October 16, 2022

New Rules for Allocation of Industrial Land with Installed Utilities

In an effort to expand local manufacturing, the Egyptian Cabinet issued Decree No. 3308 of 2022 facilitating the allocation process and pricing mechanism of industrial land with installed Utilities (“Decree”).

The Decree mandated the Industrial Land Allocation Committee formed under the Cabinet Decree No. 2067 of 2022 (“Committee”) to inventory and study all available industrial land plot which has utilities installed therein and take the necessary procedures for its immediate offering to investors.

According to the Decree, industrial land with installed utilities can be allocated to investors either through sale of the land or under the usufruct system.

Sale at reduced prices

Price-reduced industrial land is offered in 83 industrial zone at 23 different governorates throughout Egypt for a period of one year starting from the effective date of the Decree which is 23 of September 2022.

The prices differ according to each governorate, the location of the industrial zone and the licensed purpose of the land. For example, prices in Cairo per square meter ranges from EGP 1000 (around $ 50) in New 6 of October City to EGP 6400 (around $ 325) in Karamia, in Damietta from EGP 1500 (around $ 76) to EGP 2185 (around $ 111), while in Sohag in Upper Egypt from EGP 300 (around $ 15) to EGP 1175 (around $ 60).

Usufruct system

The usufruct right will be grated against an annual payment of 5% of the price of the land. The usufruct payment will be fixed during the first four years, with 7% accumulative annual increase during the fifth and sixth years and 10% for the subsequent years.

Delay in paying the usufruct amount will trigger interest at the rate announced by the Central Bank of Egypt. failure to pay two consecutive payments, the competent governmental authority will have the right to terminate the usufruct agreement.

The duration of the usufruct agreement will be agreed between the investor and the competent authority and can be renewed for up to fifty years. In order to continue retaining the usufruct agreement, the investor must fulfill the following requirements:

  1. Complete the project according to the certified completion schedule.
  2. Start operation of the project within a maximum of three years from the date of receiving the land.

Convert Usufruct to Ownership The investor is allowed to purchase the land allocated thereto through usufruct after five years from completion of the project and starting operation. The price of the land will be re-evaluated according to the then market prices.

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