Revenue Share Agreements And Startup Tax Risks In Egypt

The tax treatment of "Revenue Share" agreements between startups and investors in Egypt is a new and controversial topic. While this financing model has gained popularity, especially in startups and technology sectors, its handling from a tax perspective remains unclear. With the absence of a well-defined legal framework addressing this type of financing, questions continue to arise regarding how the revenue shared between startups and investors should be classified under Egypt's tax system.

What is the "Revenue Share" Model?

The "Revenue Share" model is an agreement in which an investor receives a percentage of the operating revenues of a startup in exchange for their investment, rather than acquiring a stake in the company's equity or a share of its profits. This model offers flexibility for startups by allowing them to raise capital without giving up ownership of the company. Instead of the traditional model of equity investment, which involves profit sharing