The Startup Bill, 2022
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
New Registration Regime for Kenyan Startups
Establishes a formal registration system managed by a newly appointed Registrar of Startups. To be admitted into incubation programmes, an entity must be registered under Kenyan law (such as the Companies Act or Partnership Act), have existed for under 5 years, hold at least 90% Kenyan citizenship ownership, and allocate at least 15% of expenses to research and development.
Annual Reporting Obligations on Registered Entities
Under Section 22, registered startups must maintain financial records in accordance with legislative requirements. Startups are obligated to submit their annual financial records and budgets to the Kenya National Innovation Agency by the 31st day of March in each financial year.
Establishment of a Credit Guarantee Scheme
Section 28 empowers the Cabinet Secretary to establish a Credit Guarantee Scheme to provide accessible financial support and credit information to registered startups. The scheme is required to prioritize women, marginalized groups, and rural populations in its funding eligibility.
Science, Technology and Innovation Act Amended
Amends the Science, Technology and Innovation Act (No. 28 of 2013) to mandate that the National Research Fund and other agencies provide financial support to technological innovations registered under the Startup Act. It also adds startup representation to the Board of the Kenya National Innovation Agency.
Bill No.
Bill No. 14 of 2022
Gazette No.
Supplement No. 207 of 30th December, 2022
Background
The Startup Bill, 2022 provides a national framework to foster a culture of innovative thinking and entrepreneurship in Kenya. It establishes formal mechanisms for the registration of technology-based startups, the certification of business incubators, and the facilitation of fiscal and non-fiscal support to help startups attract Kenyan talent and capital.
Key Amendments
Science, Technology and Innovation Act (No. 28 of 2013)
The Bill makes direct amendments to No. 28 of 2013 to integrate the startup support system into the existing national framework:
- Section 29(1): Inserts a new paragraph (pa) to provide financial support specifically to technological innovations registered under the Startup Act.
- Section 32(4): Modifies the board composition of the Kenya National Innovation Agency by adding two members with knowledge and experience in innovation, technology, and entrepreneurship, as well as one representative of startups nominated by an organization representing startups in Kenya.
- Section 33(2) & 36(1): Amends provisions to direct financial support specifically to registered technological innovations.
New Obligations
For Startups
To qualify and maintain active registration under Sections 8 and 22, startups must:
- Be registered in Kenya as a private limited company, partnership, limited liability partnership, or non-governmental organization.
- Be newly registered or have existed for no more than five years from the date of incorporation.
- Maintain at least 90% of shares owned by Kenyan citizens.
- Dedicate at least 15% of expenses to research and development activities.
- Submit annual financial records and budgets to the Kenya National Innovation Agency no later than the 31st day of March in each financial year.
- Inform the Agency of any change in structure, composition, or objectives within one month of the change.
For Incubators
To be certified under Section 23, an incubator must:
- Be a registered company, NGO, partnership, or LLP whose principal object is supporting the development of innovative startups.
- Maintain physical and virtual facilities (such as testing spaces and ultra-wideband networks) to accommodate startups.
- Be administered by persons of recognized competence in business and innovation.
Penalties
False Statements
Under Section 20, any person who signs an application for registration under Section 8 containing any matter which is false in any material fact known to that person commits an offence.
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