One of the most common—and often unexpected—challenges that foreign companies face when doing business in Egypt is the late-payment culture.

Whether you sell machinery, technology, or services, a delayed payment can quickly escalate into a financial crisis. A typical foreign principal often asks us:

  • “Can we legally recover this if we don’t have a stamped contract?”

  • “Do we really need to sue, or is there a faster way?”

  • “Can we seize their assets if they ignore us?”

At Consortio Law Firm, we answer these questions with “Execution Reality.” This guide explains exactly how we enforce debts in Egypt on behalf of international businesses, moving from negotiation to seizure.

1. Why Non-Payment Happens (The Root Cause)

Foreign companies often misunderstand why the money isn’t coming. It usually falls into three categories:

  1. Cyclical Liquidity: Many Egyptian companies operate on extended credit cycles. They prioritize cash flow over contractual deadlines.

  2. Bureaucracy: In sectors like construction or government, payment requires multi-layered sign-offs that get stuck.

  3. The “Test”: Some customers intentionally delay to see if you have local teeth. If they sense you are hesitant to sue, you move to the bottom of the payment pile.

Consortio Insight: If a customer goes silent after delivery, it is rarely an “admin error.” It is a liquidity test. You must pass it by showing immediate local legal presence.

2. Your First Priority: Secure Your Position

Before we send a single letter, we must ensure your “evidence package” is litigation-ready.

  • The Contract: Ideally written and signed.

  • The Invoices: Stamped invoices are powerful, but even unstamped ones work if backed by delivery proof.

  • The “Golden” Evidence: Delivery Notes or Completion Certificates. In Egyptian courts, proving you delivered the goods is often more important than the contract itself.

  • Email Trails: Yes, Egyptian courts accept emails as evidence of debt acknowledgment, provided they meet specific digital criteria.

3. The Consortio 3-Phase Escalation Model

We do not jump straight to a lawsuit. That is slow and expensive. Instead, we use a structured escalation ladder designed to force a settlement.

Phase 1: Commercial Pressure (The “Warning Shot”)

Egyptian companies rarely respond to polite emails from abroad. They do respond to a formal Legal Notice (Inzar) from a local law firm.

  • Action: We send a formal demand letter on Consortio letterhead.

  • The Message: “The file has been handed over to legal. You have 7 days to pay or face asset seizure.”

  • Result: Over 50% of cases settle here because the debtor realizes the “foreign” company now has “local” power.

Phase 2: Pre-Litigation (The “Pressure Point”)

If they ignore the warning, we escalate without yet filing a full lawsuit.

  • Police Report: If there is evidence of fraud or a bounced check, we file a police report. The threat of criminal liability usually triggers immediate payment.

  • The “Payment Order” Assessment: We check if your debt qualifies for a Payment Order (Amr Ada’)—a fast-track judicial order issued in 3 days.

[Internal Link] Does your debt qualify for a fast-track Payment Order? Check the 4 strict conditions in our guide: Getting Paid: The Payment Order Route

Phase 3: Litigation & Enforcement (The “Nuclear Option”)

If we must go to court, we do not just sue for the money; we sue to execute.

  • Provisional Attachment: We petition the judge to freeze the debtor’s bank accounts or assets while the case is ongoing. Nothing brings a debtor to the negotiating table faster than frozen accounts.

  • The Executive Formula: Once we win, we obtain the “Executive Formula” that allows bailiffs to seize inventory, vehicles, or real estate.

4. Common Red Flags of Bad Debtors

Watch out for these behaviors. If you see them, call us immediately:

  1. “Finance is reviewing”: A classic stall tactic.

  2. Partial payments with long gaps: Buying time to avoid legal action.

  3. Refusal to sign delivery notes: They are trying to destroy your evidence trail.

5. Preventing the Problem: “Enforcement-First” Drafting

The best way to recover debt is to structure your contract so you never have to chase it.

  • Use Checks, Not Transfers: In Egypt, a bounced corporate check is a criminal offense. Holding checks gives you massive leverage.

  • Define “Acceptance”: Your contract should say “Goods are deemed accepted if no objection is received within 3 days.” This prevents them from claiming “defects” 6 months later to avoid paying.

[Internal Link] See how bad drafting ruined a supplier’s case (and how we fixed it) in this Case Study: Debt Recovery & Enforcement-Driven Drafting

Summary for the CFO

  1. Don’t wait: The longer you wait, the harder it is to collect.

  2. Document everything: Delivery notes are your best friend.

  3. Escalate locally: A letter from Cairo works 10x better than a letter from London.

[Internal Link] Want to understand the full court system? Read our Commercial Litigation Guide

[Internal Link] Facing a financial crisis? Learn about our Corporate Recovery Services

3. Relevant Resources

For deeper insights into specific recovery strategies, explore these Consortio articles: