The Egyptian government has activated a new framework designed to significantly support the country’s micro, small, and medium-sized enterprises (MSMEs) and the broader startup scene. Under Law No. 152 of 2020 and its executive regulations, the Micro, Small, and Medium Enterprises Development Agency (MSMEDA) will oversee a wide range of new incentives aimed at startups, investors, and ecosystem enablers like incubators and accelerators.
Quick Facts
- New law offers direct financial and logistical support.
- Incentives target startups, incubators, and investment funds.
- Aims to reduce operational costs and unlock new capital.
A Comprehensive Package of Financial Support
The law introduces a broad set of measures intended to lower the financial barriers for new and growing businesses. Administered by MSMEDA, the core incentives available to qualifying projects include:
- Utility Cost Rebates: The state will refund all or part of the cost of connecting utilities to the project’s designated land after operations begin.
- Flexible Utility Payments: Projects may be granted extended payment schedules for utility connection fees, including partial or full exemption from late payment interest.
- Subsidized Employee Training: The government will cover a portion of the costs for technical training programs for the startup’s workforce.
- Land Allocation: The law allows for the allocation of land to projects for free or at a symbolic price.
- Land Value Refunds: Companies may be reimbursed for up to half the value of the land allocated to their project.
- Reduced Guarantees: Startups can be exempted from, or see a reduction in, the financial guarantees required when land is allocated for a project.
- Exhibition Support: The government may cover all or part of the costs for a startup’s participation in exhibitions.
Bolstering Incubators and Accelerators
The incentives are not limited to startups alone. The legislation extends these benefits to larger companies and organizations that actively support the ecosystem. This includes entities that establish industrial, production, or service complexes that house small and micro-enterprises.
Crucially, business incubators and accelerators that provide services to startups, particularly early-stage ventures, are also eligible for the same package of financial and logistical support.
New Cash Incentives to Unlock Startup Funding
To stimulate investment, Article 89 of the law establishes a program to provide cash incentives to investment funds and companies that finance entrepreneurial projects. This incentive is awarded when these investment vehicles sell their shares or stakes in the startups they have backed. The goal is to create a more attractive environment for venture capital and other forms of early-stage financing.
About MSMEDA
The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) is the primary governmental body in Egypt responsible for developing and supporting the MSME sector. It works on formulating policies, coordinating efforts between government agencies, and implementing programs to foster entrepreneurship, create jobs, and drive economic growth.
Source: Youm7
