Sports Services Company Licensing In Egypt | Law 71 Of 2017 Requirements

Regulations on Establishment and Licensing of Sports Services Businesses In recent years, Egyptian legislation and regulations governing sports have undergone significant changes, which have had a clear impact on the investment environment associated with the sports services industry. The establishment of sports service businesses has become one of the most important avenues for the private sector to contribute effectively to the management of sports facilities, the organisation of activities, as well as the provision of technical, marketing and training services within a clear legal framework. This change comes in light of the Sports Law 71 of 2017 and the Executive Regulations thereof, and the subsequent ministerial decisions that reinforced the economic role of sports institutions and allowed Egyptian and foreign investors to enter this field.

Therefore, it has become necessary for every investor or entity targeting this growing market to review the legal requirements, incorporation conditions, and regulations governing the operation of sports services companies. This Article aims to shed light on the legal framework governing the establishment of such businesses in Egypt, highlighting the most important obligations, requirements, and procedures to be followed to ensure that activities are conducted in accordance with the law and meet the highest standards of governance and quality in the provision of sports services.

 Sport service providers are joint stock companies, established by the Sports Authority, pursuant to the provisions of the law, to practise one or more sports activities. These activities take several forms, as determined by the competent minister and, in particular, include the management, operation, or marketing of sports, or the establishment of clubs for specific purposes.

 Legal controls on licensing sports service providers:

1. Legal form: The business shall be in the form of a joint stock company. Its main activity shall be sports services (sports facility management, sports marketing, sports event organisation, establishment of academies, training, etc.).

2. Capital: The issued capital shall not be less than EGP 250,000 if the licence is for one field of sports services. The issued capital shall not be less than EGP 1,000,000 if the licence is for more than one field of sports services.

The issued capital shall not be less than EGP 10,000,000 if the licence is for a single private club, a single branch of a private club, a branch of a sports authority, or a specialised club. In all cases, the issued capital shall be at least one-third of the project investment costs.

3. Licence fee: The company shall pay the licence fee or renewal fee to the competent administrative authority, equivalent to 0.75% of the issued capital, in accordance with any rates subsequently determined by the competent minister.

4. The company shall pay a State resource development tax equivalent to 0.5% of its issued capital. 5. Payment of the fees and expenses for the inspection to obtain the licence.

6. The company's activities shall not be subject to the supervision of the Ministry of Tourism.

7. The company shall have an independent head office suitable for carrying out the activities covered by the licence. The acquisition period shall not be less than the licence term.

8. The validity of the premises and facilities designated for the practice of the field for which the licence is sought, in accordance with the general location and factors of security, safety, environmental safety, and the requirements of the game's federation.

 General documents and requirements for licensing all areas of sports services:

1. Completing the application forms according to the fields, to be approved and stamped by the company.

2. A recent extract (not older than three months) from the company's commercial register.

3. A certified copy of the company's Memorandum of Association (MoA) and Articles of Association (AoA), specifying its activities, or a copy of the investment Gazette in which the MoA and AoA were published.

4. Valid tax card.

5. Title or acquisition documents of the company's premises.

6. Supporting documents for places of business, for fields that require a place of business.

7. For new establishments, an opening financial statement approved by the general assembly and the company's auditor, or the financial statements for the last year, approved by the general assembly and the company's auditor, in the case of regulatory compliance.

8. A printer for the manager responsible for the activity.

9. Criminal records of the founders, board members, and the director responsible for the activity.

10. A detailed statement of the project's investment costs, approved by the company's auditor, with a statement of funding sources.

11. A copy of the fee payment receipt, after reviewing the application and the documents submitted.

 Sporting services licence term:

The licence issued to sports service companies shall be valid for three years and renewable, in accordance with the form prepared by the competent administrative authority. The competent administrative authority may grant a temporary licence for six months, to fulfil the conditions and documents required by law. If these conditions and documents are fulfilled during this period, the licence will be issued for a period of three years from the date of issue of the temporary licence. If they are not fulfilled during this period, the licence will be considered revoked, and the paid fees will not be refunded.

 Obligations of sports service providers:

1. Compliance with laws and regulations governing sports services.

2. Obtaining official licences to practise sports activities and renewing the licence periodically in accordance with the specified period.

3. Providing safe and effective services to ensure the safety of sports facilities and equipment, and verifying the qualifications of coaches and staff.

4. Adherence to transparency towards customers, maintaining the privacy and confidentiality of subscriber data.

5. Compliance with the authorized capital and legal management of financial resources, submission of accurate accounting records, and preparation of periodic reports on activities and the number of participants.

6. Adherence to occupational health and safety standards for employees and trainers, and maintenance of equipment and facilities in accordance with approved standards.

 Reasons for licence revocation:

1. An administrative issue with any government authority or judiciary, relating to the company's activities or places of operation.

2. Termination of title/possession/use of the place of business or registered office.

3- Alteration, modification, cancellation, or falsification of any data or documents submitted for licensing to the Sports Services Licensing Office, resulting in illegal use of the licence.

 Requirements for licence revocation:

1. Submitting an application, stating the reason for revocation.

2. A valid licence from the Sports Services Companies Licensing Office.

3. The company's general assembly meeting minutes, including approval of the revocation, the licence number, and scope, provided that the minutes are approved by the General Authority for Investment and Free Zones (GAFI).

In conclusion, the establishment of sports service providers in Egypt is a strategic step towards developing the sports sector and promoting investment in sports-related activities and services. The legal and regulatory framework, including compliance with licensing requirements and obligations towards customers and regulators, ensures legal stability and sustainable success for companies.

Regular monitoring and follow-up also play a key role in ensuring the provision of safe, high- quality sports services, reflecting companies' commitment to occupational health and safety standards and boosting the confidence of investors and beneficiaries alike. In this context, Sadany & Partners Law Firm provides comprehensive services to investors in the sports services sector. We provide a comprehensive range of services, including start-up and licensing advice, review of legal and technical obligations, and support for businesses in complying with regulatory requirements. This ensures that their investments are protected and that their commercial and sporting objectives are achieved efficiently and professionally.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.