Who Must Keep Commercial Books in Egypt?
Under Article 24 of the Egyptian Commercial Code, the bookkeeping obligation applies to:
- Any trader whose capital invested in trade exceeds EGP 20,000
- The trader must keep books appropriate to the nature and scale of their business
- At minimum, traders must maintain a daily journal and an inventory book
The books must clearly show:
- The trader's financial position
- Their rights and commercial obligations
- The results of their operations for each financial year
Practical note for expats: Even if your business is relatively modest, if your invested capital exceeds EGP 20,000 — a relatively low threshold — you are legally required to maintain formal commercial books. This applies equally to foreign nationals operating businesses in Egypt.
The Daily Journal: What Must Be Recorded
The daily journal is the primary transactional record. Under Article 25:
- All commercial transactions carried out by the trader must be recorded day by day, in detail
- Personal withdrawals must also be recorded, though they may be recorded in aggregate on a monthly basis rather than daily
- Traders may use subsidiary journals to capture detailed transaction data, with totals transferred to the main journal
Practical advice: Keep your personal withdrawals clearly separated from business transactions. Maintain consistent daily records — gaps or irregular entries can create problems if your books are ever examined in a legal dispute.
The Inventory Book: Year-End Records
Under Article 26, the inventory book must record:
- Detailed particulars of all goods in the trader's possession at the end of each financial year
- Alternatively, a summarized statement is acceptable if full details are contained in separate, supplementary books or lists
- Any supplementary books or lists used in this way are treated as integral parts of the inventory book
Correspondence and Document Retention
Beyond formal accounting books, Article 27 requires traders to:
- Retain copies of all correspondence, telegrams, and other documents sent or received in connection with their trade
- Keep these records in an organized manner that allows for easy review
In today's environment, this extends to email correspondence, contracts, invoices, and digital communications related to your business. Expats should establish digital filing systems that are organized chronologically and by subject matter.
Formal Requirements for Commercial Books
Article 28 sets strict standards for the physical integrity of commercial books:
- Books must be free from blanks, erasures, deletions, alterations, or writings in the margins or between the lines
- Before first use, the Journal and Inventory Books must have their pages numbered
- Each page must be signed by the Commercial Registry Office and stamped with its official seal
- Books must be kept in accordance with generally accepted accounting principles
Practical advice: Do not attempt to alter or correct entries by erasing or overwriting. Use proper accounting correction methods. Pre-registration of books with the Commercial Registry Office is a mandatory step before you begin using them.
How Long Must Records Be Kept?
Under Article 29, retention obligations are as follows:
- Commercial books and supporting documents must be retained for 5 years from the date of endorsement indicating the book is complete or closed
- Copies of correspondence, telegrams, and similar documents must also be retained for 5 years from the date they were sent or received
Practical advice for expats: Even if you close or sell your business in Egypt, you remain obligated to retain these records for five years. Plan for secure storage of both physical and digital records.
Entries Made by Employees
Under Article 30, entries recorded in commercial books by authorized employees are treated as if the trader made them personally. Critically:
- Such entries are presumed to have been made with the trader's knowledge
- This presumption can only be overturned by contrary evidence
Practical advice: As a business owner, you are legally responsible for what your employees record in your commercial books. Implement proper authorization controls and regularly review your accounting records.
Use of Commercial Books in Legal Proceedings
Commercial books play an important role in Egyptian court disputes:
- Well-maintained books support your legal position if a commercial dispute goes to court
- Poorly maintained or missing books can be used against you
- Courts may draw adverse inferences from failure to produce required books
Summary Checklist for Expat Business Owners
- [ ] Determine whether your invested capital exceeds EGP 20,000 (triggering bookkeeping obligations)
- [ ] Register and stamp your Journal and Inventory Books at the Commercial Registry before use
- [ ] Record all transactions daily in the journal
- [ ] Complete an inventory record at the end of each financial year
- [ ] Retain all business correspondence for at least 5 years
- [ ] Keep books free from erasures or unauthorized alterations
- [ ] Supervise employee bookkeeping entries carefully