Kerala Technology Startup Policy

The vibrant and talented youth of Kerala are often compelled to seek better career opportunities outside their State, emerging as successful entrepreneurs far from home. This exodus represents a significant loss for Kerala, a place where intellect and innovation hold more value than material resources. To counteract this brain drain, the Kerala Government has launched the Kerala Technology Startup Policy. This groundbreaking initiative aims to establish a world-class scientific and technological ecosystem, empowering the youth of Kerala to pursue their dreams and maximize their potential within the State.

Vision of the Policy

The vision of the Kerala Technology Startup Policy is:

For Kerala to emerge as the first destination for startups in India and to be amongst the top five startup ecosystems in the world.

Objectives of the Policy

The Kerala Technology Startup Policy underscores the following objectives:

To attract investments of at least INR 5,000 Crores into Kerala's Incubation and Startup Ecosystems.
To allocate INR 2,500 Crores for initiatives linked to Youth Entrepreneurship.
To cultivate Indian-owned Global Technology Companies based in Kerala.
To establish a minimum of 10 Technology Business Incubators or Accelerators in each sector within the State.
To support and incubate at least 10,000 technology product startups.
To develop 1 Million Sq. Ft. of Incubation space throughout Kerala.
To nurture Venture Capital funding amounting to at least INR 2,000 Crores.
To create the framework necessary for a home-grown billion-dollar technology company to emerge.

Startup Funding

The Government of Kerala encourages financial institutions to extend favorable lending schemes to startups. Entities like Kerala Financial Corporations are motivated to back initiatives such as the Credit Guarantee Fund Trust for Micro and Small Enterprises. Adequate guarantees will be provided to these institutions for losses up to 10% of total loans disbursed and outstanding.

Private funds are encouraged to operate within the State to fund startups. The Government may also participate in a SEBI-approved Venture Capital Fund as a Limited Partner, contributing up to 25% of its corpus.

State Support

General Incentives

The Policy provides Non-Fiscal and Fiscal Incentives to accelerators, startups, and incubators across various sectors. MSME sector schemes will be applicable to startups based on classification. Women working in startups are offered the benefit of General Permission for three-shift operations with the necessary safety precautions.

Financial Support to Startups and Incubators

The incentives outlined in the State IT Policy of 2012 are applicable to this Policy. The Kerala Government will match funding raised by Incubators from the Government of India on a 1:1 basis as matching grants.

Performance Linked Assistance involves granting the Host Institutes an Operating Grant, calculated on the number of startups incubated annually. Human Capital Development is emphasized to enhance the innovation pipeline and entrepreneurial talent, with recognized incubators executing these programs.

Additional Incentives for Private/PPP Model Incubators

Incubator Projects capable of creating at least 1000 startups are defined as Nodal Incubators, eligible for additional benefits. Government-owned buildings leased to technology incubators are exempt from rent or maintenance charges for up to five years or until they become self-sustainable.

Administration of Financial Incentives & Implementation of Programmes

The administration and distribution of financial incentives as outlined in the Kerala Technology Startup Policy are managed by the Technopark Technology Business Incubator (T-TBI). A panel of external experts, representing industries, academia, and associations, assists in implementing various schemes and programs transparently.

For more information on business structure registration such as Sole Proprietorship Registration in India, entrepreneurs can explore resources that align with their vision.

Understanding local requirements, such as obtaining a Trade License, is essential for setting up compliant business operations in Kerala.

Adhering to financial standard practices is crucial for startups. Entrepreneurs can gain insights into capital and Public Limited Company registration processes, helping them scale their businesses effectively.

Legal considerations like filing for income tax under Rule 3A can also affect startup operations, making it essential for entrepreneurs to have a comprehensive understating of financial obligations.

An effective talent acquisition strategy is vital for the success of startups and can be streamlined with services like Talent Acquisition Service to ensure the right workforce.

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Frequently Asked Questions

Common questions about Kerala Technology Startup Policy.

The main objective of the Kerala Technology Startup Policy is to create a world-class scientific and technology ecosystem that empowers the youth of Kerala to pursue their entrepreneurial dreams and reach their maximum potential within the state itself. The policy aims to reverse the brain drain from Kerala by attracting investments, providing funding support, and establishing incubators and accelerators to facilitate the growth of technology startups.

The policy encourages banks and financial institutions to extend favorable lending terms to startups. It also promotes the formation of Venture Capital Funds, with the state government participating as a Limited Partner up to 25%. Additionally, the policy provides for matching seed funds for recognized incubators to increase the available funding for startups.

The policy offers various incentives and support measures for incubators and accelerators, including financial assistance in the form of matching grants, operating grants based on the number of startups incubated, reimbursement of registration fees and stamp duty, and subsidies for private/PPP model incubators with a capacity to create at least 1000 startups.

The policy aims to encourage innovation through Challenge Grants focused on innovative products that address societal problems. It also supports human capital development programs through recognized incubators, with the state government providing 10% of the approved program expense as a Program Implementation and Monitoring Fee.

The policy offers various incentives to startups, such as the applicability of existing MSME sector schemes, general permission for three-shift operations with women employees, reimbursement of patent filing costs, training assistance for employees, and performance-linked grants for startups achieving a specific year-on-year growth rate.

The policy encourages the utilization of Corporate Social Responsibility Funds from State Public Sector Undertakings to create corpus funds at incubators, in compliance with the New Companies Act of 2013. This initiative aims to strengthen the startup ecosystem in Kerala.

The Technopark Technology Business Incubator (T-TBI) is responsible for administering all the monetary support offered to startups and incubators under the Kerala Technology Startup Policy. It ensures the timely and transparent provision of support, with the assistance of a committee of external experts from various industries, academia, incubators, and industry associations.

One of the objectives of the Kerala Technology Startup Policy is to create more Indian-owned Global Technology Companies that are based out of Kerala. By providing a conducive ecosystem, funding support, and incentives, the policy seeks to nurture startups that can grow into globally successful technology companies headquartered in Kerala.

The policy aims to attract at least INR 5,000 Crores in investments into the incubation and startup ecosystems in Kerala, provide INR 2,500 Crores for youth entrepreneurship activities, establish a minimum of 10 Technology Business Incubators or Accelerators in every sector, incubate a minimum of 10,000 technology product startups, and develop 1 Million Sq. Ft. of incubation space in the state.

One of the objectives of the Kerala Technology Startup Policy is to set up the platform for creating a minimum of one home-grown billion-dollar technology company from all the startups incubated and supported under the policy. By fostering a conducive ecosystem, providing funding support, and offering various incentives, the policy aims to nurture startups that can potentially grow into unicorn companies based in Kerala.