What Is the Egyptian Commercial Code?
The Egyptian Commercial Code (Law No. 17 of 1999) replaced the previous commercial law that had been in place since 1883. It came into force on 1 October 1999, with special provisions relating to cheques taking effect on 1 October 2005.
The law governs:
- All commercial acts in Egypt
- Every natural person (individual) and juristic person (company) recognized as having trader status
- The rights and obligations of merchants, companies, and those who deal with them
When Does Egyptian Commercial Law Apply to You?
Article 4 establishes that the Commercial Code applies to all commercial acts and to every person — Egyptian or foreign — who is established to have trader status. As an expat, if you are engaging in commercial activities in Egypt, this law applies to you.
The Hierarchy of Rules
Article 5 sets out a clear priority order for resolving commercial disputes:
- The agreement of the contracting parties — what you and your counterpart have agreed in your contract comes first
- The Egyptian Commercial Code or other relevant commercial laws
- Rules of commercial custom and usage in Egypt
- Egyptian Civil Law — as a final fallback
This means your contract terms are the most powerful tool you have. Well-drafted contracts can override many default legal rules.
Mixed Commercial and Civil Transactions
Article 6 deals with situations where a contract is commercial for one party but civil for the other — for example, a business buying goods from a private individual. In such cases:
- Commercial law applies only to the commercial party's obligations
- The other party's obligations are governed by civil law
This is particularly relevant for expat businesses purchasing from private sellers or individual service providers in Egypt.
Key Definitions You Need to Know
Commercial Acts
The law defines commercial acts broadly to include buying and reselling goods, leasing property for profit, providing services professionally, manufacturing, transport, brokerage, agency, and any activity analogous to these. If your business involves any of these, Egyptian commercial law governs it.
Trader
A trader under Egyptian law is either:
- An individual who professionally engages in commercial acts in their own name and for their own account, or
- A company registered under Egyptian companies law, regardless of what it does
Small Craftsmen Are Exempt
If you are a small craftsman — someone doing basic craft work requiring minimal investment just to earn a daily livelihood — Egyptian commercial law does not apply to you under Article 19.
Does the Law Apply to State Entities?
Under Article 23, the Egyptian government and public legal entities are not classified as traders. However, when they engage in commercial activities, the Commercial Code's provisions still apply to those activities. This matters for expats who contract with Egyptian state-owned companies — commercial law governs those dealings.
How Egyptian Commercial Law Interacts With Your Contracts
One of the most practical aspects of the Commercial Code is that party agreements take priority over default legal rules. This means:
- You can customize your commercial relationships through well-drafted contracts
- Default rules only fill in the gaps where your contract is silent
- Commercial custom and practice in Egypt can influence how gaps are filled — knowing local business norms matters
Practical Tips for Expats New to Egyptian Business Law
- Understand which law governs your obligations. If your contract is commercial for both parties, the Commercial Code applies to both. If it is commercial only on your side, civil law may govern your counterpart's obligations.
- Draft contracts carefully. Since party agreement takes priority under Article 5, a well-structured contract is your strongest legal tool in Egypt.
- Register your business properly. Forming a company automatically makes it a trader — triggering bookkeeping, registration, and compliance obligations from day one.
- Don't assume your home country's commercial rules apply. Egyptian commercial law has its own definitions, presumptions, and procedures that may differ significantly from what you are used to.
- Seek qualified Egyptian legal counsel before signing significant commercial agreements, especially for joint ventures, agency arrangements, or supply contracts — the legal framework has specific nuances that affect liability and enforceability.
- Keep records from day one. Whether or not you are above the EGP 20,000 capital threshold, proper documentation protects you in any future dispute governed by Egyptian commercial law.