Nevine Gamea Quotes

The law has put into effect a stimulating mechanism that will enable enterprises operating in the informal sector to engage in the formal economy. Such a mechanism will allow them to obtain a temporary licence for a period up to five years until their conditions have been reconciled. They will similarly be entitled to a package of financial and non-financial incentives in the same period.

The law gives as well more financial and non-financial incentives, which targets the companies and institutions that support these enterprises. In addition, it adopts simplified bases for taxes imposed on these enterprises and develops mechanisms to put these incentives in action.

The law encompasses six major pillars. It gives a consolidated definition for MSMEs. A serious problem the MSMEs sector was facing in Egypt is having more than one definition for these enterprises. This has resulted in widescale confusion that negatively affected the sector.

It is important to take into account that this kind of enterprises is often run by one person or one family, which could enfeeble the enterprise's financial position.

Under the law, the enterprise premises shall be temporarily allocated to the funding institution, thereby securing its fund recovery rights according to the risks it shoulders.

The law sets that informal enterprises applying to formalise will be exempt from the stamp duty and registration fees for five years. It also states a unified custom duty of two percent of imported machines and equipment and that capital gains resulting from assets and production equipment will be exempt from taxes with conditions.