Tunisia has launched a new Startup Act (in Arabic) after 2 years of deliberations with legislators engaging entrepreneurs, civil society, and investors. The act sets out government’s policies for startup growth in the region putting science and technology at the heart of Tunisia’s economic transformation.
On the 6th of December, a Tunisian Startup Forum is taking place in Dubai where Middle East-based VCs and investment funds connect with top performing Tunisian startups, potential investment opportunities are exposed to startups through pitches and presentations, and finally where VCs are updated about the latest Startup Act.
The act is part of a broader initiative: "Startup Tunisia" which aims to transform the country into a nation of entrepreneurs at the crossroads of the southern shore of the Mediterranean, the MENA region, and Africa.
Firstly, the law strictly defines the criteria of a startup. Companies should fall under the following criteria as they apply for the “Label”:
- The company should not be older than 8 years;
- The number of its employees should not exceed 100;
- More than two-thirds of its shareholders should be founders, or angel/hedge fund investors;
- The company should have an innovative business model, preferably technologically-based;
- Its activities should significantly contribute to economic growth.
While the act doesn’t require a startup to be a pure tech business, it does articulate that its operations involve “the use of new technologies.”
In terms of financing startups, the law grants them exemptions from corporate taxes, allows both private and public sector employees up to a year off (can be extended to 2 years) from their current jobs to run their companies, provides a government-sanctioned salary to founders, and helps firms file for international patents.
The startup act has also made it easier for local businesses to access international markets. The maximum amount startups can pay through the International Technology Card (launched in 2015 by the country’s postal service) is raised to $39K (Tunisian Dinar 100K) per year.
Furthermore, the act has a provision allowing each startup to open a “special foreign exchange account” in the country. Startups will be allowed to use the accounts meant for capital contributions, quasi-capital, and revenue in foreign currencies enabling them to invest the assets of these accounts abroad freely and without any authorization.