Entrepreneurship .. Legislation and taxes prevent the reaping of the fruits

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Ibrahim Al -Mobaideen

Amman - 6 pioneering companies attract investments by 8.8 million dollars, "" a Swedish group that acquires an electronic games company founded by Jordanians "," the launch of investment funds and specialized business incubators ";These titles and others show their appearance by "ideal" for the entrepreneurial environment in Jordan.

However, in fact, there are other details narrated by leaders and experts confirming that this reality is still lining challenges and problems that push many of them to register and transfer their projects outside Jordan in search of incentives and an appropriate legislative environment to expand and continue.

Despite the progress reached by the entrepreneurial environment in the Kingdom, experts confirm that barriers still exist in the face of the establishment or development of their entrepreneurial projects, calling on the government and the authorities concerned with the entrepreneurial environment to determine these challenges and resolve them in coordination with those concerned in the sector, asking:When can we reap the economic benefits of this pioneering movement, ”especially with the distinctive human resources that Jordan possesses.

The challenges monitored by "tomorrow" in a limited survey varied between challenges facing the pioneering in the foundation stage and another in the stage of growth and expansion, as these challenges were distributed between the issues of financing, investment, human resources, the ability to reach markets, guidance, guidance, government legislation and taxes, but the challenge that I unanimously agreed uponExperts and leaders focus on legislation and regulations related to entrepreneur.

Experts and leaders called on the government to evaluate the laws, regulations and regulatory instructions related to entrepreneurship, and to make the necessary amendments, their development and their application, and to make fundamental improvements to them to become more consistent and friendly to entrepreneurship, reviewing laws and organizational instructions related to customs, taxes, companies, work, local administration, social development, any legislation or organizational instructionsOthers are necessary to enable the entrepreneurial system.

They stressed the importance of the stability of legislation and taxes, which is a worker that helps the entrepreneur to move forward with his project and enhance the confidence of the local and foreign investor and the confidence of the investment funds funded by startups.

Experts called for the importance of working quickly to make rapid reforms on the entrepreneurial environment to take advantage of the great economic benefits that startups, small and medium -sized companies can cause the most able to bring about economic growth and employment in a country where the unemployment rate increased to 25 % this year.

They stressed the importance of reviewing the sales tax in which entrepreneurial companies are equal to large companies, income tax, social security, and facilitating the procedures for establishing companies and helping them by giving their products an advantage over other companies in government and private bids and purchases, so that these companies can expand, grow and contribute to the economyIn the future.

Road is not furnished with flowers

Zaid Al -Habban, the founder of “Posrocket”, confirmed that the entrepreneurial environment in Jordan is not completely ideal and needs more work for development, especially in the field of legislation and taxes, pointing out that his company is registered in Jordan for operations and in the British Virgin Islands “PVI”As a requirement is required by investors, because this region has stability in tax laws.

He said that his company has been able, since its foundation five years ago, to attract investments of 7.2 million dollars on rounds, stressing that the idea, hard work and consideration are far from the Jordanian market limited in size. It is necessary for success and growth..

The entrepreneur is Sari Hawatat, and today he works to develop his second entrepreneurial company named "Zina for Artificial Intelligence", he believes that "entrepreneurship is not an easy thing and that its path is not furnished with flowers", hoping that the government will work to overcome the obstacles faced by the leaders at the level of the legislative environmentFor companies that need, as he sees, to necessary adjustments to keep pace with rapid changes in the nature of the business of startups mainly on technology.

Hawattat believes that the exemption of entrepreneurial companies from the income tax does not provide sufficient incentive for them because these companies are usually not profit in the first years of their life..

He suggested saying: “In order to give the tax incentive to these companies, they must be exempted from the tax of imported services that make up the backbone of entrepreneurship companies that depend on imported technology to conduct their business.”.

Hawatat also suggested, "The deduction rate must be reduced from startups in the early years of establishment or at least the first year, which encourages them to create more job opportunities, otherwise she will hesitate to employ for fear of the cost of social security deductions.".

The challenges of the internal startups

For its part, the founding partner at the company "Asa'a", Alaa Suleiman, indicated that there are internal obstacles facing entrepreneurial projects, including the difficulty of finding appropriate competencies (employees) with appropriate salaries (competent people with high salaries and modern graduation are very weak), and weak administrative and financial skills of the foundersCompanies and the need to enjoy many and varied skills in order to be able to manage and grow companies.

Suleiman noted an external challenge, which is the limitations of the Jordanian market, and the weak purchasing value, which makes it difficult to provide adequate revenues to cover the company's expenses..

Jordan classification in the Global Entrepreneurship Index

The Jordan Center fluctuated in the World Leadership Index issued by the Institute for Global Leadership and Development in recent years;It appears that the Kingdom ranked (63) globally out of 137 countries, compared to 49th in the previous year 2018, while Jordan ranked 56th in 2017, and 64th in 2016.

Endocrusal policy for entrepreneurship

The government, represented by the Ministry of Digital Economy and Leadership, recently accomplished a public policy concerned with the leadership of business in the Kingdom and its proposal to general advice with partners and those interested to follow the procedures for its approval by the Council of Ministers and then start implementing it.

"Despite all the developments in the entrepreneurial system during the past decade, it is still full of challenges related to the growth and interconnection of this system, especially the difficulties facing business leaders in the start of a business, and the inability to predict the business environment And the weakness of the possibilities of openness and access to the Arab and global markets and the leakage of competencies for neighboring markets and avoiding adventure and hesitation and the inability to infrastructure from legislation, procedures and training, and the lack of sufficient support for research, development and e -commerce regulation, in addition to other challenges related to taxes and access to financing and the increase in financial burdens on entrepreneurs..

He added, “Jordanian pioneering companies’ approach to registration or work in other countries mostly comes under the pressures and requirements of investors who want to invest in these startups, as these investors search for a tax system and stable, easy and clear legislation, so they ask startups in all recognized areasGlobal with its stimulating tax system, "noting that a large number of entrepreneurial companies are registered in Jordan by virtue of their operations.

The minister added, "The entrepreneurial companies are also always seeking to be in a stimulating and encouraging environment for work, legislation, tax system, and easy governmental procedures and procedures that reduce the costs, especially in the beginnings of the establishment of the company.".

Possible legislative reforms for entrepreneurship

Al -Hananda stressed that the policy that is being worked on aims to "create a friendly and stimulating environment for entrepreneurship in the Kingdom and remove obstacles to it in a way that ensures maximization of the economic capabilities of the Jordanian entrepreneurial system and its growth", pointing out that the government, through this policy, will work to make a series of reformsLegislative and development on government regulations and procedures, in a manner that guarantees the conversion of legislation and procedures disabled to the possibility and support for the entrepreneurship system in the Kingdom.

Al -Hananda stressed that the policy will achieve a set of goals to facilitate the legislative environment for entrepreneurship in coordination with all entities and encourage investment in Jordanian entrepreneurial companies and remove obstacles in front of them, and work to find sources to finance investment in entrepreneurial projects in coordination with all relevant bodies, in addition to the assistance of entrepreneurial companiesJordanian to reach the markets, open new markets for them and enable entrepreneurs to devise creative solutions and products, and enhance the Kingdom's ability to compete at the regional and international levels in the field of entrepreneurship.

The Chairman of the Board of Directors of the "Oussse 500" Fund, Marwan Jumaa, stressed the importance of what the government is doing today to issue this policy and start implementing it to include and affect all startups in Jordan at all the stages it is going through.

He added: “If we want to be a regional center for the pioneering and technical sector in the region, we have to develop procedures for legislation and the tax system to be stimulating in a way that facilitates entrepreneurs and investors, with the importance of these legislations, regulations and procedures are clear and stable, and that their application is also clear and easy.”.

Jumaa said, “Today, investors are looking for fixed legislation and laws and incentives for investment, so we find pioneering companies and for purposes of obtaining financing and attracting the necessary investment to ensure their growth, expansion and sustainability, they are present and register in countries such as the UAE and Britain and regions that have exemptions, incentives and tax systems encouraging investment.”.

He pointed out the importance of the entrepreneurial company also improving management, marketing and working with a harmonious team, which is also what the investor is searching for when evaluating the company.

"Jia" defines basic challenges facing the pioneering sector

For its part, the Jordanian Entrepreneurial and Creativity Association (Jia) has identified basic challenges facing the entrepreneurial sector, including that local financing in general is still difficult, scarce and installed in non -pioneering projects, and that external financing is linked greatly to “companies’ migration ”to obey the conditions of external financing.

Among the challenges set by the association as well;Entry to the local market and then the regional and then global, explaining that there was no effective and successful way to help companies and entrepreneurship projects to offer products locally and expand regionally and globally, and challenges related to the employment of those whose experiences are compatible with the achievement of the project or who believes in it.

She emphasized that the recruitment of talents and workers with advanced specializations is difficult, and thus obscures the ability to transfer experiences from experienced and globally affiliated with our Jordanian employees..

Regarding the challenges of legislation and laws, Jia confirmed that one of the biggest obstacles to the leadership sector;Legislation and laws that must be developed in a way that suits the entrepreneurial environment and the technical development taking place.

Munir Al -Nouri's "Sils" founder, the founder of the "Salas" company, suggested that the Jordanian entrepreneurial companies and their products advocate to government institutions in offering bids and concluding contracts to adopt specific products or services, stressing that this matter gives entrepreneurial companies a strength when dialogue with potential investors and in entering bids and projects in the countries of the region.

Map of leadership programs in Jordan

The latest data issued by the TTI Foundation, a non -profit organization concerned with spreading a culture of leadership and innovation, shows that the entrepreneurial system in Jordan consists of 245 projects and a working program, affiliated with 96 local and foreign institutions (by 2.5 program for each institution).

A gap between the capital and the governorates in leadership support programs

The data revealed that a percentage of up to 80 % of programs and projects supporting entrepreneurship is concentrated and existed and served entrepreneurs from the capital, Amman, and 20 % of them for the rest of the provinces.

These numbers show the gap between the capital and the governorates in the field of support for entrepreneurship, which is what the Jordanian entrepreneur, founder of the "Rayyuk al -Karak" platform, Ibrahim Al -Qarala, who said that one of the challenges of entrepreneurship in the governorates focuses on the support of entrepreneurs in the capital and major cities.

Al -Qarala explained, “We face in the governorates in general and in the south in particular, a problem and gap in communicating with the institutions and bodies concerned with entrepreneurship from the public and private sectors with the lack of programs and projects that support leadership outside the major cities and the absence of correlation offices for business speeds or investment funds orThe bodies supporting the pioneering sector in the governorates..

The pioneering sector needs exemptions and incentives

Al -Qarala emphasized that the most important challenges of entrepreneurial companies are legislation that still constitute an obstacle to many ideas to implement them inside Jordan or carry an additional pioneering project to make expansion and enter difficult external markets, especially in the field of electronic commerce, noting that entrepreneurial projects need a set ofIncentives and exemptions to ensure their ability to sustain.

What is the perfect environment for entrepreneurship?

The administrative partner of the company "Vinths X" - the supervisor of a group of specialized business incubators - Youssef Hamid al -Din, believes that the entrepreneurial environment today in Jordan is "not perfect" completely and needs more work between the parties to this environment and in cooperation with the government to develop and improve it, notingTo the importance of legislation that stimulates leadership.

Hamid al -Din said that the entrepreneurial environment is perfect if it generates large numbers of entrepreneurial companies annually, and was able to motivate young people to innovate and leadership, and was able to attract capital and financing funds to invest in Jordanian startups, and to preserve the pioneering companies operating and registered in Jordan from the stageConstruction through the stages of growth and attracting investments and even advanced stages if they succeed in completing sales deals, all so that we can benefit from their locally economic impact.

Early investment is a need

He added, "We see that the legislation today is still unable to achieve the previous standards, and therefore I think that the environment is still not perfect." He pointed out that there is still a challenge in Jordan in the field of investment in emerging companies in the idea stage and the beginning of the establishment (From 10 thousand to 25 thousand dollars), most of the financing agencies and funds provide financing in advanced stages, where we must work to encourage young people in the beginning of the establishment of projects..

The founder and CEO of "Start Abs" company, Mohamed Al-Khawaja, said that "the early bold capital (called the Seed Funding 100-500 thousand dollars) and very early (is called Pre-Seed Funding less than 100 thousand dollars) is still a challenge for startupsIt cannot be ignored.On the long term ”.

Al -Khawaja explained that personal financing is from angel investors one of the most important very early financing resources, which is extremely important as a first step in the leadership of the promising company, especially since their investment does not stop at financial financing, but rather goes beyond the provision of experiences, networking and development opportunitiesBusiness by the investor (owners).

275 technical pioneering companies distributed over 21 sectors

The results of a neutral local study, this year, revealed that there are 275 technical starters operating in Jordan, which constitute 80 % of the real number of startups in Jordan, and this number is distributed over 21 sectors.

Pure companies that provide 2618 direct jobs

The study showed that these companies contributed to the provision of 2618 direct jobs, and also showed that 60 % of startups and by 160 companies are in the growth phase, while 25 % of them and by 68 startups are in the stage of the applicable project, and the rest between the idea stage and the development of initial models.

The results indicated that 35 % of startups are belonging and benefit from business incubators or business accelerators, and about 65 % do not belong to any business incubators, and that 154 emerging companies out of the total number have not received any funding until today.

The educational system does not develop a culture of leadership and innovation

"We have a problem in the entrepreneurial environment related to the basic educational system and in universities, as this system does not develop a culture of leadership and innovation among young people from a young ageA wide range, to collide with a bitter reality when establishing their projects in the future, despite the start of some universities, specialized courses in entrepreneurship, and some institutions for teaching and training young people on entrepreneurship..

He pointed to the instability of legislation and taxes in Jordan, which is a major challenge for entrepreneurs and investors as well.

A clear definition of entrepreneurial companies

"We need today a clear definition of entrepreneurial companies and startups that are a clear and unified definition that all stakeholders adopt in order to benefit from this definition in amending the legislation and laws regulating the ease of practicing their work, and helps to direct support for the entrepreneurial companiesAnd young people and not equality in dealing with major companies..

Obaidat pointed out that one of the obstacles facing business leaders;The lack of stability in the legislation, and their lack of observance of the nature of startups, whether the laws to establish and close companies, tax laws and procedures, social security, customs, and work.