The Guide is designed to help companies and individuals involved in CSR, NGOs and other community development programs understand and comply with the new civic law and its regulations of 2021. Throughout, we attempt to provide companies—and particularly their legal and compliance professionals—with a practice-oriented overview of the key features of the law. This guide will be particularly useful for companies with existing NGOs and CSR activities seeking to maintain the legality of their operations and increase their civic engagement in Egypt.

This Guide is organized into 3 discrete modules:

• Civic society actors and compliance procedures.
• Associations: Their Purpose, obligations, regulatory aspects and new Finacial considerations.
• More on Associations, Foregien NGOs, Volunteerism provisions and Penalties.

Part I: Civic society actors and compliance procedures

The Civic Work Practicing Law is considered one of the most significant legislations in the past 2 years. On one hand, it comes in line with current context and challenges that face the Civic Work in Egypt, especially anti-money laundering and anti-terrorism policies, as it is issued 2 years after the previous Law No. 70/2017. On the other hand, it crosses path between both the private and civic sectors, as main actors in both fields are the same.

This guideline aims to highlight the main features, actors, procedures of compliance, regulatory and financial aspects and main innovations introduced by Civic Work Practicing Law promulgated in August 2019 (hereinafter referred to as the “CWP Law”) and its Executive Regulation (“ER”) issued recently on the 11^th of January 2021.

Main innovations

The CWP Law keeps the same Civic Society’s Foundations definitions and concepts, modifying only the following aspects:

1. On one hand, the law reduces the required capital for establishing a Civic Foundation from 50k EGP to only 20k EGP.
2. On the other hand, the law increases the number of civic associations or foundations required to establish a federation from 10 to 15 entities.
3. Finally, it stipulates chapters for each Civic Society’s Foundations (associations, Foundations of Public Interest, Civic Foundations, foreign NGO, General and Regional Unions). In addition to that, a separate chapter has been assigned to “administrative authorities” -the central unit and its local units/ the Civic Associations and Foundations Projects Support Fund CAFPSF), volunteerism and a final chapter for penalties.

Main actors and concerned legal persons

This Law applies to:

1. The associations (the ordinary one or for Public Interest purpose),
2. The Regional or Foreign NGO’s (Non-Governmental Organizations) working in Egypt,
3. The Civic Foundations founded by moral or natural persons,
4. The Unions working in Civic work field (Regional, Federal or General Unions).

Each category of those above-mentioned has been defined precisely in art. 1 of the CWP Law and was all mentioned as “Civic Society Foundations”.

v. Moreover, the CWP Law permits persons to launch civic society initiatives and campaigns without establishing any of the civic work legal entities, after fulfilling 3 conditions:

1. Obtaining an authorization from administrative authority- ER (art.22) provides for the required documents to be attached to the request.
2. The duration of such initiative or campaign shall not exceed one year – renewable upon authorization.
3. A bank account shall be opened in the name of the initiative in one of the banks that are under the supervision of the CBE.

This abovementioned innovation aims to encourage individual volunteering initiatives in serving the society without facing administrative and regulatory complications.

It is worth mentioning that one of the most significant innovations is that the CWP Law now allows persons to practice Civic Work activities without taking any of the above-listed legal forms, under only one condition: obtaining a license from the competent administration. Consequently, the legal or natural person shall be called “the entity”.

 The regularization of current situations/ compliance procedure

The CWP Law stipulates a year -starting of the ER issuance – issued on 11^th of January this year- as a time limit for all legal and natural persons working in Civic Work field to regularize and settle their legal situations according to this law. In this regard, we were verbally advised by the Ministry of Social Solidarity (the “MOSS”) that they are currently working to digitalize the submission of documents, the documents will then be submitted online as soft copies.

Non-Compliance Penalties

• The mandatory dissolution of the entity by the competent court’s decision.
• The confiscation of its fund toward “Civic Associations and Foundations’ Projects Supporting Fund” created by previous Law No.170/2017.
• The immediate cessation of its activities by force of law.

The compliance procedures

The Civic Society Foundation shall:

• Notify the MOSS of information concerning its activities, funding, programs and cooperative protocols signed with foreign entities.
• Amend its statute-internal regulation- in accordance with the current law stipulations and the indicative internal regulation provided by the ER.
• Obtain the approval of extra-ordinary general assembly on the amended Statute and notify the decision to the Central Unit attached with documents listed in the ER.
• The administration shall finally note the entity’s compliance in the Civic Society foundations Registry.
• It’s impossible to comply associations or entities that has been listed as terrorist entity or has been convicted in one of terrorism crimes.
• Finally, administrative authority (local units) shall notify therefore the uncompiled entities in order to regularize its legal situation as soon as possible.

Accordingly, Local Units shall:

• have a material registry in addition to an electronic one to record the received compliance notifications.
• Create one or several committees to handle dissolutions decided by courts.

Moreover, the ER has listed precisely in its art. 10 the compliance procedure that shall be applied by foreign NGOs. On the contrary, non-registered entities have no choice but establishing an association or foundation, otherwise its former license will be cancelled.

The entry into force of the law and competent jurisdiction

The CWP Law entered into force in August 2019, and its ER was issued on 11^th of January and became effective the following day.

Further, the law expressly determined the administrative courts as the competent jurisdiction over matters arising from its implementation.

 Features of the law

Procedures of Association establishment

The CWP Law kept – in its section I of Chapter II- same founding conditions as following:

1. Association shall be founded via only a notification addressed to the administrative authority (the central or local competent unit).
2. The notification shall be attached with all required documents listed in the ER.
3. The association must have a written statute signed by all its founders; the statute comprises the same previous stipulations though adding the mandatory stipulations regarding “volunteerism criteria and conditions to work in the association’s activity as well as “volunteers’ rights and obligations”.
4. The ER has expressively added requirements concerning the “adequate headquarter” for the association’s activities.
5. The administrative authority shall then accept the notification as long as it satisfies the conditions and required documents, register the association, and publish its statute on its official website.
6. The law stipulates that the MOSS should create Civic Society Foundations Data Base and give each foundation a specific number. The integrity and the confidentiality of such data base must be preserved.
7. In practice, the MOSS’ response takes up to 60 business days to be calculated after submitting all the required documentation.

Similarly, the law has kept same previous criteria concerning the founding member as well as Board of Directors BoD members adding only one new condition “the member should not be listed on terrorism lists.”

Moreover, as for foreign members, the law stipulates that foreign legal residents in Egypt can be members in the association or its BOD - and increases their membership percentage from 10% to 25%- by following the procedure stipulated in the ER:

1. The association shall notify the administration of the foreign members that wish to join.
2. The unit has a period of 60 days to review and investigate with competent authorities their names and information.

This blog contains general information on legal and related matters and should not be interpreted as legal advice. Fore more information please refer to our disclamer below.