Foreigners can buy property in Egypt, under Law No 230 of 1996.
Foreigners cannot buy more than two pieces of real-estate, which cannot exceed 4,000 square meters
1- Due Diligence Report
The due diligence report is the most important part of the transaction since it aims to verify the legal safety of the property, or otherwise. Your lawyer will obtain the necessary documents to complete the legal checks and submit to you a written report of their findings.
A due diligence report necessarily investigates the following items:
• Title of Deed
The legal proof of who the legitimate owner is of your desired property.
• Building License
A license issued by the state granting the right to build on a land plot, defining the purpose of the building, the grace period and the percentage of land it is permissible to construct upon.
• Commercial Register
This is the official record of the developer’s company.
• Tax ID
The legal proof that the developer’s company is recognized by tax authorities.
Once the due diligence report has been completed and your lawyer has confirmed it is safe to continue with the transaction, the next step is to check your contract.
2- Revision of your Contract
A draft copy of your contract should be sent to you by your agent or the developer directly. Once you have received this then a copy should be forwarded to your lawyer, whist it is advisable to peruse the document yourself also to confirm your details are correct and highlight any queries you may have.
Your lawyer will revise your contract both in English and Arabic to confirm an accurate translation, to ensure the contract complies with the due diligence report, to ensure all mandatory articles are present and to evaluate whether the clauses are fair for both parties. Any issues raised by either you or your lawyer would then be discussed with the developer and changes made, where applicable. Once the final contract is agreed upon by both parties it must be signed by both parties on every page, including any addendum’s, with your names signed and printed on the last page of the contract, in Egypt signatures must be with blue ink.
Once the contract has been signed by both parties, one original copy should be sent to your lawyer to be authenticated by the Egyptian court.
Authentication of your Contract
The authentication of the contract is done by way of a court case known as “Signature Validation” “Power of Attorney transfer”. The case aims to prove that the signature of the first party is legitimate, thus preventing contract denial and rendering him unable to dispute any clause in the contract at a later date.
3- Real Estate Tax Law (Law No. 196 of 2008)
On property handover the owner is liable to complete the tax form and submit it to the tax office. This can be done by the owner personally or by a representative, but it is the owner’s responsibility to ensure that the task is completed.