The story first came from Tunisia in May 2018, and now Mali. The Malian government has put in place machinery to begin the process of legislating for a new startup Act.
Mali’s Minister of Digital Economy, Arouna Modibo Touré recently declared that all is now set to enact a new Startup Act for Mali.
Mali’s Minister of Digital Economy, Arouna Modibo Touré
Key Insights Into What The Startup Act Is Going To Look Like
- Mali’s Startup Act, if passed by Parliament without delay would be second in Africa after Tunisia passed its Startup Act in May 2018.
- The Act is going to contain 23 Articles which will set an administrative, economic and fiscal environment favourable to young entrepreneurs who are usually confronted with numerous challenges like company creation and management as well as access to funding.
- The Act is targeting startups which are less than four years old, which has Malian nationals owning about one-third of its equities and which have less than ten employees.
- Companies of this nature will be provided with seed funding as well as the possibility for innovation grants.
- Additionally, a start-up guarantee fund will also be created to help those startups raise about 80% of the funds they need.
- Malian government would also help to promote it abroad.
- The Act will also encourage startup incubators to be more rigorous in their choice of the various projects and in their coaching.
- To make this happen, the Act will provide that for an incubator to be funded, 50% of its startups should have survived for two years. That’s a big deal!
- The selection of coaching, mentoring and training professionals will be based on performances and only the best will survive. This will guarantee the success and quality of the firms in the market.
- The Act also plans to create research and development laboratories in schools to grow the entrepreneurship sense of its youth. A special scholarship will then be awarded to any student carrying an innovative project.
Mali’s Startup Act is Similar to the Tunisian Startup Act.
Unarguably, Tunisia leads other African countries in bold startup legislations. The Tunisian Startup Act, passed in May, 2018, also reveals the following similarities with the Malian Startup Act.
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- Tunisian Startup Act defines startups as an entity having legal existence not exceeding eight (08) years from the date of its constitution,while Mali’s makes provision only for startups less than four years.
- More than two-thirds (2/3) of Tunisian startups’ capital must be natural persons, venture capital investment companies, collective investment funds, investment, seed money and any other investment body according to the legislation in force or by foreign Startups to qualify as startups under the Act.
- The business model envisaged by the Tunisian Startup Act is one that is highly innovative, utilizing cutting-edge technology.
- Under the Act, any individual promoter of a Startup, public agent or employee of a private company, may benefit from the right to Startup Leave for creation of a Startup for a period of one year renewable once
- Any promoter of a Startup may benefit from a Startup scholarship for a duration of one (01) year. Only three (03) shareholders and full-time employees in the relevant Startup may however benefit from the scholarship awarded.
- Young graduates who create startups are free from taxation for three years.
- The profits from the sale of the securities relating to the shares in the Startups are exempt from the capital gains tax.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.