Foreigners’ Ownership of Real Estate in Egypt: A Comprehensive Guide

The legal framework governing foreigners’ ownership of real estate in Egypt has evolved significantly. Historically, restrictions were stringent, but the introduction of Law No. 230 of 1996 marked a considerable shift, albeit with conditions and limitations still in place. This guide provides a comprehensive overview of the current regulations.

Historical Context and the 1996 Law

Prior to Law No. 230 of 1996, foreigners faced significant hurdles in acquiring Egyptian real estate. The 1996 law relaxed these restrictions, allowing foreign ownership under specific circumstances, detailed below. This landmark legislation fundamentally altered the landscape of foreign investment in Egyptian property.

Key Conditions for Foreign Real Estate Ownership under Law No. 230 of 1996

Article (2) of Law No. 230 of 1996 outlines the primary conditions for foreign ownership:

Property Limit: Foreigners may own a maximum of two properties nationwide for private residential use. This does not preclude ownership for licensed business activities approved by Egyptian authorities.
Area Restriction: Each property’s area cannot exceed 4,000 square meters.
Antiquity Protection: The property must not be classified as an antiquity under the Antiquities Protection Law.
Prime Minister’s Discretion: The Prime Minister retains the authority to grant exceptions to the above conditions on a case-by-case basis.
Council of Ministers’ Authority: The Council of Ministers sets conditions and rules for ownership in designated tourist areas and urban communities.
Diplomatic Missions Exception: Article (3) exempts diplomatic and consular mission headquarters and annexes, subject to the principle of reciprocity.
Building Requirement and Sales Restriction: Article (4) and (5) mandate construction within five years of acquisition, with a corresponding extension to the sales ban for any delay. The Prime Minister may authorize earlier disposal in specific circumstances.

Foreign Ownership in the Sinai Peninsula: Specific Regulations

Egyptian law No. 14 of 2012, concerning integrated development in the Sinai Peninsula, introduces distinct regulations:

General Prohibition: Non-Egyptians are generally prohibited from owning land in the Sinai Peninsula.
Exceptions Granted by the Integrated Development Authority: The Board of Directors of the Integrated Development Authority, with approval from the Ministries of Defense, Interior, and General Intelligence, may allow:

• Ownership of built facilities (but not the land itself) by Egyptians with dual nationality and non-Egyptians in specific regions.
• Usufruct rights (use and benefit) in residential units for a maximum of 50 years for non-Egyptians.

Prohibited Areas: Ownership, usufruct, rental, or disposal are prohibited in strategic military areas, border regions (as defined by Presidential Decree No. 444/2014), Red Sea islands, and natural reserves/archaeological sites. All transactions require approval from the Board of Directors and the aforementioned Ministries; unapproved contracts are void.

Presidential Decree No. 128 of 2022 and Recent Amendments

Presidential Decree No. 128 of 2022 introduced further restrictions, specifically excluding Sharm El Sheikh, Dahab, and the Gulf of Aqaba sector from previous exceptions. Foreign entities remain prohibited from land ownership in these areas. Ownership is restricted to Egyptian nationals and Egyptian legal entities with entirely Egyptian capital. The usufruct right in these areas is extended to 75 years. All transactions still require approval from the Ministries of Defense, Interior, and General Intelligence.

Conclusion

The legal landscape surrounding foreign real estate ownership in Egypt is complex. While Law No. 230 of 1996 eased restrictions, significant conditions and limitations remain, particularly concerning the Sinai Peninsula. Foreign investors must meticulously review and comply with all regulations to avoid legal complications. Get expert legal advice before any real estate transaction in Egypt.

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