For a while now, starting a tech business in Nigeria has been stressful and clueless.
Apart from the stress, the startup framework was not solid enough to let people scale through.
Fortunately, it is official that the Nigerian Startup Bill was passed on July 20, 2022, by the Nigerian Senate.
The Startup Bill 2022, has been passed into Law and is now recognized as the Nigeria Start-up Act, 2022.
This bill is aimed at creating a friendly environment for tech-based startups in Nigeria.
However, that’s not everything about the bill and how it helps an average tech-based startup.
Here in this article, we would lay down 10 facts about this new bill and how it would help your tech business.
10 Facts about Nigeria’s Startup Bill
1. Special certification for startups
This defines a company as a startup or not.
Before a company can be tagged as a startup, it must obtain a certificate known as the startup label.
This officially verifies the company as a startup company, thus no startup company without a startup label is recognised.
The issued bill mandates the establishment of a Startup Support and Engagement Portal to facilitate the issuance of the startup labels and also bridge the gap between regulators and startups.
It also reveals the necessary requirements for getting a startup label.
According to the bill, all Companies issued with a startup label are mandated to abide by obligations under the bill and failure to abide with these obligations can revoke their startup label.
Finally, For a company to be certified as a startup, it must be a registered limited liability company that has been existing not more than ten years from the date of incorporation, amongst other requirements.
2. Seed Fund for startups
As technology continues to trend, Nigerian youths are energised with lots of innovations only to be faced with startup-capital challenges.
Fortunately, this bill reveals the entitlement for startups.
Under the bill, startups can access a special seed fund created.
This Startup Investment Seed Fund is solely for startups alone as it will provide finance and tech relief for startups.
This means increased access to funding that will help the startups struggling to fund operations.
With this, it will be very easy for startups to leverage the grants and loans available in funding their operations.
3. Provision for Tax Incentives
Companies certified as startups will enjoy some tax reliefs and incentives under the bill.
These certified startups are eligible for pioneer status incentives and other tax reliefs.
A certified startup with at least ten employees where 60% of the employees have no prior work experience within three years of graduation or any vocational program have access to percentage-based tax relief.
4. Fosters Communication between regulatory bodies and startups
One of the reasons startups fail along the line is the communication gab between them and regulatory bodies.
But as a certified startup, the bill enhances regulatory support for your business.
It fosters collaboration between startups and regulatory bodies to facilitate seamless processes.
According to Nairametrics, the provision for regulatory support applies to bodies like the Corporate Affairs Commission, Nigerian Copyright Commission, and Trademarks, Patent and Design Registries, Securities and Exchange Commission, National Office for Technology Acquisition and Promotion, Central Bank of Nigeria, and Nigerian Exchange Limited.
5. Provides Growth Programmes
Under the bill are provisions for accelerator and incubator programmes geared toward startups growth.
These incubators will aid startups solve many likely problems, provide workspace at little or no cost, and serve as breeding hubs for the startups.
6. Creates a legal framework for startups
As said earlier, there is now a levelled entry ground for all startups.
The bill eradicates the shaky or uncertain legal framework that have been existing in the past.
It provides the necessary guidelines responsible for a successful startup.
Also, it makes a company to easy register and become certified.
Having rules set into place, makes it easy for startups to thrive in any environment.
Finally, the bill sets a foundation where other authorities can also make policies for the sector.
7. Creates an institutional framework for startups
The bill clearly establishes authority over startups.
The National Council for Digital Innovation and Entrepreneurship is the authority over startups.
Within this body is the responsibility to formulate policies that:
- Encourage the development of startups.
- Monitor, and evaluate startup regulatory frameworks.
- Approve and support startup programmes such as giving of grants, loans, incentives, etc.
8. Training of Industry Talents
Under the bill is the provision of a program that enhances the training and development of talents in the Nigerian startup bandwagon.
This program will provide support for academic research institutions geared towards startup development.
Startups will have access to educational programs and empowerments as it relates to their field.
With this, startups can gain relevance and prevalence in their field.
9. A regulatory-friendly environment for tech-based startups
Regulatory bodies greatly influence the development of tech-based businesses.
Some regulations are toxic for the health of business platforms.
However, under this bill, the reverse is this case.
The bill creates a friendly environment for tech-based startups and promotes seamless business operations in the country.
With this, the tech space will become enticing to investors and usher in new entrants into the market.
The earlier opium about starting a tech-based business will be erased, thus new startups will rise as existing ones continue to thrive.
The bill also allows for the establishment of hubs and innovation parks that will provide registration support, free or subsidised workspace and facilitate the entrance of startups into foreign markets, etc.
10. Positions the Nigerian Startup Space Strategically
Nigeria is known to be the giant of Africa.
With technology Nigeria can remain on top, if well positioned in tech.
Therefore, the core aim of the bill is to position Nigeria as a leading tech hub in Africa.
This is visible as it seeks to enhance easy operations of tech-based startups.
It also stand to promote local and foreign investment in the tech startup ecosystem.
Conclusion
While this bill was awaiting the assent of President Buhari a year ago, the Nigerian President has recently assented to the National Bureau of Statistics (NBS), which gives tech startups optimism in the Nigerian-tech space.
Thus, this bill will leverage the growing digital economy in the country.
A solid regulatory framework as seen above is the answer to a better Nigeria in tech.
