Egypt: Rules For Granting Licenses To Sports Services Companies

Last Updated: 11 October 2019
Most Read Contributor in Egypt, October 2019

Prepared by/ Dahlia Hakim

Sports is not just an exercise for physical fitness, health and disease prevention, or for the purpose of watching for recreation and enjoyment of its arts, but it becomes a tool for attracting investment, making benefit from the same and in achieving economic development. That's why multinational corporations and large investors invest their monies in establishing sports clubs, especially in football.

Law No. (77) of 1975 concerning the civil associations has been issued and after more than forty years have passed since the promulgation of this law its philosophy and objectives become unsuitable for the conditions of the Egyptian sport. The Egyptian Constitution of 2014 states in article (84) that sport is a right for all, and that state institutions must discover the talented athletes and take the necessary procedures to encourage the exercise of sport.

For implementation purposes of the provisions of the Constitution, the Olympic Charter and international standards and to follow up on the recent developments in the field of sports, the Sports Law No. 71 of 2017 was issued, including the following:

1- Ensuring the right of the sports bodies in all rights related to connecting the public with the sporting event and all the rights of transferring the image and prohibiting the use or exploitation of the names, badges or signs registered for those bodies, except after agreement with the concerned sports body.

2- Banning the licensing of the establishment or operation of companies operating in the field of sports services such as health club "GYM", fitness centers and sports academies, except after fulfilling the conditions and completing the specifications determined by the competent minister, subject to the supervision of the central administrative body to ensure compliance with the prescribed conditions regarding its security, safety and services.

3- Settlement of sports' disputes arising from the application of the provisions of the law in which one of its parties is a person or body or entity subject to the provisions of this law and this is done through the Center for Settlement and Arbitration Sports.

4- Regulating the investment in the sports field and authorizing the competent minister to set the rules, conditions and procedures necessary to facilitate the investment in this field, taking into consideration the provisions of the laws governing companies and the capital market, guarantees and incentives for investment in Egypt.

5- Imposing the criminal penalties deterrent to commit offenses related to sports activity.

Accordingly, the sports and youth minister issued decree no. 1124 of 2017 approving the regulations set for granting the licenses for the sports services companies amended by virtue of decree No.125 of 2018 regulating the business relationship between the sports' companies and the sports ministry, as follows:

First: Scope of sports' services

  • Establishing private clubs
  • Establishing and managing the sports' courts or the covered lounges or swimming pools.
  • Establishing health clubs ("gyms") or fitness centers.
  • Establishing academies (sports or military sports).
  • Sports marketing.
  • Managing and operating the sports clubs.
  • Managing and operating the sports games.

It should be noted that the competent minister can add any other services related to sports.

Second: Conditions of granting licenses to sports services companies

1- The applicant company shall take the form of a joint stock company, provided that its issued capital shall not be less than EGP 250,000 if the license is for one field of sports service, and one million pounds if the license is more than one field and EGP 10 million if the license to establish a one private club or one branch for your club or a branch for the sports body.

In all cases the issued capital of the company shall not be less than one third of the project's investment costs.

2- The company shall pay the license fee or its renewal fess to the competent administrative authority in a value not less than 0.75% of the total issued capital.

3- The company's bylaws or its articles of association shall include one of the above mentioned sports services.

4- The company's activities shall not be subject to the control of the Tourism ministry.

5- The company shall have an independent headquarter valid for the field or fields in which the license is issued, and the tenure period shall not be less than the license period.

6- The validity of the places and facilities designated for practicing the licensed field.

Third: Method of payment of the license fee

- Payment shall be made in the account of the National Sports Council.

- Payment is made in cash at the National Sports Council account in Alexandria Bank.

Fourth: The annexes to the license application

The license application is submitted to the competent administrative authority (the Sports Services Office of the Ministry of Youth and Sports)

- General Documents

- Attached copies of the company contract and its articles of association indicating its activity.

- A recent official extract from the company's commercial register.

- A copy of the bylaws including the company contract and its articles of association.

- A financial statement approved by the General Assembly and the Company's auditor for the companies that are established after the issuance of these regulations or the financial statements of the company for the last year approved by the General Assembly and the company's auditor in case of reconciliation.

- A detailed statement of the investment costs of the project approved by the company's auditor indicating the sources of financing.

- A copy of the title deed or possession of the company's headquarters, the partners' qualifications, place of residence and nationality.

- A statement on behalf of the manager in charge of the licensed field, his qualification, his ID number and a print with his insurance number.

- Criminal statement record of the founders and members of the board of directors of the sports body in case the company is a subsidiary of it.

- Payment of the license fee.

- Special Documents

- For companies that aim to engage in sports activities such as setting up private clubs, academies, health clubs, fitness centers, etc. - in addition to the above - the following documents are required:

- A sketch showing the company's facilities and specifications.

- An ownership or possession deed of places engaged in sports activity.

- A description of the types of machines and their numbers and validity for use.

- Private club internal rules (for private clubs).

- A maintenance contract of facilities and stadiums or provide evidence that the company has specialized labor team for this purpose.

It is worth to note that Ministry of Youth and Sports shall decide on the application for the license within 60 days from the date of submission of the application. All documents and papers shall be completed and the response to the application shall be by an official letter received at the address mentioned on the application. Passing 60 days without a response shall be considered as acceptance of the request.

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.

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