Tunis: There is an urgent need to adopt the Innovation Act in order to improve the results of the Startup Act, develop the startup ecosystem and increase its contribution to the national economy, said the president of Tunisian Startups, Oussama Messaoud.
As a reminder, the concept of startups was initiated by the Startup Act, promulgated in 2018, and came into force in April 2019 with the granting of the first label, but this framework did not anticipate the next phase, explains the president of Tunisian Startups, an NGO founded in 2016 and aiming to be the voice of the startup ecosystem in Tunisia.
The Startup Act achieved its objective by creating an initial pool of startups (around 1,000) based on innovation and scalability (the ability to adapt and grow efficiently in response to an increase in demand for products or services), but today there is a feeling that the ecosystem has been “left behind”, hence the urgent need to update the law in question, he argued.
He went on to say that, following this ob
servation, a task force bringing together the public and private sectors and comprising the Ministries of the Economy and Planning and Communication Technologies, the Agency for the Promotion of Industry and Innovation, Tunisian Startups and several other stakeholders, worked on updating and developing the Startup Act in 2022 and 2023.
// Innovation Act, a framework better suited to start-ups and innovative companies
The “Innovation Act”, which is now a bill, was drafted using a participatory approach and aims to create a framework more suited to start-ups and innovative companies.
Indeed, investing in start-ups – a risk-taking model with a very high potential return on investment that has proven its worth in several countries – is not a priority for local investors. What’s more, the current legal framework (startup law/foreign exchange regulations, etc.) is not conducive to attracting foreign investors, says Messaoud, himself a start-up entrepreneur.
In his view, the lack of international funding mechani
sms and the small size of the Tunisian market are the reasons why many Tunisian start-ups have emigrated to seek international funding from foreign investors in order to expand.
Several countries have copied the Tunisian law and have been able to move forward,” says Messaoud, “but it’s time to improve and take things to a new level that will increase performance and catch up with the rest of the world, because it’s no longer possible for certain startups to develop and operate from Tunisia within this regulatory framework.
A new wave of measures
The draft law includes a new set of measures aimed at making procedures more flexible, guaranteeing greater impact and capitalising on innovation as a way out of the crisis, since it (the law) concerns not only startups but also innovative companies.
Indeed, the new draft proposes, among other things, the introduction of new activities, especially as some of them (activities) are either prohibited by law (drones) or over-regulated (fintech), making it impossible t
o innovate, according to Messaoud.
He added that this will be made possible by the creation of sectoral sandboxes, like the one set up at the Central Bank of Tunisia (BCT), to test innovative financial solutions before validating them.
The draft law also provides for new financing mechanisms tailored to start-ups and in line with international standards.
In terms of attracting world-class talent, the bill provides for the granting of talent visas while facilitating procedures (online platform with rapid response) to enable Tunisian startups to recruit foreign talent to benefit from their expertise.
It also includes incentives for Tunisian skills (employees of start-ups and innovative companies) to encourage the retention of Tunisian talent.
For example, the bill provides for the payment of part of salaries in foreign currency and the possibility of acquiring a stake in the capital of the start-up (stock options) through a target-based equity plan or in the company’s foreign subsidiaries.
Digitisation an
d simplification of procedures
The bill also provides for the creation of specific legal forms for start-ups, instead of the current SARL, SUARL and SA, which are not very suitable.
Indeed, Messaoud explains, the governance of SARLs and SUARLs is not too formalised (shareholders and directors), while SAs are too rigid for start-ups. “We have proposed more simplified forms, such as simplified joint stock companies (SAS),” says the association’s president.
The bill also proposes the creation of specialised investment funds, better suited to start-ups and innovation, with simplified conditions. These would be regulated funds with few procedures, accessible via a digital platform.
Funds that currently go through the Financial Market Council (CMF) and are not very suitable for start-ups are more used to investing in the industrial sector and large companies,” explains Messaoud.
Messaoud also points out that part of the bill is reserved for the post-label phase, which is limited in time.
The startup no longer
has the Startup Act label, either because it has not achieved scalability, or because it has not complied with the law, or because the validity of the label (eight years) has expired, or if the startup is successful and expands (more than 100 employees and a turnover of more than 15 million dinars).
If the startup is successful and the label period expires, it is no longer considered a startup but an innovative company, he added.
During this phase, a number of benefits are withdrawn, including the payment of employer and employee contributions by the National Agency for Employment and Self-Employment (ANETI) and the holding of a foreign currency account. However, Messaoud points out that these advantages, which have allowed the company to grow, should be gradually withdrawn to avoid destabilising it, while at the same time allowing new start-ups to benefit from them.
Source: Agence Tunis Afrique Presse