Associations that shelter children, the elderly, and patients with chronic diseases

Providing shelter for the elderly, children, and people with special needs is one of the most noble humanitarian values ​​​​that individuals and society can achieve. The state has adopted this to achieve sustainable development in society by permitting the establishment of associations to shelter children, the elderly, the sick, and people with special needs. This is stipulated by the Egyptian legislator in Law No. 149 of 2019 and Resolution No. 104 of 2021 issuing the executive regulations of the Law Regulating the Practice of Civil Society Work.

What is Article 35 of the Executive Regulations?
Article 35 of the Executive Regulations issued by Resolution No. 104 of 2021 stipulates that:

Associations wishing to allocate spaces to shelter children, the elderly, patients with chronic diseases, and others in need of social care or people with disabilities must submit a request to the relevant authority responsible for the shelter activity using the designated form, including the following information and documents:

The type of institution or home, the purpose of its establishment, the groups and ages it serves, and the geographical scope of its work.
The internal regulations of the institution or shelter
Proof that the financial position of the association or civil society organization is suitable for carrying out its activity.
A certificate from the relevant unit or sub-unit, as applicable, stating that the institution or shelter falls within the activities and fields of work of the association as stated in its bylaws.
The names of the members of the board of directors of the institution or shelter or the committee supervising the shelter and its employees, provided that the following information and documents are available (name, national ID number, nationality, job or profession, place of residence, criminal record, and a declaration not to be included on terrorist lists).
Fulfillment of other conditions, documents, and procedures issued by a decision of the relevant minister for each activity separately.
The entity responsible for the shelter activity must issue the license within sixty days from the date the association submits the license application, based on the findings of the report of the relevant unit or sub-unit, as applicable, indicating the absence of financial, administrative, or technical violations within the association.

The association is obligated to open a separate bank account for the licensed activity in a bank subject to the supervision of the Central Bank of Egypt.

What are the cases in which an institution or shelter's license may be revoked if a violation of the license is proven?
Violation of the license terms
Violation of the laws and regulations governing the operation of the institution or shelter
Proven abuse of the shelter's residents
Financial or administrative inability to manage the shelter

After consulting the relevant authorities and obtaining the approval of the competent minister, the institution or home may request the appointment of a temporary committee to manage the activity. The committee's members shall comprise no fewer than three and no more than seven specialists, including members of the general assembly or others, depending on the size of the activity, provided that at least one-third of the members have experience in this activity. The committee's term shall not exceed six months and may be renewed for a single term. In this case, the signature of the committee chairman or one of its members must be approved to manage the independent sub-account for the activity.

The scope of the responsibilities of the board of directors of an association or home for children, the elderly, and the sick:
This includes:

The board of directors of the association, within the limits of its available capabilities, shall manage the financial activities if the resources allocated to the account for the activity managed by the committee are insufficient.

The necessary financial support to manage the activity and ensure its continuity may be provided through the fund, based on the request of the activity management committee and the approval of the fund's board of directors, if the association lacks sufficient financial resources. Upon completion of the committee's work, it submits a report to the relevant authority regarding the shelter activity, detailing its accomplishments and the feasibility of continuing the activity or revoking the license. The committee chair and members shall assume financial, administrative, and technical responsibility for the activity during the committee's term.
The association is obligated to open a bank account in a bank subject to the supervision of the Central Agency. The association may also maintain multiple accounts for its activities in the same bank. All transactions related to the activity, including the acceptance of donations, commissions, and bank transfers, must be conducted solely through this account.
If annual revenue or expenditures exceed five million, the association may open additional accounts in other banks, subject to the approval of the relevant unit or sub-unit. The Association has the right to receive funds and donations from within or outside the Republic:

Receiving Funds and Donations from Within the Republic:

The Association may receive funds and donations from natural or legal persons, or foreign non-governmental organizations authorized to operate within Egypt. These funds shall be deposited in the Association's bank account and recorded in the Association's register. They shall be spent to achieve its objectives, and the relevant unit or sub-unit shall be notified of this through a technical report and an account statement detailing expenditures and activities, all within three months of the date of receipt of the funds and donations. If the amount exceeds 500 Egyptian pounds or its equivalent in foreign currency, this shall be done by bank check through banks subject to the supervision of the Central Bank.

Receiving Funds and Donations from Abroad:

The association may receive funds and donations from Egyptian or foreign natural or legal persons outside Egypt. These funds shall be deposited in the association's bank account and recorded in the association's registry. They shall be spent to achieve its objectives. The relevant unit or sub-unit shall be notified within three months of the date of receipt of the funds and donations, using the designated form, including the following information:

1. Name and information of the donor of the funds, donations, or grants, whether a natural or legal person.

Natural person: Name, nationality, proof of identity, job or profession, and place of residence.
Legal person: Name of legal person and head office, legal license for the activity, information of the legal representative of the legal person and members of the board of directors, including their names, nationalities, and dates of joining the licensing entity, website, if any, and the activity or purposes of the foreign person or entity.
2. The value of the funds or donations received by the association, and the minutes of the board of directors' approval to accept the funds.

3- A letter from the donor or entity stating the grant amount and purpose, and the association's final accounts for the most recent fiscal year.

4- In the case of international agreements, the project contract, cooperation protocol, or agreement to be signed by the donor must be submitted.

5- A description of the project or activity to be implemented, its purpose, and the estimated budget for the project or activity distributed among expenditure items.

6- The study submitted to the donor and a certified Arabic translation.

- The relevant unit or sub-unit has the right to object to receiving these funds after consulting the relevant authorities, provided that the request is complete and complete within 60 days from the date of receipt of the notification. Failure to object is considered implicit approval.

- The association will be notified of the approval or rejection of the request within 5 working days from the date of issuance of the objection or approval decision, or the expiry of the 60-day deadline.

The association is obligated, within a period of 5 days from the date of notification of the unit’s non-approval, to contact the bank with which the funds are deposited, by means of a letter approved by the competent unit or sub-unit, to take measures to return the funds to that donor. The competent unit or sub-unit is provided with the supporting documents for that, and the bank is obligated to return those funds to the donor within 5 working days from the date of receipt of the letter to return those funds.

A question arises: Is it permissible for an association to receive in-kind funds from Egyptian or foreign natural or legal persons, or foreign non-governmental organizations authorized to operate in Egypt?
- Article 46 of the Executive Regulations issued by Resolution No. 104 of 2021 stipulates that:

The association may accept in-kind funds from Egyptian natural or legal persons, or foreign non-governmental organizations authorized to operate in Egypt, in accordance with the following procedures:

These funds must be necessary for the service of the association or one of its activities stipulated in its bylaws.

The activity must be licensed by the relevant authority.

The amount of these funds must be commensurate with the size and activity of the association.

Notify the relevant unit or sub-unit, as the case may be, within fifteen days from the date of receipt, using the form prepared for this purpose.
Article 47 of the Executive Regulations issued by Resolution No. 104 of 2021 stipulates that:
Without prejudice to the conditions stipulated in Article 46, the association may accept or receive in-kind funds from Egyptian or foreign natural or legal persons from abroad, or from foreign natural or legal persons from within the country, in accordance with the following procedures:

1. Record the in-kind funds in its warehouses upon receipt and record them in its records.

2. Submit a request to the unit within thirty working days from the date of receipt of the funds using the designated form, attaching the following documents:

- A certified copy of the operating license for the association's activity to which the donation is intended.

- A clear copy of the bill of lading, bill of lading, or purchase invoice for the donation or incoming shipment, or a certificate from the shipping agent indicating the shipment, or proof of purchase from a free zone, as applicable, and all other customs documents.

- Specify the port of shipment or port of arrival and the destination of the shipment if the in-kind donation is from abroad.

- Describe the shipment, its quality, quantity or number, purpose, and target groups.

After consulting the relevant authorities, the unit has the right to object within sixty working days following the date of submitting the request, including all required information and documents. If the unit does not respond within the specified period, this shall be deemed approval.

- The association is exempt from customs duties if the gifts or donations are for equipment, machinery, and devices necessary for the activity and production supplies. This is based on a request submitted to the relevant unit or sub-unit, with a pledge that if the exemption request is rejected, the tax will be paid or the items will be re-exported.

An association may send funds or aid to individuals or organizations abroad, subject to the approval of the competent minister alone and after consulting the relevant authorities within 60 days from the date the association submits a request to the unit on the prescribed form. The request must include the following documents:

- Name and information of the entity to which the funds, donations, or grants are being sent, whether a natural or legal person.

- (Natural Person) Name, Nationality, Identity Document, Job or Profession, Place of Residence.

- (Legal Person) Name, Headquarters, and Nationality of the legal entity; Legal License for the Activity; Information about the legal representative of the legal entity and the members of the Board of Directors, including their names, nationalities, and dates of joining the entity; Website, if available; and The activity or purposes of the foreign person or entity.

- The amount of funds the association wishes to send and the reasons for sending, the minutes of the Board of Directors approving the sending of funds abroad in accordance with the association's bylaws, and the association's final accounts for the most recent fiscal year.

- In the case of international agreements, the project contract, cooperation protocol, or agreement to be signed by the entity to which the donation is being sent must be submitted.

- A description of the project or activity to be implemented, its purpose, and the estimated budget for the project or activity, distributed among expenditure items.

- A study submitted by the entity to which the donation is sent, along with a certified Arabic translation.

- Civil society organizations or institutions may collect donations from within the Republic, whether from natural or legal persons, Egyptian or foreign, licensed to operate within the Republic. This may be done through banks, money collection companies, SMS, various electronic distribution channels, charity events, charity markets, exhibitions, competitions, or any other means approved by a decision of the competent minister. The funds must be spent on the activities for which they are allocated, in accordance with the provisions of the license.

There are conditions for granting associations a license to collect donations, including:
1. The association must be free of financial, administrative, or technical violations.

2. The liquidation of the association's previous fundraising license, if any, must be completed. The liquidation must not have resulted in serious violations unless these violations are removed.

3. The collection request must not be for the benefit of one or more of the association's activities specified in its bylaws.

- Only the competent minister may issue a decision to suspend the association's activities after taking the following measures (in accordance with Article 74 of the Executive Regulations issued by Resolution No. 104 of 2021):

1. The competent unit or sub-unit must issue a written warning to the association, including a statement of the alleged violation, the legal procedures involved, and the specified period for removing the violation, which must not be less than 15 days.

2- If the specified period expires without a response or removal of the violation, or if the association's response to the relevant unit or sub-unit does not include documentary evidence that it did not commit the alleged violations, the following legal measures will be taken:

Referring the association's activity to the competent minister for a period not exceeding one year.
Requesting the dissolution of the association, the board of directors, or the board of trustees, as the case may be, from the competent court. The competent branch of the State Lawsuits Authority must be notified within 15 days of the date the competent minister approves the filing of a lawsuit to dissolve the association or remove its board of directors, in accordance with the procedures specified by law.

Do you wish to establish a shelter for children, the elderly, or the chronically ill?
Saadani & Partners Law Firm provides specialized legal advice on licensing procedures in accordance with Egyptian Law No. 149 of 2019 and its executive regulations. We guarantee that all required documents are met, from preparing internal regulations to submitting licensing applications and managing independent bank accounts. With our team of expert lawyers, we help you avoid legal violations and facilitate the process of receiving in-kind and cash donations.

Contact us today to realize your humanitarian vision with confidence and legal compliance!