Investment and Security: Resolving Legislative Contradictions

Recently, the Egyptian House of Representatives finally approved amendments to Articles 11 and 12 of the Desert Land Law No. 143 of 1981, allowing non-Egyptians to own desert lands in Egypt. This amendment aligns the law with Investment Law No. 72 of 2017 and the Desert Land Law. This amendment is Compatible with the ruling of the Supreme Constitutional Court, to create an attractive investment climate. In this article, we clarify that this legal amendment does not conflict with Egyptian national security or affect the sanctity of the Sinai Peninsula.

Necessity of Intervention: Addressing Legislative Contradictions

• Investment Law No. 72 of 2017 allows both Egyptian and foreign investors to own properties without discrimination, regardless of their share or contribution to the company’s capital, as stated in Article 55. This contradicts Article 11 of the Desert Land Law, which requires Egyptians to own 51% of a company’s capital, limiting individual ownership to 30%.
• The Investment Law also stipulates the investor’s right to establish, manage, and finance investment projects from abroad without restrictions and in foreign currency, as mentioned in Article 6. This contradicts Article 12 of the Desert Land Law, which limits ownership under this law to Egyptians only.

Legal Protection of Egyptian Borders: No Compromise on National Security in the Sinai Peninsula

The enhanced and strict laws of the Sinai Peninsula protect its lands by prohibiting foreigners from owning any property or vacant land. As mandated by the following legal legislations: 

• Defense Minister’s Decision No. 203 of 2012: Allows natural persons of Egyptian nationality from Egyptian parents, and Egyptian corporate entities wholly owned by Egyptians, to own property in the Sinai Peninsula, and prohibits foreigners from owning land there, ensuring no harm to Egyptian national security.
• Decision No. 14 of 2012 on Integrated Development in the Sinai Peninsula: This decision emphasizes the exclusive ownership of lands and built properties in the region to natural persons holding Egyptian nationality and to legal entities whose capital is wholly owned by Egyptians.
  In the case where a foreigner wishes to establish an investment project in the areas governed by this decision, it shall be done based on the right of usufruct, in accordance with a decision from the Prime Minister. The project must be formed as an Egyptian joint-stock company, and it is affirmed that any ownership contract concluded otherwise is considered absolutely null and void.
• Decision No. 128 of 2022, exempting Sharm El Sheikh, Dahab, and the Gulf of Aqaba sector from the provisions of the Integrated Development Law in the Sinai Peninsula: Affirms that only natural persons of Egyptian nationality and Egyptian companies with fully Egyptian-owned capital can own land and properties in these areas, limiting foreigners’ rights to usufruct but not ownership.

Conclusion:

the amendment aims to ensure that the Desert Land Law does not conflict with the Investment Law.  It does not annul previous laws that prohibit foreigners from owning lands in the Sinai Peninsula. This aims to facilitate investment and create incentives for attracting foreign investment. In support of the Egyptian economy and achieving the government’s goal of attracting $100 billion in foreign investments by 2023.

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