Egypt has been re-assessing many regulations in order to make the Egyptian market more conducive to both local and international investment. With a growing start-up community both in the tech industry and otherwise, laws such as the New Investment Law No. 72 of 2017 and the Small and Micro Enterprise Law No. 141, 2004, aim at leveling the playing field for new comers to the Egyptian market, allowing for equality of opportunity across a list of industries, empowering the ever-so-growing youth population and enhancing good governance and transparency.
According to Egypt’s Small and Micro Enterprise Law (No. 141, 2004) Small Enterprises are defined as “all companies or facilities with productive, commercial, or service-providing economic activities, with a minimum capital of 50,000 EGP, a maximum capital of 1,000,000 EGP, and a maximum of 50 employees. While Micro Enterprises are defined as all companies or facilities with productive, commercial, or service-providing economic activities, with a capital less than 50,000 EGP.”
These establishments/ projects which are in line with the guidelines of Law No. 141, 2004 intend to support citizens in need and enhance their role in economic development. With respect to funding and finance, the Egyptian authorities have taken the initiative to put in place tailored financing systems by the Central Bank of Egypt (CBE) such as creating funds in each of Egypt’s 27 governorates to facilitate these types of enterprises. As the mindset shifts towards supporting SME’s the CBE, in 2016, established guidelines as an initiative to increase finance for SMEs by giving the authority to national banks to pledge a minimum of 20% of their loans to SMEs.
A year later in 2017 the CBE took it a step further and worked closely with the banking sector by injecting a total financing of EGP 30 billion (EUR1.4 billion) to stimulate financing for microbusinesses which over the coming years is projected to aid around 10 million customers.
That same year, Misr Venture Capital Company, a private fund with a capital of EGP 150 million (EUR 7.1 million), was founded by the Ministry of Trade and Industry aiming to relive distressed but viable SME’s by facilitating short-term financing mechanism.
Moreover, in 2018 the CBE launched a four-year EGP 200 billion (EUR 9.3 billion) financial scheme to fund SMEs projects, also putting in place three plans to assist such enterprises by:
- exempting banks from the reserve requirements for specific credit facilities for SMEs financing
- facilitating the renewable energy sectors to invest in equipment and
- providing short term facilities for working capital. 
Moreover, the regulation indicates that 10% of the available property for investment will be dedicated solely for the SME’s. The price payable for the purchase of the available plots of land will be proportionate to the cost of utilities /facilities. Otherwise a usufruct is another option for possessing the land against a 5% of the estimated value of the land.
All licenses, approvals or any other formalities for the creation of these establishment will be issued in less than 30 days from the day of submitting the request, same goes for the issuance of the commercial registries and the tax cards.
The regulation also will facilitate some of the following for establishment by:
- Identifying the investment opportunities.
- Assisting in a study analysis for all the available projects.
- Providing advice concerning the best price and place to buy the necessary machines and equipment.
- Risk analysis
- Marketing at local and international exhibition
These establishments shall not be administratively suspended in case of committing a contravention. In such case, the owner will be informed with such contravention and the time limit to rectify it and only in case of default will the establishment will be suspended.
The current environment is quiet accommodating to new interest and development, and our firm aims at assisting those who seek services and advise with respect to establishing and realizing their ideas and/or projects. Our firm would work closely to cater to the needs of the investor and to formulate the best plan suitable for their endeavor, taking into consideration all the benefits provided by the law.
Oxford Business Group (30 June 2016) “SME financing ramps up Egypt,”
Enterprise (24 May 2017) “CBE Microfinance to push out EGPO30bn in subsidized financing to as many as 10mn borrowers within four years,” http://enterprise.press/stories/2017/24/cbe-microfinance-to-push-out-egp-30-bn-in-subsidized-financing-to-as-many-as-10-mn-borrowers-within-four-years
Egyptian Ministry of Trade and Industry (29 May 2017) “Misr Venture Capital Launched Soon,”
OECD/EU/ETF (2018), The Mediterranean Middle East and North Africa 2018: Interim Assessment of Key SME Reforms, SME Policy Index, OECD Publishing, Paris