Central Bank Details License Cancellation and Liquidation Rules for Credit Guarantee Firms
The Central Bank of Egypt has set procedures for establishing and registering credit guarantee company branches, alongside rules for license cancellation, deregistration, suspension and liquidation, requiring companies to settle their legal and financial obligations before ending operations.
Branch Establishment and Registration
After completing branch establishment procedures, a company must apply to the Central Bank for an inspection and pay an EGP 50,000 inspection fee for each branch. The application is submitted to the Central Bank Governor, and the company must be notified of the decision within 15 days.
If approved, the company’s registration is amended to add the branch to the Central Bank’s credit guarantee companies register. The branch may not operate before final approval is notified and registration is completed. The company must also notify the Central Bank at least one week before operations begin.
The company must submit a commercial register extract showing the branch address and a tax authority extract confirming its addition to the tax file. Any change in registered branch data requires an application to amend the registration.
License Cancellation and Suspension
The rules prohibit suspension, merger, acquisition or liquidation without prior approval from the Central Bank Board of Directors. Final approval for suspension requires adequate guarantees and clearance of the company’s legal obligations.
The Central Bank may cancel a license and deregister a company for serious or repeated violations of the Central Bank and Banking System Law No. 194 of 2020 or related instructions, if the violation is not remedied within the period and conditions set by the Board.
Other grounds include policies that harm the public economic interest, monetary policy or the banking system; obtaining a license on the basis of false information; or a material change in the information on which the license was granted. The rules also cover cessation of activity or a voluntary request to suspend and liquidate the company.
Cancellation may also apply if the company is deemed distressed under the instructions and the Central Bank sees no appropriate way to settle its position; loses a licensing condition; merges into another company; sells all or most of its assets; fails to begin operations within the specified period; or undergoes a change that the Central Bank considers harmful to its activities in Egypt and the proper conduct of its business.
Suspension and Liquidation Requirements
A company seeking suspension must submit an application for preliminary approval, accompanied by the required extraordinary general assembly approval, evidence of liquidator appointment if liquidation is decided, a study explaining the reasons, and an undertaking to provide adequate guarantees or clear its legal obligations.
The Board must decide on a complete application within 60 days, with notification within 15 days. After preliminary approval, the company must seek final approval and provide evidence that creditor obligations have been settled or adequately secured.
Required documents include a tax certificate showing no taxes due through the suspension date; a National Organization for Social Insurance statement showing no outstanding balances; certificates from banks and credit providers on guarantees and related obligations; a certificate that judicial disputes have ended or a guarantee for potential liabilities; and a certified financial position statement after obligations are settled or adequately secured.
The final decision is issued within 90 days of completing the required documents, with notification within 15 days. License cancellation and deregistration decisions are published in the Official Gazette within 10 days at the company’s expense and on the Central Bank’s and company’s websites throughout liquidation.
