Ownership of real estate in Egypt for foreigners

user Youssry Saleh & Partners calender 14 Sep 2022 views 110 Views
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In the past few years Egypt has taken a new development process by building new urban areas, around 30 cities were newly established. The Egyptian laws and regulations encourage investors to invest and by real estate in Egypt with certain rules and regulations to avoid any monopolization and at the same time it grants foreign investors incentives to motivate them to buy and invest in real estate in Egypt.   

The ownership of land by foreigners is governed by three laws:

  • Law No. 15 of the year 1963 regulating prohibition of foreign ownership of Agricultural Lands;
  • Law No. 143 of the year 1981 regulating the acquisition and ownership of desert land; and
  • Law No. 230 of the year 1996 regulating Non-Egyptians’ Ownership of Built Real Estate and Space Lands.
  • Law No. 15 of the year 1963 regulating prohibition of foreign ownership of Agricultural Lands stipulates that no foreigners, whether natural or juristic persons, may acquire agricultural land.

Where Article (1) of the aforementioned law states: “Without prejudice to the provisions of the Investment Law promulgated by Law No. 230 of the year 1989, the ownership of non-Egyptians, whether natural or legal persons, of built real estate or vacant lands in the Arab Republic of Egypt – whatever the reason for acquiring ownership other than inheritance – is in accordance with the provisions of this law…”

  • Law No. 143 of the year 1981 regulating the acquisition and ownership of desert land stipulates the limits that are placed on the number of feddans that may be owned/acquired by individuals, families, cooperatives, partnerships and corporations.

Where Article (1) of the aforementioned law defined the dessert land as” the land lying two kilometers outside the borders of the city…”.

Moreover Article (11) of the law regulating the acquisition and ownership of desert land states: “The maximum ownership limit in the desert lands subject to the provisions of this law shall be in accordance with the rationalization and economy achieved by irrigation methods and methods in the use of available water resources, and in accordance with scientific developments in this field, as follows:

(A)If irrigation is on groundwater or modern methods are used, such as sprinkler or drip, or any irrigation method that depends on water pressure, the maximum ownership limit is determined as follows:

  • 200 (two hundred) acres for the individual and 300 (three hundred) acres for the family, and the family herein refers to the wife and unmarried minor children.
  • 10,000 (ten thousand) acres for a cooperative society, with a maximum amount of 30 (thirty) acres for a member.
  • 10000 (ten thousand) acres for partnerships and limited shares, taking into account that the maximum limit for individual ownership does not exceed 150 (one hundred and fifty) acres.
  • 50,000 (fifty thousand) acres for joint stock companies.

(B) If the irrigation is by the surface irrigation method that is agreed upon between the concerned Minister and with Reclamation and the Minister of Public Works and Water Resources, or for the drained areas of lake lands, the maximum ownership limit shall not exceed half of the aforementioned maximum limits.

In conclusion, the ownership of Egyptians must not be less than 51% of the company’s capital, and the ownership of an individual must not exceed 20% of its capital.”

  • Law No. 230 of the year 1996 regulating Non-Egyptians’ Ownership of Built Real Estate and Space Lands.

Where Article (2) of the aforementioned law states certain condition for the Non-Egyptians’ to own Built Real Estate and Space Lands as follows:

  • Ownership is limited to two real estate properties in Egypt that serve as accommodation for the owner and his family (spouses and minors) in addition to the right to own real estate needed for activities licensed by the Egyptian Government.
  • The area of each real estate property does not exceed 4,000 sqm.
  • The real estate is not considered a historical site.

Some incentives are granted to foreign investors to be able to acquire the residency visa based on property ownership and it shall be granted through the following condition:

The Egyptian state currently provides several investment methods for foreigners in order to benefit from residency by purchasing a property in Egypt, the purchased property will grant a foreign investor the following residence visa:

  • If the purchased property with total value of 200,000 USD or more this will grant the foreign investor (3) years visa renewable residence; and
  • In case the purchased property is with total value of 400,000 USD or more this will grant the foreign investor (5) years visa renewable residence;

Provided that 75% of the property value is paid according to a transfer or a statement from the bank with the total amount paid from the property price.

Limitations for Acquisition /Selling of Real Property by the company’s whether owned by Egyptians or foreign investors:

However, the Prime Ministers’ Decree No. 350 of the year 2007 regulating the companies and establishments rights to possess the lands and properties required for carrying out or expending their activities, stipulates some exceptions for the companies’ ownership of lands as follows:

  1. Companies and Establishments shall not possess or have the right of usufruct on the land and properties located in the following areas:
    1. Strategic areas of military importance determined by presidential decree No. 152 of the year 2001 according to the said law No.7 of the year 1991;
    2. The areas adjacent to the zones defined for securing the International Boarders of the Arab Republic of Egypt.
    3. Western borders according to the Presidential Decree No. 560 of the year 1986;
    4. Southern borders according to the Presidential Decree No. 413 of the year 1988;
    5. Eastern borders according to the Presidential Decree No. 298 of the year 1995;
    6. Islands located in the Red Sea and the Mediterranean sea;
    7. Archeological areas and their security zones;
    8. Natural preserves;
    9. Coast lands of the Red Sea, the Mediterranean Sea and the Suez Canal according to said Environmental law No. 4 of the year 1994;
    10. All types of roads and the grounds of these roads according to the Roads law No. 84 of the year 1968.

Finally, Law No. 14 of the year 2014 restricts the ownership of property in Sinai. The government has designated development areas in Sinai where companies (whether owned by Egyptians or foreigners) may have the right of usufruct over designated property. Such usufruct rights can be granted for terms of up to fifty years. It must be noted that Egyptian must own at least 55% of the ultimate shareholding of such companies.