By issuing law no. 7 of 2017, the import regulation in Egypt has been amended from many aspects. The most important of all those aspects are represented in requiring a business volume of 5.000.000 LE which must be reached by each company working/will work in importation and must be proved by the company’s tax declaration, in requiring a minimum capital of 2.000.000 LE for the Limited Liability Companies or 5.000.000 LE for the Joint Stock Companies, though, just a capital of 15.000 LE was required before the issuance of the legislative amendment, in allowing the foreigners to own a percentage not exceeding 49% of the company’s shares, though, a percentage of 100% of the Egyptians’ ownership was required, and in increasing the value of the insurance required to be 200.000 LE, though, it was just 50.000 LE before the issuance of the legislative amendment.
Overall, it would be said that the effects of the amending law on the companies that were working in the Egyptian market before the issuance date, are limited on what we can call with “Adaptations” and what we cannot call other than “Permits”. As for the “Adaptations”, it is represented in obliging the companies that were working in importation to increase its capital to the minimum extent required as well as to increase the insurance that would be deposited upon renewing the Import Card. As to the “Permits”, it is represented in granting the aforesaid companies the right to release 49% as maximum of its shares to foreigners and to appoint foreign directors provided that the importation responsibility is not to be assigned to one of them.
What we concern in this respect that the matters which have been recently called as “Adaptations” may be deemed as unconstitutional. As the Supreme Constitutional Court had previously reviewed a similar article provided by an amendment inserted into the Central Bank Law by which the legislator was obliging the existing exchange companies to adjust its situation by increasing its capital to the extend determined by such amendment. Whereupon, the court considered the article as unconstitutional and relied on the fact that the amending law cannot be applied retroactively on the legal situations that were established before its force and that the exchange companies which have been established before the force date should not be addressed by this amendment. And this is what exactly applicable on the companies that were working in the Egyptian market in importation before March 7, 2017 which is the date of issuing law no. 7 of 2017.