Egypt Mandates Disclosure of Ultimate Beneficial Ownership

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In an effort to enhance transparency and combat financial crimes, Egypt has introduced new regulations requiring companies operating within the country to disclose the ultimate beneficial owners (UBOs) of their entities.

New Regulations for Enhanced Transparency

The amended Executive Regulations of the Commercial Registration Law No. 234 of 1976 mandate that all entities registered in Egypt maintain a register detailing the names and particulars of UBOs holding actual ownership or control over the company. This information will be made publicly available, effective as of March 9.

Uncertainty in Definitions

While the regulation requires companies to disclose UBO information, there is a lack of clear definitions for “control” and minimum ownership levels, leaving some aspects uncertain. However, authorities may refer to criteria outlined in money laundering regulations for guidance.

Key Changes

• New Field in Commercial Register: A new field has been introduced in the Commercial Register to reflect UBO information.
• Immediate Record of Changes: Companies are required to maintain an up-to-date UBO register and record any changes immediately.

Consequences of Non-Compliance

Failure to comply with the regulation may result in the suspension of certain services by the Commercial Registration Authority. The resolution does not specify how far up the chain of ownership authorities will investigate, leaving some scope for interpretation.

A Step Towards Increased Transparency

Despite the ambiguity in certain aspects, the introduction of this requirement is seen as a significant step towards increased transparency in Egypt’s corporate landscape. It reflects a broader effort to enhance governance and combat financial crimes.