The GAFI Incorporates E-Signatures for Company Formation
For the first time in Egypt, electronic signatures (E-Signatures) have become an integral part of legal and official procedures in the public sector. The Ministry for Investment and International Cooperation has announced that The General Authority for Investments and Free Zones (GAFI) has made it possible to sign the paperwork setting up a company through electronic signature. Such paperwork includes contracts and official forms, which previously could only be accepted if signed by hand.
E-signatures are unique numbers or letters expressed electronically to uniquely identify a person. Similar to the traditional signature, they are a safeguard against fraud due to their ability to identify the signatory and differentiate them from another. However, their main benefit is that they can be used online without requiring physical presence. For that reason, e-signatures are a safer substitute for traditional signatures, as they provide the same benefits but with added modernity and practicality.
These new developments come as part of the efforts associated with facilitating and updating the links between the public and the private sector, where the availability of signing through e-signature should make setting up companies easier. This goes hand in hand with the new investment law, Law No. 72 of the year 2017, which calls for a more modern and computerized registration system. Giving e-signatures legal status means that one can now set up a company entirely through GAFI’s online system. Without ever having to physically visit the GAFI, or any other governmental authority, entrepreneurs and business people alike can now log on to the GAFI website, submit the required paperwork, pay the allocated fees by credit or debit card, sign everything electronically, and then receive the completed and authenticated paperwork pertaining the creation of their new company.
From a legal standpoint, however, one may be skeptical about the binding ability of an e-signature. But, Law No. 15 of the Year 2004 promulgating Electronic Signatures (E-Signatures) addressed this issue years ago, asserting that electronic signatures on official forms and paperwork are legally binding in all cases civil, administrative, or corporate so long as the signature is done correctly and according to the law at hand. In other words, the ministry and the GAFI’s move forward stands on a strong legal basis that has long allowed for e-signatures to be used in official matters. This stride only asserts the recent efforts of the public sector to facilitate business decisions, backed up by legal mandate.
From our opinion, however, more can be done in such efforts. We believe that e-signatures could and should be used for more than setting up companies, but for other corporate procedures as well. These could include signing General Assembly and Board meeting paperwork, and integral part of most corporate decisions. This is especially true since the law now allows for such meetings to take place over the phone, so this could be further aided by allowing for virtual attendees to sign paperwork through e-signature.
All in all, this is one of many steps required to ensure that Egypt is ready for advanced, modern transactions. This need to upgrade Egypt’s legal incorporation system as well as the need to cut on time, effort, and paperwork in tomorrow’s paperless economy means that we need to incorporate e-signatures into more and more legal procedures – beyond corporate law and further to cover more legal transactions in the public sector.
If you need help setting up your company electronically, we at Andersen Egypt can inform you of the correct procedures to make sure that your e-signature is safe and legally binding.