laws and Official Fee Schedule



Effective January 1st, 2022, a new Trademark Official Fees Schedule has come into force in the OAPI jurisdictions: Benin, Burkina Faso, Cameroon, the Central African Republic, Chad, Comoro Islands, Congo, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Ivory Coast, Mali, Mauritania, Niger, Senegal and Togo.

The same will be reflected in our schedule of fees going forward, our professional fees remain unchanged. Importantly, trademark applications no longer cover 1-3 classes; official fees are payable for the 2nd class and each additional class. Further, there is no fee for color publication and goods and services can now be included in a single application.

Should you have any inquiries please contact mail@eldib.com or oapi@eldib.com