Presidential Decree No. 128 of 2022 Excluding Sharm El-Sheikh, Dahab, and the Aqaba Gulf Tourism Sector from Sinai Development Law and PM Decree No. 1109 of 2022 Amending Capital Market Rules

Price 10 Pounds
Year
Sixty-Fifth
Issued on 21 Sha'ban 1443 AH
Corresponding to (24 March 2022 AD)
Number 12
(Continued)

Contents of the Issue:
Presidential Decree of the Arab Republic of Egypt
Page Number
Number 128 of 2022 Excluding the Cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector in South Sinai Governorate from the Provisions of the Integrated Development Law for the Sinai Peninsula Issued by Decree-Law No. 14 of 2012 ......................

Presidential Decree of the Council of Ministers
No. 1109 of 2022 Amending Some Provisions of the Executive Regulation of the Capital Market Law Issued by Decision of the Minister of Economy and Foreign Trade No. 135 of 1993 .............................

Presidential Decree of the Arab Republic of Egypt No. 128 of 2022 Excluding the Cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector in South Sinai Governorate from the Provisions of the Integrated Development Law for the Sinai Peninsula Issued by Decree-Law No. 14 of 2012 President of the Republic Having reviewed the Constitution; And the Civil Code; And the Law on Joint Stock Companies, Limited Partnerships by Shares, Limited Liability Companies, and Single-Person Companies Issued by Law No. 159 of 1981 and its Executive Regulation; And the Capital Market Law Issued by Law No. 95 of 1992 and its Executive Regulation; And Law No. 10 of 2009 Regulating Supervision on Non-Banking Financial Markets and Instruments; And the Integrated Development Law for the Sinai Peninsula Issued by Decree-Law No. 14 of 2012 and its Executive Regulation; And the Investment Law Issued by Law No. 72 of 2017; And the Decision of the President of the Council of Ministers No. 48 of 2017 Concerning the Rules and Conditions for Ownership and Licensing of Use for Squatters on Lands in the Sinai Peninsula; And the Presidential Decision No. 28 of 2021 Partially Excluding the Cities of Sharm El-Sheikh and Dahab in South Sinai Governorate from the Scope of Application of the Provisions of the Integrated Development Law for the Sinai Peninsula;

And based on what was presented by the Board of Directors of the National Authority for the Development of the Sinai Peninsula; And after the approval of the Ministries of Defense and Interior and General Intelligence; And after the approval of the Council of Ministers; And based on what the State Council deemed appropriate; Decided:
( Article One )
The cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector in South Sinai Governorate are exempted, according to the attached survey maps and coordinate lists, from the application of all provisions of the Integrated Development Law for the Sinai Peninsula mentioned above, with commitment to the provisions contained in this Decision.

( Article Two )
Ownership of lands and built properties in the areas subject to the provisions of this Decision shall be for natural persons holding Egyptian nationality and for Egyptian legal entities whose capital is wholly owned by Egyptians.
Without prejudice to acquired rights, disposal by competent authorities of lands or built properties owned by the State as private property in the aforementioned areas to individuals and private legal entities shall be under the usufruct system, where the total duration of the usufruct right does not exceed 75 years, with the right of the transferee to own the structures erected on the usufruct land throughout the duration of the usufruct. Disposal by sale is permitted for built structures without the underlying lands, all in accordance with the model contracts attached to this Decision.

In all cases, ownership or allocation of lands, properties, or units for residential purposes, granting usufruct rights, or carrying out any real or in rem transactions, whether for Egyptians or foreigners, is prohibited unless approval is obtained from the Ministries of Defense, Interior, and General Intelligence exclusively. Any contract concluded in violation of this shall be absolutely void, and any interested party may invoke nullity or request a ruling of nullity, and the court shall rule on it ex officio.

( Article Three )
Competent authorities shall continue to examine ownership or usufruct requests from squatters prior to the date of application of the provisions of the Integrated Development Law for the Sinai Peninsula mentioned above, for lands they have built upon, reclaimed, or cultivated, after approval from the Ministries of Defense, Interior, and General Intelligence and the National Authority for the Development of the Sinai Peninsula, in accordance with the provisions of Decision of the President of the Council of Ministers No. 48 of 2017 mentioned above.

( Article Four )
Investment or development projects for non-Egyptians in the areas subject to the provisions of this Decision must take the form of an Egyptian joint stock company.
No changes in the names of founders, partner ratios, shares, or amendments to some articles of contracts or statutes, or changes in the form of companies, or public and private offerings of securities shall be enforceable against third parties without obtaining approvals from the Ministry of Defense, the Ministry of Interior and General Intelligence, and the General Authority for Investment and Free Zones or the Financial Regulatory Authority, as applicable.

The trading of securities listed on the stock exchange subject to the conditions mentioned in this Article shall be subject to the provisions of the Capital Market Law and its Executive Regulation mentioned above.

( Article Five )
The National Authority for the Development of the Sinai Peninsula shall refer all requests related to lands, properties, projects, and companies within the scope of the areas subject to the provisions of this Decision, in their current state, to the South Sinai Governorate, competent authorities, or the General Authority for Investment and Free Zones or the Financial Regulatory Authority, as applicable. Competent authorities shall supervise and monitor compliance with the provisions stipulated in this Decision in coordination with the concerned authorities mentioned above. Companies whose activity is limited to the areas subject to the provisions of this Decision in the Sinai Peninsula shall be subject to the provisions of this Decision, provided that their statutes or founding contracts are amended in accordance with the laws regulating this, after approval from the Ministries of Defense, Interior, and General Intelligence exclusively.

( Article Six )
Presidential Decision No. 28 of 2021 mentioned above is repealed, and any provision conflicting with the provisions of this Decision is also repealed.

( Article Seven )
This Decision, its explanatory memorandum, the survey maps, coordinate lists, and model contracts attached to it shall be published in the Official Gazette, and it shall be enforced as of 2022/4/1.
Issued at the Presidency on 20 Sha'ban 1443 AH ( Corresponding to 23 March 2022 AD ).
Abdel Fattah El-Sisi

Explanatory Memorandum
The Integrated Development Law for the Sinai Peninsula Issued by Decree-Law No. 14 of 2012 was issued to regulate certain provisions regarding the disposal of lands and properties in the Sinai Peninsula and to establish a general framework for investment and development projects in the region. Its provisions organized the rules and procedures to be taken before carrying out such disposals or establishing these projects, and clarified the jurisdictions of competent authorities over these lands and other concerned authorities as specified in the provisions of the mentioned Law.

The legislator authorized in Article (4) of the mentioned Law the President of the Republic, for reasons he deems fit, after approval from the Ministries of Defense and Interior and General Intelligence and the Council of Ministers based on a presentation by the Board of Directors of the National Authority for the Development of the Sinai Peninsula, to exempt a city or part of it and coastal areas from the application of the provisions of this Law.

Since legislation is born of necessity and must keep pace with the development of societies and their changing reality, necessity required exempting the cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector in South Sinai Governorate, according to the attached survey maps and coordinate lists, from the provisions of the Integrated Development Law for the Sinai Peninsula mentioned above, due to the special nature of these areas which made them a fundamental factor in attracting tourism development. Accordingly, this Decision was prepared to exempt the cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector from the application of all provisions of the Integrated Development Law for the Sinai Peninsula mentioned above, with commitment to certain provisions deemed necessary to be adopted and their controls contained in Articles Two, Three, and Four of this Decision, exclusively; relying on the principle that he who owns the greater owns the lesser. This Decision includes provisions consisting of the following:

Commitment to the general rule that ownership of lands and built properties in the aforementioned areas shall be for natural persons holding Egyptian nationality and for Egyptian legal entities whose capital is wholly owned by Egyptians.

Regarding lands and built properties owned by the State as private property in the aforementioned areas: Determining the methods of disposal by competent authorities to individuals and private legal entities under the usufruct system, consistent with the nature of these areas and considering national security requirements, without prejudice to rights acquired based on a legal principle, contracts, or legal transactions.

Commitment to the general rule requiring approval from the Ministries of Defense, Interior, and General Intelligence for all ownership, allocation of lands, properties, or units for residential purposes, granting usufruct rights, or carrying out any real or in rem transactions, whether for Egyptians or foreigners, in the aforementioned areas.

Continuation of competent authorities examining ownership or usufruct requests from squatters prior to the date of application of the provisions of the Integrated Development Law for the Sinai Peninsula mentioned above, for lands they have built upon, reclaimed, or cultivated, after approval from the Ministries of Defense, Interior, and General Intelligence and the National Authority for the Development of the Sinai Peninsula, in accordance with the provisions of Decision of the President of the Council of Ministers No. 48 of 2017 Concerning the Rules and Conditions for Ownership and Licensing of Use for Squatters on Lands in the Sinai Peninsula.

Commitment that investment or development projects for non-Egyptians in the aforementioned areas must take the form of an Egyptian joint stock company, continuing the same approach adopted by the legislator in Law No. 14 of 2012 mentioned above, and emphasizing that regarding non-Egyptian companies mentioned above, whether existing or established after the implementation of this Decision, no changes in the names of founders, partner ratios, or amendments to some articles of contracts or statutes, or changes in the form of companies, or public and private offerings of securities shall be enforceable against third parties without obtaining approvals from the concerned authorities mentioned.

Article Five stipulates that the National Authority for the Development of the Sinai Peninsula shall refer all requests related to lands, properties, projects, and companies within the scope of the aforementioned areas, in their current state, to the South Sinai Governorate, competent authorities,

or authorities of jurisdiction, or the General Authority for Investment and Free Zones or the Financial Regulatory Authority, as applicable, with competent authorities supervising and monitoring compliance with the provisions stipulated in Article One of this Decision in coordination with the concerned authorities mentioned.

Since companies exercising their activity in the cities of Sharm El-Sheikh and Dahab and the Aqaba Gulf Tourism Sector, whether actually established or established after the implementation of the provisions of this Decision, either exercise their activity only in these areas without other parts of the country, or in a second case exercise their activity only in these areas - without other parts of the Sinai Peninsula - as well as in other areas in the country, or in a third case exercise their activity in these areas as well as the rest of the Sinai Peninsula, and since the companies referred to in the third case are subject to Law No. 14 of 2012 mentioned above, Article Five in its last paragraph specifically stipulates that companies subject to the provisions of this Decision are those that exercise their activity according to the first and second cases only, and not the third, provided that their statutes or founding contracts are amended in accordance with the laws regulating this, after approval from the Ministries of Defense, Interior, and General Intelligence exclusively.

Article Six stipulates the repeal of Presidential Decision No. 28 of 2021 mentioned above, as well as the repeal of any provision conflicting with the provisions of this Decision.