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 Post subject: New Decree by the Prime Minister.
PostPosted: Sun Sep 23, 2007 2:32 pm 
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Joined: Sun Jan 14, 2007 4:24 pm
Posts: 84
Location: Sharm el Sheikh.
Dear All,

A new decree is to be issued shortly by the prime minister. Please find the original governmental copy through the following link:

http://rapidshare.com/files/42674065/Ne ... e.zip.html

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

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