The Non-Cash Payment Law Law No. 18 for year 2019

Do you know the new law entered into force that limits the use of cash in your business? So, what does that mean?

To put it simply, this means you have to pay all your salaries, suppliers' dues and expenses through bank transfer.

In the following article, we cover the most important principles of the non-cash payment law: its definition, those addressed by the law, the obligations and the penalties.

First, on April 15th, 2019, the law is passed, and the Executive Regulation of the law is issued on September 7th, 2020, which sets out procedures for the implementation of such law. The Council of Ministers agreed to extend the period for reconciliation; hence, the law will be effective on September 7th, 2021.

Definitions as per the New Law:

• Non-cash payment method:

All means of payment which are carried out by adding credit to beneficiary’s bank account.

• Bank account:

A contract between a natural or legal person and a bank registered with the Central Bank or one of the entities authorized to engage in deposit or credit activity in Egypt to open an account at the bank for the purpose of recording all transactions for the payment, receipt and settlement of exchanged payments in cash or through electronic monetary units.

• Cash Financing:

Finance provided by banks, real estate finance companies, financial leasing, microfinance companies or associations or any other party authorized to work in these fields.

The Following was Addressed by this Law:

• All authorities and agencies of the state

• Public legal persons

• Companies in which the state owns all or the majority of its capital

• Private legal persons and establishments of all types

Obligations covered by the Law:

• All state authorities, public legal persons and companies in which the state owns all or the majority of its capital, are obliged to pay their financial dues to members of the boards of directors committees, employees, experts and social insurance contributions through non-cash payment methods.

• Private legal persons and establishments of all types are obliged to pay amounts dues of their employees, experts, chairmen and members of the boards of directors and social insurance contributions through non-cash payment methods, whenever their number of employees exceeds 25 or the value of their monthly wages exceeds EGP 100.000.

All state authorities and agencies, legal persons and establishments of all types are obliged to make the following payments through non-cash payment methods, and they can be summarized as follows:

EGP 1

All amounts dues to suppliers, contractors, service providers, and other contractors paid by the authorities or agencies of the state or public legal persons and companies in which the state owns all or the majority of its capital

EGP 5000

All amounts due to suppliers, contractors, service providers, and other contractors paid by private legal persons and establishments of all types

EGP 2000

Cash Finance

EGP 2000

Profits from contributions to the capital of companies or investment funds

EGP 500

Dues of Union/syndicate members

EGP 5000

Dues of subscribers to Private insurance funds’ members and insurance compensation

EGP 500

Disbursement of subsidies and donations by associations and institutions working in the field of civil work

EGP 10000

Amounts due as a result of purchasing or mortgaging land or vehicles

EGP 5000/month

In return for the purchase of land, real estate or express transportation vehicles

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