Egypt Law:Determining the Companies' Capital by the Free Currency

October 3, 2019

 

 


It may determine the companies' capital upon incorporation by any free convertible currency according to the following two conditions: 


1) To deposit the stated percentage of the capital of the Joint-Stock Companies or Partnerships Limited by Shares by any free currency in any bank registered with the Central Bank of Egypt into the foreign currency account. 
2) To deposit the full capital of the other legal entities of the companies by any free currency in any bank registered with the Central Bank of Egypt into the foreign currency account. 
In all cases, the funds shall be deposited with the same currency according to the data specified by the investor, or attorney thereof, in the investment application. Further, the companies shall be obligated to prepare the financial statements, as per the Egyptian accounting standards, with the same currency of incorporation without prejudice to the obligation of the stock companies concerning publishing their financial statements.  


The existing companies may apply for converting their capital from Egyptian Pound into any other free convertible currency in accordance with the following controls: 


1) Issuance of a resolution by the Extraordinary General Assembly or the Partners, as the case may be, by the majority stipulated in the Company's Memorandum or Articles of Association concerning the approval to convert the capital into any other free convertible currency.  
2) The company’s issued capital, prior to conversion, may not be less than 250 Million Pounds paid in full. 
3) The capital shall be converted according to the prevailing exchange rates determined by the Central Bank in the day of issuance of the resolution of the Extraordinary General Assembly or the Partners, as the case may be, concerning the conversion, on condition that it should complete the other procedures of conversion within at most (120) days of this date.  
4) To submit a certificate confirming that on the time of incorporation, the founders, shareholders, or partners have paid (100%) of the company's paid-up capital before converting in the free convertible currency transferred from abroad, and submit a certificate confirming that the shareholders paid at least (100%) of the remaining issued capital of the company by converting from foreign currencies transferred from abroad or from the profits made by the company prior to the conversion.  
5) To reword the financial statements of the company in the year preceding the conversion to become in the free convertible currency, as per the Egyptian accounting standards.  
6) The companies shall be obligated to prepare and publish the financial statements with the same convertible currency. 


The above controls shall be applied if there is a change to the company's legal entity or merging, dividing, or transferring it from the Free Zones regime into internal investment regime or vice versa if any of such cases led to changing the new company’s capital to become in a free currency, whether in the company which has a new legal entity, the merged company resulting from the merger, or the company converted from the Free Zones regime into internal investment regime or vice versa

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