Work is no longer constrained to a single office or even a single country. As companies become more global, many are expanding and doing business in other countries. Expansion usually entails opening some kind of office or presence abroad. In light of this, establishment of branches of foreign companies could be the best option for your globalizing business. As it helps companies strengthen their presence in a foreign country.
Egypt is a strategic location for foreign companies to expand their businesses in the Middle East and Africa. It has a large population, a growing economy, and a favorable investment climate. One way for foreign companies to enter the Egyptian market is to establish a branch. A branch is a legal entity that is separate from the parent company, but it is subject to the control and direction of the parent company. A branch of a foreign company can carry out any lawful activity that is consistent with Egyptian laws and regulations.
Why Establishing a Branch of a Foreign Company in Egypt?
There are several benefits to establishing a branch of a foreign company in Egypt, including:
- Access to a large and growing market: Egypt has a population of over 100 million people, and its economy is growing rapidly.
- Favorable investment climate: The Egyptian government has implemented a number of reforms to make it easier for foreign companies to invest in the country.
- Strategic location: Egypt is located at the crossroads of Africa, Asia, and Europe, making it a strategic location for businesses that want to reach global markets.
Benefits of Establishment of branches of foreign companies
The establishment of branches of foreign companies carries distinct benefits and incentives as follows:
- Market Expansion: Establishing a branch in Egypt allows foreign companies to expand their presence in the Egyptian market, tap into new customer bases, and explore business opportunities. It enables them to establish closer relationships with local partners, suppliers, and customers.
- Knowledge Transfer and Technology Exchange: By establishing a branch, foreign companies can transfer knowledge, expertise, and advanced technologies to Egypt. This contributes to capacity building, skills development, and the transfer of best practices, ultimately benefiting the local workforce and economy.
- Brand Recognition and Reputation: A branch of a well-established foreign company can enjoy brand recognition and reputation, which can enhance its market position and credibility in Egypt. This can create a competitive advantage and attract potential clients, partners, and investors.
- Transfer of foreign currency: the mother company is entitled to get back the profits gained by its branch in Egypt in foreign currency.
Registration procedure of a branch in Egypt
To set up a branch in Egypt, the parent company has to obtain the approvals of the Minister of Trade, the General Authority for Investment and Free Zones, the Minister which is overseeing the relevant sector of the branch activity and the Investment Authority.
A branch also has to be registered in the Commercial Registry and with the Companies Department. The registration application has to be submitted together with other documents, such as:
- The Articles of Incorporation of the business.
- An audited balance sheet for the latest fiscal years.
- The business decision or decisions which authorize(s) setting up of a branch in Egypt, naming its manager and assigning the needed capital for its activities.
- A copy of the contract the business has signed related to its operations in the country.
Establishment of branches of foreign companies in Egypt is a viable option for foreign companies that are looking to expand their businesses into the Middle East and Africa. However, it is important to note that the establishment process is complex and requires careful planning and execution. By cooperating with our legal expert team at “Consortio Law Firm”, foreign companies can increase their chances of success in establishing a branch in Egypt.
In case you would like to learn more about establishment of branches of foreign companies in Egypt, or for assistance to open a company in Egypt, Please Contact us Now via the phone number 002 01028806061 or via WhatsApp or email Info@consortiolawfirm.com.