Legal Framework of E-commerce business in Egypt

user Youssry Saleh & Partners calender 28 Aug 2022 views 2289 Views

E-commerce can be defined as a system of buying and selling goods, services, and products using Internet and transferring money and data to carry out these transactions. It is usually used to refer to the sale of products and goods on the Internet, but it can be described by any type of transaction. E-commerce can be used to make time and money easier for both: distributors and consumers, and there are many platforms that work in the field of E-commerce such as Jumia, Amazon …etc. and other major successful and profitable companies. E-commerce also helps to interact with consumers by sharing and creating content through online platforms such as YouTube, Instagram, Facebook, Tiktok …etc. and helps to promote brand’s name and business, attracting new clients and building stronger relationships with existing clients.

In order to incorporate an E-commerce company in Egypt that will promote its products through websites or mobile applications the following laws will apply: Companies Law No.159 of the year 1981, Investment Law No.72 of the year 2017, and Decree No.26 of the year 2020 regarding the issuance of the licensing regulation promulgated by the Supreme Council for Media Regulation (SCMR) and the National Telecommunications Regulatory Authority (NTRA). These are the main regulations restricting registration of E-commerce business in Egypt. Companies seeking to practice this activity in the territory of the Arab Republic of Egypt must comply with the aforementioned laws and regulations.

The Supreme Council for Media Regulation is entitled to issue licenses for having websites or applications “without prejudice to the provisions contained in the law and the Executive Regulations regarding electronic newspapers and the website of the media outlet, the license for the website (page, link or application) that provides news, informational or electronic commercial advertising services and that provides content that includes promotion of business, services, products or people through the international information network (the Internet) inside the Arab Republic of Egypt, in accordance with the provisions of these regulations”. (Article 13, Decree No. 26 of the year 2020).

Pursuant to Article (14) of the aforementioned Decree, Egyptian persons, natural or juridical, are entitled to have their own websites, as whoever, among them, owns websites shall not conditionally be deprived of exercising its political rights, and no judgement shall be rendered charging that Egyptian person in a felony or misdemeanour of moral turpitude or breach of honesty or public morals unless the person has been rehabilitated. The owner who is a private legal person is also required to take the form of a company owning the website and composing of one or more persons, whose capital must not be less than EGP 100,000 (One Hundred Thousand Egyptian pounds).

Moreover, according to Law No. 10 of the year 2003 on Telecommunications Regulation, the company must obtain a license from the National Telecommunications Regulatory Authority (NTRA).

NTRA is the official authority concerned with regulating telecommunications sector through implementing and establishing policies for developing and disseminating telecommunications of various types, in line with developing communication technology and ensuring that needs of individuals, institutions, and companies, as well as the needs of the various State sectors – production, economic, administrative, and services sectors – of telecommunications services, are met most properly and in suitable prices while encouraging investment in this sector on a non-monopoly basis and in light of free and open competition between the best international and national experiences ensuring openness and transparency of information and provision of comprehensive services as well as protection of users’ rights.

Although E-commerce has become the preferred transaction means for both consumers and businesses this mode of trading poses higher risks to the consumer, which inevitably leads to problems that require innovative regulating and enforcement methods. In this context, the role of Egyptian Consumer Protection Law comes to provide the required protection to the consumer by setting rules.

Article 37 of Consumer Protection Law No.181 of the year 2018 states that “Before concluding the contract remotely, the supplier is obliged to provide the consumer, in a clear and explicit way, with information and data that will enable him to make his decision to contract, in particular the following:

  • Supplier data, including name, address, phone number, e-mail, if any, commercial registration number and tax card, whether the supplier belongs to a legally regulated profession, his professional capacity and the name of the authority or professional organization registered or registered therein, in addition to any information that allows identification of the factory or the importer, as the case may be.
  • Data of the product being offered, including its source, its essential qualities and characteristics, how to use it, and the risks that may result from such use, if any.
  • The price of the product and all amounts that may be added to the price, in particular fees, taxes and shipping costs.
  • Duration of the show.
  • The guarantee provided by the supplier.
  • The services he provides after contracting (if any).
  • Duration of the offer, which deals with services provided periodically.
  • The date and place of delivery, and the expenses due upon delivery.
  • Provisions of recourse in the contract, especially the period during which the consumer may revert to it.
  • Data of the maintenance center and the method of performing maintenance for the commodities specified in this law.
  • Contract data that will be sent to the consumer in the event the contracting process is completed. Moreover, any other data that guarantees the rights of the consumer is specified by the executive regulations of this law.”

In addition, The Egyptian Legislator is working on a Bill with regard to the electronic transactions, known in the media as electronic commerce, whereby the upcoming legislation will also regulate Egypt’s trend towards digital transformation, and it is considered as a complement to the laws against electronic crime and the protection of personal data.

The Bill will also regulate the position of advertisements on social media in light of the presence of fake advertisements and the spread of electronic gangs that carry out fraudulent actions against users.

This Bill is expected to have an impact on E-commerce businesses in Egypt and accordingly on the consumer by imposing many rules to control the online transactions on different online platforms and E-commerce companies and the Bill is also expected to be issued in the near future.

Recently, a new trend has appeared worldwide where individuals take social networks platforms such as YouTube, Instagram, Facebook, Tiktok …etc. to make money through them, the Egyptian Tax Authority issued a statement alerting “bloggers”, “Youtubers” and content makers – on social networking sites – that they must register with the Egyptian Tax Authority and open tax files for them – as they were not subject to taxes before this statement- for those whose income exceeds five hundred thousand pounds per year. This is in accordance with the Income Tax Law No. 91 of the year 2005, Unified Tax Procedures Law No. 206 of the year 2020, and Value Added Tax Law No. 67 of the year 2016.