During a press conference in the presence of several ministers, during which the results of the first meeting of the Supreme Investment Council, chaired by Egyptian President Abdel Fattah El-Sisi, were reviewed, the Egyptian Prime Minister Dr. Mostafa Madbouly revealed the details of the new foreign ownership decision as follows:
Regulated rulings in the past were that the maximum limit for any foreigner wishing to own property in Egypt was two, and they were in two different cities. Today, the Minister of Justice will work with all parties to release this number so that any foreigner who wants to come and own real estate in Egypt can own any number of real estate. As long as it remains within the framework of the controls which include payment of the value of these goods and priority of payment in free currency.
This comes at a time when the Egyptian state is keen to overcome all obstacles facing investors, and as part of efforts to attract foreign direct investment in particular. The recent decisions (22 decisions) rendered by the High Council for Investment, chaired by the President of the Republic, have expressed the volume of incentives and facilities in this context.
Support the real estate sector
Economist Dr. Mustafa Badra said in exclusive statements to Sky News Arabia Economy that the move opens the door for more investment in the real estate sector as it reflects the increased volume of demand, and in a way that helps to shift the sector in general, especially in light of the realization of expensive (luxury) investment projects that do not match the capabilities of a large segment of Egyptians, while foreigners can own them.
And he adds: “As a result, a large segment of investors will accept areas that have a special character, especially areas of tourism investment projects, in El Alamein, Sharm el-Sheikh and other areas rich in projects. real estate, as well as cities and luxury real estate projects near industrial areas.” associated with the work of foreign investors.
The Egyptian economist briefly lists the main returns expected from this decision, as follows:
Stimulate real estate activity Increase operational capacities and create employment opportunities Inject hard currency Revitalize a number of sectors related to the real estate sector
Badra explains that the real estate sector is a locomotive that pulls many sectors behind it, and therefore such a decision which affects the sector would clearly affect these other related sectors, including the tourism sector, which affects and is affected by the real estate sector, thus helping to turn the wheel of the economy and the movement of investments.
And previous reports had revealed positive estimates for the evolution of the real estate sector in Egypt, including a report published by the agency “Fitch”, which forecasted the sector to expand by 6.8% on an annual basis during the year. current year 2023, and an average growth of 7.4% between 2024 and 2027, noting that “Egypt will see a greater role for private capital, especially in light of the partnership framework between the public and private “.
Support the investment climate
For his part, the head of the Egyptian Forum for Economic Studies, Dr. Rashad Abdo, believes that “the new decision on opening the door to foreign ownership of real estate is a good decision, while it is arrived too late”. This refers to Cairo’s need for such a decision for a long time, to support the business and investment climate.
And he points out, in statements exclusive to the “Sky News Arabia Economy” site, that it is, for example, not logical for the state to work to attract investment and invite investors to pump their investments into Egypt and at the same time put restrictions on their ownership of real estate, forcing some of them to start their business inside a “hotel”. For example, explain that the investor has the right to own real estate, which reflects on his ability to run his business in a stable and secure manner.
He points out that such a move would help attract investors to work in Egypt, as it has overcome one of the obstacles that existed before.
And while this decision is part of a group of new decisions (22 decisions) issued by the Supreme Investment Council recently, the head of the Egyptian Forum for Economic Studies believes that “the most important of the decisions themselves is the implementation…the lesson is the practical translation on the ground, and that the legislation that has been approved comes out. next 5 years.
The practical application of these procedures – according to Abdo – contributes to the investor’s ability to plan clearly, with the need to reduce bureaucracy.
Egypt aims to attract foreign direct investment worth $10 billion by the end of the current year 2023. According to data revealed by Hossam Haiba, CEO of the Egyptian Investment Authority, in last April, net foreign investment exceeded 5 billion dollars since the beginning of the current year. fiscal year.
Over the past year, the Egyptian state has taken many steps, including the preparation of a state property policy document, as well as the expansion of the issuance of the golden license. And the Prime Minister indicated in the last press conference that with regard to the golden license, it was an article of the investment law since 2017 and it was not activated, until that it is already activated and that the license has been granted to 15 companies, in addition to other requests from other companies.
The Prime Minister indicated that one of the guidelines stipulated that only strategic projects and major projects benefit from the golden license, and there is now a recommendation to extend the issuance of the golden license to many projects in order to facilitate the procedures.
encourage investment
For his part, the real estate expert Abd al-Majid Jadu points out, in statements exclusive to the “Sky News Arabia Economy” site, that many countries in the world allow foreigners to own real estate in this way, especially in the framework to encourage investment, but the issue usually comes with a set of political and security determinants and dimensions that are overcome by establishing specific controls on the availability of property, underscoring the importance of those controls that will be announced in this context.
He believes that the overall effects of this decision are undoubtedly in favor of supporting the Egyptian economy in general, explaining that the decision came at a time when the real estate sector is suffering from a state of stagnation, and that it is therefore considered in this context. as leading to a sort of revitalization of the market, especially with the high costs of industry with all its inputs (from building materials to industry-related services).
And the Egyptian real estate expert adds in the same context: “The real estate industry and its various inputs is an influential industry in any society, and it is generally labor intensive, either directly or indirectly through the bias of the services associated with it, and such a decision would move the market to some extent in the current period.
He points out that the demand for investment in the luxury real estate sector resulting from the authorization of foreign ownership is linked to a feasibility study of the market and the extent of demand for this type of real estate.
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