Bookkeeping for Foreign Companies in Egypt: Language, Currency, Place
Where and in what language must a foreign group's Egyptian entity keep its books? What the commerce and tax procedure laws say on place and language, and producing the books.
By Accounting & Bookkeeping Department · 14 October 2026 · 10 min read
Executive summary
- A company incorporated in Egypt has its head office in Egypt even if every shareholder is foreign (article 1 of the Companies Law, Law 159 of 1981), and keeps books under the Commerce Law (Law 17 of 1999) and article 38 of the Unified Tax Procedures Law (Law 206 of 2020). A branch must have an auditor; the Companies Law and its regulations do not require a representative office to keep particular commercial books, although its books and documents are open to inspection.
- The Egyptian Tax Authority (ETA) may accept records and documents in any language, provided they come with an Arabic translation by a body approved by the ETA (article 2 of Law 206).
- Under Egyptian Accounting Standard (EAS) 13 the functional currency is the currency of the entity's primary economic environment, and a company whose capital is set in a freely convertible currency prepares its financial statements under EAS in that same currency (article 36 of the Investment Law's executive regulations). Neither the Income Tax Law nor the Unified Tax Procedures Law sets the currency of the tax return or a conversion method.
- On overseas bookkeeping the Commerce Law and the Unified Tax Procedures Law and its regulations are silent: they name no place for the books and neither forbid nor permit keeping them outside Egypt; Law 206 leaves the controls for electronic accounts to a decree of the Minister of Finance. They do require retention for five years, and production of the books to ETA officers on every request for inspection where they are held, without prior notice (articles 38 and 7).
Which entity, which obligation
An Egyptian company owned by foreign shareholders. "Every company incorporated in the Arab Republic of Egypt shall take a head office in Egypt", and its articles state the address of that head office, "in which its management business is conducted" (article 1; the third paragraph was added by Law 4 of 2018). It is a trader whatever its object (article 10 of the Commerce Law), keeps books, in particular the journal and the inventory book, once its capital invested in trade exceeds EGP 20,000 (article 21), and as a taxpayer is bound by article 38 to keep regular books, manually or electronically, unless it is registered under the simplified regime of Law 6 of 2025, in which case it keeps instead the simplified records set by decree of the Minister of Finance (article 13 of that law).
A branch of a foreign company. The Income Tax Law (Law 91 of 2005) counts among legal persons "foreign banks, companies and establishments, even if their head office is abroad, and their branches in Egypt" (article 48), so a branch falls under article 38 when it carries on a commercial, industrial, craft or professional activity. It must have an auditor (article 166 of the Companies Law) and file its financial statements and the auditor's report each year within three months of its year end (article 312 of the executive regulations).
A representative office. Its object is studying markets and production possibilities "without carrying on any commercial activity" (article 173). Neither Part Six of the Companies Law nor its regulations requires the office to keep particular commercial books or appoint an auditor, but the companies administration may inspect it and "examine its books and documents" to confirm it has not gone beyond what it is licensed to do (article 320 of the regulations), and it must notify its staff, their salaries, the share of wages paid to Egyptians and the work it has done every year (article 321). The difference between the two forms is in Foreign branch or representative office, and when a permanent establishment arises in Permanent establishment in Egypt.
Books for an entity on a group system
The rules for every business are in Mandatory and electronic books. Two of them matter most to an entity running on a foreign group's accounting system:
- What counts is the Egyptian entity's own set of books. The executive regulations of Law 206 (Minister of Finance Decree 286 of 2021) require transactions to be recorded "as they occur", and the set of books to be "complete, faithful and regular in form, and to allow the net taxable profit to be determined" (article 45).
- The journal and the inventory book must have every page signed and stamped by the commercial registry office before use, and be presented to it at the end of the financial year to certify the pages used (article 25 of the Commerce Law).
Language of the books
The chapter on commercial books in the Commerce Law (articles 21 to 29) says nothing about the language of entries. Nor do the Companies Law and its executive regulations address the language of the books or the financial statements; where they mention Arabic, it concerns notices published in daily newspapers. The Unified Tax Procedures Law addresses it directly:
"The Authority may accept data, information, records and documents relating to tax in any language, provided they are accompanied by a translation into Arabic by a body approved by the Authority" (article 2).
The ETA may specify what has to be translated, and its head publishes a list of the approved translation offices and bodies (article 3 of the executive regulations).
Functional currency, financial statements and the return
| Question | Text | Rule |
|---|---|---|
| Functional currency | EAS 13, definitions and paragraph 21 | The currency of the entity's primary economic environment; a foreign-currency transaction is recorded in that currency at the spot rate on the transaction date |
| Presentation currency | EAS 13, paragraph 39 | Statements may be presented in any currency, translated if it differs from the functional currency |
| Capital set at incorporation in a freely convertible currency | Article 36, Investment Law executive regulations | Statements are prepared under EAS in the currency of incorporation |
| Redenominating existing capital from pounds | Same article | Permitted on conditions, including fully paid issued capital of at least EGP 250 million and restating the prior year's statements in the new currency |
| Tax return | Income Tax Law and Unified Tax Procedures Law | No text on the currency of the return or on how figures are converted |
The EAS 13 in force is the text issued by Prime Ministerial Decree 636 of 2024. It is issued in Arabic, and "functional currency" here renders its term «عملة التعامل (عملة القيد)». Foremost among the factors for identifying it are the currency that mainly influences sales prices and the currency that mainly influences the cost of labour and materials (paragraph 9), so it may differ from the parent's currency. For tax, "net profit is determined on the basis of the income statement prepared in accordance with Egyptian Accounting Standards" (article 17 of the Income Tax Law); where the functional currency is not the pound, it is prudent to document the basis of conversion in the return file. Translating statements and accounting for exchange differences fall outside this piece.
Where the books are kept
Neither the Commerce Law nor the Unified Tax Procedures Law and its executive regulations names a place for the books, and none of them addresses running the accounting system from outside Egypt. The second paragraph of article 38 leaves the rules for keeping electronic accounts to a decree of the Minister of Finance. Before Law 206, the Minister issued Decree No. 542 of 2018 on applying the standards for taxpayers' keeping of electronic accounts and on moving from written to electronic accounts. We have not found its text in an official source, nor any decree issued since under article 38, so the controls in force should be checked before adopting a system kept or hosted outside Egypt. What the texts impose are duties to keep records and make them available:
| Duty | Source |
|---|---|
| Keep records, books, documents and invoice copies for five years after the tax period covered by the return | Law 206, article 38 |
| Produce the books that the Commerce Law or any other law requires, paper or electronic, to ETA officers with judicial police powers on every request, for inspection where they are held and without prior notice | Law 206, article 7 |
| Produce the account books and any documents the ETA asks for on every request, even if the business is not subject to tax or is exempt | Law 206, article 11 |
| Notify the taxpayer of the date and place of an examination at least ten days ahead | Law 206, article 41 |
| Officers with judicial police powers may enter business premises during the officers' working hours without prior notice | Law 206, article 42 |
| Preventing ETA officers from carrying out inspection, requesting documents or examining them, or breaching articles 7 or 11: a fine of EGP 3,000 to 50,000 on top of the tax due | Law 206, article 69 |
Article 7 provides: "Officers of the Authority referred to may not be refused access to those books ... whether paper or electronic, provided that the inspection takes place where they are held and without the need for prior notice." In an examination the taxpayer supplies the data and copies of documents the ETA requests in writing within fifteen days of the request, which the head of the ETA or a delegate may extend by an equal period if the taxpayer shows sufficient evidence of difficulty (article 41). Neither article makes an exception for books held outside Egypt. Article 71 punishes a breach of the first three paragraphs of article 38 with a fine of EGP 20,000 to 100,000, and failing to keep the books and records for the legally required period with a fine of up to EGP 50,000.
What the parent needs and what Egypt needs
- The Egyptian statements. The EAS income statement is the basis of taxable profit (article 17); who must appoint an auditor is in Statutory auditor in Egypt. A capital company's return is signed by an accountant entered in the register of accountants and auditors (article 31 of Law 206).
- The IFRS group package is separate; the differences are in Egyptian Accounting Standards and IFRS and First-time adoption of IFRS. Consolidated statements at parent level fall outside this piece.
- Intra-group transactions are subject to the transfer pricing rules: the framework and the documentation threshold.
- Interest, royalties and service fees paid to a non-resident are taxed at 20% (article 56 of the Income Tax Law); treaty effects are in Payments to non-residents.
- Sales, including sales to the parent, go on an e-invoice that identifies the buyer type, foreign among them, and records the Central Bank exchange rate when issued in a foreign currency (article 42 of the Law 206 regulations): E-invoicing.
What this requires
- Set the system up to produce the Egyptian entity's complete books, separate from group reporting, and take the journal and inventory book to the commercial registry office on time.
- Determine the functional currency on the paragraph 9 factors of EAS 13 and document it; apply article 36 if the capital is in a free currency.
- Since accepting records in another language is at the ETA's discretion (article 2), the safest course is to keep the books in Arabic or in both languages, or to have an Arabic translation by a body approved by the ETA ready before the examination.
- If the books are kept or stored outside Egypt: a written procedure that ensures they can be produced on every request without prior notice (article 7) and that what is requested in an examination is supplied within 15 days (article 41); a check of the Minister of Finance's controls for electronic accounts (article 38) before the system is adopted; and an archive that stays readable for the whole retention period.
- Reconcile intra-group balances in the monthly close and track deadlines in the compliance calendar.
The firm's Accounting & Bookkeeping Department keeps the books of foreign companies and branches operating in Egypt to Egyptian requirements and prepares what the parent needs from them.
Nehal Saied, Partner
Chartered Accountant, Ministry of Finance, Egypt
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation
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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.