Representative Office in EgyptDec 17, 2016
As regulated by Article 316 of Egyptian Company Law, representative offices of multinational corporations in Egypt might be registered to research the Egyptian marketplace and inspect the potential and growth of the parent company performing commercial activity.
The research will consist of studying market activity and taking market surveys, as well as other associated assessments. After a representative office of a ‘technical’ parent company has been determined, the itinerary of approved activity will also include the inspection of technical products inside the market.
Authorities in Egypt are mindful that most representative offices of multinational corporations are performing activities that surpass the instructed authority. As such, the General Authority for Investment (or GAFI), have begun an examination process where the behavior of representative offices can be audited. They now seek copies of the market research and data acquired by the office to make sure that the organization is not doing more than they are permitted to. Therefore, it is necessary that multinational corporations with representative offices in Egypt maintain meticulous records of all their studies so that they may be reviewed upon request. It is advised that these kinds of market reports are produced annually, at the very least.
Given the restrictions of allocated activities by a representative office, it might be more prudent to establish a separate entity so that you can conduct all activities as regulated by your business’ requirements. For instance, a joint stock-company, a limited liability company, or a branch office can conduct far more activities and, if requested, we can help you select the proper legal entity for your company requirements.
For more details, or if you would like to learn more about establishing a legal entity in Egypt and maintaining its good standing afterwards, don’t hesitate to call or email us.