Explainer: Egyptian law to legalise unlicensed shops comes into force

Amr Kandil , Tuesday 13 Dec 2022

On Sunday, Egypt will start implementing Law 154/2019, published by the Official Gazette today, that requires owners of hundreds of thousands of unlicensed shops to legalise their businesses and that introduces restrictions on cafes serving shisha.

A file photo of a crowded cafe in Cairo


The law imposes a fine ranging from EGP 20,000 to 50,000 on those running unlicensed shops.

In addition, those who fail to comply with the law will receive jail sentences, Cairo governorate said in a statement on Saturday.

According to media reports, fees for obtaining licences for new shops and businesses will range from EGP 1,000 to EGP 100,000.

The law will specify the fees required for obtaining licences for new businesses based on the location of the shop, said MP Mohamed El-Faioumy, spokesman of the higher committee for general shops licences, in TV remarks last week.

It will also take into consideration the social and economic dimensions of the shop’s activities, added El-Faioumy.

Owners of new businesses will obtain the licence after a maximum of 60 days from the date of submitting an application, he said.

Existing licensed businesses will only pay half of the fees mandated by the new law to obtain new permanent licences under the bill.

Licensed businesses will also have a two-year grace period to submit for a permanent licence, El-Faioumy added.

The law, passed by parliament in 2019, applies to all facilities that undertake commercial activities or that provide for-profit services to citizens.

It facilitates licensing procedures for shops by eliminating previous bureaucratic hurdles.

To obtain licences for their shops, owners will now deal with 339 designated centres nationwide.

The law also provides a five-year temporary licence for shops located in unlicensed buildings pending their legalisation.

Furthermore, it allows investors to obtain licences for businesses granting that they do not pose a threat to health, environment, and security.

Unlicensed shops that commit violations can reconcile status with the state by paying compensation equal to double the minimum fine mandated by the law.

Restrictions on shisha

The law punishes those serving shisha without a licence by jail terms and a fine of EGP 10,000 to 20,000.

It also imposes additional restrictions on restaurants and cafes serving shisha, including an EGP 10,000 fee and a provision that these establishments be located at least 1,000 metres from places of worship, schools, educational institutions, and fuel stations.

Cafes and restaurants can only serve shisha in only 50 percent of their total premises.

They also have to ensure that their floors are not covered with flammable material and that their doors are kept shut at all times except during entering or exiting.

They also have to ensure good ventilation, discard consumed shisha coal in specialised metal or ceramic containers, and keep stored coal in isolated places.

Ending informal economy

The law seeks to integrate unlicensed and informal businesses into the formal economy in order to strengthen economic activity, according to statements by Minister of Local Development Hisham Amna and Cairo governorate on Saturday.

According to local administration professor Hamdy Arafa, the law will also open new investment horizons, boost the economy, help in drawing a completer map of shops nationwide and allow the state to collect taxes.

In TV remarks following the law’s enforcement, Arafa said unlicensed shops cost the state billions of pounds in lost taxes as well as stolen electricity and water.

El-Faioumy said the new shops law is connected with the bill approved by the Senate late in November that would allow a wider scope of illegal building violations to be settled and reconciled.

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