Egypt’s commercial legal policies have been seeing an overhaul in recent years, with the primary goal of easing business operations. This has been one of the main attributions to the country’s rank improvement in the World Bank Group’s 2020 Ease of Doing Business report, jumping six spots from 120 last year to 114 in rank.
To better explore the major changes that happened in Egypt’s legislative and regulatory structure, Arab Finance sat with Rasheed Kamel, a partner at Al Kamel Law Firm. During the interview he shared his views on the overall legal landscape, highlighting top new legislations that are making a difference.
Can you tell our readers a bit about Al Kamel Law Firm and your main edge in the market?
Al Kamel Law Firm was founded by Mohamed Kamel in 1978, with its headquarters in Cairo.
Our broad client base includes many multinational and local corporations, banks, financial institutions, government agencies, non-profit organizations, and private enterprises operating in a vast range of industries and sectors.
Our professional legal minds are well versed in all aspects of laws and procedures, covering the full spectrum of industry sectors relating to corporate, commercial, and finance. This is in addition to negotiating, drafting, and administrating virtually every kind of contract including those relating to joint ventures, privatization, loans, and other financing arrangements. We further provide services in specialist areas such as tax, labor law, arbitration, telecommunications, and maritime law, adding to an extensive litigation experience in trials.
One of our strengths is that we provide our services in different working languages including, English, Arabic, and French.
Furthermore, we have a large team of experienced lawyers who have significant international exposure and are well versed in the Egyptian law, as well as a team of high caliber paralegals.
Egypt is digitizing its litigation system. In your opinion, how will this shift impact the country’s legal system, entities like yourselves, and clients?
The semi-full organization of the digitized litigation system in Egypt is related to disputes before the courts of the first instance and appeal at economic courts.
The system will have a tremendous impact on well-established and archaic legal concepts. It will shorten the litigation procedures and process to ensure the resolution of disputes in a more efficient manner.
The government is keen to implement the digitized litigation system, and accordingly, the Minister of Justice Omar Marwan issued decision No. 8548 for 2020 to govern registration in the electronic register for litigation before the economic courts.
What steps do you advise policymakers to take to limit the drawbacks and ensure the effectiveness of a digital legal system?
Legislators should issue comprehensive producers for a smooth application of digitized litigation system; to set a timeline for its implementation across all courts in the country; invest in infrastructure and security measures; retain market leaders to implement the system; spread awareness on the benefits of the new move and provide training on the use of the program.
Since corporate M&A is one of your areas of specialization, what are the biggest deals you worked on? And how do you evaluate the M&A scene overall in Egypt?
The M&A scene has been active and we have seen significate involvement of private equity firms. In addition, the implementation of the ongoing legislative reforms in our view will render the M&A scene more attractive.
Al Kamel has been involved in numerous transactions. We advised the shareholders of Alfa Medical Group, an Egyptian healthcare group, in connection with a partnership with CDC Group, which eyes a minority equity stake in the former.
We counseled minority shareholders concerning the contemplated merger between Cleopatra Hospitals Group (CHG) and Alameda Healthcare Group. In addition, Al Kamel advised Bedaya Hospital regarding a joint venture with CHG.
We assisted Saudi Telecom Company with the due diligence assignment in relation to the contemplated acquisition of Vodafone Group’s stake in Vodafone Egypt, as well as an investor in relation to his acquisition of Nasr Utilities and Installations Company from Madinat Nasr for Housing and Development.
Al Kamel advised Investec Africa Private Equity Fund 2 LP on its acquisition of Spinneys Egypt Limited, and KarmSolar on its contemplated equity fundraising to support its future developments.
How did the pandemic impact your operations? And what changes did you make to maneuver the system?
During the COVID-19 pandemic, we had to organize our attorneys and staff members to work remotely from home, and commutation was carried out through the use of technology. To our surprise, productivity and efficiency were much better than expected.
Given authorities were in a lockdown and the courts were only operating administratively to defer court hearings, the challenge was to ensure that our attorneys are present before the relevant counts to defer the cases. In the meantime, we had to make sure that our attorneys are taking the appropriate measure to protect themselves and others so we issued internal health and safety guidelines for all our staff members.
What are the recent laws passed that attracted your attention? Why?
Law No.191 of 2020 amended some provisions of the Civil and Commercial Procedural Law No. 13 of 1968 and became enforceable as of October 1st 2020. The new law increased the jurisdictional financial value of courts whereby the legislator aligned it with the true value of the money. Raising the jurisdictional financial value of courts should reduce the number of lawsuits brought before high degree courts.
More legislations include the Uniform Tax Procedural Law No. 206 of 2020 amended by Law No. 211 of 2020, the Tax Procedural law. The new legislation regulates all types of tax procedures and disputes, with every taxpayer given a single tax number. It works on the digitization of the tax records and invoices which is a major step towards the complete digitization process that Egypt is going through.
Another milestone is Customs Law No. 207/2020 that aims to develop customs control through the creation of an information system of the goods and services to be imported. The law is concerned with facilitating international trading, promoting investment and conduct of business, and encouraging local economic projects.
I also want to highlight the Personal Data Protection Law No. 151 of 2020 that protects data of natural persons, provides civil and criminal protection, and sets limits to the use of data for e-marketing purposes. It also implies the protection of “processed data,” which is defined as any electronic or technical operation done to use personal data.
Last but not least is Investment Law No. 72 of 2017 which has been amended to attract more foreign investments into Egypt. It offered incentives such as residency and capital repatriation, as well as allowing any investor of any nationality to invest solely without an Egyptian partner.
What are your insights on the Banking and Central Bank Act and how it’ll benefit the financial sector?
The Central Bank Law No. 194 for 2020, known as the New Banking Law, is considered a milestone in the field of banking supervision and governance.
The new law merged the provisions of the executive regulations of the previous banking law with new provisions, granting the authority to the Central Bank of Egypt’s (CBE) board directors to issue decisions to address any practical impediments.
The legislation has widened the scope of its application to extend to other non-banking entities such as operators and providers of payment services, as well as credit rating and risk guarantee companies.
It allows the CBE to grant licenses to financial institutions wishing to obtain a commercial mortgage, and thus resolve difficulties that foreign financial institutions faced previously. Such was previously required to be obtained from the Ministry of Internal Trade.
What are the common regulatory issues businesses face when opening up in Egypt?
The main problem is bureaucracy, which dictates a lengthy process to accomplish the relevant governmental procedures. The country has been working on eliminating bureaucracy by issuing new laws and regulations I highlighted before, aiming mainly to facilitate administrative procedures.
What advice would you give to young lawyers hoping to practice in the region?
To ensure having a second foreign language, namely English, while maintaining a strong Arabic base.
I advise young lawyers to become knowledgeable of disciplines other than law, such as business and finance, etc., which will enable them to better understand the client’s needs and the matters at hand.
For those starting their career as transaction lawyers, they should always take the business and commercial aspects into consideration not only to better advise the client but also address the legal risk associated with any decision.
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