الهيئة العامة للرقابة المالية

Dr. Islam Azzam – FRA Chairman:

• The new Resolution accommodates the distinct business models and obligations of real estate developers based on practical market insights.
• These amendments strike a balance between facilitating corporate growth and maintaining strict compliance with legal borrowing limits under Capital Market Regulations.

 FRA Board of Directors chaired by Dr. Islam Azzam, has issued a new resolution amending key conditions for converting real estate developers into Real Estate Investment Funds, previously regulated under Board Resolution No. 179 of 2025. The amendments reflect the distinct operational model of real estate developers, their multi-year business cycles and ongoing contractual obligations toward clients which are progressively settled through project execution and delivery.

Under the new resolution, the equity requirements for companies seeking conversion to Real Estate Investment Fund have been modified. Net equity must now be at least EGP 500 million based on the latest approved financial statements, eliminating the previous requirement that net equity equal at least 40% of total assets and investments.

Net equity will be calculated after deducting any asset revaluation surpluses, with the remaining net equity utilized to subscribe to fund units upon conversion, as stated in the audited financial statements approved by the fund company’s general assembly.

In addition, the resolution introduces a new leverage condition requiring that total outstanding loans shown in the company’s latest approved financial statements do not exceed the maximum borrowing threshold permitted for Real Estate Investment Fund under the Executive Regulations of the Capital Market Law.

 Meanwhile, the original baseline requirement remains unchanged, keeping the converting company’s minimum issued and paid-in capital at EGP 5 million or its foreign currency equivalent.