Egypt’s FRA amends standards for financial evaluation of enterprises

Egypt’s FRA amends standards for financial evaluation of enterprises

Egypt - The Financial Regulatory Authority (FRA) issued decision No. 150 for 2023 to amend the Authority’s decision No. 1 for 2017 regarding the standards for financial evaluation of enterprises, by developing some methodologies and models that suit the nature of start-ups to help them access the necessary funding for growth, expansion, and business development.

The resolution defines startups as companies with a short operating history and often newly established and in the process of growth and search for markets, some of which depend on technology to innovate new solutions, and often start with low capital and high costs with the establishment stage and face many challenges at its inception to obtain The necessary financing to develop the size of its operations and expand its presence in the market.

The need to evaluate emerging companies in order to increase capital appears according to the stage of growth that the company is going through, as the main investors, whether current or prospective, need to evaluate their investments in light of the different returns and risks according to each stage of the growth of the startup.

The decision stipulated the addition of a new method for evaluating startups during the pre-revenue and pre-sales phase within