President Mohamed Muizz on Thursday approved a bill amending the Tourism Law, introducing changes that will allow resorts to extend rental contracts by paying reduced fees.
Previously, the Tourism Law allowed resorts or integrated resorts to extend their leases for another 49 years if certain conditions were met. These conditions included paying any outstanding rent, fines, taxes or fees to the government, except for rent and penalties that were deferred pursuant to an agreement with the Ministry of Tourism.
The 10th Amendment to the Act, passed on December 27, 2020, established the following requirements for lease extensions:
- A lump sum of $5 million will be paid for up to a 49-year extension if paid within the first two years after December 27, 2020. After this period, the fee will increase to $10 million.
- For extensions of up to 50 years, if agreed to two years after the effective date, $200,000 will be paid for each year of the extension.
The new amendment was ratified on Thursday,
- Resorts can extend for up to 49 years by paying a lump sum extension fee of $5 million within six months of the amendment’s effective date. After that six-month period, the fee will revert to $10 million.
- For lease extensions of up to 50 years, the resort must pay $200,000 for each year of the extension within six months, and an equal amount at the end of each six-month period.
The amendment gives resorts six months to secure lease extensions for the lower fee of $5 million instead of $10 million.
