Incorporation of Transportation Companies in Egypt25 Apr 2019 3064 Views
The New Parliamentary Regulations on the Procedures of Incorporation of Transportation Companies according to the Egyptian Investment Law:
In the context of successive developments in the laws and regulations that have been observed in the last period, the Egyptian Parliament approved the draft of a Law that stipulates establishing the Domestic and International Land Transport Regulatory Authority. Such authority is considered as a legal person to organize the companies working in the transportation activities in Egypt. The said law leads to the unification of the mechanisms of regulation of domestic land transport services for passengers and goods between governorates as well as international land transport services in one authority through finding a legal alternative well organized and regulated.
Presidential Decree No.348 of 2012 stipulates the establishment of a regulatory authority for regulating land transport services for passengers and goods on the main way between the governorates. In addition, the Presidential Decree No.439 of 2012 stipulates the establishment of a regulatory authority for regulating transport services in Greater Cairo area, after the establishment of these authorities the obligations and competences of the General Authority for Road and Bridges will be transferred to the Domestic and International Land Transport Regulatory Authority.
Moreover, the parliament imposed a penalty of 50,000 EGP as maximum limit on establishing companies or opening branches for the companies working in transportation activities in Egypt without obtaining license from the Domestic and International Land Transport Regulatory Authority.
Article No.13 of the above-mentioned draft Law stipulates: “Subject to the provisions of Egyptian Companies Law No.159 of 1981 amended by Law No.4 of 2017 and Investment Law No.8 of 1997 amended by Law No.72 of 2017, it is not permissible to approve the establishment of companies or branches working in transportation activities, except after obtaining an approval from the Domestic and International Land Transport Regulatory Authority, according to this law and its executive regulations”.
According to the Egyptian Investment Law No.72 of 2017 and its executive regulation No.2310 of 2017, in addition to the new regulation of the General Authority for Investment and Free Zones (GAFI), companies working in transportation activities are obliged in Article No.1 of the executive regulation to obtain an initial approval from the Ministry of Transportation. Moreover, the said companies shall submit acknowledgment stating that they will not practice these activities except after obtaining the final approval from the Ministry of Transportation according to the measures prescribed in the executive regulation No.2310 of 2017.
In order to obtain the approval from the Ministry of Transportation in Egypt , companies shall submit a feasibility study to the License Department at the Ministry, which includes information about activities, capital, and bus numbers. The License Department will examine the application and issue a letter directed to the General Authority for Investment and Free Zones (GAFI) stating that the Ministry approved the establishment of the company and the practice of transportation activities on condition that the capital of this company shall not be less than 10,000,000 EGP.
After finishing the procedures of establishing the company, the company must provide the License Department at the Ministry with the following documents:
- The Commercial Register of the company.
- The Articles of Association of the company.
- A Letter from the company directed to the Ministry.
- The company must identify the number of buses, which are expected to operate.
The Ministry also obliges the companies to renew the license annually and this condition is related to the obtainment of the Ministry’s approval on the renewal of bus licenses.