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Startup Act 2022. Key Highlights And What You Should Know.

STARTUPS NOW REQUIRE ADDITIONAL CERTIFICATION

• Before a company can enjoy the benefits under the Act, it must obtain a Certificate known as the startup “label”. By this, only entities with the startup label can be considered as startups for the purpose of the Act.

• The Act establishes a startup investment seed fund through which startups can access financing.

BENEFITS OF OBTAINING A STARTUP LABEL

• Eligibility to access special funds
• Access to grants and loan administered by the Central Bank of Nigeria (CBN) and Bank of Industry (BOI)
• Eligibility for possible four years tax exemptions and other tax incentives.
• Eligible employees of a labelled startup are entitled Personal Income Tax exemption of 35% of the income of the employee for a period of two years from date of engagement.
Etc.

ELIGIBILITY FOR GRANT OF STARTUP LABEL

• According to the Act, to be labelled a startup, the entity must be registered as a Limited Liability Company under the Companies and Allied Matters Act 2020.

• The startup must have been in existence for a period of not more than 10 years from the date of Incorporation.

• It must have at least one Nigerian as a co-founder.

• Its business object must include: “innovation, development, production, improvement, and commercialisation of a digital technology innovative product or process”.

The Startup Act was signed into law on the 19th day of October 2022

Arome Abu is the Managing Partner of TCLP.

CAVEAT: Note that this information is provided for general enlightenment purposes and is not intended to be any form of legal advice.

Obscure Legal Facts is an exclusive publication of THE COUNSEL L-P. ABUJA, FCT
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