Stimulating Startups is One of Egypt's Priorities
Within the framework of Egypt’s keenness to encourage investment, open up new horizons for more job opportunities for the youth, and promote sustainable economic growth, the government is working to stimulate startups and entrepreneurship.
MSMEs Development Law in Favor of Startups
MSME’s development law stipulates a simplified lump-sum tax for startups.
Under the law, the annual revenues determine the tax amount for micro-enterprises. Annual revenues less than EGP 250,000 require a tax payment of EGP 1,000, revenues between EGP 250,000 and 500,000 require a tax payment of EGP 2,500, revenues between EGP 500,000 and 1,000,000 require a tax payment of EGP 5,000.
In addition, annual revenues between EGP 1 million and 2 million are subject to a tax rate of 0.5%, revenues between EGP 2 million and 3 million are subject to a tax rate of 0.75%, annual revenues between EGP 3 million and 10 million are subject to a tax rate of 1%.
It is worth noting that establishments and companies whose annual turnover does not exceed EGP 10 million can benefit from the MSME’s development law, which includes further simplification of the procedures for attaching and collecting tax on startups and reducing the volume of tax disputes.
A Simplified Tax for Startups 2023
The Minister of Finance has directed the Egyptian Tax Authority (ETA) to quickly take procedures to end the tax examination for urgent cases, such as liquidation, cessation, and departure within only 90 days in accordance with the provisions of Law No. 91 of 2005, so that none of the founders of these startups will be surprised who is forced to close his company and starting another company, knowing that his closed company still has its tax file pending and has not finished determining its tax status.
Minister of Finance’s Statement Regarding this Issue
The Minister of Finance, Mohamed Maait, stressed the need to accelerate the procedures for examining and collecting taxes for startups and entrepreneurship in a way that contributes to encouraging young people to invest in various fields.
He added that this decision comes with Egypt’s direction towards supporting and stimulating startups and entrepreneurship by providing all means of support that help grow its number and enhance its areas of work. It also works to increase the participation of the private sector as the locomotive of growth and the main engine of economic activity, especially in light of the frequent global changes following the war in Europe.
He also pointed out that startups are usually in the growth stage and searching for markets, start with low capital and high costs during the construction stage, and face many challenges, which makes them need support.
GAFI CEO’s Statement Regarding this Issue
The CEO of the General Authority for Investment and Free Zones (GAFI), Mr. Hossam Heiba, explained that the new unit for entrepreneurship and startups established under the auspices of the Council of Ministers aims to work on the growth of startups and represents all parties concerned with the entrepreneurship environment in Egypt.
He added that this unit works to remove any challenges facing startups and entrepreneurs, which encourages them to contribute to the economic development process, and the technical secretariat of the unit has been formed, which meets periodically and works to receive complaints from startups and entrepreneurs and submit them to the relevant authorities to work on quickly resolving them. This paves the way for startups to work in a stimulating environment free of challenges.
It is clear that the Egyptian government is doing its best to encourage investment. It has started to stimulate startups and entrepreneurship by taking procedures to complete the tax examination for urgent cases, such as liquidation, cessation, and departure within only 90 days. To learn more about this issue, click here or here.
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