However, a very important distinction between the two exists, whereas branch office can engage in commercial activity in Egypt and earn profits, and is licensed to perform activities similar to those carried out by the mother company in its home jurisdiction, a representative office is not permitted to perform commercial activity and earn profits but is limited to marketing research and/or promoting its mother company’s products and services and establish network of connections in Egypt. Our attorneys assist foreign companies to establish its representative office in Egypt providing consultations throughout the process.
As discussed under the Law Number 159, a foreign entity may establish a representative office in Egypt.
Accordingly, certain policies and regulations shall be relevant:
- The registration of the representative office must take place under the supervision of the General Authority for Investment and Free Zone (GAFI). In case the office holds a position of a “technical” office, the entity shall be registered with the Ministry concerned with the area of practice.
- The main scope of activity includes conducting market research and surveys, along with product review in the market. Additionally, it may take on the responsibility of monitoring commercial activities of other business entity
- A foreign manager may take upon a responsibility for the management of the representative office, with the control being in the hands of the parent company. GAFI is in charge of the review process of the activities of the representative office
- No minimum capital requirement is applied. The expenses are paid by the parent company
By law representative office does not perform any commercial activities, no profits are gained. Therefore, the entity is not subjected to taxes. However, the employment income is subjected to taxation