A new compliance requirement is now imposed on companies doing business in Egypt, entailing disclosing the ultimate beneficial ownership (UBO) of any entity. This information will be publicly available.
On 1 March 2020, the Executive Regulations of the Commercial Registration Law No. 234 of 1976 were amended by virtue of the Minister of Supply and Internal Trade Resolution No. 41 of 2020 ("Resolution") requiring:
- Entities registered in Egypt to hold a register disclosing the ultimate beneficial owners of the entity ("UBO Register").
- The UBO Register should include the names and details of the UBO having actual ownership of a company or having control over a company registered in Egypt. Control is not defined and the minimum ownership level is unspecified. In the absence of clear definitions, criteria and definitions included in the money laundering regulations may apply. Further guidelines or circulars may be issued to shed more light on the scope of application.
- The Commercial Register, issued by the Commercial Registration Office, will include a new placeholder that will reflect the details of the UBO. This information is considered material information that must be included to register any entity in the Commercial Register.
- The UBO Register must be held throughout the life of the entity and for five years thereafter.
- This change has become effective as of 9 March 2020.
What it means for you
- The UBO information will now become publically available.
- Companies having a presence in Egypt must comply and are now required to hold and update a physical UBO Register. Any change to the UBO must be immediately recorded.
- Given that such information is considered material information, the Commercial Registration Authority may suspend some of the services pending the provision of the details of the UBO.
- The Resolution does not define "control" and it is not clear how far up the chain the authorities will look.
We are closely monitoring the practice and implementation to assess how the relevant authorities will apply this change.