Foreign Investment in Egyptian Real Estate

Egypt’s property market has opened up steadily since the 1990s. Under Law No. 230 of 1996, non-Egyptian individuals and companies may own real estate—albeit with strict limits and approvals. This legal framework was part of Egypt’s cautious shift towards foreign investment. Today, foreign buyers can invest in homes, resorts or businesses, but must navigate caps on quantity and location. (Recent reforms – including a 2024 amendment to the Desert Land Law – have further liberalized the rules, allowing foreigners to own land for investment projects beyond previous ownership caps.)

Legal Framework for Foreign Ownership

Egypt’s rules on foreign property ownership come from several laws and decrees. Law 230/1996 is the core statute: it permits foreigners to acquire property but imposes key restrictions. Under this law, a foreign individual may own up to two real estate units (often homes) for personal or licensed business use, each no larger than 4,000 square meters. All acquisitions require prior government approval (a Council of Ministers review) and adherence to administrative decrees. For example, Prime Ministerial Decree No. 548/2005 lays out the procedure: foreign purchases must be vetted by security agencies and approved at the cabinet level.

Older laws continue to restrict land use. Law 15 of 1963 still prohibits foreigners from owning agricultural or undeveloped desert land. In practice, farmland and strategic areas are off-limits except by special presidential dispensation. Additional rules apply in Sinai and border zones (Law 14/2012 generally bans foreign ownership in Sinai) and resort districts. For example, a 2022 presidential decree forbids foreign ownership in Sharm el-Sheikh, Dahab and the Gulf of Aqaba. In short, even as Law 230 permits foreign buyers, other statutes carve out no-go zones (Sinai, islands, heritage sites, military zones) that require special clearance.

Recent reforms have liberalized some aspects. In January 2024, Parliament amended the Desert Land Law to allow foreigners to fully own land for investment projects. This lifted prior rules requiring majority Egyptian ownership (51%) of investment ventures and capping individual foreign shares at 30%. However, ordinary property sales to foreigners still follow the classic Law 230 limits (two units per individual, etc.). Also, Egypt’s 2017 Investment Law (No. 72/2017) encourages foreign capital by allowing corporate investors to purchase real estate for projects and by offering incentives, though it did not change the basic personal ownership caps.

Eligibility of Foreign Investors

Individuals vs. Companies

Individuals (natural persons): Any non-Egyptian can potentially buy property, subject to the above laws. As noted, a foreign individual is capped at two units (≤4,000 m² each) and must use them as a private residence. They must also secure all required approvals. Crucially, a foreign buyer must hold a valid Egyptian residency permit (or visa) to purchase property. Egypt does not grant automatic residency to property buyers; foreigners generally obtain an investor visa or other residency permit first.

Companies (legal entities): Foreign-owned companies enjoy broader rights. A foreigner may establish an Egyptian company (e.g. an LLC or joint-stock company) with up to 100% foreign ownership. Such entities can then acquire commercial, industrial, or tourism-related real estate for business use. In fact, non-residential purchases are typically done through corporations: Law 230 bars individuals from directly buying industrial or office land, but a foreign investor can form a local company to do so. Note that for sensitive sectors (e.g. media, defense), foreign involvement might be restricted by other laws.

(For more on business structures, see ByLaw’s guide on How to Establish a Company in Egypt and Types of Companies in Egypt.)

Residency and Nationality Considerations

Foreign real estate investors do not need Egyptian citizenship, only a legal residency status. In practice, Egypt requires foreigners to hold a multi-year visa (a “residence permit”) before buying property. Common types are work, family, or investment visas. Significantly, Egypt’s “investment visa” program grants longer residency based on investment size. For example, purchasing $50,000–$100,000 of property qualifies the foreign buyer for a 1–3 year renewable permit, while $200,000 or more can yield a 5-year residency. (There is also a 5-year “deposit residency” for placing ~EGP 7 million in an Egyptian bank.) However, simply owning property does not automatically produce a visa: the permit must be applied for and issued separately.

In summary, foreign investors usually remain foreign nationals (with all the attendant legal rights/limitations). Egyptian law makes a clear distinction between citizens and foreign residents: citizens enjoy full property rights and social benefits, whereas foreigners’ rights are “limited…to certain residential real estate” and subject to restrictions. Long-term residence, let alone citizenship, is rare for property buyers.

Types of Property Foreigners Can Own

Egypt’s diverse residential real estate – from city apartments to private villas – is generally the main category open to foreign ownership. Under the law, residential properties (buildings meant for living) are fully permitted. For example, high-rise condominiums in Cairo or coastal vacation homes on the Red Sea can be bought by foreigners under Law 230. Foreign buyers are limited to their personal quotas (two units total), and each unit must not exceed 4,000 m². Importantly, only residential and mixed-use properties qualify – land reserved for agriculture or raw undeveloped land is off-limits.

Commercial real estate (offices, retail, warehouses) is typically acquired by foreign-owned companies. A foreign company registered in Egypt can buy commercial or industrial property for business purposes. (Individual foreigners cannot directly purchase office blocks or factories under Law 230.) In sectors like tourism, a foreign developer often forms a company to buy hotel or resort land. Tourist and resort properties themselves are actively encouraged: in practice, areas like Hurghada, El Gouna and parts of the North Coast welcome foreign investment in hospitality developments.

By contrast, agricultural and desert land remains nearly completely restricted to Egyptians. Law 15/1963 still forbids foreign ownership of farmland or desert plots without special permission. A foreigner who tried to buy farm land would almost certainly have the contract voided. In industrial zones, however, foreign companies can often acquire land under the Investment Law (especially in free zones or designated industrial parks) as part of licensed projects.

Geographical Restrictions on Foreign Ownership

Foreign buyers can purchase property in most parts of Egypt, but there are notable excluded areas. As a rule, border zones, security zones, archaeological sites and certain Red Sea islands are off-limits. For example, the entire Sinai Peninsula is generally closed to foreign owners. Likewise, a 2022 decree explicitly bans foreigners from buying property in Sharm el-Sheikh, Dahab and the Gulf of Aqaba (popular resort areas on the Sinai coast). The Red Sea islands and areas near military bases are also typically restricted.

Outside those sensitive zones, foreign investment is permitted but still requires government clearances. In practice, most foreign home or resort purchases occur in pre-approved development zones. These include new urban areas like New Cairo and the New Administrative Capital, and touristic regions on the North Coast or Red Sea (Hurghada, North Coast resorts, etc.). Such areas have been “pre-cleared” for foreign ownership and often have streamlined registration. Nonetheless, even in open areas, each transaction must be registered with the Land Registry and the Real Estate Authorities as usual.

Sharm el-Sheikh (shown here) is a major resort city on the Sinai coast – but note foreigners cannot own property there. Presidential Decree No. 128/2022 expressly prohibits foreign ownership in Sharm, Dahab and the Gulf of Aqaba. By contrast, cities like Cairo, Alexandria, Luxor or Hurghada are open for foreign purchases (subject to the standard ownership limits).

Investment Zones and Free Zones

Egypt has created special zones to attract foreign investment in property and industry. Notable examples are the Suez Canal Economic Zone and various free trade zones. These areas often allow 100% foreign ownership of enterprises and offer generous incentives. For instance, companies in the Suez Canal Zone pay only a 10% flat corporate tax (instead of 22.5%) and just 5% on personal income. Many goods and services in those zones are exempt from VAT or customs duties.

Similarly, Investment Zones (industrial parks, technology zones, new urban communities) provide privileged terms. Projects established in GAFI-designated investment zones can enjoy tax breaks and subsidy programs. Foreign developers of large residential or tourism projects will often locate in these zones to benefit from the incentives (lower taxes, fast approvals) that the Investment Law (No. 72/2017) and its executive regulations grant. (However, note that using these incentives generally requires formal project approval – small resale transactions don’t automatically get these breaks.)

Property Registration for Foreign Investors

Once a foreigner (or foreign-owned company) agrees to buy property, proper registration is crucial. The sale contract must be authenticated before a public notary and then registered at the local Real Estate Registry (known as “Tabu”) within 10 days. For foreign buyers, the authorities require proof that the purchase funds were remitted from abroad in foreign currency. In practice, the seller must show that the price was paid via an approved bank transfer from outside Egypt, or if paid in pounds, an equivalent foreign-currency transfer at the prevailing rate. Egyptian law forbids illicit currency sales: a 2024 regulation mandates registration offices to refuse any sale to a foreigner unless these foreign-exchange requirements are met.

All foreign purchase contracts are scrutinized by the Real Estate Registration Authority. They will not finalize the title transfer until the foreign-currency rules are satisfied and national security checks (if any) are done. For the buyer, this means closing often involves coordinating with a local bank, a notary, and possibly GAFI (the investment authority) if special approvals are needed.

Taxation of Foreign Real Estate Investments

Foreign property owners face the same tax regime as Egyptians. Key taxes include:

• Real Estate Tax (RET): An annual tax of 10% of the assessed rental value of the property. This is calculated on the notional rent the property could earn (with standard deductions for expenses). In practice, small residential units (annual value below EGP6,000) are exempt, but most larger homes, shops or hotels pay RET at 10% of rent value.

• Income/Corporate Tax: If the property generates income (rental or business profit), it is taxed at the normal 22.5% corporate rate (for companies) or at personal income tax rates (for individuals). Foreign-owned companies owning hotels or rental buildings pay 22.5% on net profit. Capital gains from a sale of property by a company are also taxed at 22.5%. (For individuals, a capital gain would be treated as part of taxable income under the law.)

• Transfer Tax: When the property is sold, the seller pays a 2.5% tax on the sale price. This is a one-time levy on transferring real estate. Foreign buyers should budget for it, although often the contract will specify who (buyer or seller) bears it.

• Stamp Duties: Small fixed fees apply on contracts (usually nominal, e.g. EGP 1 per paper).

Egypt does not impose additional surtaxes on foreigners beyond these. Crucially, Egypt offers no special tax holiday just for buying property. (It does offer general investment incentives under the Investment Law, such as cash refunds of a portion of the corporate tax and multi-year tax holidays, but those apply to qualifying development projects rather than a simple home purchase.) In other words, once a foreign investor establishes a legal company or submits rental income, their taxes follow the standard rules.

Dispute Resolution in Foreign Real Estate Investments

Real estate disputes in Egypt are typically resolved through Egyptian courts. Foreign buyers often include arbitration clauses in their contracts, but they should be aware of legal limitations. Under Egyptian law, real estate and public-order disputes are generally not arbitrable. This means that even if the contract says “arbitration,” Egyptian courts may refuse to enforce arbitral decisions on property titles. In practice, a contractual dispute over land or a title will usually end up in a local civil or administrative court (which can include an appeal up to the Supreme Court).

Investors may also seek negotiation or local mediation. Egyptian law does recognize arbitration in other commercial matters, but for land deals the safer assumption is litigation. Experienced foreign investors often use dual strategies: they may agree on an arbitration forum (e.g. ICC or UNCITRAL) for breaches of contract or general investment disputes, while realizing that enforcing any award about the title itself still requires going through Egyptian courts. In any case, having good local legal counsel is critical. ByLaw attorneys offer litigation and ADR support for cross-border property cases.

FAQs

Which areas are foreigners allowed to buy property in Egypt?

 Apart from the restricted zones (Sinai, strategic border lands, Red Sea islands, Sharm/Dahab), foreigners may buy in virtually any city or development. This means Cairo, Alexandria, Luxor, Red Sea resorts (Hurghada, El Gouna, North Coast) and newer cities (New Cairo, New Capital, etc.) are all open to foreign purchase (with the usual approvals). Each purchase still requires government clearance, but no nationality-based ban exists outside the sensitive areas listed above.

Do foreign investors need residency to own property in Egypt?

 Yes. Egyptian law requires a foreign buyer to hold a valid residence permit or visa when purchasing real estate. A tourist visa is not sufficient; one typically obtains an investment or other residency visa first. Buying property itself does not automatically grant residency – the investor applies separately for the permit. However, qualifying real estate investments can speed that process: for instance, a $100,000 property purchase allows applying for a 3-year residence visa.

Are there tax incentives for foreign real estate investors in Egypt?

 Egypt’s tax incentives are generally project-based and apply equally to any investor. For large development projects (especially in tourism or industrial zones), the government offers tax holidays, duty exemptions, and cash refunds on corporate tax. Foreign-owned companies can fully benefit from these if their investment is approved. However, an individual simply buying a home or condo gets no special break beyond these general rules. In short, foreigners pay the same real-estate taxes as Egyptians (10% property tax, 2.5% transfer tax, 22.5% income tax) and any larger projects they build can tap the standard incentives.

What risks should foreigners consider when investing in Egyptian property?

 Key risks include title and registration issues. It’s not uncommon to encounter properties with unclear deed histories or undeclared liens. Always verify that the land is properly registered (the “Tabu” extract) and free of encumbrances. Zoning or construction violations are another hazard: make sure the property is legally built and has permits. Bureaucratic delays can arise if paperwork is incomplete. Currency risk is also a factor: fluctuations in the Egyptian pound can affect your costs and eventual repatriation. Fraud is a threat too, especially in off-plan or informal developments – use reputable agents, lawyers and do full due diligence. In summary, go slow, verify everything with a qualified lawyer, and be prepared for a more hands-on process than in some other countries.

Can foreigners repatriate profits from real estate sales in Egypt?

 Generally, yes. Egypt allows foreign investors to convert and send profits abroad, subject to Central Bank rules. In practice, the bank will want proof that the investment was initially funded in foreign currency (as required by law). Once a foreign-owned company sells a property and pays the due taxes, it can typically repatriate the proceeds by selling Egyptian pounds to the bank and remitting the equivalent in US dollars (or other foreign currency). Recent regulations have tightened documentation (for example, they require showing the contract price was transferred through the banking system), but no blanket ban on capital repatriation exists. It is wise to work with banks experienced in handling foreign investments and to maintain clear records of all currency transfers.

Conclusion

Egypt offers opportunity but complexity for foreign real estate investors. To summarize:

• Ownership Limits: Foreign individuals are capped at two properties (≤4,000 m² each) under Law 230. Companies face no such per-unit cap.

• Permitted Areas: Most cities and tourism zones are open to foreign buyers. Restricted areas include Sinai, military/border zones, and the Sharm/Dahab region.

• Residency: A valid Egyptian residence permit is required for any purchase. Large property investments can help secure multi-year visas.

• Taxes: Foreign owners pay the same taxes as locals. (Egypt’s investment incentives benefit developers, not private buyers.)

• Regulation: All transactions must be registered in the national registry, with proof of foreign-currency payment.

• Risks: Title disputes, regulatory changes, and currency controls are potential pitfalls. Expert legal advice and due diligence are essential.

As Egyptian law continues to evolve (for example, the 2024 land-ownership reforms), it pays for foreign investors to stay informed and use local legal counsel. When done correctly, foreign investment can unlock high-growth opportunities in Egypt’s urban and tourist property markets – but careful planning and compliance are key to a successful purchase.