New rules solve the problems facing would-be tech entrepreneurs, government officials said yesterday, as part of the Madbouly government’s drive to attract private capital and drive growth of the domestic tech industry.
The changes will make it easier for people to set up tech companies and offer a handful of tax exemptions and preferential customs treatment to some companies.
#1- It’s going to be easier to set up a tech company. People will be able to establish tech companies by notifying the government via a digital platform. No other details were provided about the procedure, but the statement says the measure comes as part of the government’s ambition to “remove all obstacles facing startups and entrepreneurs.” Tech companies will also no longer need to have a physical headquarters, a move designed to lower costs for firms in the sector. The government will also allow sole traders to set up companies, the statement said without providing further information.
#2- They’re on the customs “white list”: Tech companies importing electronic components will be added to the customs’ “white list”, allowing them to clear goods through customs more quickly. Per the Customs Act, goods imported by companies on the white list do not have to undergo inspection, making clearance quicker and reducing clearance fees.
#3- New tech investment zones + tax exemptions: The government will expand tech investment zones and roll out new tax exemptions for startups, the statement said, without offering further details.
Several government agencies are working to develop regulations to attract international VCs and make it easier for founders to start and grow their companies. In the coming months, we could be seeing a standard shareholder agreement for startups (allowing new-to-Egyptian-law minority right protections, including preferred shares and founder claw-back clauses, among other things) as well as a framework allowing convertible notes for the first time.
