Part 1: Overview of the Law

Highlights

On 9 July 2024, law no. 155 of 2024, which issues the Unified Insurance Law (the “Law”), was enacted. This landmark legislation represents a comprehensive overhaul of Egypt’s insurance regulatory framework by consolidating and codifying existing regulations into a single comprehensive legislation. As a result, several related laws were repealed as of 10 July 2024, including:

  1. Law No. 54 of 1975 promulgating the Private Insurance Funds Law.
  2. Law No. 10 of 1981 promulgating the Insurance Regulation and Supervision Law.
  3. Law No. 72 of 2007 promulgating the Compulsory Insurance for Civil Liability Arising from Accidents of Rapid Transit Vehicles Law.
  4. Articles 747-771 of the Civil Law No. 131 of 1948.

Scope of Application

The Law governs all insurance and reinsurance activities, along with associated services, professions, and activities within Egypt. It stipulates that companies subject to the Law must be established as Egyptian joint-stock companies. The Financial Regulatory Authority (“FRA”) is granted exclusive authority to license, supervise, and regulate entities involved in these activities.

FRA Powers and Competencies

The Law provides the restructure of the FRA’s role in response to global and regional insurance market changes. It mandates the FRA to regulate and supervise all insurance and reinsurance activities, as well as their associated professions and services.

Key competencies of the FRA include, but are not limited to:

  1. Regulating and supervising all entities involved in insurance activities.
  2. Issuing rules and executive regulations governing such activities.
  3. Establishing governance rules and disclosure requirements.
  4. Setting requirements for consumer protection, anti-money laundering, and combating terrorism financing.
  5. Defining rules for digital transformation within the sector.
  6. Regulating the approval of insurance policy terms and templates.
  7. Establishing investment guidelines for insurance and reinsurance companies and funds.

The Law imposes a new obligation on insurance companies to maintain the confidentiality of clients’ data, prohibiting the disclosure of such data without obtaining prior written consent, except where required by legislation.

It should be noted that the Law prohibits any individual or entity from engaging in insurance activities, directly or indirectly, without obtaining a license from the FRA.

Compliance Period

The Law provides a one (1) year compliance period from its effective date, which is on 11 July 2024, i.e. until 10 July 2025, for entities to comply with its provisions. The FRA may extend this period for additional terms, not exceeding three (3) years.

Objectives and Aims

The Law unifies existing insurance-related legislations, simplifying the regulatory landscape for companies in the insurance sector. Accordingly, it aims to:

  1. Allow property insurance companies to expand their services to include credit and agricultural insurance.
  2. Protect citizens by introducing new mandatory coverages, including professional liability insurance for doctors, lawyers, and accountants.
  3. Address the essentials of compulsory motor vehicle insurance, as previously governed by Law No. 7 of 2007, enhancing industry social responsibility.
  4. Increase access to micro-insurance by developing new products tailored to meet specific risks, such as agricultural insurance, to mitigate farmers’ losses.
  5. Enhance transparency and accountability within private insurance funds by establishing clear governance procedures.
  6. Allow property insurance companies to expand their services to include credit and agricultural insurance.

Dispute Resolution and Appeals

The Law stipulates that most insurance disputes will fall under the jurisdiction of the Egyptian Economic Courts (“ECC”), with certain exceptions adjudicated by the Council of State to expedite resolution. It establishes new Appeals Committees (the “Committee”) to handle appeals against administrative decisions made by the FRA, ensuring transparency in the enforcement of the Law. The composition of the Committee and the appeal process are defined by the Law. It should be noted that appeals must be filed within 30 (thirty) days of the decision’s issuance, and the Committee is required to issue a decision within 30 (thirty) days of receiving all relevant documents. The Committee’s decisions are final and binding. An appeal fee of twenty thousand Egyptian Pounds (EGP 20,000) shall be imposed, which is refundable if the decision is overturned.

Penalties

The Law introduces a range of penalties, in Articles 215-225, for violations related to insurance and reinsurance activities. These include fines ranging from one thousand to twenty million Egyptian Pounds (EGP 1,000 to 20,000,000), with the possibility of higher fines if the financial benefit from the violation exceeds these amounts. In certain cases, imprisonment may also be imposed.

Additionally, the court may prohibit individuals from engaging in insurance or reinsurance activities for up to three (3) years. Moreover, the concept of marginal responsibility is introduced, holding individuals managing companies accountable if they are aware of violations and fail to act. Companies are jointly and severally liable for any penalties or compensation arising from employees’ misconduct.

Major Violations

The Law provides several key violations, which include:

We are delighted to announce that ADSERO - Ragy Soliman has been included in the International Employment Lawyer (IEL) Elite Guide 2025, a prestigious guide to the world’s leading employment law practices. This recognition highlights our commitment to providing innovative and high-value legal advice to employers across the globe.

A special thank you to our dedicated team for their hard work and to our clients for their continued support and positive feedback. We are proud to be recognised among the top employment law teams, showcasing our expertise in advisory, disputes, and transactional work.

To learn more about the IEL Elite and view the full list, click here.

If you have any questions, please feel free to contact Alia Monieb, Partner and Head of Employment.

We advised Sylndr Egypt, an Egyptian used-car online marketplace, on securing an EGP 370 million working capital facility from a group of lenders, which consisted of EFG Corp-Solutions — the leasing and factoring arm of EFG Holding — alongside EFG Holding’s commercial bank Bank NXT, and EGBANK.

This transaction sets a new standard for scalable, ring-fenced capital financing specifically tailored for Sylndr’s highly complex legal and financial framework that acts as a base for any new lender to scale up the structured facility.

Our team was led by Hossam Gramon, Partner and Head of Banking & Project Finance, and Karima Seyam, Senior Associate, assisted by Aya Badr, Associate, and Junior Associates Mostafa Serry and Nour El Kholy.

Congratulations to Omar El Defrawy, Omar Ezzat, and Amal Fathy of Sylndr.

Pleased to have worked alongside our colleagues, Amira Sherif of Sarie Eldin & Partners Legal Advisors, Talal Elayat, Maie Hamdy, and Marwan El Didi of EFG Holding, Amr Khaled of Bank NXT, and Karim Shabana of EG Bank.

For more information, check out Enterprise’s coverage here.

We advised Ezdehar Management (Ezdehar), an Egypt-based private equity firm, on the full acquisition of Zahran Market after purchasing the remaining 40% stake.

This deal marks the completion of a two-year collaboration with the Zahran family, focusing on modernising operations and enhancing management systems, highlighting Ezdehar’s commitment to Egypt’s retail sector.

Our team was led by Ragy Soliman, Managing Partner and Co-Head of M&A and Capital Markets, Dina Sherif, Counsel, and Yomna Taha, Managing Associate.

Congratulations to Amir Mishriky, Amr ElSalanekly, and Diyar Hozaien of Ezdehar.

Pleased to have worked alongside our colleagues Saifallah Kadry and Ali Abu Zeid at Matouk Bassiouny, legal advisors to Zahran Market, and Ahmed Hussein at Compass Capital, the financial advisors to Zahran Market.

For more information, check out Enterprise’s coverage here.

We are pleased to share our latest report highlighting the laws and decrees issued in the third quarter of 2024.

To access the report, click on the attachment below.

If you are interested in acquiring a copy of the legislation and keen on remaining up to date with the most recent laws and decrees, sign up here.

Q3 of 2024Download

We are pleased to share ADSERO’s contribution to the newly updated International Employment Lawyer’s Guide to Whistleblowing. As organisations navigate an evolving legislative landscape focused on accountability, this guide addresses key challenges in protecting individuals who report corporate misconduct.

Contributed by Alia Monieb, Partner and Head of Employment; Nada Khaled, Managing Associate; Hoda Khira, Junior Associate; and Khaled Omar, Junior Associate, the Egyptian law chapter offers practical insights into compliance requirements, reporting mechanisms, and the legal protections available for whistleblowers, helping employers effectively manage associated risks.

Explore the guide and learn more about whistleblowing protections across various jurisdictions here.

Overview

In the complex landscape of Egyptian business law, the concept of fully functional joint ventures (“JV”) plays a crucial role in determining the application of merger control regimes. This article explores the essential criteria for assessing fully functional JVs and their implications for businesses operating in Egypt.

Understanding Fully Functional JVs

A fully functional JV is an entity that operates autonomously on a lasting basis, performing all the functions typically associated with independent businesses in its market. The Egyptian Competition Authority (the “ECA”) and the European Commission (the “EC”) provide guidance on assessing these JVs, which is particularly relevant in the context of Egypt’s evolving business environment.

Key Assessment Criteria

Joint Control

For a JV to be considered fully functional, it must be jointly controlled by 2 (two) or more entities. This control can result from either the establishment of a new entity or the acquisition of an existing one.

Operational Independence

A crucial aspect of fully functional JVs is their ability to operate independently in the market. This requires:

Interestingly, the EC allows for some flexibility in staffing arrangements. Personnel may be procured from third parties or seconded from parent companies, provided this aligns with industry standards or is limited to a start-up period.

Beyond Auxiliary Functions

To be considered fully functional, a JV must perform activities beyond mere auxiliary functions for its parent companies. It should have its own presence and purpose in the market, rather than simply supporting its parents’ operations.

Commercial Relationships with Parents

The JV’s relationship with its parent companies is a critical factor in assessing its functionality. While some level of interaction is expected, the JV should maintain a degree of independence:

Lasting Operations

The ECA presumes that a JV operates on a lasting basis if its duration is not predetermined. However, if a specific duration is set, it must be sufficient given the nature of the market. Additionally, the EC notes that JVs established for short-term, specific projects may not meet this criterion.

Implications for Businesses

Understanding these criteria is crucial for businesses considering JVs in Egypt. Fully functional JVs may trigger merger control notifications, while changes in a JV’s activities could be considered a new concentration requiring fresh assessment. As Egypt continues to attract foreign investment and local businesses expand, the proper structuring of JVs becomes increasingly important. Companies must carefully consider these factors to ensure compliance with competition law and to maximise the strategic benefits of their JV.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of ADSERO. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Readers should consult with a qualified attorney for specific legal guidance. ADSERO does not guarantee or warrant the accuracy, completeness, or adequacy of the information presented and assumes no liability or responsibility for any errors or omissions in the content.

We advised Telecom Egypt (TE) in the successful signing of a long-term EGP 18 billion syndicated loan facility aimed at financing the company’s operations through a syndication of 13 banks, led by CIB Egypt and Banque Misr as Initial Mandated Lead Arrangers and Bookrunners, along with the National Bank of Egypt (NBE) as Mandated Lead Arranger and Bookrunner.

The syndication of banks is comprised of CIB, Banque Misr, NBE, First Abu Dhabi Bank Misr (FABMISR), QNB Egypt, Ahli United Bank - Kuwait, Arab African International Bank, Banque du Caire, Bank NXT, Abu Dhabi Commercial Bank, Credit Agricole Egypt, Bank ABC in Egypt, and MIDBANK.

TE will use this new seven-year syndicated facility to refinance its existing short-term EGP facilities. The refinancing comes at a strategic juncture, aligning with TE’s ongoing efforts to improve its cash flow, ensure adequate liquidity, and enhance financial flexibility as the company executes its long-term growth plans.

Our team was led by Hossam Gramon, Partner and Head of Banking & Project Finance, and Karima Seyam, Senior Associate, assisted by Aya Badr, Associate, and Junior Associates Mostafa Serry, Nour El Kholy, and Nour Osama.

Congratulations to the TE team Mohamed Nasr, Wael Hanafy, Ashraf Fawzi, Walid Fahmi, Dr Marwa Abdelfatah, Eman Mesak, Eman Abdelsatar and Shaymaa El Maghraby on this groundbreaking deal.

Pleased to have worked alongside our colleagues Ragia Omran, Ibrahim Waël Abdelwadoud, and Iten Osama from Zaki Hashem, Attorneys at Law.

For more information, check out جريدة المال new’s coverage here.

We are pleased to announce ADSERO - Ragy Soliman & Partners' contribution to the latest edition of the Global Guide Quarterly (GGQ) published by Littler. Our insights, provided by Alia Monieb, Partner and Head of Employment, and Rawan Roshdy, Associate, highlight key developments in labour and employment (L&E) law in Egypt.

The GGQ is a quarterly newsletter that offers concise coverage of global L&E law developments in key countries across the Americas, Asia-Pacific, Europe, the Middle East, and Africa. It serves as an essential resource for multinational enterprises to stay informed about important changes in the L&E law framework.

Read our overview here.

Highlights

On 28 August 2024, the Egyptian Financial Regulatory Authority (“FRA”) issued decree no. 178 of 2024 (the “Decree”), which entered into force the following day of its publication. This Decree governs the acquisition, control, and mergers of companies engaged in non-banking financial activities. It introduces new approval requirements designed to enhance transparency and promote competitive practices within Egypt’s non-banking financial sector.

Key Provisions

1. Scope of Application:

The Decree applies to companies involved in non-banking financial activities, such as insurance, financial leasing, factoring, mortgage, and consumer finance. It also covers entities seeking ownership control or planning mergers within this sector. Actions include establishing new entities, acquiring shares, issuing shares due to mergers, capital amendments, or restructuring require FRA approval, particularly for share acquisitions, ownership control, and mergers.

2. Approval for Acquisitions and Control:

Entities intending to acquire a stake of 10% (ten per cent) or more in a company operating in non-banking financial activities must submit a formal request to the FRA. Approval is necessary for direct and indirect acquisitions or mergers. Companies are required to disclose all shareholder and governance changes during the approval process.

3. Ownership Restrictions:

Entities seeking to own or control more than 10% (ten per cent) of a company’s share capital must obtain prior approval from the FRA. If ownership or control exceeds 25% (twenty-five per cent), additional documentation must be submitted to the FRA. This includes the rationale behind the acquisition or control, the future investment plan, and, if the applicant is a foreign financial entity, documentation proving that it is subject to the supervision of a regulatory authority in its home country. This regulatory authority must have functions similar to those of the Central Bank of Egypt or the FRA in the relevant field of activity.

4. Merger Requirements:

Companies planning to merge must submit comprehensive documentation to the FRA, including the rationale for the merger, draft resolutions, and auditors’ reports on the companies involved. The FRA will assess factors such as market impact, competition, and shareholder interests during the approval process.

5. Review Process and Duration:

The FRA will issue its decision within  45 (forty-five) days of receiving a complete application. The decision remains valid for 6 (six) months, during which the applicant must finalise the acquisition or control; it may be extended once for an additional 6 (six) months. The FRA’s decision will consider factors such as the applicant’s financial capability, business experience, potential impacts on market competition, and the applicant’s legal and financial track record. The FRA must seek the opinion of the Egyptian Competition Authority when considering applications for ownership or control that could impact market competition, especially if any of the cases stipulated in Article 19 of Law No. 3 of 2005 and Article 53 of its Executive Regulations occur.

Concerned Entities

The Decision impacts:

Important Stipulations

We advised UMX Studio, one of Saudi Arabia’s pioneering game development studios, in its recent acquisition by Jetapult, a global strategic investment company in the gaming sector backed by Accel.

This transaction marks Jetapult’s first investment in the MENA region. It aims to expand its electronic games portfolio, target new global audiences, and open doors for international investors in Saudi Arabia’s gaming industry. Additionally, it highlights Saudi Vision 2030’s goal of becoming a regional hub for video gaming and e-sports.

Our team was led by Ibrahim ElGengehy, Partner, assisted by Soha Hussein, Associate, and Youssef Abdelkader, Junior Associate.

Congratulations to Ali Al-Harbi, Founder of UMX Studio, and the seasoned team on this achievement.

Pleased to have worked alongside our colleagues from Catalyst Partners, UMX Studio’s financial advisors: Abdelaziz Abdel Nabi, Co-Founder; Ramy Osman, Partner; and Mohamed Akmal, Director; as well as Jerome Merchant + Partners.

For more information, check out Amwal Al Ghad's coverage here.

Highlights

On 28 August 2024, the Egyptian Financial Regulatory Authority (“FRA”) issued decision no. 177 of 2024 (the “Decision”), outlining updated conditions for licensing and renewing licenses for companies engaged in non-banking financial activities. This Decision aims to regulate the licensing processes, ensuring companies comply with financial laws while fostering transparency and growth in the financial sector.

Key Provisions

1. Scope of Application:

2. License Requirements:

3. Ownership and Investment Rules:

4. Corporate Governance:

The Decision requires companies to have a clear corporate governance framework, ensuring accountability and transparency. For instance:

5. Timeframe:

Concerned Entities

The Decision impacts:

Important Stipulations

We are pleased to share our latest report highlighting the laws and decrees issued in the second quarter of 2024.

To access the report, click on the attachment below.

If you are interested in acquiring a copy of the legislation and keen on remaining up to date with the most recent laws and decrees, sign up here.

20240926_Q2 of 2024_Legislations NewsletterDownload

We are pleased to share our most recent report highlighting the critical decisions issued by the Board of Directors of the Financial Regulatory Authority (FRA) during the first half of 2024.

To access the first issue, click on the attachment below.

20240922_FRA DecisionsDownload

The Egyptian General Authority For Investment (GAFI) has released a new guide detailing the legislative framework for protecting minority shareholders in Egyptian companies. Key points include:

Read the full guide here.

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