Highlights

Law no.8 of 2022 (“Law”) depicting a new vision for Hotels and Tourist Establishments (“H.E” and “T.E”) on both development and regulatory grounds has entered into force a day following its publication on 09 March 2022.

The Law included new requirements, procedures, and compliance periods to enhance and regulate activities carried out by H.E and T.E. Having the Law in place abolishes and replaces the previous Law no.1 of 1973, which was applicable since then.

Concerned entities mentioned by the Law are entities involved in hotels and tourism activities, which are all H.E and T.E listed in Article 1. This client alert aims to break down the definitions of each concerned entity, highlight key provisions and critical stipulations of the Law and establish a complete guide to help analyze and apply its procedures and objectives.

Concerned Entities and Compliance Period

1. Concerned Entities
   The Law applies to entities involved in hotels and tourism activities which include:
   1. Hotel Establishments (“H.E”): defined as places equipped for hosting Egyptian and foreign residents and licensed by competent ministerial decrees, i.e. hotels, tourist villages, floating, heritage or boutique hotels, safari or ordinary camps, hotels, apartments or units, and any other establishments determined by competent ministerial decrees.
   2. Tourist Establishments (“T.E”): defined as places equipped for hosting Egyptians and foreigners to provide food and beverages consumed on-site or outside and licensed by the competent Ministry. These include restaurants, floating, fast-food or truck restaurants, cafeterias, discos, nightclubs, ordinary or tourist goods stores, all tourist or trips means of transportation (river, sea or ground means), tourist’ activities centres (i.e. diving, safari or sea activities), sports and health centres inside hotel establishments and any other establishments determined by ministerial decrees.
   3. Accreditation Offices (“A.O”): defined as “entities licensed by the Permanent Committee for issuing accreditation certificates to applying establishments - to be presented afterwards to the competent ministry - after examining all technical and special requirements and documents to verify its compliance with procedures, criteria and conditions stipulated by the Law.”
      1. On the one hand, an A.O can obtain the license after paying estimated fees (between EGP 5,000- 50,000) valid for one year. They are competent to issue accreditation certificates stating that the applying H.E/T.E fulfilled all requirements to obtain the license following the Law and Executive Regulations (“E.R”) stipulations. After completing licensing procedures, such certificates shall be presented to the competent ministry.
      2. On the other hand, the Law provides competencies, obligations, and professional liabilities of these A.O.Accordingly, several entities were excluded, such as facilities and establishments managed by Ministries of Defense and Interior or related entities.
2. Compliance Period
   • The Law stipulates that the Prime Minister (“M”) shall issue E.R during a period of six months following the Law’s entry into force on 10 March 2022.
   • Meanwhile, all regulations, ministerial decisions, and licenses shall remain effective. Once adopted, H.E/T.E shall fulfil legal requirements following conditions, compliance period, and procedures of E.R.

Key Provisions

The Law stipulates two relevant committees:

1. The Ministerial Committee of Tourism: Headed by the P.M, composed of eleven ministers and the chairman of the Egyptian Union of Tourism Chambers. This committee has a monthly meeting, and the P.M decree shall assign its members and determine its competencies. Also, the committee shall submit an annual report to the High Committee of Tourism.
   The Law provides its competencies and prerogatives, including the following:
   1. eliminating all obstacles and difficulties in the tourism industry;
   2. supervising the coordination between all involved public entities;
   3. approving fees determined by competent authorities which are directly or indirectly related to the tourism industry to maintain a sustainable activity, preserve actors’ interests and the country’s public interest; and
   4. improving and enhancing tourism objectives and purposes by enlisting new tourism cities and sectors with the aim of sustainable development and a new planning strategy.
2. The Permanent Committee (“P.C”): Headed by the Minister of Tourism (the “Minister”) and the membership of:
   1. four related public entities’ presidents;
   2. representatives of ministries of Environment, Manpower, Finance, Urban Development and Defense;
   3. presidents of related sectorial public entities; and
   4. heads of the Egyptian Unions of both Tourism Chambers and Hotels Establishments Chambers.

Competencies of the P.C were stipulated as follows:

1. determining and providing special requirements to grant licenses for H.E/T.E such as environmental, security, and health requirements;
2. determining requirements, procedures, and conditions of licensing an A.O;
3. determining related fees and charges;
4. preparing a guide to include all necessary procedures and requirements needed to obtain a license;
5. examining requests and complaints of entities applying for a license; and
6. evaluating the A.O services and fees.

Important Stipulations

1. The Law stipulates that obtaining a license is necessary to engage in such tourism activities and manage H.E/T.E. Such permission is granted by the Ministry of Tourism (the “Ministry”) according to conditions and procedures stipulated in the Law and its E.R.
2. The licensing procedures are chronologically stipulated as follows:
   1. the applying establishment shall fill out a license request to the Ministry on the template and following requirements and procedures to be determined by the E.R;
   2. the Ministry shall undertake a preliminary decision within thirty days following the request filling;
   3. the Ministry shall notify the applying establishment, within one week following this decision, of all general and special requirements to be fulfilled;
   4. the applying establishment shall pay a previewing and inspection fees (of EGP 500 - 100,000) within one week;
   5. the involved entities shall engage in the reviewing and inspection of the applying establishment within the following forty-five days; and
   6. finally, the license is granted during the following thirty days if all requirements and conditions are fulfilled.
3. License fees: the applying establishment shall pay EGP 1,000 up to EGP 1,000,000 to the Ministry to obtain the license.

General Provisions

1. It is worth mentioning that the Law stipulated the Minister’s competencies to decide on the following:
   1. requirements to be fulfilled by the licensed establishment and its manager based on its nature and activities;
   2. pricing policies regarding residency and services provided for clients by ensuring fair competition and eliminating illegal practices in the tourism industry;
   3. temporary licenses granted for occasional temporary establishments during fairs, festivals, and seasonal occasions (noting that the provisional license fees are EGP 10,000 to EGP 100,000);
   4. requirements and criteria of establishments’ classification and ranking; and
   5. approving and updating the special register for licensed establishments all over the country.
2. Also, important stipulations mentioned several obligations on H.E/T.E and their managers, especially regarding the security and surveillance of the establishment and manager-client relations.
3. Important restrictions and additional licenses and fees were also stipulated for H.E/T.E if providing specific services such as alcohol serving, “nargila”, and poker or gambling games.
4. Finally, the Law enables P.M, on the one hand, to list any area(s) as Tourist Area, and actors within it will have a compliance period of six months following the decree issuance. On the other hand, for public interest and national security purposes, P.M can also restrict the establishment of H.E/T.E in a specific area for only one year, renewable once.

Penalties and Administrative Sanctions

1. The Law stipulates a fine (EGP 50,000 to EGP 500,000) and/or imprisonment penalties for exploitation and managing an H.E/T.E without necessary licenses, and in case restrictions of alcohol and gambling services were violated.
2. Additional sanctions were also stipulated for unlicensed A.O and managers of establishments entitled to legal personality.
3. Reconciliation procedures were stipulated if the violation was ended and requirements were fulfilled, except for specific contraventions against the country’s touristic reputation, national security, health, or environmental standards.
4. Finally, cases and procedures of both establishment closure and license cancellation were also defined and listed in detail and compliance procedures.