Land and Real Estate Ownership Laws
The ownership of land by foreigners is governed by three laws: Law No. 15 of 1963, Law No. 143 of 1981, and Law No. 230 of 1996.
Law No. 15 stipulates that no foreigners, whether natural or juristic persons, may acquire agricultural land.
Law No. 143 governs the acquisition and ownership of desert land. Certain limits are placed on the number of feddans (one feddan is equal to approximately one hectare) that may be owned by individuals, families, co-operatives, partnerships and corporations. Partnerships are permitted to own 10,000 feddans. Joint stock companies are permitted to own 50,000 feddans.
Partnerships and joint stock companies may own desert land within these limits, even if foreign partners or shareholders are involved, provided that at least 51 per cent of the capital is owned by Egyptians. Upon liquidation of the company, however, the land must revert to Egyptian ownership. Article 1 of Law No. 143 defines desert land as the land lying two kilometers outside the borders of the city.
Furthermore, the lease of desert land for more than 50 years is also considered to be ownership under Law No. 143. Although companies formed under the Investment Law No. 8 of 1997 do not require Egyptian participation, companies that undertake projects over desert land must be owned in their majority by Egyptians. (The President of the Republic may decide to treat Arab nationals as Egyptian nationals for purposes of this law).
On July 14, 1996 Law No. 230 superseded Law No. 56 of 1988. The new law allows non-Egyptians to own real estate (vacant or built) under the following conditions:
* 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 m².
* The real estate is not considered a historical site.
Exemption from first and second conditions is subject to the approval of the Prime Minister. Ownership in tourist areas and new communities is subject to conditions established by the Cabinet of Ministers.
Furthermore, non-Egyptians owning vacant real estate in Egypt must build within a period of five years from the date their ownership is registered by a notary public. Non-Egyptians may only sell their real estate five years after registration of ownership, unless the consent of the Prime Minister for an exemption is obtained.
There are two basic property registration processes in Egypt: full registration and signature of validity
.
Full registration of property
This is a somewhat involved process, including several steps:
• Present a request for property registration to the land registry (it is then sent to the Egyptian Surveying Authority).
• The Surveying Authority delegates a team from the Department of Measurements to produce a report on the property, which is then sent back to the Surveying
Authority
• Once the inspection report is either approved or disproved by the Surveying Authority, it is sent back to the land registry, which then prepares an “acceptance
report”
• The Egyptian Lawyer’s Syndicate approves the final draft of the purchase contract (you must have a lawyer to complete this procedure), which is then returned to the land registry for processing
• The buyer pays a maximum LE2,000 to obtain his contract from the land registry
• Both the buyer and seller sign the contract at the offices of the land registry
• The buyer collects his contract at the land registry
The entire process generally takes between three and four months to complete. While full registration gives you the most protection under Egyptian property law, it also places certain restrictions on how many properties you may own (no more than two) and when you can sell them (not before five years of ownership, and even after that only with Prime Ministerial approval.
Signature of validity
This is an increasingly popular process amongst foreigners buying land in Egypt, as it removes restrictions on how many properties a foreigner may buy and when he may sell them. It is also not nearly as time consuming as full registration, though it as not quite as iron-clad legally.
When a property is registered under signature of validity, the buyer begins by obtaining what is called a “negative certificate” from the land registry. This document certifies that there are no outstanding debts or claims on the land. Tax authorities then produce a document showing what taxes, of any, are due on the property.
The next step is the drafting of a contract that outlines the property size, purchase price, et cetera and so on, which the buyer and seller both sign. In the final step, the buyer delegates power of attorney to his lawyer, who then files a suit to legally certify the signature of the seller as valid, which in effect completes the sale. This process also takes several months.
Freehold property limitations in South Sinai
In most areas of Egypt, foreigners are allowed to purchase property with full “freehold” and “leasehold” rights. That is to say, they may improve their property, rent it, or otherwise modify it forever (so long as they are the legal owners).
Foreigners are not, however, allowed to purchase property to lease in South Sinai. There is also a 99-year limit on their freehold property rights. Essentially, this means that when a foreigner “purchases” a property in South Sinai, he is in fact purchasing a 99-year lease. Because of this peculiar technical detail, foreigners may only register property through the signature of validity method in South Sinai.