EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Hana ElBarbary and Dima Mazen, Shehata & Partners
Licensing requirements Natural and juristic persons must obtain a CBE licence to operate payment systems or provide payment services. This requirement also applies to payment system providers (PSPs) and pay - ment system operators (PSOs) targeting Egyp - tian residents from abroad. Record preservation Licensed service providers must preserve electronic copies of registries, contracts, cor - respondence, commercial papers and banking transaction documents. These copies have the same legal value as original documents if pre - served, processed and retrieved according to CBE guidelines (Article 203). Key Challenges Although Egypt has witnessed a number of efforts to support growth of the digital market, in practice, some challenges remain, as discussed here. Regulatory framework • Multiple regulatory authorities: The digital market involves various authorities based on the digital activity type. There is no consoli - dated E-Trade Law or authority regulating all e-commerce fields, leading to enforcement issues. • Outdated legislation: The E-Signature Law, issued in 2004, is outdated given the current technology market’s development. • Unclear legislative platform: Egypt lacks clarity in handling e-commerce, especially regarding electronic transactions, liabilities, rights, and burden of proof. • Slow e-government framework: The slow enactment of an e-government regulatory framework hinders integration with the com - mercial digital market, especially locally.
The 2017 national e-commerce strategy with UNCTAD highlighted these issues and the need for legislative improvements, such as intermedi - ary liability, e-procurement, and data protection enforcement. The Data Protection Law’s appli - cation remains unclear without an established licensing body and executive regulations. Intellectual property • Lack of specific protection: The IP Law does not provide specific protection for IP and copyrights in digital markets. It remains unclear which authority protects IP rights in the digital economy. • Registration requirement: To gain legal pro - tection under the IP Law, trade marks and IP rights must be registered. • Enhancement needs: Enhancements include granting ITIDA authority to investi - gate infringements via an online complaints system, and training officers for electronic evidence procurement. 1.2 Digital Economy Taxation The tax application regime in the digital market and e-commerce is complex. Key challenges include identifying the permanent establishment (PE) subject to tax, determining tax liability, and enforcement. Inclusion in the Tax System Egypt has taken steps to include e-commerce in the tax system: • Decree No 307 of 2020 created an e-com - merce department to register e-commerce businesses for taxation; • Executive Circular No 89 of 2021 requires that commercial and non-commercial activities be registered with the Egyptian Tax Authority
(ETA), including: (a) e-commerce;
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