President William Ruto has announced the imminent signing of the Kenyan Startup Bill into law, scheduled for April 2024, marking the culmination of a comprehensive two-year legislative process.
Disclosed during the Kenya Innovation Week, President Ruto highlighted the significance of the Startup Bill in de-risking innovations and fostering a conducive environment for startups to evolve into sustainable businesses.
In December 2021, Senator Johnson Sakaja presented the Kenya Startup Bill in the Senate, garnering unanimous support with 34 approvals.
The legislation is currently awaiting concurrence from the national assembly before proceeding to President Ruto for assent.
The Startup Bill aims to provide tax incentives, facilitate credit access, and establish a supportive platform for startups to access resources.
Envisaged as a framework fostering technological growth, the bill is expected to attract talent and capital to Kenya.
Notably, 92.13% of VC funding in Africa during H1 2023 was allocated to Egypt, Kenya, South Africa, and Nigeria, emphasising the strategic importance of Kenya in the tech landscape.
The Fintech Association of Kenya views the signing of the Startup Bill as a significant milestone for the country’s startup ecosystem, creating an enabling environment for startups to flourish and contributing to Kenya’s economic transformation.
The provisions of the Startup Bill define a Kenyan startup as a recently registered company or one operational for up to seven years from the enactment of the Bill, with a possible extension to ten years for biotech startups.
Additionally, the startup must have at least one-third of its ownership held by Kenyans and maintain a headquarters or branch in the country.
The legislation mandates businesses registered with the Business Registration Service to undergo registration with the Kenya National Innovation Agency (Agency).
The Agency is tasked with registering new businesses, formulating incubation policy frameworks, facilitating connections with local and international accelerators, and supporting startups in their initial stages.
Empowered by the Bill, the Agency will provide financial and non-financial assistance to startups admitted into incubation programs, safeguard intellectual property, and contribute to overall startup growth.
The establishment of a loan guarantee mechanism is aimed at streamlining access to financial aid, enhancing the availability of financial assistance for new businesses.
The Bill further authorises the Agency to oversee startup registration, appoint a Startup Registrar, maintain a database of registered startups, conduct assessments of their financial needs, and identify investment assistance requirements.
This information will be valuable for venture capitalists and private equity funds seeking investment opportunities in the Kenyan startup ecosystem.
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