In a groundbreaking move to further support and nurture the startup ecosystem in Egypt, Rami El Dokani, Chairman of the Egyptian Stock Exchange, announced a proposed study in cooperation with the Financial Supervisory Authority. The study aims to establish a specialized stock exchange dedicated to the trading of emerging companies in Egypt. This new exchange would have fewer disclosure conditions and lower profitability requirements compared to the main market, catering specifically to investors with a certain financial solvency.
The establishment of this exchange comes as part of Egypt’s comprehensive plan to fortify startups and promote entrepreneurship in the country. President Abdel Fattah El-Sisi recently unveiled a bold initiative offering a 5-year tax exemption program for startups. The aim is to provide a significant boost to the startup ecosystem, which already contributes over 40% to Egypt’s gross domestic product.
To support this initiative, Dr. Hala Abu Al-Saad, the Undersecretary of the Small and Medium Enterprises Committee in the House of Representatives, anticipates significant legislative amendments to the existing Small and Medium Enterprises Law. The proposed amendments seek to introduce special facilities for startups, including the 5-year tax exemption period and a simplified flat tax rate structure. This flat rate tax system ensures fairness and simplifies the tax process for startups, allowing them to plan and anticipate their tax obligations effectively.
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Furthermore, the amendments will address critical aspects such as providing lands for small projects through the usufruct system. By reducing additional financial burdens, startups will be better positioned to focus on growth and development, driving economic expansion.
Recognizing the dominant role of medium, small, and micro companies in Egypt’s private sector, the government has allocated a substantial budget of EGP 1.5 billion to support medium and small projects in the upcoming fiscal year. This financial commitment solidifies the government’s objective of bolstering the startup sector and generating employment opportunities.
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With the establishment of a specialized stock exchange for trading startups, coupled with the 5-year tax exemption program and other supportive measures, Egypt is taking significant steps to become a thriving hub for entrepreneurial endeavors. These initiatives demonstrate the government’s unwavering commitment to fostering innovation, driving economic growth, and positioning Egypt as a favorable destination for startups and investors alike.
Stock Exchange startups Egypt
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard