With the launch of Startup India Action Plan in January 2016, Modi government have provided many facilities to the young entrepreneurs, below is the list of all you wanted to know about facilities / advantages for start-ups under Startup India scheme:
1) No Inspection for three years- Under the Scheme, no inspection would be carried out on start-ups for three years regarding labour laws. In addition, environment law compliance is required only post-self certification.
2) Self certification- The start-ups will adopt self-certification to reduce the liabilities. The self-certification will apply to laws including payment of gratuity, labour contract, provident fund management, water and air pollution acts.
3) Financial benefits- In patent costs, the startups can claim an 80% rebate. That means, if a startup applies for a patent, the government will fund the defence of the patent, and give rebate of 80% in the fees. The government will also pay fees of the facilitator for helping the startup obtain the patent. Faster patent registration and protection for Intellectual Property Rights (IPRs) is provided under the Scheme. Patent filing procedures to be simplified. Reduction in fees for filing Patents.
4) Legal Support and Fast-tracking Patent Examination at Lower Costs- To promote awareness and adoption of IPRs by Startups and facilitate them in protecting and commercializing the IPRs by providing access to high quality Intellectual Property services and resources, including fast-track examination of patent applications and rebate in fees.
5) Register through app- To serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders. The government is launching a mobile app on 1 April 2016 and a portal that will allow companies to register in a day. In addition, there would be a single point of contact for Start-up India hub. In addition, there will be single window clearance for clearances, approvals, and registrations.
6) Rs 10,000 crore fund- To provide funding support for development and growth of innovation driven enterprises. The government will develop a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years, to support upcoming start-up enterprises. The Life Insurance Corporation of India will play a major role in developing this corpus. A committee of private professionals selected from the start-up industry will manage the fund.
7) Special benefits for startups in public procurement- Startups in the manufacturing sector are exempted from the criteria of prior ‘experience/ turnover’ without any relaxation in quality standards or technical parameters in public procurement (by government).
8) Public Procurement for Startups- To provide an equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/ companies in public procurement.
9) No Income Tax for three years- To promote the growth of Startups and address working capital requirements. Start-ups would not pay Income Tax for three years. This policy would revolutionize the pace with which start-ups would grow in the future.
10) No Capital Gains Tax- At present, to promote investments into Startups by mobilizing the capital gains arising from sale of capital assets. Investments by venture capital funds are exempt from the Capital Gains Tax. The same policy is being implemented on primary-level investments in start-ups.
11) Credit Guarantee Fund- To catalyze entrepreneurship by providing credit to innovators across all sections of society.
12) Tax exemption for investments of higher value- In case of an investment of higher value than the market price, it will be exempt from paying tax.
13) Building entrepreneurs- To propel successful innovation through augmentation of incubation and R&D efforts. Innovation-related study plans for students in over 5 Lakh schools. Besides, there will also be an annual incubator grand challenge to develop world class incubators.
14) Atal Innovation Mission- The Atal Innovation Mission will be launched to boost innovation and encourage talented youths.
15) Setting up incubators- A private-public partnership model is being considered for 35 new incubators and 31 innovation centers at national institutes.
16) Research parks- The government plans to set up seven new research parks, including six in the Indian Institute of Technology campuses and one in the Indian Institute of Science campus, with an investment of Rs 100 crore each.
17) Entrepreneurship in biotechnology- The government will further establish five new biotech clusters, 50 new bio incubators, 150 technology transfer offices and 20 bio-connect offices in the country.
18) Dedicated programmers in schools- The government will introduce innovation-related programmers for students in over 5 Lakh schools.
19) Rebate- A rebate amount of 80 percent of the total value will be provided to the entrepreneurs on filing patent applications.
20) Easy rules- Norms of public procurement and rules of trading have been simplified for the start-ups.
21) Faster exit- To make it easier for Startups to wind up operations. If a start-up fails, the government will also assist the entrepreneurs to find suitable solutions for their problems. If they fail again, the government will provide an easy way out.
Guest Author
Sameer Rastogi is the Managing Partner of India Juris, heading corporate and commercial practice with specialization in cross border transactions and M & A. He is globally trusted by large multinational companies, banks and FIIs for his expertise in joint ventures, foreign collaborations, India entry strategy, private equity investments, capital market advisory, F & O transactions, ESOPs, tax structuring, public offerings and infrastructure projects. He is also acclaimed for legal advisory on projects of renewal energy sectors.
