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GAFI to draft a new Companies Act in line with changing investment climate: The General Authority for Investment and Freezones (GAFI) plans to prepare a revamped companies law to replace the Companies Act, GAFI boss Hossam Heiba told Hapi Journal. This comes as part of efforts to keep up with developments in the investment arena seen over the past few years and to provide a legislative framework that aligns with the increasing reliance on electronic documents. The authority is expected to put the draft legislation up for public consultation after Ramadan, he said.
Unfamiliar with the Companies Act? The law provides a regulatory framework for how companies in Egypt are incorporated, managed, and dissolved. The law also covers shareholder rights and the responsibilities of boards. You can check out the full text of the law on GAFI’s official website.
What can we expect from the new law? The new law will focus on the incorporation procedures for companies, post-incorporation services — such as documenting board meetings or general assemblies — and recognizing electronic procedures and documents, which are still not recognized under the current legislation, Heiba revealed.
Creating a unified authority: The new law will select a single authority through which companies can register their establishment — a process that currently spans eight different entities.
“The process of establishing companies in Egypt currently differs from other countries, as it involves numerous procedures and requires fulfilling all founding requirements right from the beginning,” Heiba was quoted as saying. “There will be a move to divide these procedures into two phases: the first will only involve the establishment of the company and give it a 12-month grace period to define its activities and meet the remaining requirements,” he said.
The authority has done its homework: GAFI looked into legislation from 20 countries in preparation, Heiba said, adding that the authority also worked to identify recurring issues in the existing law.
Remember: The government has been working tirelessly to boost investment, introducing reforms and incentives to facilitate the investment process with the aim of attracting a large number of investments.
