Both the finance law 2020 and its complementary law have provided for new incentives for start-ups in the form of tax reliefs and new sources of financing.
However, the regulatory framework remains unclear as no legal definition of start-ups has been fixed in Algeria.
Nevertheless, the decree N° 20-254 of September 15th, 2020 clarified the criteria and conditions for a company to enjoy the status of start-up. Indeed, the new decree sets the conditions of the eligibility criteria and resolves to establish a committee whose purpose is to assess each project.
Which are the conditions to enjoy the status a Start-up ?
The aforementioned decree provides for several concurring eligibility criteria in order to obtain the status of start-up.
First of all, the operator must justify that its business model is innovative. In other words, the aim is to promote young companies with strong technological and digital potential. In addition, according to article 11 of the same decree, the company must have been registered in the commercial register for less than 8 years and employ less than 250 employees.
Therefore, any already existing company with an innovative business model and whose eligibility criteria are met, is entitled to benefit from the incentives provided by the law.
Which company is considered as a Start-up in Algeria?
What is the procedure in order to be considered as a start-up ?
The eligibility criteria are assessed by a national committee.
This committee is chaired by the minister in charge of start-ups or its representative, but also by the representatives of each sectorial ministry.
In addition, the committee has the role of assessing the innovative extent of the projects. The procedure consists of the submission of documents and other evidences via a web platform to be created later.
In addition, the committee has 30 days to grant the start-up status for a period of four (4) years, renewable once.
In conclusion, the new system provides for eligibility criteria that will be assessed on a case-by-case basis by a national committee with broad discretionary powers and for the moment it is possible to set up the file that will be submitted once the ad hoc web platform will be launched.
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