In a bid to revitalize its entrepreneurial landscape and accelerate its transition to an information economy, Tunisia has embarked on a significant endeavor — the launch of the Startup Act 2.0. Building upon the successes and lessons from the original Startup Act, which was passed in 2018, the Tunisian government, led by Prime Minister Najla Bouden, recently held a crucial ministerial working session at the Government Palace in La Kasbah. During this meeting, senior government officials unanimously emphasized the pivotal importance of finalizing the definitive version of the new bill. Their goal is to align it with ongoing legislative initiatives and to provide a robust legal framework to bolster the country’s burgeoning startup ecosystem.
A Collaborative Approach to Legislative Renewal:
The meeting underscored the government’s strong commitment to the new Startup Act, recognizing its vital role in fostering the development of the entrepreneurial sector and driving innovation within the country. Aware of the urgency to empower startups with a solid legal foundation, the participants agreed to expedite the legislative process, signaling the government’s determination to enact the new Act efficiently.
The Startup Act 2.0 has been subject to thorough consultations with various stakeholders, including representatives from the Ministry of Communication Technologies, the Ministry of Economy, the Ministry of Vocational Training and Employment, the Ministry of Education and Scientific Research, startups themselves, and civil society components. This collaborative approach aims to incorporate diverse perspectives and ensure that the Act addresses the unique needs and challenges faced by the startup community.
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Learning from Past Experiences:
The original Startup Act, enacted in 2018, laid the foundation for Tunisia’s innovation ecosystem, contributing to the establishment of a stable platform for startups and aiding their market penetration. However, over the years, the Act exposed certain inefficiencies and challenges, some of which the proposed law intends to correct. They are summarized below:
- Addressing Financing Challenges: One of the most pressing issues faced by Tunisian start-ups is the lack of adequate financing options. Despite the success of the first Startup Act in fostering a stable ecosystem and market penetration, the funding gaps have become evident barriers to the growth and sustainability of many promising start-ups. The government aims to accelerate funding opportunities for these start-ups, making it a top priority for the new legislation.
- Fostering Collaboration Between Start-ups and the State: While the initial Startup Act facilitated collaboration between the public and private sectors, there still exists untapped potential for closer cooperation between start-ups and the government. By encouraging start-ups to work more closely with the state, there is an opportunity to leverage their innovative solutions to improve public services and address societal challenges. The new Startup Act seeks to incentivize such partnerships.
- Retaining Start-ups Locally: A significant concern for the Tunisian government is the trend of successful start-ups leaving the country in search of better funding opportunities and more supportive ecosystems. This “brain drain” not only affects the local entrepreneurial landscape but also hampers the country’s economic development. The new legislation aims to create an environment that encourages start-ups to remain in Tunisia by offering attractive incentives and support.
- Adapting to a Changing Economic Landscape: The world is rapidly evolving, and the economic landscape is transforming due to technological advancements. To remain competitive and seize the opportunities presented by the digital era, Tunisia recognizes the importance of revising its Startup Act. The new version, Start-up Act 2.0, aims to be more adaptive and forward-looking, aligning itself with the country’s vision for 2035 and the transition to the information economy.
- Overcoming Regulatory Challenges: The successful implementation of any legislation requires an efficient regulatory framework that allows for flexibility and agility in responding to evolving market dynamics. The Tunisian government acknowledges the need to improve the regulatory framework to facilitate innovation, remove bureaucratic hurdles, and create an environment conducive to start-up growth.
- Building on Past Experiences: The initial Startup Act revealed valuable insights into the strengths and weaknesses of Tunisia’s innovation ecosystem. Learning from past experiences, the new legislation, Start-up Act 2.0, aims to build upon the collaborative spirit of its predecessor while addressing the identified shortcomings to create a more comprehensive and effective legal framework.
So far, the success of Tunisia’s initial Startup Act can be attributed to the collaboration between the public and private sectors. The involvement of Smart Capital, a privately managed company with public shareholding, in administering the Startup Act has proven beneficial in avoiding bureaucracy and inefficiencies that often plague government agencies in Africa. Smart Capital has been actively promoting Tunisian start-ups and planning various fund launches to support their growth.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard