GAFI to announce new draft law as part of efforts to overhaul Companies Act

Cairo – January 14, 2025: The General Authority for Investment and Free Zones (GAFI) plans to present a draft legislation in the next few months as part of an overhaul/replacement for Egypt’s Companies Act aimed at aligning with recent developments in the investment landscape.

GAFI’s head, Hossam Heiba, explained that the new law will modernize the regulatory framework, particularly to address the growing reliance on electronic documentation.

According to Hapi Journal, the authority plans to present the draft legislation for public consultation after Ramadan.

The current Companies Act serves as the legal foundation for the incorporation, management, and dissolution of companies in Egypt, covering shareholder rights and the responsibilities of boards. However, with changes in the business environment, there is a need to update the law to reflect contemporary practices and technological advances.

Heiba explained that the new law would streamline company formation and post-incorporation services, such as documenting board meetings and general assemblies, while also integrating the use of electronic procedures and documents—areas not fully recognized under the existing law.

A key change in the new law will be the consolidation of company registration under a single authority, simplifying what is now a process spread across eight different entities.

The GAFI head emphasized that the current system in Egypt is more complex than in many other countries, as it involves numerous procedures and requires companies to fulfill all founding requirements upfront. To address this, the new law will divide the process into two phases.

The first phase will focus solely on the establishment of the company, granting a 12-month grace period for companies to define their activities and fulfill any remaining requirements.

In preparation for these reforms, GAFI reviewed the company legislation of 20 different countries and identified recurring issues within the existing law that needed to be addressed.

The ongoing effort is part of the government’s broader initiative to enhance Egypt's investment climate, which includes introducing various reforms and incentives aimed at attracting more foreign and local investments.

The forthcoming changes are expected to simplify the business establishment process, foster a more efficient and investor-friendly environment, and encourage economic growth across the country.