Kenya hopes to get entrepreneurs moving with Startup Act
Kenya’s senate has published the Startup Act 2020, legislation designed to support the country’s start-up and entrepreneurship market.
The East African country joins other nations, including Senegal and Tunisia, who have introduced special legislation to help develop local start-ups. According to Kenya's latest Act, the country will support the registration and incubation of start-ups, along with a funding mechanism.
An excerpt from the legislation reads: “The object of this Act is to provide a framework for linkage of startups with private investors, financial institutions, the private sector, research institutions and such other institutions at the county, national and international level; to facilitate investments in startups; to facilitate the provision of fiscal and non-fiscal support to startups in Kenya; that promotes an enabling environment for the establishment, development, conduct of business and regulation of startups.”
Companies eligible for registration as start-ups must have been operational for seven years or less, except for biotechnology companies that will have to have been operational for up to ten years.
The Act also aims to increase the number of start-up incubators in the country at national and county levels.
The Cabinet Secretary for Information, Communication and Technology will also have leeway to provide other policies to enhance the growth of start-ups, including subsidised registration, formalisation and protection of intellectual property.
“The Cabinet Secretary shall, in consultation with the Cabinet Secretary responsible for matters relating to finance, put in place measures for the granting of fiscal incentives including tax incentives as shall be considered necessary for the development of startups in the country,” the legislation stated.
The law has been introduced at a time when start-ups in Kenya and across Africa continue to raise substantial amounts, despite the impact of COVID-19.
According to Briter Intelligence, African start-ups have already raised over US$500-million between January and August 2020.