Licensing of Tourism Companies in Egypt

Licensing of Tourism Companies in Egypt                       

First: Definition of Tourism Companies:

Pursuant to Article 1 of the Law Regulating Tourism Companies, a 'tourism company' is defined as any company engaged in all or any of the following activities:

• Organizing tourism trips, whether for groups or individuals, within or outside Egypt, in accordance with specified programs, and providing related services, such as transportation, accommodation, and any ancillary services. (Tourism Companies under Clause A)
• Selling or issuing travel tickets, facilitating luggage transportation, and booking seats on various means of transportation, as well as acting as agents for airlines, shipping companies, and other transportation entities. (Tourism Companies under Clause B)
• Operating transportation vehicles, whether land, sea, air, or river, for the purpose of transporting tourists. (Tourism Companies under Clause C)

Second: Documents Required for Establishing Tourism Companies in Egypt:

1. Certified Copy of the Company's Memorandum of Association and Articles of Association Clearly stating the purpose of the company's establishment.
2. Certified Copy of the Company's Commercial Registration Certificate.
3. Copy of the Company's Gazette Where the summary of the Memorandum of Association is published.
4. Audited Initial Balance Sheet Signed by a certified public accountant.
5. Receipt of Insurance Payment.
6. Statement of Employees Including their names, qualifications, addresses, and nationalities.
7. Criminal Records For general partners, the managing director, and company employees.
8. Approval from the Ministry of Tourism For companies intending to operate tourist transportation.
9. Approval from the Ministry of Defense For tourism companies wishing to operate in military or border areas, upon the recommendation of the Ministry of Tourism.
10. Receipt for Payment of Licensing Fee.
11. Ownership or Lease contract for the company's premises.

Third: Regulations and Conditions for Granting Licenses to Tourism Companies
According to the Executive Regulations of Law No. 125 of 2008, amending Law No. 38 of 1977 on the Regulation of Tourism Companies, issued by Ministerial Decree No. 209 of 2009

The following conditions must be met to obtain a license for tourism companies:

1. The applicant entity must be a company, regardless of its legal form.
2. The company's registered memorandum of association must not include purposes other than engaging in tourism activities as specified in Article 1 of the Law Regulating Tourism Companies (A, B, C).
3. The company must have a registered premises in the Arab Republic of Egypt.
4. The company must have a general manager who is an Egyptian national.
5. The company's capital must not be less than two million Egyptian pounds. The value of transportation means shall not be included in the calculation of the minimum capital.
6. The company must provide a financial guarantee to the Ministry of Tourism according to the following categories:
   • EGP 200,000 for category (A) tourism companies.
   • EGP 175,000 for category (B) tourism companies.
   • EGP 150,000 for category (C) tourism companies.

This guarantee shall be provided in cash, by a certified check, or by a guaranteed and unconditional letter of credit.

Requirements for the Head Office or Branch of a Tourism Company:

1. The premises must be located in an area suitable for the type of tourism activity conducted by the company.
2. The premises must be in a separate unit or location, independent of any other activity.
3. The head quarter must have a minimum area of 60 square meters, and a branch must have a minimum area of 30 square meters. However, this does not apply to company headquarters and branches established in hotels, airports, clubs, or government entities.
4. The premises must be equipped and furnished adequately for the conduct of tourism activities and must be equipped with modern communication and information technology.
5. If the premises are rented, the lease agreement must have a minimum duration of five consecutive years and must be authenticated or have a certified date at the Real Estate Registration and Documentation Authority.
   • A tourism company may establish more than one branch within a governorate, subject to the following maximum limits: three branches in all governorates except Cairo, where the maximum is five branches, and Alexandria, where the maximum is four branches.
   • A tourism company seeking to establish a branch in a tourist governorate must demonstrate a minimum of EGP 15 million in incoming tourism revenue during the two years preceding the application. To maintain the branch, the company must continue to generate a minimum of EGP 18 million in annual incoming tourism revenue during two years following the branch’s licensing.
   • The tourism governorates referred to in the previous clause are the areas located within South Sinai and Red Sea governorates.
   • Category A tourism companies may establish branches in any governorate, excluding tourist governorates referred to in the previous clause, regardless of their annual incoming tourism revenue.
   • Branch licenses granted under the aforementioned conditions shall be permanent.
   • Branches are subject to the same regulations stipulated in the Executive Regulations for parent companies concerning branch managers, premises, and the payment of chamber subscriptions. They are also subject to the same rules and penalties applicable to the parent company.
   • Category C tourism companies may establish branches at land, air, and sea border crossings provided they comply with all applicable conditions and regulations. Such branches shall be exempt from the minimum space requirements for the branch and the prohibition on multiple branches within a governorate.
   • The Minister of Tourism, at their discretion and based on factors such as the company’s investment size, contributions to tourism promotion plans, workforce size, provision of supportive services to the state, or other considerations in the interest of Egyptian tourism, may grant a tourism company additional branches exceeding the maximum limits specified in the first clause of Article Four of Ministerial Decree No. 209 of 2009, as amended by Article One of this decision.

Requirements for Appointing a General Manager for the Company:

1. Must have at least ten years of experience in the tourism work that the company engages in, with at least four years in a managerial role if holding a higher education degree, or fifteen years if holding an above-intermediate degree, with at least eight years in a suitable managerial role.
2. Must be dedicated and not employed by any other company or entity. The company manager may also be the manager of its branch located in the same city as its headquarters.
3. Must have at least five years of experience in the tourism work that the company engages in, if holding an intermediate or above-intermediate degree, and must be dedicated and not employed by any other company or entity.

In both cases, the required experience period is reduced by three years for holders of a bachelor's degree in Tourism and Hotels - Tourism Studies Department - and four years for holders of a Postgraduate Diploma in Tourism, and five years for holders of a PhD in Tourism Sciences.

In the event of the general manager's service termination or death, the company may continue its operations until a new manager is appointed within a period not exceeding six months. Otherwise, the Minister of Tourism will issue a decision to suspend the company's activities.

Fourth: Regulations and Conditions for Granting Licenses to Foreign Tourism Companies to Open Branches in the Arab Republic of Egypt:

1. The company must be from a country that grants Egyptian companies the right to establish branches therein, verified by an official certificate from the Egyptian Ministry of Foreign Affairs.
2. The company must provide the Ministry of Tourism with a financial guarantee of two hundred thousand Egyptian pounds in cash or via an irrevocable, non-transferable and indivisible letter of guarantee from an Egyptian bank.
3. The company must permanently deposit with the Ministry of Tourism proof of having a capital in Egypt not less than three million Egyptian pounds.
4. The company must follow legally prescribed commercial registration procedures.
5. Branch must have premises meeting the following conditions:
   • An area of no less than (30) square meters, except for the headquarters of companies and their branches that are established in hotels, airports, clubs, or government agencies.
   • It must be prepared and furnished appropriately to conduct tourism activities and equipped with modern communication and information technology.
   • If the place is rented, the lease contract must be for a period of no less than five consecutive years and must be authenticated or dated by the Real Estate Registry and authentication.
6. The branch must have an Egyptian manager who meets the conditions required for a company manager.
7. Branch must appoint an account auditor.\
   • Agencies managed by foreign tourism companies in Egypt shall be considered branches if they are managed by themselves or by their employees, and the agent has the authority to conclude contracts on behalf of the company.
   • Egyptian companies in which foreign capital is invested in must:
     1. The company must provide the Ministry of Tourism with a financial guarantee of two hundred thousand Egyptian pounds in cash or via an irrevocable, non-transferable and indivisible letter of guarantee from an Egyptian bank.
     2. The company must permanently deposit with the Ministry of Tourism proof of having a capital in Egypt not less than three million Egyptian pounds.
   • Egyptian tourism companies and branches of foreign tourism companies licensed to practice tourism activities in Egypt must provide the Ministry of Tourism with their budgets and final accounts within a maximum period of three months from the end of the company's financial year and must comply with the rules set by the Ministry of Tourism in agreement with the Ministry of Finance for the purposes of auditing their revenues and expenditures.
   • Tourism companies licensed within six months of the effective date of Decision No. 274 of 2014 and those that will be licensed within six months of the license must join the Chamber of Travel Agencies. Joining the aforementioned chamber is considered one of the conditions for continuing the license and carrying out the activity.

Fifth: Conditions for Approval by Ministry of Tourism for Various Transportations Means Used by Tourism Companies:

1.  Land Transportation:

For Category (A) tourism companies:

• The vehicle manufacturing date must not exceed two years for buses, with no restrictions on minimum or maximum seat capacity.
• The number of seats in small passenger cars must not be less than fifty seats as a minimum for limousines and twenty seats for four-wheel drive vehicles used in safari tourism.
• The expansion of the carrying capacity of tourism companies regarding "limousines" is only allowed by one car for every one hundred and eighty thousand Egyptian pounds of the company's revenue for the three years preceding the request for expansion in the carrying capacity of those cars.
• The revenue of the company wishing to expand the carrying capacity, according to Decision No. 777 of 2013, shall only be considered the revenue from tourism and limousine activities, regardless of the type of tourism company, whether it is Category (A) or Category (C).
• For tourism companies that have not been licensed or have not been engaged in tourism and limousine activities for three years, their average revenue shall be calculated at sixty thousand Egyptian pounds for each full year they have been licensed or engaged in such activity, in accordance with the provisions of Article One of this Decision.
• These rules stipulated in Decisions No. 777 of 2013 and 904 of 2013 shall not apply to companies that have not been licensed or have not been engaged in tourism and limousine activities for a full year.

2. Maritime and River Transportation:

The capacity of the unit must not be less than one hundred passengers, and it must be equipped to accommodate them properly, and it must meet all maritime and river safety requirements and other navigational requirements determined by the competent authority for maritime or river transport, according to the type of unit used in tourism transport.

3. Air Transportation:

The company must own no fewer than two aircraft, and the year of manufacture is determined by the Civil Aviation Authority, in compliance with the provisions of the Civil Aviation Law No. 28 of 1981.

Tourism companies and branches of foreign companies are required to notify the General Administration for Programs at the Ministry of Tourism of their tourism programs at least fifteen days before implementation. The notification must include the following information:

• The names, grades, addresses, and prices of hotels or accommodation places where the groups will stay as per the prepared programs.
• The method by which the company will pay for the services provided, and the source of payment. Payment must be in one of the legally accepted currencies.
• The bank through which the payment will be made, which must be one of the banks authorized to deal in foreign currencies.

The Administration may object to any program that it finds to be in violation of the provisions of the Law Regulating Tourism Companies and its Executive regulations. In this case, the violating company must amend its programs and implement them in accordance with the objections raised.

• Category (A) tourism companies engaged in Hajj and Umrah activities must notify the administration of their Hajj and Umrah travel programs.
• The commitments listed in each travel program template must be executed and adhered to by the tourism companies, and any deviation is considered a new program that has not been notified.
• The provisions of Article 25 bis (z) of Law No. 38 of 1977, as amended by Law No. 118 of 1983 and Law No. 25 of 2005, apply to tourism companies that execute any element not included in the program notified to the Ministry of Tourism for Hajj and Umrah trips or have not obtained the Ministry's approval for any modifications to the program.
• The Supreme Committee for Hajj and Umrah in the Sector of Companies and Tourist Shops reviews and examines cases, complaints, and reports regarding the execution of Hajj and Umrah trips by companies in light of paragraphs (a, b, c) and other provisions of the Executive Regulations and Law and proposes appropriate penalties in a memorandum presented to the Minister’s Legal Adviser for issuance of the appropriate decision.
• The volume of a company's activity in exporting resident tourists abroad annually shall not exceed twenty percent (20%) of its total annual activity, including all tourism services provided to incoming tourists, tourism transportation activities if they conflict with the activities, it carries out, and domestic tourism.
• The General Administration of Company Licenses at the Ministry of Tourism, before returning the financial guarantee of a company whose license has been canceled, shall verify the company's fulfillment of its obligations within a maximum period of six months from the date of cancellation of the license.
• The company's request for a refund of its financial guarantee, which is submitted by the company’s liquidator in the event of its liquidation, shall be submitted to the dispute resolution committee for consideration. In all cases, the amount of the financial guarantee of a company whose license has been canceled or liquidated shall not be refunded before obtaining the opinion of the Chamber of Tourism Companies.