Article (165) of the Companies Law defined the scope of application of the provisions of Chapter Six concerning branches and representative offices of foreign companies in Egypt. It stipulated that the provisions of this chapter apply to foreign companies that do not have their management or principal center of activity (EU equivalent: Head Office or Registered Office) in Egypt, but maintain a center for conducting business in Egypt, whether this center is a branch, an industrial house, a management office, or otherwise.
According to the second paragraph of Article (165), agencies managed by these companies in Egypt shall have the status of the aforementioned branches, houses, or offices in any of the following cases:
A-If the foreign companies manage them directly or entrust their management to their employees.
B-If the agent has the authority to conclude contracts on behalf of the company.
C-If the agent has in their possession goods or products of the company, which they dispose of according to the company's orders and in execution of its contracts.
In reality, according to paragraph two, item (a) of the aforementioned Article (165), the matter does not relate to an agency according to the legal concept of an agent in general, and a commercial agent (EU equivalent: Commercial Agent under Directive 86/653/EEC) in particular. There is no agency if the foreign company manages the branch itself or entrusts this management to its employees. In such cases, transactions are executed by the foreign company itself without an agency relationship; therefore, we are dealing with a branch of the foreign company and not an agency.
Regarding items (b) and (c) of the same paragraph, the matter truly relates to a commercial agency where the agent acts in the name and on behalf of the company towards third parties. If the agent has the authority to conclude contracts on behalf of the company or disposes of goods in their possession according to the company's orders and in execution of its contracts, they are considered a commercial agent acting in the name and on behalf of the company towards third parties.
Since the third paragraph of the same Article (165) stipulates that commercial agents—outside the previous cases—are not considered branches of commercial companies, this implies that commercial agents who contract in their personal name and for their apparent account, but actually on behalf of their principals (such as commission agents and their equivalents, like a commercial representative who contracts in their name and on behalf of a producer or distributor), are not considered equivalent to branches of foreign companies.