President Muhammadu Buhari on Wednesday signed the Nigeria Startup Bill (NSB) into law.
The bill, which was a joint initiative of Nigeria’s tech startup ecosystem and the Presidency, aimed at harnessing the potential of the country’s digital economy through co-created regulations, had earlier been passed by the Senate and House of Representatives in July this year..
The Minister of Communications and Digital Economy, Prof. Isa Ali Pantami, confirmed the President’s assent to the Bill through his Twitter handle.
He tweeted: “His Excellency, @MBuhari has just assented to Nigeria Start-up Bill. It has now become Nigeria Start-Up Act, 2022. It was an Executive Bill, initiated by both Office of the Chief of Staff & the Office of the Minister of Comms & Digital Economy. Congratulations to all!”
By its provisions, the enactment of the NSB into an Act, automatically eradicates the legal uncertainties that have have pervaded the startup concept in the past years.
The Act also provides for criteria to be fulfilled before a company can register and obtain startup status and also specifies the legal rules that govern the startup subsector.
Specifically, the Startup Act 2022 provides, inter alia, that before a company can be labelled a startup, it must obtain a certificate known as the startup label. This means that only companies with the startup label will be recognised as startups.
The Act mandates that a Startup Support and Engagement Portal should be established to facilitate the issuance of the startup label and also bridge the gap between regulators and startups as well as lists the requirements for a company to obtain a startup label.
In addition, it provides that entities issued with a startup label have obligations under the Act and failure to comply with these obligations can revoke their startup label, adding that for a company to be named a startup, it must be a registered limited liability company that has been in existence for not more than ten years from the date of incorporation, amongst other requirements.
Qualifying entities can access a special seed fund through Startup Investment Seed Fund, created under the Act specifically designated for startups alone to provide finance and tech relief for them.
The Act also provides that companies labelled as startups will benefit from some tax reliefs and incentives under the Act, including but not limited to pioneer status incentives and other tax reliefs.
For instance, it also provides that labelled startups with at least 10 employees where 60% of the them have no prior work experience within three years of graduation or any vocational program have access to percentage-based tax relief.
