In a bid to attract foreign investment and transform the economy, Egyptian government announced five important changes to tech startups regulation. The changes were announced by Presidential spokesperson after a meeting between President Abdel Fattah Al-Sisi, Prime Minister Moustafa Madbouly, and Minister of Communications and Information Technology Amr Talaat. The directives include the following changes:
1) Setting up a physical headquarters is no more required when founding a tech company, a step that may save potential investors much time and money;
2) Reduction of requirements for one person companies;
3) Creation of a digital platform for business registration. This step also eliminates many bureaucratic obstacles facing start-ups and entrepreneurs;
4) Expansion tax exemptions for start-ups;
5) Expansion of free investment technological zones.
The changes aim to reduce bureaucratic procedures and digitalize basic processes, but still represent only a broad framework, as the Ministry of Communications and Information Technology will further elaborate on the proposed changes.
Over the past years, Egypt’s startup sector has been on a rapid rise culminating in an all-time high funding volume of $491 million, according to Magnitt’s 2021 Egypt Venture Investment Report. Egypt, thus, achieved first place in Africa, and third among Arab countries, lagging behind Saudi Arabia and the UAE.
The step comes amid deepening financial crisis as the country tries to dampen inflation and support the national currency.