Dear All,

A new decree is to be issued shortly by the prime minister.

Please read the translation below:



Prime Minister’s Decree number (350) of 2007

The Prime Minister

After perusing the constitution and perusing:

Law no. 143 of 1981 concerning desert lands;

Law no. 7 of 1991 concerning the state private properties;

Law no. 4 of 1994 concerning environment protection;

Law no. 230 of 1996 concerning regulation of foreigners’ ownership for built properties and empty land plots;

Law no. 94 of 2005 concerning amending some regulations for joint stock companies, limited partnership stock companies, and limited liability companies, originally stipulated in law no. 159 of 1981, and law of investment guarantees and incentives originally stipulated in law no. 8 of 1997;

President’s Decree no. 560 of 1986, concerning securing the neighboring area to the western borders of Egypt;

President’s Decree no. 413 of 1988 concerning securing the neighboring area to the southern borders of Egypt, amended by president’s decree no.99 of 1999;

President’s Decree no. 152 of 2001, concerning securing the eastern borders of Egypt;

President’s Decree no. 152 of 2001 concerning fixation of strategic desert areas with military importance;

President’s Decree no. 153 of 2001 concerning establishment of The National Institution for Planning the State’s Lands Usage;

President’s Decree no. 154 of 2001 concerning fixation of state lands usage until 2017;

Prime Minister’s Decree no. 731 of 2004 entitling the military landscape department to prepare the required database for land plots needed for the various activities of the ministries concerned, among the map of investment opportunities;

Prime Minister’s Decree no. 548 of 2005 concerning foreigners’ rights of freehold and usufruct in certain areas of Egypt;

Defense and Military Production Minister’s Decree no. 146 of 2002 elucidating the terms and conditions required for the state defense in desert areas, concerning institutions stipulated in law no. 143 of 1981, and law no. 7 of 1991;

HAS DECIDED
Article (1)
With no violation to legal acts which have taken place before the enforceability of law no. 94 of 205 abovementioned, companies and institutions preserve the right to own land plots and properties needed for either establishing their activities, or elaboration of the said activities. This is regardless of the nationalities of partners and contributors, their locations, their percentages of partnership, and their contribution to the capital, EXCEPT FOR THE LAND PLOTS AND PROPERTIES SPECIFIED IN ARTICLES (2) AND (3).

Article (2)
Companies and institutions are NOT GRANTED neither the freehold right nor the usufruct right on land plots and properties in the following zones:

1- Strategic zones with military significance specified in President’s Decree no. 152 of 2001 based on law no. 7 of 1991 aforementioned in the preamble.
2- Neighboring zones to the areas used to secure the state international borders of Egypt:
A- Western borders according to the President’s Decree no. 560 of 1986.
B- Southern borders according to the President’s Decree no. 413 of 1988.
C- Eastern borders according to the President’s Decree no. 298 of 1995
3- Islands of the Mediterranean Sea and of the Red Sea.
4- Archeological (Monumental) zones and their security zones.
5- Natural Protected Areas.
6- Red Sea campus, Mediterranean Sea campus, and Suez Canal campus, according to environment law no. 4 of 1994 abovementioned.
7- Roads of all types and campuses of these roads, according to the roads law no. 84 of 1968 abovementioned.


Article (3)
Companies and institutions are not granted the freehold right on land plots and properties in Sinai Peninsula, and these land plots and properties included in the geographical zone of Suez Governorate, Ismailia Governorate, and Port Said Governorate.

Article (4)
Except for the land plots aforementioned in Article (2), companies and institutions can utilize the land plots and properties in Sinai Peninsula by means of USUFRUCT ONLY, and according to the following terms and conditions:
1- Articulation of a limited period usufruct contract (One year – 99 years) between the usufructuary and the institution owning the land, according to the activity. This usufruct period is renewable upon agreement between the usufructuary and the landlord.
2- Before obtaining the dedication resolution, and before concluding the usufruct contract, the usufructuary must obtain the needed approvals from (Ministry of Defense – Ministry of Internal Affairs “Police” – National Security Institution – The concerned governorate).
3- After the usufruct period is finished, the land plot subject of usufruct, and the establishments built on them get automatically transferred to the original landlord.

Article (4)
The state utilities and institutions, each to their realm of concern, shall implement this decree with coordination between them and the competent authorities.
Article (5)
This resolution is effective since the day of publishing it in the official newspaper. This decree nullifies any other decree which is non compliant to its terms and conditions.


PRIME MINISTER
Dr. Ahmad Nazeef


Translated by:
Solicitor/ Zeiad Yehia


Comments on the Prime Minister’s Decree no. 350 of 2007:

This decree can be considered as a continuation for the previous decree 548 of 2005. This new decree is expected to have serious consequences on Sharm el Sheikh, and I can elucidate some of these consequences as follows:

A- New companies who wish to build new residential complexes in Sharm el Sheikh will not be granted the freehold right, regardless of their nationality, which means, subsequently, that Egyptian purchasers in new complexes will be granted only the usufruct right for 99 years. This will create a market unbalanced situation, since the Egyptian purchasers will tend to buy properties only from the projects established in prior to this decree, in order to obtain the freehold right. This gives me the opportunity here to terminate the myth stating that in the even an Egyptian citizen has purchased a property for a foreigner citizen, the contracts changes automatically from usufruct to freehold. Definitely the idea is contradictory even to logic, and not just to law; if I don’t have something, how can I give it away to someone else? Usufruct remains usufruct, all right? I will post more on this very issue, but this is another topic.
B- Individual foreigner purchasers remain unaffected by this new decree, since it did not change their positions in any way.
C- Foreigner companies, even if mixed with Egyptian capital (49% foreigner to 51% Egyptian) are still restricted from owning land plots or properties, and I believe that this consequence was the true purpose of this decree.
D- It was written clearly that the usufruct right is RENEWABLE for one or MORE similar periods. This apparently gives foreigner purchasers, either individual or institutional ones, the practical freehold privileges, but not the legal position of landlords. In other words, it is just about the name.


Kindly post any enquiries or questions concerning the new decree on the message board of this thread. Thanks.

Zeiad Yehia
Head of Legal Department
City and Urban International
Gendy Mall, King of Bahrain St., 2nd Floor,
Neama Bay, Sharm el Sheikh,
South Sinai, Egypt.
Telephone: +20 69 3601515
Fax: +20 69 3601520
Cellular: +20 12 3344988
email: legaladvisor@cui-egypt.com
cui-egypt.com

Hi all, I am new to this forum, and would appreciate any help my friend and I bought land in Dahab a couple of years ago it still has not been registerd in our name as the local government want to take some of the land for a road, we have a lawyor working on this case from Cairo, as we have had problems with local agents in dahab, we have now been informed by our lawyor that there is a new law being enforced regarding foreigners not being allowed to own land in south sinai, and he wants us to sell the land to someone that he knows can anyone please tell me if this is true, as we are afraid that we are being taken advantage of again. please please help. we now just want to sell this land and get out of our investment as we have had so much problems and so many people have tried to cheat us. we should have made money on this land but will be lucky to get our money back at this rate. thanks.

Hi Zeiad, this sounds a little scary, if only I could understand the legal jargon a little more! What's usufruct? sounds like a food additive! what do all these words mean to us buying in DP and CSPearl?

Hi

I am a little confused. will this affect Marsa Alam area. We have been told we are buying as freehold?????

Or does it just affect sharm?

Thanks.

Lou

Hi the above concerns the Sinai region where we have a 99 year lease and not freehold in areas such as Hurghada.

Even Hurghada is not freehold, you can't have a freehold apartment. Freehold means you own the land also, in Hurghada it is a leasehold without tenure, (no lease period). It is the same as Bulgaria, they also sell apartments as freehold but they are leasehold with no lease period. I hope this makes sense?

__________________
Best, Regards, Neil Hollingsworth Tel:01793 602490/07717826505
Email - neil@rivermeadglobalproperty.co.uk Find us on the FreeIndex directory http://freeindex.co.uk/profile(river...rty)_98122.htm and read our reviews.

Thanks for the clarification Neil - and yes it does make sense.

Dear all,

Please be informed that the decree subject-matter of this thread does not touch on neither Hurgada nor Marsa Alam, but is limited to Sinai Peninsula, Suez, and Ismailia.

Usufruct is the right to enjoy another party's property for a limited period of time, and ALSO ENJOY ITS PROFITS i.e. rental income.

Dear Rivermead Global Property,

Thanks for your input, may I mention that foreigners in Hurgada own the property AND the land, since thisi s a general rule of freehold, and since the freehold can't be defected without a clear restriction i.e. law or decree. There is no reason to presume that foreigner purchasers in Hurgada can own the property but not the land, but actually they do. The situation may be different in Bulgaria, but the abovementioned situation is the situation in Hurgada. If I am unaware of a certain law or decree that stipulates otherwise then please correct me.

All the best,

Zeiad Yehia
Solicitor

Mr. ziad,
Why don't come open a branch in hurghada, I hope you think about it to protect us for unprofessional laywers who wana only take money

__________________
George Sabry
Co Partner
Real Estate Mart
The Ultimate Guide To Red Sea Real Estate Investments And Resale Properties
And Property Management Services

I'm quite thankful for your kind words. However I am always here on the forum and I practice in Hurgada via my network. Whenever you need an advice you'll get it here for free, and whenever you need a practical job it can easily be done. Thanks again.

All the best,

Zeiad Yehia
Solicitor