Egypt tightens factoring controls with mandatory digital invoice clearance system

Egypt’s Financial Regulatory Authority (FRA) has introduced new rules requiring factoring companies to verify invoices through its unified electronic system before granting finance, in a move aimed at strengthening transparency, governance, and operational efficiency across the non-banking financial sector.

The requirement, issued under FRA Decision No. 51 of 2026, is designed to prevent duplicate financing of the same receivable. Under the framework, invoices must be checked via the Authority’s designated digital platform to ensure they have not already been financed. The system also enables invoices to be electronically “frozen” in favour of the factoring company for the duration of the financing agreement.

The FRA launched the digital factoring system in early February through its official online portal in partnership with e-finance. In its initial phase, the platform allows factoring companies to conduct electronic inquiries and confirm the financing status of invoices. This process is supported by integration with key government bodies, particularly the Ministry of Finance and the Egyptian Tax Authority.

Factoring, a short-term liquidity solution, enables companies to sell invoices or deferred receivables to a financing entity in exchange for immediate cash. Transactions typically involve three parties: the seller, the debtor, and the factoring company.

The decision also obliges factoring firms to include a contractual clause confirming that the security right over the financed receivable has been registered in the Movable Collateral Registry, in accordance with Law No. 115 of 2015 governing security rights over movable assets. This step is intended to safeguard financiers’ rights and reinforce legal certainty.

A second phase of the system will introduce full digitalisation of the factoring lifecycle, from verification through to settlement, reducing processing times and operational costs. The regulation will take effect the day after its official publication.