Over the past few years, Egypt has enacted several business-friendly laws and regulations mainly dedicated to micro, small and medium-sized businesses (MSMEs 1), as well as informal economy projects. These changes are reflecting the Egyptian government’s effort to legalize all forms of businesses and increase their tax contributions that are currently much needed, and bring them into Egypt’s formal business economy.
A prime example of these new laws is the New Micro, Small, and Medium Enterprises (MSMEs) Development Law issued in 2020 and its executive regulation issued in April, 2021. Enacting such a law has proven to be timely given the importance of MSMEs to the Egyptian economy. It is estimated that SMEs employ about 70% of the country’s workforce, contribute by about 34% to Egypt’s GDP and now take a center stage position in the business landscape.
The law grants unprecedented tax and non-tax incentives to MSMEs and facilitates the work of entities and bodies that support their ecosystem. It has also laid the groundwork for the foundation of the MSMEs Development Agency3 that supports, oversees and facilitates the funding of SMEs, helping in the legalization process of MSMEs and informal economy projects.