Egypt Introduces Beneficial Ownership Disclosure Regulations for Companies

Enhanced Transparency Measures Against Money Laundering

In a significant step towards combating financial crimes and improving corporate governance, Egypt has implemented new regulations requiring companies to disclose their ultimate beneficial ownership (UBO) information. As of March 9, entities registered in Egypt must maintain a register disclosing the names and details of individuals with actual ownership or control over the company.

Requirements for UBO Register

The following details are expected to be included in the UBO register:

• Names and identities of individuals with a significant stake in the company
• However, the minimum level of ownership required is not specified, leaving room for interpretation.
• The resolution does not define “control,” which may lead to ambiguity on how far up the chain of ownership authorities will investigate.

Compliance Obligations

Companies operating in Egypt are now obligated to:

• Hold and update this physical register throughout their existence
• Maintain the UBO register for five years after dissolution
• Record any changes to the UBO immediately
• Failure to comply may result in the suspension of services by the Commercial Registration Authority.

Rationale Behind the Regulations

The move aims to increase transparency and compliance with international anti-money laundering regulations. However, concerns have been raised about the lack of clear definitions and guidelines on the scope of application, which may lead to confusion among businesses. Further circulars or guidance are expected to clarify these matters.

Impact on Businesses

As companies adapt to this new requirement, they must ensure that their UBO information is accurate and up-to-date to avoid any potential consequences. This marks a significant step in Egypt’s efforts to combat financial crimes and improve corporate governance.