Highlights
During the Cabinet’s meeting held on May 15, 2024, His Excellency Minister of Justice Omar Marwan announced that strict measures had been taken to regulate the sale, in foreign currency, of real estate to foreigners. It was announced that circular no. 41 (the "Circular") was issued on March 25, 2024, by the Real Estate Registration and Notarisation Authority to all its offices, branches, and general departments. The Circular requires that the purchase price of any real estate sold to a foreigner be transferred from abroad in foreign currency to a local bank in Egypt.
Scope of Application
The Real Estate Registration and Notarisation Authority issued Technical Publication 8 (the “Publication”) and the Circular, which entered into force on March 26, 2024, stipulating that Foreign Property Applicants (the “Applicants”) are required to provide evidence that the purchase price, as specified in the sale agreements concluded on or after March 26, 2024, was transferred from abroad in a foreign currency to one of the banks authorised by the Central Bank of Egypt (the “CBE”).
Additionally, the Publication instructs Notary Public officials to forward a copy of all documentation to the Real Estate Ownership Affairs for Non-Egyptians’ Office.
The Circular imposes further controls on the purchase prices specified in sale agreements that require notarisation, as follows:
- if the purchase price stated in the sale agreement is in Egyptian pounds, the purchase price still must be paid in foreign currency, based on the prevailing exchange rate at the time; and
- if the purchase price stated in the sale agreement is in foreign currency, it shall be mandatory to obtain CBE’s prior approval before concluding the sale in foreign currency.
The Circular prohibits all Notary Public offices from notarising any agreements until all the Applicants have complied with the provisions outlined in the Circular.
Objectives
The above comes in light of the Egyptian government’s approach to mitigate currency fluctuations, invigorate the local market and increase foreign currency reserves by exporting real estate in Egypt and offering rental and ownership of residential units in foreign currency to foreigners and Egyptian expatriate investors. Such approach includes a set of incentives encouraging potential customers and buyers, including residency programs in Egypt.
The requirements set by the Publication and Circular mentioned above provide a regulated real estate portfolio for foreigners and investors through a facilitated and documented process. They also support the CBE’s aim of ensuring the soundness of the monetary and banking system, as well as the stability of prices within the framework of Egypt’s general economic policy.