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    HomeGovernance, Policy & Regulations ForumPolicy & Regulations ForumNigeria Opens Portal for Startup Label: Here’s How to Apply

    Nigeria Opens Portal for Startup Label: Here’s How to Apply

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    In a step toward enhancing the startup ecosystem, Nigeria has opened a new portal for startups to secure the startup label, named ‘the Startup Support and Engagement Portal’, one year following the enactment of the landmark Startup Act. Led by the Honourable Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, this initiative stands as a pivotal element of the Nigeria Startup Act (NSA 2022), intended to foster the expansion of startups and foster technological talent within Nigeria’s borders.

    What is the Startup Label?

    Central to the Nigeria Startup Act is the concept of a “Startup Label.” This label serves as a certificate issued by the Startup Secretariat to qualifying startups, signifying their compliance with the stipulated requirements outlined in the Act. A startup becomes eligible for labeling under this Act if it meets certain criteria:

    1. Legal Status: The startup must be registered as a limited liability company under the Companies and Allied Matters Act 2020, with a maximum existence of 10 years from the date of incorporation.
    2. Innovation Focus: Its core objectives should revolve around innovation, development, production, improvement, and commercialization of digital technology products or processes.
    3. Ownership Structure: At least 51% of its shares must be held by one or more Nigerians. In cases where foreign ownership exceeds a prescribed threshold, eligibility is retained if the ultimate beneficial owners of foreign shares are Nigerian citizens.
    4. Compliance: The startup must comply with all extant laws governing businesses in Nigeria.

    How to Apply for Startup Label?

    1. Registration: Interested startups can register on the designated Startup Portal at https://www.startup.gov.ng.
    2. Application Submission: Submission of an application through the Startup Portal in the prescribed format is necessary. The application should be supported by requisite documents and fees as prescribed by the Secretariat.
    3. Review and Approval: The Coordinator evaluates the application and, if satisfied with the compliance, enters the startup’s details into the register of startups and issues the startup label.

    Obligations of Labelled Startups:

    Once labelled, startups are expected to adhere to certain obligations:

    • Legal Compliance: Comply with all existing laws governing businesses in Nigeria.
    • Reporting Requirements: Provide annual reports on human resources, total assets, annual turnover, incentives received, and advancements made.
    • Financial Transparency: Maintain proper book of accounts as per reporting obligations under extant laws and regulations.
    • Notification of Changes: Notify the Coordinator of any structural, compositional, or objective changes within one month of occurrence.
    • Compliance with Coordinator’s Obligations: Fulfill any additional obligations set forth by the Coordinator post-label issuance.

    Incentives for Obtaining the Startup Label in Nigeria

    In addition to the prestigious recognition and compliance benefits, obtaining the Startup Label in Nigeria unlocks a range of incentives and support mechanisms designed to catalyze the growth and success of labelled startups. Here are the key incentives for startups that obtain the label:

    1. Startup Investment Seed Fund:

    The Startup Investment Seed Fund constitutes a vital resource aimed at empowering labelled startups to scale and thrive. Labelled startups can access finance from the fund to fuel their growth trajectory. Upon recommendation by the Fund Manager and approval of the Council, early-stage finance is provided to labelled startups, bolstering their journey from ideation to execution.

    2. Pioneer Status Incentives (PSI) Scheme:

    Labelled startups operating within industries covered by the extant Pioneer Status Incentives (PSI) Scheme are eligible to apply for tax reliefs and incentives through the Nigerian Investment Promotion Commission (NIPC). This scheme offers a range of benefits, including tax holidays and exemptions, incentivizing investment and innovation in strategic sectors.

    3. Personal Income Tax Exemption:

    Employees engaged by labelled startups enjoy a significant incentive in the form of personal income tax exemption. Eligible employees benefit from a 35% exemption on their income for a period of two years from the date of engagement, providing financial relief and enhancing the attractiveness of employment opportunities within labelled startups.

    4. Streamlined Transactions:

    The Secretariat collaborates with the Corporate Affairs Commission (CAC) to streamline administrative processes for labelled startups conducting transactions. A designated section on the Startup Portal facilitates seamless interactions with the CAC, simplifying registration, compliance, and other business-related procedures.

    Charles Rapulu Udoh, a Lagos-based lawyer, is a key figure in Africa’s tech startup scene, having contributed significantly to the Nigerian Startup Act. With a wealth of experience in multimillion-dollar deals spanning various jurisdictions, he specializes in venture capital, private equity, and intellectual property law. Charles is also renowned for his expertise in corporate governance, cross-border data privacy, and tax matters. As an award-winning writer and researcher, he is passionate about sharing the African startup story, solidifying his position as one of the continent’s pioneering voices in this field.

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