Startups

The term startup company refers to a project launched by entrepreneurs looking forward to develop a product or service that they believe meets an urgent need in the market, or provides an effective solution to a problem and thus meets a growing demand in the market. Startups often start with modest capital and high costs, and face many challenges in their beginning in terms of obtaining the necessary funding to grow their operations and expand their presence in the market.

What distinguishes a startup company from traditional projects is that it aims to achieve accelerated growth without this growth being accompanied by a linear (constant) increase in costs. The challenge lies in balancing the ability to receive and serve more customers in return for not incurring large operational expenses. In addition, the startup or start-up company is known for its lack of a crystallized and clear business model. Rather, its efforts in its early days are focused on developing a product that the entrepreneur believes is required in the market.

The initial capital that is invested to launch the startup company differs from the investment capital in that it is the capital that is brought in to develop an entrepreneurial idea and transform it into a real product or service, and this capital covers the costs associated with presenting and presenting the idea.

As for financing, start-up companies often seek in their early days to attract financing by paying attention to relatives and friends, before the destination shifts towards investment financing agencies that want pioneering projects. You are begging for a donation to fund the project from someone who believes in the feasibility of the project and the idea, especially if the project has a social mission and mission that will reflect positively on the environment and society as a whole.

As for the legal form, the sole proprietorship is the most appropriate form for entrepreneurs wishing to transform their ideas into start-up projects due to the aforementioned privileges enjoyed by the sole proprietorship.

It is worth noticing that that the procedures followed and the documents required to register a startup company do not differ from the aforementioned procedures according to the legal form of the company determined by the entrepreneur. It is also subject to the same investment laws as companies, in addition to the Small and Medium Enterprises Development Law (Law 152 of 2020).

• Small and Medium Enterprises Development Law

The law authorized the board of directors of the Medium, Small and Micro Enterprise Development Agency (the agency) to grant incentives to enterprises that work in a number of activities, including: entrepreneurship, digital transformation and artificial intelligence, as well as those working in the field of information technology and related services. These incentives are varied to include monetary incentives, bearing part of the cost of technical training, full or partial bearing the cost of participating in exhibitions, in addition to what is related to the land or facilities required by the project. The law stipulates that a yearly allocation for this purpose in the state’s general budget does not exceed 0.3 per thousand of the gross domestic product, with a minimum of 1.5 billion pounds annually.