On 13 August 2025, President Abdel Fattah El-Sisi ratified Law No. 168 of 2025 (the “Law”) introducing a regulatory framework for the disposition of privately owned state properties (“State Properties”), particularly those held by unlawful possessors. The Law sets out the rules, procedures, and timelines that the unlawful possessors must follow to legalise their possession of State Properties. Additionally, the Law addresses cases where legalisation is not possible.
Importantly the Law repeals Law No. 144 of 2017 (the “Old Law”), which previously governed the transfer of State Properties to unlawful possessors seeking to legalise their status. The application period under the Old Law expired more than seven (7) years ago. As a result, the new Law has been enacted to continue the State’s efforts to safeguard its State Properties and to stabilise the legal status of unlawful possession. Notably, the Law introduces several new provisions not included in the Old Law, aimed at overcoming practical challenges and enforcement obstacles under the Old Law.
It is worth noting that in 2016, the State Lands Recovery Committee (the “Committee”) was established by virtue of Presidential Decree No. 75 of 2016 Presidential Decree. The Committee is mandated to identify unlawfully possessed state-owned lands and take the necessary legal actions to recover them. It coordinates with relevant administrative authorities to reclaim state-owned lands and safeguard public property rights. It remains unclear whether the executive regulations of the Law will explicitly reference the Committee’s enforcement role or not.
The Law will enter into force after the lapse of thirty (30) days from the date of its publication in the Official Gazette on 13 August 2025 (the “Effective Date”). The Executive Regulations of the Law will be issued by the Prime Minister within thirty (30) days from the date of its publication (“Executive Regulations”).
Scope of Application
The Law applies to State Properties held by unlawful possessors. The scope is further confined to State Properties that have been cultivated, reclaimed, or built upon by such possessors prior to 15 October 2023, including infill lands and planning surplus areas.
The Law also extends to pending legalisation applications submitted under the Old Law, as well as related appeals, where the statutory review periods have not expired as of the Effective Date (the “Pending Applications and Appeals”). In addition, individuals whose applications were rejected under the Old Law may either file an appeal— provided their appeal periods has not lapsed—or submit new applications under the new Law.
The Powers of Competent Government Authorities
The Law authorises the governmental authorities having jurisdiction over the unlawfully possessed State Properties (“Competent Authorities”) to either: (i) remove encroachments on State Properties at the expense of the violating persons; or (ii) dispose of the State Properties to their current unlawful possessors through direct agreement (by sale, lease, lease-to-own, or usufruct) subject to submission of legalisation application from the unlawful possessor, and after getting the approval of the Ministry of Defense.
Legalisation Application Procedures and Related Committees
A. Application and Legalisation Timelines
Unlawful possessors must submit a legalisation application (the “Legalisation Application”), together with the required supporting documents, to the Competent Authorities within a period of six (6) months as of the date the Executive Regulations enter into force. This period can be extended by Presidential Decree for additional periods up to maximum of three (3) years.
If the Competent Authorities fail to issue a decision on the Legalisation Application within six (6) months from the expiry of the application submission period, the matter must be referred to the Cabinet to decide on it.
B. Reviewing Committees
Committees composed of technical, financial, and legal members shall be formed within each Competent Authority (“Reviewing Committees”). The Reviewing Committees shall be responsible for reviewing, assessing and approving/rejecting the submitted Legalisation Applications. The decisions of the Reviewing Committees shall be endorsed by the relevant Minister, Governor, or the Head of the Competent Authority.
C. Application and Inspection Fees
Applicants must pay the following:
(i) Application fees to be determined based on the area of the State Property, with a maximum of EGP 10,000 (ten thousand Egyptian pounds).
(ii) Inspection fees not exceeding EGP 1,000 (one thousand Egyptian pounds) per feddan for agricultural or reclaimed State Properties; and not exceeding EGP 10 (ten Egyptian pounds) per square meter for Properties on which buildings are established.
All Pending Applications and Appeals automatically transferred to the newly established Reviewing and Appeal Committees for review under the Law, without requiring additional application or inspection fees, if already paid to the Competent Authorities under the Old Law.
D. Appeal Committees and Procedures
At least one Appeal Committee composed of technical, financial, and legal members shall be formed within each Competent Authority (“Appeal Committees”). Neither the chairperson nor any member of the Reviewing Committee may serve as member or chairperson of the Appeal Committee.
Applicants may appeal the Reviewing Committee’s decisions (after its endorsement) before the relevant Appeal Committee, within fifteen (15) days of being notified of such decisions.
Applicants whose Legalisation Applications were rejected under the Old Law may submit appeals within (15) days from the date the Executive Regulations enter into force.
The Appeal Committee must issue its decision within thirty (30) days from the date of submission of the appeal, without prejudice to the right of concerned parties to challenge the decision before the competent court.
Disposition of State Properties
A. Restrictions and Obligations
All contracts concluded under the Law must expressly oblige the contracting party to use the State Properties for their approved purposes (i.e., agricultural, industrial, urban, etc,…).
Furthermore, the contracting party to whom a Competent Authority disposes of State Property is prohibited from disposition of such State Property, in whole or in part, prior to full payment of the purchase price. Transfers to third parties after full payment are permitted, provided that the approved purpose of the property is not altered.
B. Valuation and Pricing
The Executive Regulations will define the valuation and pricing criteria for sale, lease or usufruct consideration of State Properties. It is worth noting that, in the event of approval of the Pending Applications and Appeals, the applicable consideration shall be determined in accordance with the rules set out in Prime Ministerial Decree No. 18 of 2017, which implements the provisions of the Old Law.
In cases where legalisation is not undertaken or temporary removal of encroachments on the State Properties is not feasible, Competent Authorities must charge interim usufruct fees until the encroachments are completely removed. The interim usufruct fees shall not exceed the following limits, subject to 5% (five per-cent) annual increase:
(i) EGP 100 (one hundred Egyptian pounds) per square meter per annum State Properties on which buildings are established.
(ii) EGP 20,000 (twenty thousand Egyptian pounds) per feddan per annum for agricultural and reclaimed State Properties.
Criminal Implications and Penalties
The Law provides for the extinction of the criminal proceedings/liability for encroachments on State Properties if the (i) the State Property has been legalised and disposed to the unlawful possessor, or (ii) unlawful possessor hands over the State Property within six (6) months from the date the Executive Regulations come into force. The Public Prosecution must order the suspension of any sentence if the legal disposition or handover occurs during its execution.
The Law imposes the following penalties for use of State Properties for purposes other than those approved, or for any disposal of State Properties in violation of its provisions:
(i) A fine ranging from EGP 250,000 (two hundred and fifty thousand Egyptian pounds) to EGP 1,000,000 (one million Egyptian pounds).
(ii) Restitution of the State Property or removal of any encroachments, at the violator’s expense.
(iii) Repayment of any profits gained.
Conclusion
The Law presents a comprehensive and updated legal framework that supports the state’s ongoing efforts to resolve the long-standing issue related to the unlawful possession of its properties. It streamlines the legalisation process, provides for longer timelines, and establishes a more equitable appeal mechanism. The Law also addresses enforcement challenges under the Old Law. Entities and individuals currently possessing State Properties without legal grounds should assess their legal position, closely monitor the issuance of the Executive Regulations, prepare the required documentation for legalisation process, and ensure timely compliance with the Law.
The contributors to this article are Dr. Mohamed Fathy, Partner and Head of Real Estate, Tourism and Hospitality, and Hannah Mahran, Junior Associate.
