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Understanding Kenya’s startup bill 2020 and what’s in for startups
The Kenyan Parliament recently published the Startup Bill 2020 to encourage the creation of new businesses for local and foreign investors.
In a recently held KEPSA ICT Sector discussion on the Start-Up Bill, Johnson Sakaja, who is the Senator of Nairobi County emphasized on how vital it is to create a nexus between the government, research institutions, and investors to create a sustainable startup ecosystem
The bill has been referred to as one that supports incubators more directly compared to startups. The bill allows for the “the establishment of incubation facilities at the National and county levels of government”, and empowers Kenya and county executive committee members to establish a national and county incubation policy framework for the development of the business incubation sector and startup system.
The bill defines an “incubator” as a company, partnership, nongovernmental organization or limited liability partnership, whose principal object is the support for the birth and development of start-ups, innovation, and related activities related to the transfer technological and research, development and innovation processes, through the offer of dedicated physical spaces and services advice.
Among other things, it legislates for partnerships with local and international business incubators, the launch of programmes for the certification and admission of incubators into the incubation programmes, and the creation of an enabling environment for the promotion of business incubators, including fiscal and non-fiscal incentives.
During the public discussion held at Nairobi Garage by KEPSA and Liquid Telecom, most people were in support of the Bill suggesting that it was time we put together a framework to identify credible startups since we had a lot of startups coming up, providing creative solutions to real problems, and investors are really interested in financing these.
Sharing his thoughts, David Ogiga, Co-founder of Sote Hub said, “The cost of doing business in Kenya is highly expensive. We need to recognize the important role played by startups and incubators in the economy and find solutions to this challenge.”
On her end, Linda Bonyo CEO and Founder of Lawyer’s Hub suggested that the #StartupBill needs to provide for specific regulation of startups, capital incentives, and intellectual property incentives and we also need to ensure that the ecosystem is not overregulated.
Benefits for startups
The proposed Act has included several benefits for startups that are registered. The Startup Bill plans to promote the foundations of registered startups. Under the Act, startups will be given support in terms of research and development.
The main objective of the Act is to provide a framework that fosters a culture of innovative thinking and entrepreneurship. The act will also help with the registration of startups and also linkage of startups with private investors, financial institutions, the private sector, research institutions and such other institutions at the county, national and international level.
The act will also facilitate investments in startups through facilitating the provision of fiscal and non-fiscal support to startups in Kenya.
Startup Growth programs
The Startup Bill also aims to help promote an enabling environment for the establishment, development, conduct of business and regulation of startups, establishment of incubation facilities at the National and county levels of government, the establishment of an environment that promotes the establishment of startups as well as monitoring and evaluation of the legal and regulatory framework to encourage the development of startups.
The Public Service Commission of Kenya will recruit a registrar for registering startups. The Kenya National Innovation Agency will appoint a registrar.
Local and national governments will also work to promote a link between the business community and universities and research institutions.
Startup Bill 2020 has been published in the Kenya Gazette, an official publication of the government of the Republic of Kenya.
Getting a bill published in the Kenya Gazette is a big, important step in the process of making it part of national laws.
The Kenyan startup bill is now expected to go through a number of stages in both the Senate and the National Assembly and is on track to become law in the coming months.
Kenya now follows into the footsteps of the likes of Italy who were the first to have a specific startup law globally passed. Tunisia and Senegal were the first two African countries to have enacted them. A host of countries, including Mali, Ghana, Ivory Coast, the Democratic Republic of Congo (DRC), and Rwanda, are expected to implement their own this year.
Kenya is also the first of the “big five” startup ecosystems to publish its own proposed legislation, though there have been some movements to do the same in South Africa.
The Bill is open to the public here. You can read and share your comments and thoughts on the same.
