EGYPT Law and Practice Contributed by: Mahmoud S. Bassiouny, Iman Nassar, Habiba Gamaleldin and Israa Mostafa, Matouk Bassiouny
exchange information and co-operate with the CBE in implementing its role. Applicants for a banking licence must submit their request accompanied by all the mentioned documents and information. The fee for submit - ting an application for preliminary approval of a banking licence is EGP1 million for a joint stock company and USD50,000 for a branch of a for - eign bank. The board of the CBE must issue its decision within 90 days of the submission being completed. If the application is approved, the applicants must finalise the establishment of a joint stock company or a branch, as the case may be, within one year from the approval in relation to joint stock companies and six months in rela - tion to branches. The preliminary approval and all required documents will then be submitted a second time for the final approval of the board of directors of the CBE. The licensing for branches of a foreign bank requires an additional step whereby foreign banks guarantee all the deposits of the branch, the rights of its creditors and all other liabili - ties. The registration of a new bank or a branch must then be annotated in the register of banks maintained by the CBE. The fees for this are EGP500,000 for headquarters and EGP250,000 for any registered branch, or EGP100,000 for small branches or agencies. Foreign banks are further allowed to establish a representative office in Egypt after obtaining a licence from the CBE. The New Banking Law also includes several other provisions for the licensing of foreign cur - rency exchange firms, money transfer com - panies, payment facilitators, credit guarantee
companies and payment aggregators. However, these provisions leave the details of the licensing processes to be decided by the board of direc - tors of the CBE. 3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank The ownership of share capital in Egyptian banks is allowed equally for Egyptians and for - eigners, whether individuals or companies, sub - ject to several rules that relate to the percentage of ownership. Any ownership between 5% and 10% of the issued share capital or voting rights of a bank requires the owner to notify the CBE within a maximum of 15 days from the date of acquiring ownership. If the ownership of the bank-issued share capital or voting rights is anticipated to be more than 10%, then the prior approval of the CBE must be obtained. Any request to acquire more than 10% of the bank-issued share capital must be sub - mitted at least 60 days prior to the date of acqui - sition. The applicant must demonstrate solid creditworthiness and its objectives in respect to the acquisition and details of its strategies for participating in its management. An applicant seeking to acquire more than 10% of the issued share capital of a bank must also clarify its own capital and ownership structure (if a company) and identify all its related parties and ultimate beneficial owners. The CBE checks whether the applicant has the financial capabili - ties and expertise to support the capital struc - ture of the bank and to implement its objectives without adversely affecting competition in the banking industry.
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