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Egypt Introduces Beneficial Ownership Disclosure for Companies

In a move aimed at boosting transparency, Egypt has issued a new regulation requiring all companies to disclose their ultimate beneficial owners.

New Regulation Mandates Beneficial Ownership Disclosure

The Ministerial Decree No. 41/2020, which amends the Executive Regulations of the Commercial Register Law No. 34/1976, mandates that businesses maintain a special book detailing the names and data of those with actual ownership or control.

Key Provisions

• Companies must notify the relevant Commercial Register Office of any changes in beneficial ownership immediately upon their occurrence.
• Authorities have the right to inspect these records upon request.

Changes to Commercial Register Template

The regulation has introduced changes to the commercial register template, which will now include a placeholder for the details of ultimate beneficiaries. This information is necessary for registering new entities or updating existing companies’ records.

Consequences of Non-Compliance

While the Decree does not specify penalties for non-compliance, failure to adhere may result in imprisonment and/or fines under Article 19 of the Commercial Register Law for providing incorrect information.

Challenges and Uncertainties

The lack of definition on “control” and a minimum ownership requirement has raised questions about the scope of disclosure required. As authorities begin implementing this new regulation, its effectiveness will be closely monitored.