At the dawn of an era of innovation and economic development, Algeria is introducing support measures and new regulations to encourage the emergence of local start-ups and to give an unparalleled boost to entrepreneurship. As an inspiring model for Africa, Algeria shows that startups and entrepreneurship can play a key role in the economic and social development of a country through the governmental and political measures that have been put in place.
Launched in October 2020, the Algerian Startup Fund (“ASF”) was created as a catalyst for the startup ecosystem in Algeria. ASF is a public venture capital company, which supports the financing of companies with the Startup label and was born from the collaboration of the Ministry of Startups and 6 public banks. The ASF will enable entrepreneurs of innovative projects to start their activity without the restrictions of arbitrary financing mechanisms. In 2022, the ASF signed an agreement with Algeria’s General Directorate to launch a new fund to invest in local startups across the country’s 58 regional provinces.
Further, in 2020, the Department of Knowledge of the Economy and Startup was created. Following its inception, the department merged with the Ministry of Micro-enterprises in September 2022, establishing the ministry responsible for the knowledge of the economy, startups, and micro-enterprises. This institutional evolution paved the way for a series of reforms and measures that stimulated startup creation and innovation in Algeria.
In October 2023, was published the executive decree no. 23-01 authorizing companies to undertake crowdfunding activities in the country. This will enable companies with innovative projects with a strong social impact to collect funds from a large audience via a digital platform. Such legal framework will allow such companies to be an intermediary of financing of start-ups by connecting donors and entrepreneurs. This is part of the actions carried out by the government, offering new financing possibilities to strengthen the chances of success for start-ups and innovative projects.
Among the important regulations aimed at promoting startups is the promulgation of law no.22-09 issued in May 2022 which created a new legal form of a company named the simplified joint stock company “SPAS”, established exclusively for companies that have been certified as “start-ups”. Such legislation will boost the creation and flexibility of startups in Algeria by simplifying the corporate management of a joint stock. It includes many advantages such as the absence of a minimum or maximum number of shareholders and no minimum share capital is required. Furthermore, laws no.22-23 on self-entrepreneurs grants entrepreneurs tax advantages, with a preferential tax regime as well as social security coverage.
In conclusion, the new governmental and legislative measures shall help transforming Algeria into a regional hub for startups based on knowledge and innovation.
