It is now accepted by most legal scholars that a company, if properly established according to the law under which it was founded, can conduct its business activities in foreign countries with great freedom. However, if it establishes branches in those countries, it must be subject to the same regulations applicable to domestic companies in those countries. Some kingdoms (France, Russia, and Austria) stipulate that a company must be licensed to operate within them, and this license can be general or specific in the form of a treaty, law, or decree.

However, if a national company is formed in a foreign country in the guise of a foreign company to evade the regulations pertaining to companies in its home country, European courts unanimously declare it void and non-existent.

Following this brief examination of the principles determining the nationality of commercial companies in foreign countries and their rights in other countries, and after outlining the circumstances that led to the issue at hand being brought before the Mixed Courts, it is necessary to explain the provisions of Egyptian laws concerning this subject.

Since the establishment of the Mixed Courts, foreign companies have enjoyed complete freedom to conduct their business in Egypt, with the only requirement being that they adhere to the laws of their nationality in their formation, management, and dissolution. This practice has solidified their right to the extent that it now has the force of law. The situation of foreign companies in Turkey is similar to that in Egypt.

The provisions in the Civil and Commercial Codes of the Mixed Courts in Egypt pertaining to companies are very brief and incomplete. The two decisions of the Council of State, which we referred to earlier, addressed this deficiency. The original legal texts on this subject are Articles 47 and 46 of the Mixed Commercial Code.