Oualid El-Mahdi Yacine - Afrikan Heroes

When Funding Fails: How Algeria Is Democratizing Access To Startup Funds With A National Fund For Startups

May 20, 2021

Algeria is not among Africa’s “Big Four” when it comes to funds accruing to the continent’s startup ecosystem. In fact, in 2019, the last peak year of funding for the ecosystem — before the coronavirus enveloped the world — the country reportedly recorded just one round of funding, far behind its regional counterpart Egypt, which recorded 47 and ranked 3rd on the continent. But the story it is about to change. This is because of the recent launch of Algeria Startup Fund (ASF) by the country’s Minister Delegate to the Prime Minister in charge of the knowledge economy and startups, Oualid El-Mahdi Yacine.

The fund focuses on equity investments in startups instead of credit facilities.

According to Ahmed Haftari, Director General of this fund which began operations last January, the value of the funding granted by the Fund to companies bearing the label “Startup” and “innovative project” oscillates between 2 and 20 million DA ($15k-$150k).

Already, sixty innovative projects are being examined for funding by the Fund.

In a statement on the sidelines of the closing of the first edition of the National Innovation Fair for Vocational Training and Education, Mr. Haftari called on labeled startups in the North African country to approach the Fund to obtain financing as well as the technical support that would allow them to materialize their projects in their respective areas.

Joining Other African Countries To Boost Local Startup Ecosystems

Algeria Startup Fund is one of the many incentives introduced by the country’s government to support local startups following the passage of Executive Decree 20–254 of September 15, 2020 for the labeling of “Startups”, “Incubators” and “Innovative projects”.

Under the executive decree supported by the country’s 2021 Finance Act, companies in Algeria with a startup label will be exempt from several taxes, starting with the TAP (tax on professional activity) and the IBS (tax on corporate profits) for a period of 2 years from the date of obtaining the said label.

“Exempt from VAT and subject to 5% of customs duties are equipment acquired by companies with the label “startup”, ” says article 84 of the law.

“The purpose of this measure is to allow the Algerian startup to devote all of its financial resources, as well as all the attention of its management to activities related to its startup and rapid development,” the law further states.

For companies with the “incubator” label, they are also exempt from TAP, IBS in addition to Global Income Tax (IRG) for a period of 2 years.

“Exempt from VAT are equipment acquired by companies with the “incubator” label entering directly into the realization of their investment projects,” the law states.

With the tax incentives and a national fund for startups, Algeria joins other African countries which are vigorously championing local startup growth.

Notably, others are Tunisia, Egypt and Benin Republic which have recently implemented policies as well as instituted national funds to support startups. South Africa used to be among the list but has since scrapped Section 12J provisions which gave startups far-reaching tax incentives and funds accessibility.

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

Algeria Finally Sets Up A Commission For The Labelling Of Startups Under A New Law

December 17, 2020

Algeria has a new decree for startup and it is not making wave, but the first wave of innovative projects, startups and incubators, benefiting from labeling issued by a multisectoral commission set up under the decree, is scheduled for the end of December-beginning of January, said Tuesday in Algiers, the Minister Delegate to the Prime Minister responsible for Knowledge economy and startups, Oualid El-Mahdi Yacine.

On the occasion of the installation of the Commission for the labeling of “Startups”, “Incubators” and “Innovative projects”, the minister considered that “the timing (of the start of labeling) is rather correct” since it will coincide with the implementation of the 2021 finance law which introduces “new tax exemptions for startups.”

Labeling will thus allow the startup to benefit from these exemptions.

The minister announced that this commission will meet periodically “on average twice a month” and will allow to study the requests which will be received “exclusively” on the portal www.startup.dz which was also launched Tuesday.

The choice of all digital in the administrative procedures for obtaining the label is motivated, according to the minister, by his determination to put an end to the “bureaucracy which has taken root in our administrations” and which is “the major obstacle which has hindered the completion of hundreds of projects “.

Obtaining the “Startup” label is conditioned by two essential factors: innovation and non-linear growth, explains Noureddine Ouaddah, an executive at the ministry.

While the granting of the “Innovative Project” label will depend essentially on “the growth of the project and its business plan”, adds. Mr. Ouaddah.

Finally, the “Incubator” label requires the presentation of services such as coaching and training, a good qualification of the team as well as convincing results as to the outcome of the projects monitored, continues the executive.

Algeria Startups labelling Algeria Startups labelling

Algeria Officially Launches Its First Ever Fund For Startups

In October this year, Algeria launched the country’s first ever Fund for Startups, 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.”

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

Algeria Officially Launches Its First Ever Fund For Startups, Sets Up Committee For Labelling Startups

October 3, 2020

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 “.

Here Is What You Need To Know

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.

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