foreign company

Why And When Would Foreign Company Seek to Establish a Branch in Egypt?


Egypt offers a favorable environment for establishing branches of foreign companies. This would definitely enhance the promotion of the economic growth and the attraction of foreign investment. However, why would the foreign companies seek to establish a branch in Egypt instead of establishing a new separate vehicle? This article explores the purposes of establishing a branch of a foreign company in Egypt, provides the benefits that the foreign company would gain in case it registered a branch in Egypt instead of setting up a new Egyptian company, and highlights the key requirements for foreign companies to establish a branch.


I. Legal Framework:

The establishment of a branch of a foreign company in Egypt is primarily governed by the Egyptian Investment Law No. 72 of 2017, and its executive regulations. These law provides the legal framework for foreign investment and outline the procedures and requirements for setting up a branch in the country.

II. Purposes of Branch Establishments:

One of the goals that the foreign company may seek to achieve through establishing a branch under different territory is to execute certain project or contract in such territory; Establishing a branch can facilitate the execution of these specific projects or contracts. This may be particularly relevant for foreign companies involved in infrastructure development, construction, or large-scale projects that require a local presence.

However, under the Egyptian law the existence of a specific project or contract is not only one of the goals that the foreign companies may seek, but also a preliminary condition for permitting the establishment of a branch in Egypt.

This means that foreign company will not have the option to either establish a branch of a foreign company or set up an Egyptian company, unless it has a project or contract with an Egyptian entity in exist even before the commencement of the establishment process.


III. Benefits of Branch Establishments:

The choice between these two forms of investment carries distinct benefits and incentives as follows:

1. Market Expansion: Establishing a branch in Egypt allows foreign companies to expand their presence in the Egyptian market, tap into new customer bases, and explore business opportunities. It enables them to establish closer relationships with local partners, suppliers, and customers.

2. Knowledge Transfer and Technology Exchange: By establishing a branch, foreign companies can transfer knowledge, expertise, and advanced technologies to Egypt. This contributes to capacity building, skills development, and the transfer of best practices, ultimately benefiting the local workforce and economy.

3. Brand Recognition and Reputation: A branch of a well-established foreign company can enjoy brand recognition and reputation, which can enhance its market position and credibility in Egypt. This can create a competitive advantage and attract potential clients, partners, and investors.

4. Transfer of foreign currency: the mother company is entitled to get back the profits gained by its branch in Egypt in foreign currency.

5. The subjection to ICSID Convention guarantees: The ICSID Convention refers to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (International Centre for Settlement of Investment Disputes). The ICSID is an international arbitration institution established under the World Bank Group that provides a framework for the settlement of investment disputes between states and foreign investors.

The ECSID Convention guarantees certain protections and benefits to foreign investors who have invested in a country that is a party to the convention. These guarantees aim to provide a stable and predictable investment environment, protect the rights of foreign investors, and encourage investment flows between countries.


Here are the key guarantees provided under the ICSID Convention:

1. Consent to Arbitration: The ICSID Convention ensures that both the state and foreign investor consent to arbitration as the primary method for settling investment disputes. By ratifying the convention, states agree to submit investment disputes to international arbitration rather than resorting to national courts.

2. Investor-State Arbitration: The ICSID Convention establishes the framework for investor-state arbitration, where foreign investors can initiate arbitration proceedings against a host state in the event of a dispute. This provides foreign investors with a neutral and independent forum to seek remedies for alleged violations of their investment rights.

3. Independent and Impartial Tribunals: The ICSID Convention guarantees the establishment of independent and impartial arbitration tribunals to adjudicate investment disputes. These tribunals are composed of arbitrators who are selected based on their expertise and impartiality, ensuring a fair and unbiased resolution of disputes.

4. Enforcement of Awards: The ICSID Convention provides for the recognition and enforcement of arbitration awards rendered under its auspices. Member states are obliged to recognize and enforce these awards as if they were final judgments of their own courts, facilitating the enforcement of arbitral decisions across borders.

5. Protection against Expropriation: The ICSID Convention includes provisions to protect foreign investors against unlawful expropriation or nationalization of their investments by host states. It ensures that investors are entitled to prompt, adequate, and effective compensation in the event of expropriation or measures having an equivalent effect.

6. Fair and Equitable Treatment: The ICSID Convention guarantees that foreign investors are entitled to fair and equitable treatment by host states. This includes protection against arbitrary or discriminatory actions, ensuring that foreign investors are treated in a non-discriminatory manner and with due process of law.


Foreign investors considering investments in countries that are parties to the ECSID Convention should assess the availability and scope of these guarantees, consult legal advisors, and review the specific investment protection provisions and dispute resolution mechanisms provided under bilateral investment treaties (BITs) or other investment agreements between the host state and the investor’s home country.


IV. Requirements for Establishing a Branch:

1. Legal Form and Activities: A foreign company seeking to establish a branch in Egypt must be a legal entity in its home jurisdiction and engaged in activities that are permissible under Egyptian law. The branch must operate within the scope of the parent company’s business activities.

2. Registration and Licensing: The foreign company must register the branch with the General Authority for Investment and Free Zones (GAFI) and obtain the necessary licenses and permits. The registration process typically involves submitting required documents, such as the parent company’s articles of association, a power of attorney for the branch’s representative, and a statement of capital.

3. Capital Requirements: Egyptian law does not prescribe a specific minimum capital requirement for establishing a branch. However, GAFI may require the foreign company to demonstrate sufficient financial capacity to support the branch’s operations.

4. Local Representative: The branch must appoint a local representative who will act as the company’s official agent in Egypt. The representative must be an Egyptian national or a foreign resident with a valid work permit.

5. Tax Obligations: The branch is subject to Egyptian tax laws and regulations. It is required to fulfill tax obligations, including filing tax returns and paying corporate income tax on its generated profits.



Establishing a branch of a foreign company or setting up an Egyptian company in Egypt presents distinct benefits and incentives for foreign investors. Establishing a branch allows for immediate market presence, leveraging the parent company’s brand recognition and streamlined operations. It also enables access to the parent company’s resources and expertise. On the other hand, setting up an Egyptian company offers advantages such as local ownership and control, access to local financing, contractual autonomy, and potential preferential treatment in government tenders.

Both options provide opportunities to benefit from investment incentives, including tax benefits, customs duty exemptions or reductions, and access to free zones. These incentives aim to attract foreign direct investment, promote economic growth, and support job creation in Egypt.

Foreign investors should carefully evaluate their investment objectives, market entry strategies, and the legal and regulatory requirements to determine the most suitable form of investment. Consulting with legal and investment professionals, as well as relevant government authorities such as the General Authority for Investment and Free Zones (GAFI), can provide valuable guidance in navigating the incentives and requirements associated with establishing a branch or an Egyptian company in Egypt.

Ultimately, by choosing the appropriate investment structure and leveraging the available benefits and incentives, foreign companies can establish a strong presence in the Egyptian market, contribute to the country’s economic development, and capitalize on the numerous opportunities available in Egypt’s growing economy.

international law

International Law: its reality and existence

International law is considered one of the most important branches of law studied by jurists in various countries of the world. Studies unanimously agree on his definition of the rules that regulate relations between states in the international community. As such, it includes a set of rules and principles that define the rights and duties of states and regulate their interactions at the international level.


If we trace the rules of international law throughout the ages, we will find that they have gone through remarkable stages of development. In ancient times, there were only some basic rules that regulated relations between countries, such as the concept of national sovereignty and the right of a free ship to navigate across the oceans. In the Middle Ages and the Renaissance, international law was influenced by religious, moral, and Roman laws, from which the concepts of just war and international reconciliation arose. In modern and the emergence of diplomacy times, international law has begun to gain more complexity and development. Peace conferences and international treaties emerged, such as the Treaty of Westphalia in 1648, which ended the Thirty Years’ War in Europe and established a system of sovereign states. During this era, the rules and principles of public international law developed to reflect the principle of sovereign equality and the prohibition of colonialism. In the twentieth century and beyond, as a result of major changes in international relations, international bodies and courts emerged, such as the International Court of Justice and the International Criminal Court. During this period, new areas of international law were developed, such as human rights, international humanitarian law and environmental rights.


What is notable about the development of the rules of international law throughout the ages is that the apparent laudable goal behind each development was to move from simply preserving sovereignty and national interests to a system focused on protecting human rights and maintaining international peace and security, then to expanding the scope of international cooperation and strengthening the laws that govern Global trade, environmental protection and combating international crimes.


In our current era, international law is based on a range of different sources, including international agreements, international custom, the general laws of the United Nations, and international judicial decisions. There is also an international judicial system that contributes to the development and understanding of international law. International courts, such as the International Court of Justice, resolve legal disputes between countries and provide legal interpretations of applicable international laws. However, international law is considered a decentralized legal system, as there is no central legislative authority that issues international laws. Rather, international laws are formed through the participation of states in the international legislative process, consultations, negotiations, and international trials.


In order to determine the truth about the existence of international law – in the aforementioned sense – it is necessary to verify the availability of two factors that law cannot exist without, and it is not plausible to say that it exists in the absence of either of which. The first of these two factors is the existence of a mechanism to deter countries that violate these rules, regardless of the economic or mili-tary size of those countries. The second is the presence of neutral organizations that maintain the application of previously established rules. This is the same thing that applies to national law of all countries. If the internal legal system of each country had not included deterrent legislation for its violators, regardless of their social or economic status within the country, and had it not been for the presence of an executive authority to ensure the implementation of this law, those countries and their rule of law would not have been recognized. Even the classification of countries is measured by the availability of these two factors.


In the absence of any of the aforementioned factors at the international level, talk about the existence of what is called international law becomes merely a legitimate tool in the hands of some countries or some organizations that they can rely on wherever they want and whenever they want to give legitimacy to their decisions or actions, and they may set it aside at other times to act lawlessness without adhering to binding rules and without deterrence, and then accepting the existence of international law would be absurd.


Realizing the first factor: the consequences of states’ violations of international law

Verifying the availability of the first factor to measure the existence and reality of international law, which is the existence of a mechanism to deter states that violate those rules, regardless of their economic or mili-tary size, can only be achieved by tracking the consequences of states’ transgressions against the rules of international law throughout history. There are a variety of behaviors that violate recognized international laws. Here are some examples of such infringements:

  1. Illegal occupation: When a state seizes the territory of another state by force and occupies it without understanding or consent, it violates the principle of prohibition of illegal occupation stipulated in international law.
  2. Violation of human rights: Some countries may violate the basic human rights of individuals within their territories. This may include torture, arbitrary detention, political repression, and religious or ethnic persecution. These abuses are a violation of international law protecting human rights.
  1. Aggre-ssion and aggre-ssion: When a country attacks another without a legitimate reason or does not rely on legitimate defense, it violates the principle of non-aggre-ssion which is part of international law. This includes mili-tary inva-sion, occupation and unprovoked bom-bing of other countries.
  1. Non-compliance with obligations of international agreements: When countries contract international agreements and do not commit to implementing them or ignore their obligations, they are violating international law. This may include failure to cooperate in extraditing perpetrators or refraining from implementing international judicial decisions.
  1. Support for terro-rism: Some countries may provide direct or indirect support to terro-rist groups, including financing them, training their members, and facilitating their activities. Support for terro-rism is considered a violation of the principles of international law and international resolutions related to combating terro-rism.


There is an abundance of examples of international sanctions imposed on parties that violate international law, including:

  1. UN Sanctions on North Korea: In response to North Korea’s nucl-ear wea-pons and balli-stic mi-ssile programs, the UN Security Council imposed a series of sanctions on North Korea. These sanctions include an ar-ms em-bargo, restrictions on trade in certain goods and technologies, asset freezes, and travel bans targeting individuals and entities involved in North Korea’s wea-pons programs. The aim is to stop the spread of wea-pons of mass des-truction and encourage compliance with international non-proliferation obligations.
  1. European Union sanctions on Russia: After Russia’s annexation of Crimea in 2014 and its involvement in the conflict in eastern Ukraine, the European Union imposed sanctions on Russia. These sanctions include asset freezes and travel bans on Russian officials, restrictions on access to EU capital markets for Russian entities, and bans on certain exports and imports. The sanctions are intended to deter further aggre-ssion and support efforts to resolve the conflict in Ukraine.
  1. UN Sanctions on Libya: The UN Security Council imposed sanctions on Libya in response to the violent crackdown on demonstrators during the 2011 uprising against the regime of Muammar Gaddafi. The sanctions included an ar-ms em-bargo, asset freezes, travel bans, and measures targeting individuals and entities involved in human rights violations and violence against civilians. The sanctions aim to put pressure on the Libyan government to stop the violence and protect the civilian population.
  1. US sanctions on Syria: In response to the Syrian government’s brutal crackdown on protesters and its involvement in the ongoing civil war, the United States imposed comprehensive sanctions on Syria. These sanctions include various economic measures, such as trade restrictions, financial sanctions, and asset freezes targeting individuals, entities, and sectors associated with the Syrian government. The goal is to increase pressure on the Syrian government to stop human rights violations, end the conflict, and support a political solution.
  1. UN Sanctions on Sudan and South Sudan: In the context of the conflicts between Sudan and South Sudan, the UN Security Council imposed sanctions on both countries at different times. The sanctions included an ar-ms em-bargo, asset freezes, and travel bans, and targeted individuals and entities involved in supporting or obstructing peace processes. The sanctions aim to encourage peaceful solutions, protect civilians, and enhance stability in the region.

These examples show some of the violations carried out by some countries on the rules of international law. There is no doubt that enhancing compliance with international law and punishing violators contributes – whenever it exists – to strengthening global peace and stability. What has history recorded in this regard?


Equally, there are an abundance of examples of violations of international law that have not been punished, including:

  1. Myanmar Crisis: Persecution and human rights violations against the Rohingya population in Myanmar have been widely documented, including allegations of ethnic cleansing and genocide. Although some countries have imposed targeted sanctions on specific individuals and entities in Myanmar, no comprehensive international sanctions have been imposed on the country as a whole.
  1. The Isra-eli occupation of the State of Pale-stine: The occupation’s long-term attempts to occupy the land of Pale-stine witnessed all the violations reviewed by international humanitarian law throughout history, without exception. These violations – which continued for more than seventy years – included forcefully seizing and occupying the territory of another country without understanding or consent, and violating basic human rights, including torture, arbitrary detention, and religious or ethnic persecution. Aggre-ssion and aggre-ssion in violation of the principle of non-aggre-ssion, which is considered part of international law. And non-compliance with the obligations of international agreements concluded by Isra-el by not cooperating in implementing international judicial decisions.

These violations were even recorded in reports issued by international organizations.[1]

It is unfortunate that, despite the international community’s confirmation of these violations, many countries did not hesitate, in full view of the international community, to provide financial and milit-ary support, whether direct or indirect, to Isra-el. This represents – in its legal sense – financing, facilitating and supporting terro-rist acts that violate the principles of international law and international resolutions related to combating terro-rism. Not to mention that this support was not met with the imposition of comprehensive international sanctions on the parties participating in it, but rather the international community met it with more approval.

  1. The conflict in Syria: The protracted conflict in Syria has witnessed widespread and severe violations of international humanitarian law committed by multiple parties. These violations include targeting civilians and medical facilities, and the use of chemical wea-pons. Although some targeted sanctions were imposed on specific individuals and entities, no comprehensive international sanctions were imposed on the parties involved in the conflict.


In light of this discrepancy in the international community’s position on imposing international sanctions on violations by some countries and the disregard or inability to follow the same approach if the same violations are committed against other countries, some may say that the decision to impose international sanctions is affected by various factors, including geopolitical considerations. The complexity of the conflict, the involvement of powerful states, and the challenges associated with implementing and effectively enforcing sanctions. Sanctions are often just one tool among many in the international community’s efforts to address violations of international law and promote peace, justice and accountability.

Others may say that we must realize that international law is not a perfect system, and may face challenges and difficulties in applying and monitoring it. International law may sometimes face abuses by some states or pluralism in interpretations and applications. However, this does not mean that international law does not exist or is worthless. The existence of international law and adherence to it reflects the desire to achieve justice and world peace.

Far from siding with any party, what silences this and that, and makes these justifications for the differences in international positions regarding some countries’ violations of the so-called rules of international law mere flimsy arguments, is the fact that international sanctions have not been imposed – throughout human history – in the event of violations of the rules of international law except on countries characterized by mili-tary and economic weakness. International history has never recorded the imposition of a punishment by international organizations – and not by opposition countries – on a country that has military or economic merit. Which brings us back to the question about the reality and existence of international law.


Realizing the second factor: the presence of neutral organizations that maintain the application of previously established rules

On the other hand, the application of international organizations, in the decisions and recommendations they make, to the rules of international law that they have previously established or participated in developing in one way or another, is one of the important matters not only in measuring the extent of the reality and existence of international law, but also in considering the extent of the reality and existence of those organizations. If international organizations make decisions or end their meetings with recommendations that contradict the rules they previously codified or participated in codifying, then there is no room to talk about their existence even if international law exists.


Security Council model

The Security Council is one of the main bodies of the United Nations and has an important role in maintaining international peace and security. The Council consists of fifteen members, including five permanent members (the United States, Russia, China, France, and the United Kingdom), and ten non-permanent members who are elected for a fixed term of two years.

The Security Council has an important role in imposing and implementing sanctions on countries or entities that commit violations of international law. This role is delegated to the Security Council in accordance with Chapter VII of the UN Charter. When a report is submitted of a violation of international peace and security or a threat to peace, the Security Council can initiate consultations and take escalatory measures to deal with the situation. Among these measures, the Council can impose sanctions on the guilty state or entity.


The sanctions that could be imposed by the Security Council include several forms, including:

  1. Economic sanctions: The Council can impose economic sanctions such as imposing trade bans, freezing financial assets, restricting travel, and imposing fees and levies on the guilty country.
  1. Mili-tary sanctions: The Council can impose mili-tary sanctions such as imposing an ar-ms emb-argo, imposing a no-fly zone, and imposing sanctions on mili-tary exports and imports.
  1. Diplomatic sanctions: The Council can impose diplomatic sanctions such as severing diplomatic relations, withdrawing diplomatic recognition, and restricting bilateral relations with the guilty state.

Implementation and compliance with these sanctions is the responsibility of all UN Member States. Imposing sanctions requires voting on a resolution in the Security Council, as the resolution needs the approval of at least 9 votes, including the approval of the five permanent states present in the Council.


The process of voting on decisions in the Council takes place according to the following mechanism:

  1. General vote: This vote includes important decisions related to issues of international peace and security. A Security Council resolution requires the approval of at least 9 votes, including the approval of all permanent member states, in order to be adopted. If any permanent member state decides to use the right of veto, the decision is considered rejected.
  1. Non-public voting: This voting is used for procedural and technical matters and issues that are not very important. A non-public voting decision requires the approval of a majority of the members present at the session, and is not covered by the veto rules.

Therefore, the right to object (veto) is one of the most important aspects of the voting mechanism in the Security Council. If any permanent member state uses the right to veto, the resolution is considered rejected, even if all other member states are in favour. This right of veto prevents any state from imposing a decision against its national interest.


Hence, it is clear that the Security Council has been unable since its establishment – and will remain so throughout its existence – to pass resolutions or impose sanctions that conflict with the interests of its permanent member states. This means that these latter countries are immune from any sanctions authorized by the international community to the Security Council. The reason for saying that the Security Council will remain so for as long as it exists is that amending the rules of the Security Council requires a change in the United Nations Charter. Since amendments to the Charter are considered constitutional amendments to the organization, they require complex procedures and may require the approval of the majority member states or special approval including the permanent member states. This means that permanent member states can use the right of veto in the Security Council to prevent any amendments to the Council’s rules that might compromise their national interests. This also means that any fundamental amendments to the Council’s rules may be difficult to achieve without the approval of all permanent member states.


In light of this, we are faced with another fact, which is that international organizations do not have the ability to impose international sanctions except on certain countries. International history has never recorded a Security Council decision to impose a penalty on a permanent member state. Which brings us back to the same query about the reality and existence of international law.


In conclusion, it can be said that the existence of international law is something that contributes to organizing the international system and promoting stability, peace and justice among countries, and contributes to providing a legal framework for resolving international disputes and enhancing cooperation between countries in various fields such as human rights, humanitarian law, the environment, international trade, and conflicts, borders, maritime law, international criminal law, and others, though, this existence is still a dream that humanity has not reached.

The obstacle to achieving this legitimate humanitarian dream is the interference of considerations of economic and mili-tary interests in judging the nature of matters between countries, to the same extent that the charters and constitutions of international organizations lack a mechanism that authorizes them to impose sanctions on any of the permanent members of the Security Council when they violate international law.

The solution to remove this barrier can only be through an amendment to the Charter of the United Nations with special approval including the permanent member states, whereby it will be decided that the permanent member states will not have the right to vote in the Security Council if the resolution being voted on conflicts with their direct national interests, or whereby it will be decided to refer the parties to such resolution to a mandatory arbitration to settle whether or not the direct national interests of a certain country conflicts with the resolution. Otherwise, the entire world will continue to be managed – without law – by a handful of countries that have imposed their control only by force, until some other countries with greater force come to seize control of them, whereupon, no one will know where they will go in terms of establishing fair rules of international law.


[1] please review the United Nations’ Report

Economic Commercial Disputes

Economic and Commercial Disputes Under Egyptian Legislation

Economic and Commercial Disputes Under Egyptian Legislation: A Comprehensive Legal Analysis


Economic and Commercial disputes play a significant role in shaping the business landscape of any country, and Egypt is no exception. As a thriving economy in the Middle East and North Africa region, Egypt has established a robust legal framework to address economic disputes. This article aims to provide a comprehensive legal analysis of economic disputes under Egyptian legislation, highlighting the relevant laws, procedures, and mechanisms available for resolving such disputes.

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comparative analysis

A Comparative Analysis of the Place of Arbitration and Seat of Arbitration

Arbitration has gained significant popularity as a preferred method of resolving commercial disputes due to its flexibility, efficiency, and enforceability of awards. Two key aspects of arbitration that require careful consideration are the place of arbitration and the seat of arbitration. While these terms are often used interchangeably, they have distinct legal implications and can significantly impact the arbitral proceedings. This article aims to provide a comparative analysis of the place of arbitration and seat of arbitration, exploring their definitions, roles, and legal consequences, and to explain how can parties ensure that their chosen seat jurisdiction has favorable laws for arbitration proceedings.

I. Definitions

Place of Arbitration:
The place of arbitration refers to the physical location where the arbitral proceedings are conducted. It is the site where hearings, meetings, and other procedural aspects take place. The place of arbitration is primarily concerned with practical considerations, such as convenience, availability of facilities, and ease of access for the parties and arbitrators.

Seat of Arbitration:
The seat of arbitration, also known as the legal or juridical seat, is the legal jurisdiction to which the arbitration is tied. It determines the legal framework and procedural laws that govern the arbitration proceedings. The seat of arbitration also determines the supervisory court that exercises jurisdiction over the arbitration, including matters such as the appointment and removal of arbitrators, challenges to awards, and enforcement proceedings.

II. Distinctions:

As shown above, there is a legal difference between the seat of hearings where the parties or the tribunal choose (as a matter of convenience) to meet on one hand, and the seat of arbitration which determines the legal framework within which the arbitration takes place and upon which the conduct of the arbitration and the potential enforceability of the ultimate award are to be determined.

“There is an important distinction between the legal place (the seat) of any arbitration and the place where one or more of the hearings or other procedural steps physically take place. Although the two often coincide, in practice, it is the seat which determines the legal framework within which the arbitration takes place, not the location where the parties or the tribunal choose (as a matter of convenience) to meet. When selecting the seat of arbitration, parties should consider, in particular, the effect that this selection might have upon the conduct of the arbitration and the potential enforceability of the ultimate award. The conduct of the arbitration In choosing the seat of the arbitration, the parties are selecting the procedural law that applies. For example, by selecting London, England, as the seat, the parties bring about the application of the 1996 Arbitration Act” (LATHAM & WATKINS, Guide to International Arbitration, Page 22).

Even when the need arises to recourse to the conflict of laws rules to determine the substantive law applicable to the Subcontract, the Inter-American Guide provides that “Originally, the trend as reflected in awards granted was to give priority to the conflict of laws rules of the place of arbitration.” ( The Inter-American Guide, Page 170 and 171).

In determining the law applicable to the international commercial contracts, the New York Convention does not directly address the matter of the law applicable to an international contract submitted to arbitration, but it recognizes the parties’ choice of law governing the validity of the arbitration clause, as well as that governing the arbitration procedure. The New York Convention also establishes that, in the absence of a choice of law by the parties, the law of the seat of the arbitration will be the “law of the arbitration.” Hence, party autonomy is one of the pillars of the modern law of contract and enjoys a high level of acceptance in private international law. The basis for this principle is that the parties to a contract are in the best position to determine which law is the most suitable to govern their transaction instead of leaving that determination to the adjudicator, should a dispute arise. That strengthens the legal certainty that is required to encourage commercial transactions and is also intended to reduce state interventionism in favor of private initiative. Party autonomy includes choice of substantive law (material autonomy) and choice of conflict of laws rules (conflictual autonomy).

In the absence of a choice of law by the parties, the Hague Principles by the second sentence of Article 4, emphasized that the selection of an arbitral tribunal is not sufficient to indicate, by itself, that the parties have made a tacit choice of applicable law. Also, however, that the New York Convention considers the law of the seat of the arbitration as the “law of the arbitration”.

Further, article 37 of the 1940 Montevideo Treaty uses as a connecting factor the place of performance of the contract to govern issues related to formation, characterization, validity, effects, consequences, and performance. While, article 40 of the 1940 Montevideo Treaty provides that the law of the place of conclusion of the contract will be applicable to those contracts for which the place of performance cannot be determined at the time of conclusion.

Farthest, the Mexico Convention aims above all to recognize and promote the principle of party autonomy. Nevertheless, in the absence or ineffectiveness of a choice, Article 9, paragraph 1 provides that: “If the parties have not selected the applicable law, or if their selection proves ineffective, the contract shall be governed by the law of the State with which it has the closest ties [connections].” This is known as “the proximity principle.

Finally, the UNCITRAL Model Law, the European Convention, and the Panama Convention offer similar solution to the law applicable to the international commercial contracts in the absence of the parties’ choice. The last convention refers to the IACAC Rules, specifically Article 30, which states: “Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.”.

III. Legal Implications:

Procedural Law: The choice of seat of arbitration determines the procedural law that governs the arbitration. The selected jurisdiction’s arbitration laws and any applicable international conventions would apply to the arbitration proceedings. This includes rules regarding the conduct of hearings, evidence, interim measures, and the grounds for challenging awards.

Court Supervision: The seat of arbitration determines the supervisory court that has jurisdiction over the arbitration. This court exercises powers of judicial assistance and support, including the appointment and removal of arbitrators, granting interim measures, and enforcing or setting aside awards. The court’s role in the arbitration process can significantly impact the proceedings and the enforceability of the final award.

Enforcement of Awards: The seat of arbitration plays a crucial role in the enforcement of arbitral awards. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides a framework for the enforcement of awards in over 160 countries. The seat of arbitration determines the legal regime under which the award is considered domestic or foreign, affecting the enforceability under the New York Convention or other applicable laws.

IV. Practical Considerations:

Neutrality and Impartiality: The choice of seat of arbitration can influence the perceived neutrality and impartiality of the arbitral proceedings. Parties often seek a neutral jurisdiction to ensure a fair and unbiased resolution of their dispute, avoiding any potential conflicts of interest.

Infrastructure and Facilities: The place of arbitration should be considered for its practical aspects, such as the availability of suitable hearing venues, technological infrastructure, and proximity to the parties and their legal representatives. These factors can impact the efficiency and convenience of the arbitral process.

Costs: The choice of seat of arbitration can have cost implications. Different jurisdictions have varying fee structures, court fees, and administrative costs. Parties should carefully evaluate the associated expenses when selecting the seat of arbitration.

V. How can parties ensure that their chosen seat jurisdiction has favorable laws for arbitration proceedings?

To ensure that their chosen seat jurisdiction has favorable laws for arbitration proceedings, parties can take the following steps:

Research and Comparative Analysis: Parties should conduct thorough research on the arbitration laws of potential seat jurisdictions. This includes studying the relevant national legislation, judicial decisions, and any international conventions or treaties that the jurisdiction has ratified. A comparative analysis of different jurisdictions can help identify those with arbitration-friendly legal frameworks.

Consultation with Legal Experts: Seeking advice from legal experts, such as arbitration lawyers or law firms specializing in international arbitration, can provide valuable insights into the legal climate of various seat jurisdictions. These experts can offer guidance based on their knowledge and experience in handling arbitration cases in different jurisdictions.

Reputation and Track Record: Parties should consider the reputation and track record of a seat jurisdiction in handling arbitration cases. This includes evaluating the jurisdiction’s adherence to the rule of law, its respect for arbitration agreements and awards, and the efficiency and impartiality of its judicial system.

Pro-Arbitration Legislation: Parties should assess whether the chosen seat jurisdiction has enacted pro-arbitration legislation. Such legislation typically includes provisions that uphold the autonomy of parties in arbitration, limit judicial intervention, and promote the enforcement of arbitral awards.

Support for International Conventions: Parties should consider whether the chosen seat jurisdiction is a signatory to international conventions and treaties that are favorable to arbitration. These include the New York Convention, which facilitates the enforcement of awards, and regional conventions that provide additional support and safeguards for arbitration proceedings.

Judicial Support and Expertise: Parties may consider the quality and expertise of the judiciary in the chosen seat jurisdiction. A judiciary that is well-versed in arbitration matters and demonstrates a supportive approach can contribute to the efficient and effective resolution of disputes.

Neutrality and Impartiality: Parties should evaluate the chosen seat jurisdiction’s reputation for neutrality and impartiality. It is important to select a jurisdiction that is viewed as fair and unbiased by both parties, ensuring a level playing field during the arbitration proceedings.

Flexibility and Procedural Autonomy: Parties should assess the extent to which the chosen seat jurisdiction allows for flexibility and procedural autonomy. This includes considering whether the jurisdiction allows parties to adopt their preferred arbitration rules, choose the language of the proceedings, and determine the applicable substantive law.

By conducting thorough research, seeking expert advice, and considering the factors mentioned above, parties can increase the likelihood of selecting a seat jurisdiction with favorable laws for arbitration proceedings. It is crucial to carefully evaluate these factors as the choice of seat can significantly impact the conduct, efficiency, and enforceability of the arbitration process.


In conclusion, understanding the distinction between the place of arbitration and the seat of arbitration is crucial for parties engaging in international arbitration. While the place of arbitration relates to the physical location of proceedings, the seat of arbitration determines the legal framework and jurisdiction governing the arbitration. The choice of seat has significant legal consequences on procedural matters, court supervision, and the enforceability of awards. Parties should carefully consider both practical and legal factors when deciding on the place and seat of arbitration to ensure a fair, efficient, and enforceable arbitration process.

Ensuring that the chosen seat jurisdiction has favorable laws for arbitration proceedings requires careful consideration and evaluation of various factors. Parties should conduct thorough research, seek expert advice, and assess key elements such as the jurisdiction’s arbitration laws, reputation, support for international conventions, judicial expertise, neutrality, and procedural autonomy. By carefully considering these factors, parties can increase the likelihood of choosing a seat jurisdiction with favorable laws for arbitration proceedings. This decision is crucial as it significantly impacts the conduct, efficiency, and enforceability of the arbitral process, contributing to a successful and effective resolution of their commercial disputes.

termination employment

Termination of the Employment Relationship Under Egyptian Law

The employment relationship is a fundamental aspect of the labor market, and the termination of this relationship is a matter of significant legal importance. In Egypt, the termination of the employment relationship is governed by various laws and regulations, including the Egyptian Labor Law No. 12 of 2003 (the “Law”). This article aims to provide an overview of the legal framework surrounding the termination of employment in Egypt, including the grounds for termination, notice periods, severance pay, and dispute resolution mechanisms.

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Egyptian Legal Framework

Egypt is a civil law country with codified rules and laws, making the law easier to understand than in other countries. Furthermore, the Egyptian Constitution defines Egypt to be a republic, which implies the existence of a functional parliament with legislative authority.

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Forms of Business Structure in Egypt

Forms of Business Structure in Egypt

The Law of Commerce No. 17 of 1999 and Companies Law No. 159 of 1981 establish Egypt’s legal business structures. The Law of Commerce covers sole proprietorships and basic partnerships generally, while the Companies Law governs joint stock companies, limited partnerships by shares, and limited liability companies extensively.

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Commentary to Egypt’s New Investment Law

A commentary to the guarantee provided by article (3) of the Egypt’s new investment law no. 72 of 2017: by the same law article that emphasizes on the investment’s non-subjection to any decision carrying discrimination, the legislator adopts the possibility of granting the foreign investor special privilege in treatment under reciprocity … although, this implies inadmissible discrimination against the national investor, it contains reasonable exaggeration to reassure the foreign investment.

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Investment Incentives Designed by New Investment Law

The new Investment Law no. 72 of 2017 distinguished among four of the investment systems; the internal investment system, the investment zones system, the technological zones system, and the free zones system. The distinguish point is obviously represented on that the incentives allocated to the first three systems are different and less than the incentives granted to the last system called “the free zones system”. Such last system that kept, under the new law, the same privileges that were adopted under the previous law, representing on exempting its goods whether exported to or imported from abroad from the customs, added value tax, and the other taxes and charges.

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Effects of Amending the Importation Law on the Companies

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.

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