The Egyptian government announced its plans to give residency to foreigners who own apartments, in an effort to attract investors and revive the condo selling market.
In a statement from the Ministry of Housing, Deputy Minister of Housing Khaled Abbas said that living permits will be given to foreigners in return for owning a living unit, under law 230 of 1996. However, this only applies if the owned condos are in fully built buildings.
These permits will be labelled under temporary living visas for non-touristic reasons and will last for five years, with possibility of renewal. However, the permits will only be given to people with a condo or condos that cost more than $400,000. If the condos cost at least $200,000 then owners are given permits for three years, with a chance of renewal.
Abbas added that for units under construction, permits will only be given to its foreign owners once they pay the entire price of the apartment in dollars, with at least 40 percent in advance or 100,000 dollars.
Accordingly, whoever aims to obtain a permit should present a preliminary contract with the apartment owner, stamped by the owning entity of the land upon which the condo is built. This could be the New Urban Communities Authority, the Tourism Development Authority, or another.
The owning entity of the land should send a letter approving the process. Moreover, a bank should also present a letter proving the transfer of the entire value of the money from abroad. The amount of money sent will then be used by the visa issuing authority to determine the duration that the condo buyer is allowed to stay in the country.
Both letters should also specify if the condo is under construction and if so determine a date of finish, within four years.
As for people who want to renew their permit, they should submit a letter from the original condo owner specifying they are still the current owners of the unit, as well as a letter determining the situation of the unit from the specified authority. The letter should include the timing, which the building needs to be finished, which should be within four years. The bank should also submit a letter showing the original transaction to buy the unit in both dollars and Egyptian pounds.
Abbas concluded that three standardized examples will be created for the three letters.
These plans come at a time where Egypt has been trying to find innovative ways to encourage investment in the country. Egypt recently ratified its new investment law, which aims to encourage investment through creating new incentives, easing government restrictions and introducing new laws to protect investment money from arbitrary decisions, as well as ease cross border trade.
The move to give foreigners residency is actually a move that falls under one of the key sections of the new investment law. More broadly, the new investment law specified that all investors in Egypt are eligible for residency for at least one year until their “business” is over. Since buying apartments is considered an investment, this naturally makes apartment owners eligible for residency.
However, the investment law also targets business owners, so the rest of its rules mainly address that, allowing foreign business owners to employ ten percent of their labor as foreigners, to be increased to a maximum of 20 percent when found suitable.
The law also gives investors immunity to the systems as it does not allow public administrative authorities to revoke licenses issued for investment projects.
Egypt has been trying to pose as an attractive investment destination ever since an economic crisis hit the country in 2013. The government had to adopt austerity measures including floating the pound, which lead to severe price increases including a fifty percent fuel hike and a twenty-five percent electricity hike.
However, recent economic reports have praised Egypt’s situation, even encouraging its return as an investment hub. Back in July, Cairo was ranked as the most attractive city for investments in Africa, snatching the 64th place worldwide.
In a recent report by Rand Merchant Bank (RMB), Egypt was ranked as ‘Africa’s best investment destination’ for the second year in a row.
RMB attributed Egypt’s top position to two factors: that the country is Africa’s highest gross domestic producer, and that it enjoys the single largest consumption market in the MENA region. The report also observed that Egypt has the most diversified market in Africa, and “strides that have been made to improve the investment and legal business environment”, with a growth forecast at four percent.