Entrepreneurship Policies in Egypt

This article covers the best practices and needs for reform in entrepreneurship policies in Egypt.

The Arab Republic of Egypt was among the top ten global Doing Business reformers in four of the seven years from 2003-2010. In Doing Business 2006, Egypt ranked 6th globally on reforms, and in 2007 it ranked 1st, after reforming in five out of ten areas that were studied, jumping 26 places in one year as reported in Doing Business 2008.

On March 29–30, 2010, Ministry of Investment reported that Small & Medium enterprises (SMEs) in Egypt account for about 75% of employment, 80% of GDP, yet contributed to only 4% of exports and 10% of fixed capital formation. And according to GAFI: 90% of registered companies have capital less than LE 10 million while 70% of registered companies have capital less than LE 1 million.

The GAFI one-stop shop is a good idea but the implementation needs to be improved, according to local experts. One stop shops can show results quickly when their officials have decision making power. Since 2003, one-stop shops cut on average 5 procedures and more than halved delays in 24 countries. However, in Egypt, gains were not as dramatic, as the number of bureaucratic steps was still quite high.

Most reformers are bad marketers, according to Doing Business 2008. Advertising the changes can ensure that entrepreneurs know how much easier registration has become. Egypt's successful marketing campaign after tax reforms in 2005 is a good example to follow.

From single window concept, Egypt can bring it to the ultimate process which is online registration. Online registration is one of the most effective ways to speed the start-up process. Technology can create a unified database of business information to be shared across districts, governorates and government agencies. Egypt took the first step by certifying without delay that the company name is not already in use. The next step is to allow entrepreneurs to search for the company name online. The internet can also provide them with other information such as details on procedures, fee schedules and working hours of the relevant agencies. With some simple legislation to allow electronic signatures, the internet can be used to file business registrations. Making registration electronic cuts time—by more than 50% on average. Paper registration should remain available for those without internet access.

Governorates and other sectors of the government can follow the system in GAFI one stop shops for business start-ups. The reduction in procedures, time and cost are proof that the single window principle is effective in Egypt.

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