March 9, 2017

New Rules for Land Development in Sinai

The Prime Minister issued Decree no. 215 of 2017 amending the executive regulations of Law no. 14 of 2012 on the Development of Sinai Peninsula. Sinai Peninsula under this law refers to the Governorates of North Sinai and South Sinai and the areas locating inside the administrative boundaries of Suez, Ismailia and Port Said.

The decree continues to restrict the ownership of lands in Sinai to Egyptian nationals
and entities fully owned by Egyptians. However, it adopted a narrower interpretation of
the Egyptian nationality to mean Egyptian nationals who bear the Egyptian Nationality
alone and whose parents are Egyptian nationals. For Egyptian entities, they must be
fully owned by Egyptian nationals according to the same meaning given above for
Egyptian individuals.

Transferring the ownership of land in Sinai, allocating it, or giving usufruct either for Egyptian or non-Egyptians for a period exceeding one year must be pre-approved by the
Ministry of Defense, Ministry of Interior and the General Intelligence.

The decree removed the restriction on pledging the usufruct right over Sinai land. It
rather required the pre-approvals of the Ministry of Defense, Ministry of Interior and the General Intelligence before any disposal of the usufruct right including pledging it.

The maximum duration for a usufruct agreement is increased to 75 years instead of 50
years. The Usufruct agreement will terminate in case of (i) violation of its terms and
conditions, (ii) incompletion the project in the agreed schedule, (iii) passing away of the
beneficiary, unless an approval is obtained from the Ministry of Defence, Ministry of
Interior and the General Intelligence, or (iv) liquidation of the entity owning the

Foreign investment projects in Sinai shall take in the form of a joint stock company,
which at least 55% of its capital must be owned by Egyptians. The President, however,
shall have the authority, after the approval of the relevant authorities, to exempt a
foreign company working on development projects from such requirement according to
specific requirements and procedures detailed in the decree. The foreign company in
this case will undertake not to conduct any change to its ownership structure or articles of associations.

A new article is added to authorize the President, after the approval of the Ministry of
Defence, Ministry of Interior and the General Intelligence to give individuals with Arab
nationality the same benefits of Egyptian nationals in relation to residential units in

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