Startups, innovative projects and incubators… Keys for an innovative economy!

Here is a good summary from our friends from L’Entrepreneur Algérien about the
recent measures in favor of the innovative entrepreneurship ecosystem

(Label Startup and Incubator)
How to obtain it, and what are the advantages?
The executive decree number 20-254 published on September 15 th ,2020 in the official journal of the Algerian aimed at the creation of an Algerian national labeling committee and the necessary conditions for the attribution of the label “startup”,“innovative projects” and “incubators”. The national committee is chaired by the minister in charge of startups or his representative. His accompanied by eight (08) representatives of various ministries (finance, agriculture, telecommunication, higher education, industry, fishing, digital, renewable energies).Its mission is to:

  • Award the “Innovative projects” label to innovative project leaders who have not created a company yet;
  • Award the “Startup” label to the young innovative companies;
  • Award the “Incubators” label;
  • Study the requests after the refusal to award the “Startup”, “Innovative projects” and “Incubators” labels.

The objective of the label award is to benefit from the following advantages:

  • The exemption of a three (03) years period in terms of TAP, IBS, IRG, IFU and TVA on purchases intended for investments;
  • The possibility of being financed by the public investment fund intended for startups “Algerian Startup Fund”;
  • The possibility of benefiting from the financial tax bases for startups and incubators.

New methods of funding
The funding by an investment fund is different from the classical one as the bank credit. The objective of this fund is not to lend a sum of money to the project leader,but to participate in the social capital (the project will send a part of his shares) by injecting a sum of money during a period of time. It is about a risk that is completely afforded by the Algerian state in the case of failure to avoid the indebtedness of the project leader. This funding mode is called “venture capital”.

“Startup” label
Each company founded under the Algerian law that meets up these following criteria is considered as a “startup”:

The company must not exist for more than eight (08) years;

  • The business model of the company must rest on products, services, business models or any other innovative concepts;
  • The annual shares must be held on, at least 50% per physical person, per certified investment funds, or per other startup companies;
  • The growth potential of the company must be sufficiently large;
  • The company must not have more than 250 employees.

The company wishing to obtain the “startup” label is requested to make an application through the national startup’s website www.startup.dz accompanied by the following documents:

  • An extract of the commercial register and of the tax and statistical identification cards (NIF and NIS);
  • A copy of the legal statutes of the company;
  • A certification of membership in the national social insurance fund (CNAS) with a list of names of employees;
  • A certification of membership in the national social security fund for self-employed (CASNOS);
  • A copy of the financial statements for the current year (balance sheet and income statement);
  • A detailed business plan;
  • Scientific and technical qualifications and experience of the employees of the company;
  • Any obtained intellectual property title, reward or prize;

The “startup” label is granted for the company for a duration of four (04) years, renewable once (01).
“Innovative projects » label

Any physical person (or a group of physical persons) can apply for the “innovative projects” label, for any project relating to innovation.The person wishing to obtain the “innovative project” label, is required to apply via the national startup website accompanied with the following documents:

  • A presentation of the project and its innovative aspects;
  • Elements proving the high potential of the economic growth (business model, besiness plan…);
  • Scientific and/or technical qualifications and experience of the team in charge of the project;
  • Any obtained intellectual property title, reward or prize.

The “Innovative project” label is granted for the physical person or for the group of physical persons for a duration of two (02) years, renewable twice (02).

“Incubator” label
Any public, private or public-private partnership structure that offers a support to
startups or to the innovative projects’ leaders, concerning accommodation, formation, advice and financing. The applications for the “Incubator” label award are submitted to the national committee via the national website of startups, accompanied with the following documents:

  • A detailed layout plan of the incubator;
  • A list of available equipment for the incubated startups;
  • A presentation of various services offered by the incubator for incubated startups;
  • A presentation of various formation and supervising programs offered by the incubator;
  • The curriculum vitae (CVs) of employees, trainers and supervisors;
  • A list of eventual incubated startups;
  • An extract of the commercial register and of the tax and statistical identification cards (NIF and NIS);
  • A copy of the legal statutes of the company;
  • A certification of membership in the national social insurance fund (CNAS) with a list of names of employees;
  • A certification of membership in the national social security fund for self- employed (CASNOS);
  • A copy of the financial statements for the current year (balance sheet and income statement);

The applicants wishing to obtain the “Incubator” label are required to have staff with the required qualifications and/or sufficient professional experience in the field of companies and business support.The “Incubator” label is granted for the applicant for a duration of renewable five(05) years.

This “Incubator” label gives entitlement to aid and support from the State.The incubator applying for the “Incubator” label has as mission to support the incubated startups during all the incubation period. As such title, it undertakes to

  • Domicile the incubated startups and offer them fitted a workspace;
  • Support the project’s leaders during the creation process of the company;
  • Assist startups in carrying out business plans, market studies and financing plans;
  • Provide specific trainings, especially in business management and in legal and accounting obligations;
  • Offer logistical means, such as meeting rooms, computer and office equipment and high-speed internet connection to the projects’ leaders;
  • Assist startups for the production of prototypes;
  • Support incubated startups in the search of financing sources and the deployment on the business market.

Proceedings:
The national website of startups www.startup.dz will be operational from October
15 th ,2020. A response is sent to every submission to obtain a label within a maximum period of thirty (30) days from its filing date. Label award decisions are published on the national website of startups. Any delay in providing a part of required documents will suspend this deadline. The applicant is required to transmit them within a period of fifteen (15) days from the notification date, made to him from the national committee, under a penalty of the rejection of his request.

In the case of refusal of a request, the national committee is required to justify the
refusal decision and notify the applicant electronically. This decision may be re-
examined by the national committee based on a justified request from the applicant. A definitive response is electronically sent to him within a period not exceeding thirty (30) days from the request date.

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