The Nigeria Startup Act provides a legal and institutional framework for the development of establishments and companies (startups) whose activities affect the creation, support, and incubation of solutions in Nigeria. The Act is aimed at creating an enabling environment for the establishment and operation of startups in Nigeria.?
- The Act makes provision for the labelling of startups, in order to qualify for some incentives and benefits under the Act. This will ensure that there is a register of all startups that qualify as a startup under the Act. A major requirement to be labelled under the Startup Act is incorporation with the Corporate Affairs Commission (CAC).?
- A very important provision of the Act is the introduction of tax incentives introduced to reduce the cost of business operations for startups. Startups that meet requirements can be exempted from payment of income tax for four years. This provision can be deemed to support talent development in the ecosystem.
- The Act establishes a Startup Investment Seed Fund to be managed by the Nigeria Sovereign Investment Authority (NSIA). The fund will finance early-stage startups and hubs that incubate startups. This is a very brilliant provision that will ease access to finance for early-stage startups. In addition to this, some provisions of the Act ensure that startups and SMEs have access to grants, and loans without hassle.?
- The Startup ecosystem is financed by investors — Angel investors, VCs and Venture labs, and as such the Startup Act made provisions to encourage investment by both foreign and local investors. These include tax credits of up to 30% of the investment and free repatriation of funds for foreign investors.?
- The role of the National Office for Technology Acquisition and Promotion (NOTAP) in ensuring that technology transfer registrations and other related activities are seamless was reaffirmed by provisions of the Act.
- The impact of liaising and collaborating with regulators can not be overemphasized. The Act introduces a Startup Consultative Forum for stakeholders, such as operators, founders and industry leaders to liaise with the Government on the development of the startup ecosystem in Nigeria. This provision will help in ensuring that regulatory policies are enabling the ecosystem.?
- The Act also makes provisions for ease of application for permits, licenses, and participation of startups in regulatory sandbox programs of regulators such as the Securities and Exchange Commission (SEC) and the CBN.?
- In conclusion, the Act provides for the promotion of talent development, ideation of ideas, establishment of innovation hubs, and capacity-building programs.?
The Startup Act presents the startup ecosystem with an overwhelming show of regulatory and governmental support. The Act is an innovative development with provisions that will accelerate the growth of the startup ecosystem
