Nigeria Startup Act: Key Benefits, Funding & How to Register

Introduction

Picture this: You’re a Nigerian entrepreneur with a groundbreaking idea. You’ve got the passion, the plan, and the drive—but navigating red tape, funding gaps, and regulatory hurdles feels like running an obstacle course blindfolded. Enter the Nigeria Startup Act (NSA), signed into law in October 2022. Touted as a lifeline for innovators, this legislation promises to transform Nigeria’s startup ecosystem.

But where did it come from? The Act was co-created by the Nigerian government and key industry stakeholders to foster an enabling environment for startups. With contributions from policymakers, investors, and entrepreneurs, the NSA was modeled after global best practices to reduce regulatory friction and drive innovation. But does it live up to the hype? Let’s dive in.

What’s the Big Deal About the Nigeria Startup Act?

The NSA isn’t just another policy document. It’s a legally backed framework designed to turn Nigeria into Africa’s Silicon Valley by addressing common startup pain points. Think easier business registration, tax breaks, access to startup funding, and regulatory support. Nigeria’s tech ecosystem already contributes significantly to the economy—startups raised over $2 billion in funding between 2015–2022. The NSA aims to supercharge this growth.

For a full breakdown of the law, visit the Nigeria Startup Act official website.

Key Features of the Act

The Nigeria Startup Act 2022 introduces several provisions aimed at supporting, regulating, and funding startups in Nigeria. Below are the core features of the Act:

1. National Council for Digital Innovation and Entrepreneurship (NCDIE)

• This is the highest policymaking body responsible for overseeing the implementation of the Act.
• The Council includes representatives from government agencies, private sector stakeholders, and investors.
• It ensures effective coordination between startups, regulatory bodies, and financial institutions.

2. Startup Certification (“Startup Label”)

• Startups must apply for a Startup Label via the Startup Support and Engagement Portal.
• Certification is available to innovation-driven, tech-based companies in Nigeria:
  • Under 10 years from the date of incorporation.
  • Legally registered and majority-owned by Nigerians or co-founders.
  • Not a subsidiary of an existing large company.

“For a startup ecosystem to thrive, there must be clear legal structures. The Nigeria Startup Act is a crucial step in making this a reality,” says Iyinoluwa Aboyeji, co-founder of Andela and Flutterwave.

3. Tax Incentives for Startups

• Up to 5 years of tax holidays for labeled startups.
• Capital gains tax exemptions for startup investors, making Nigeria’s ecosystem more attractive to venture capital.
• Deductions on R&D expenses and potential access to Pioneer Status Incentive.
• Check FIRS guidelines for more on tax reliefs.

“Tax incentives are not just about reducing costs—they are about enabling businesses to reinvest in growth,” notes Tomi Davies, President of the African Business Angel Network (ABAN).

4. Startup Investment Seed Fund

• Sets up a ₦10 billion annual fund managed by the Nigeria Sovereign Investment Authority (NSIA).
• Provides grants, loans, and early-stage capital to help startups scale.
• The application process is structured, with eligibility criteria set by the NCDIE.

According to Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, “Funding is the backbone of any startup ecosystem. The NSA ensures that Nigerian startups are not left behind in the race for capital.”

5. Simplified Regulatory Compliance

• A single digital portal for startup registration, compliance, and licensing.
• Regulatory sandbox to test and deploy innovative solutions before full-scale implementation.
• Special access to government procurement, export incentives, and market linkages.

For more details on regulatory compliance, visit NITDA’s official website.

6. Intellectual Property (IP) Protection

• Fast-tracked patent and trademark registrations with the relevant IP agencies.
• Assistance in international IP protection for globally minded startups.

For information on protecting intellectual property, see the Trademarks, Patents, and Designs Registry of Nigeria.

How to Register a Startup in Nigeria Under the Nigeria Startup Act

To benefit from the Nigeria Startup Act, startups must go through an official certification process. Here’s how to register:

1. Meet Eligibility Requirements
   • Be a legally registered Nigerian company.
   • Operate within technology-driven sectors with an innovative business model.
   • Have been in existence for less than 10 years.
2. Apply via the Startup Support and Engagement Portal
   • Submit business registration details, proof of innovation, and any required documentation.
3. Await Certification Approval
   • Applications will be reviewed by the National Council for Digital Innovation and Entrepreneurship (NCDIE).
   • Once approved, startups receive the “Startup Label”, granting access to tax incentives, funding, and regulatory support.
4. Access Benefits & Stay Compliant
   • Certified startups must submit periodic compliance reports to remain eligible for continued support.

Implications for Entrepreneurs: The Good, The Bad, and The “Wait-and-See”

Although the Act is promising, it’s essential to understand its real-world impact:

The Good

• Cheaper to Scale: Tax incentives, grants, and holiday periods free up cash flow.
• Talent Boost: Founders can attract skilled workers using equity incentives.
• Global Credibility: The government-backed “Startup Label” signals legitimacy to investors.

The Bad

• Bureaucracy Blues: Implementation depends on efficient collaboration among government bodies—delays may occur.
• Awareness Gap: Many entrepreneurs remain unsure how to apply for the label or leverage the Act’s incentives.

The “Wait-and-See”

• Transparent Fund Management? Oversight of the ₦10 billion seed fund is critical.
• Inclusivity: The Act’s success hinges on rural and female-led startups accessing the same incentives.
• State-Level Adoption: Will states uniformly apply or adapt the Act’s provisions?

How Does Nigeria’s Startup Act Compare to Other African Startup Laws?

Nigeria isn’t the first African country to introduce a startup law. Tunisia (2018) and Rwanda (2021) have implemented similar policies. Here’s how they compare:

Final Thoughts: A Step Forward, But Pace Matters

The Nigeria Startup Act is a significant milestone, creating a more fertile ground for innovators and entrepreneurs. Yet, as with any legislation, implementation is key. Policymakers must ensure transparency, efficient fund disbursement, and widespread awareness.

So, to every Nigerian founder reading this:

• Apply for that startup label.
• Leverage the incentives.
• Keep pushing boundaries.

The Act is your toolkit—now go build something amazing.

What’s Next?

In the next article of this series, we’ll explore The Essential Nigeria Startup Act for Entrepreneurs and Investors.

For more insights on business innovation in Nigeria, visit PlanetWeb Solutions. 🚀