EGYPT Law and Practice Contributed by: Sherif El Hosseny, Malak El Amiry and Farida Degheidy, Matouk Bassiouny & Hennawy
after having been notarised and legalised up to the level of the Egyptian Embassy/Consulate in the coun - try of issuance. However, the mere depositing of a document does not grant perfection, rights, priority, or ranking of a document. Therefore, it is recommended to file documents with the ECAA. 2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor A foreign lessor will not be required to pay income or capital gains or other taxes upon leasing an air - craft or engine to a domestic lessee. The Egyptian lessee, however, is required by law to withhold certain amounts as a withholding tax, which shall be subject to Egyptian tax law and/or any applicable double taxa - tion treaty. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor A foreign lessor should not be deemed to be resi - dent, domiciled, carrying on business or subject to any taxes as a result of its being a party to, or its enforcement of a lease. 2.4.3 Engine Maintenance and Operations There are no liabilities in respect of aircraft or engine maintenance and operations that are imposed on a foreign lessor under a lease. However, if the Egyptian lessee does not make the necessary amounts due to the maintenance provider for example, the said main - tenance provider may put and exercise a maintenance lien. In a repossession and deregistration event, the foreign lessor may be put in a situation whereby it has to make such payments to enable it to repossess and deregister the aircraft. 2.4.4 Damage or Loss Caused by an Asset A foreign aircraft or engine owner or lessor under a lease, or a financier financing the asset on lease, shall not be liable under the doctrine of strict liability because of damage or a loss caused by the asset. 2.4.5 Attachment by Creditors Creditors of a domestic lessee could attach an air - craft leased to that lessee but owned by a different entity. The owner in this case would need to provide evidence to court of its ownership of the aircraft. A bill of sale that is notarised and legalised up to the level
of the Egyptian Embassy/Consulate in the country of issuance would be sufficient proof to exclude such aircraft from being part of the lessee’s assets. 2.4.6 Priority of Third Parties’ Rights Under Egyptian law, the rights of a lessor will rank equally with other creditors of the same ranking but will have priority in all respects over the claims of all unsecured creditors of the lessee if the lease agree - ment is registered with the ECAA except for certain sovereign and preferred debts. What constitutes sov - ereign or preferred debts includes the amounts due to the public treasury (eg, judicial expenses), which are followed by taxes, other rights (such as secured debts), maintenance liens and employees’ rights for the past six months, in that order. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies It is mandatory under Egyptian law that all insuranc - es over property be placed with domestic insurance companies. 2.5.2 Mandatory Insurance Coverage Requirements There is no minimum requirement for insurance. How - ever, industry norms are followed. 2.5.3 Placement of Insurance Outside of Jurisdiction Reinsurances can be placed outside of Egypt with foreign reinsurers. 2.5.4 Enforceability of “Cut-Through” Clauses Cut-through clauses are enforceable. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurances and reinsurances are per - mitted under Egyptian law. It is also advisable to per - fect said assignments as per Egyptian laws and regu - lations for the benefit of the beneficiaries thereunder. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities There are no restrictions for a lessor to terminate an aircraft lease. Such terms are subject to the terms of
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