Decree Establishing Joint Stock Com

On 8 February 2016, the President of Egypt promulgated Presidential Decree No. 57 of 2016 assigning the New Urban Communities Authority and the Armed Forces Land Projects Authority to establish a joint stock company[1]. The purpose of the new company shall be the planning, constructing and developing of the administrative capital, as well as Al Sheikh Mohammad Ibn Zayed Settlement. The Decree also established that the land plots allocated for the projects shall fall within the scope of “New Urban Communities”. It should be noted that the new administrative capital is part of the national mega projects announced during the “Egypt Economic Development Conference”, held in Sharm El Sheikh, in March 2015. According to the government, the administrative capital will be constructed through foreign investors. The capital should be located in the north of Cairo, between Cairo and Suez. It should become the main centre of economic and financial activity in Egypt; as all ministries, administrative divisions and embassies would be transferred to the administrative capital. On a related note, news spread over the past few months that international companies would take part in the execution of the project. In late January 2016, and during the visit of the Chinese President to Egypt, the Ministry of Housing, Utilities and Urban Development signed Memoranda of Understanding with China State Construction Engineering (“CSCES”) to execute the buildings for 12 ministries the cabinet of ministers, the parliament, the grand conference hall, and the exhibition centre. It should also be noted that the President had issued the Presidential Decree No. 446 of 2015 in November 2015, which allowed the Armed Forces Land Projects Authority to establish joint stock companies, solely or with national of foreign capital (detailed in Egypt Legal Update – Issue of December 2015). Private sector might, hence, take part as a partner to the State in the execution and development of the administrative capital. Finally, the direct result of considering the land allocated for the projects part of the areas of New Urban Communities is that these projects shall be governed by the New Urban Communities Authority Law No. 59 of 1979 and its Executive Regulation. Such a conclusion implies several consequences, such as the following: the New Urban Communities Authority will be the competent authority in issuing licenses of construction and administration of projects and activities in the mentioned land plots, the New Urban Communities Authority has the right to import its needs (equipment, devices, etc.) for the execution of the projects without customs and without obtaining authorization, and the projects will be governed by the Law No. 59 of 1979 concerning the mechanism for allocation of land and the mechanism for contracting with persons or companies needed for the execution of the projects. [1] Presidential Decree No. 57 of 2016 Considering Land Plots of New Administrative Capital and Al Sheikh Mohammad Ibn Zayed Settlement as New Urban Communities, Official Gazette, Issue No. 5 (bis), 8 Feb. 2016.