Algeria has launched the country’s first ever Fund for Startups today, at the International Conference Center (CIC) in Algiers during the National StartUp Conference “Algeria Disrupt 2020”.
According to the country’s Minister Delegate to the Prime Minister in charge of the knowledge economy and start-ups, Oualid El-Mahdi Yacine, the new financing mechanism, called the “Algerian start-up fund”, is based on investment in capital and not on classic financing mechanisms based on credit”, stating that investment in capital induces a notion of risk and this is a very important “.
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- For the minister, the objective of the fund is to create pioneering startups able to market their products all over the world, by allowing innovative young people to benefit from the same financing mechanisms as in developed countries and to realize their innovative projects in Algeria.
- Referring to the obstacles encountered by these young people, in addition to funding, the Minister raised issues of the lack of incubators, accelerators and other support structures for projects.
- Most of the incubators available are in the capital, while other parts of the country have very few. This is why, he said, his department has decided to create at least one incubator per every province in Algeria, specifying that a “Network of project accelerators” aimed at supporting innovation in Algeria will be launched during the conference.
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- This first edition of Algeria Disrupt 2020, placed under the high patronage of the President of the Republic, Mr. Abdelmadjid Tebboune, will be the opportunity to announce the measures put in place by the Government to support the ecosystem of young entrepreneurs, in particular the official launch of the Start-up Investment Fund, as well as the new regulatory framework dedicated to these companies.
- Executive Decree 20-254 of September 15, 2020 creating the national committee for the labeling of “startups”, “innovative projects” and “incubators” was published in the last issue of the Official Journal.
- During the meeting of the Council of Ministers held in January 2020, the President of the Republic ordered the development of an emergency program for startups and small and medium-sized enterprises (SMEs), in particular the creation of a special fund or a bank intended for their financing.
- He also insisted on the imperative of a “deep reform” of the country’s tax system with all that follows in terms of regulations and tax incentives for the benefit of startups and SMEs.
- The 2020 Finance Law provides for new measures in the form of tax incentives for the benefit of startups, in particular those who are active in the field of innovation and new technologies.
- These are tax exemptions concerning taxes on profits and on value added (VAT) in order to guarantee the sustainability of these businesses and to achieve sustainable economic development in the medium term.
- Customs exemptions during the operation phase and facilitated access to land as part of the extension of investment projects have also been instituted under the 2020 Finance Law.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer