seed capital grant-scheme - Seychelles Investment Board

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responsible for Employment, Entrepreneurship Development and Business Innovation. (hereinafter referred to as 'Ministry'
SEED CAPITAL GRANT-SCHEME Guidelines

1. INTRODUCTION 1.1 Overview The Seed Capital Grant-Scheme will provide seed capital of up to SCR 50,000 to fund small start-up businesses to assist them in their early stages of development. As a means to further enhance the development of more competitive and resilient businesses the Ministry of Finance, Trade and Economic Planning has allocated a sum of SCR 25 million for the scheme for the next five years beginning in 2017. A sum of SCR 5, 000,000 will be allocated for each year to assist at least 100 applicants per year. 1.2 Duration of the Incentive This incentive is designed to assist start up initiatives. For the year 2017 the deadline for submission of all forms shall be the 21st July 2017. The final date for submitting applications for the following years shall be 31st March of each year. The final date for submitting applications for the scheme shall be 31st March 2021. No assistance shall be awarded through this measure after 31st December 2021. The Ministry responsible for Employment, Entrepreneurship Development and Business Innovation in collaboration with the Ministry responsible for Finance, Trade and Economic Planning may periodically update and amend this guideline. 1.3 Designated Authority This scheme shall be administered by the Seed Capital Committee through the Ministry responsible for Employment, Entrepreneurship Development and Business Innovation (hereinafter referred to as ‘Ministry’)

2. DEFINITIONS For the purpose of this Guidelines, the following definition shall apply: 2.1 Small Start-up Businesses For the purpose of this Guideline ‘Small Start-up Businesses’ shall be defined as businesses that has been registered and/or has had a licensed by SEnPA or Seychelles Licensing Authority (SLA) respectively for less than three (3) years which has not yet distributed profits and has not been formed through a merger.

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For eligible businesses that do not require a license, the three (3) years eligibility period will be considered to start from the moment when the business becomes liable to tax on income from its economic activity. The main factors determining whether a business is a Small Start-up are: 1. number of employees which must be less than 10 Full Time Equivalent (FTE) employees; and 2. a turnover or balance sheet total which does not exceed SCR 2 million. 2.2 Establishment Date (Start-up Date) The Establishment Date of a business shall be determined as follows: i. In the case of limited liability companies, the Establishment Date shall be determined as the date of registration with the Registrar of Companies, as long as the business was not operative under a different form before registering with the Registrar. The audited accounts of the company shall be used to determine whether the company actually distributed profits; ii. In the case of self–employed, the Establishment Date shall be determined as the date the person registered as a self-employed with the Registrar of Companies or SEnPA ; iii. In the case of a cottage industry, the Establishment Date shall be determined as the date the person registered as a self-employed with SEnPA iv. In the case of registered partnerships, the Establishment Date shall be determined as the date an agreement is signed between the parties within the respective partnerships as registered with the Registrar of Companies or SEnPA, and v. In the case of unregistered partnerships the earlier date in which any involved individual was registered as a self-employed or any involved entity was duly set up as per applicable regulations. Unregistered partnership agreements have to be notarized.

3. ELIGIBILITY

In order to be eligible for assistance under this scheme, the applicants must fulfil the following criteria: 3.1 Legal Form The applicant must be registered with the Registrar of Companies or SEnPA as: a) a limited liability company; or b) registered as self-employed, or c) cottage industry, or 3|P a g e

d) registered Partnership. In case of unregistered partnerships, the agreement has to be notarized. 3.2 Business Activity This Scheme seeks to assist start-ups, engaged in any activity relating to any trade, business, profession or vocation, to part-finance their initial productive investment in either/both Tangible and Intangible assets, in line with their business plan, to implement their business growth strategies: Excluded activities:Any activity relating to any trade, business, profession or vocation, excluding the following: •

dealing in immovable property, shares, securities and, or other financial instruments;



dealing in goods other than in the normal course of business;



carrying on banking, insurance or any other activity covered by the Seychelles Investment Act, the Banking Act, and the Financial Services Act;



providing legal, accounting or other professional services;



activities relating to the development of immovable property;



receiving royalties or licence fees;



operating or managing hotels, hostels, guest houses or residential care homes;



carrying on activities in connection with the generation of electricity and other energy sources;



the holding of shares, whether directly or indirectly, in any company which carries out any of the aforementioned activities.

3.3 Innovation In order to be eligible, the applicant must be: 1. proposing products and/or services that have the potential to be marketed and distributed internationally, and 2. producing products and/or service which are new or substantially improved compared to the state of the art in the local industry. 4|P a g e

3.4 Knowledge It is expected that key persons engaged in the start-up have either: 1) sufficient knowledge of in the relevant sector (would be an advantage) and/or 2) hands on experience (at least 5 years) in the relevant sector (would be an advantage) and/or 3) an academic background and/or 4) It will be advantage for applicants to have followed the 3-day Entrepreneurship Skills Development Training offered (free of charge) by the Guy Morel Institute. 3.5 Other Provisions Small Start-up Businesses shall not be eligible to apply for this scheme if it is controlled by: a) fully or partly owned by a non-Seychellois b) owners of existing businesses or other businesses that are operative or have interests that exceed 25% in other businesses in the same or related sector or where control is shared amongst a number of individuals or other businesses that are or have interests in other businesses operating in the same or related sector; c) owners of an undertaking operative in the same or related sector that had closed down in the of twelve (12) months prior to registering with Registrar again. 3. INCENTIVE DESCRIPTION The seed capital scheme aspires to assist small start-up businesses that are in the process of establishing and/or consolidating a business operation that has been deemed as economically feasible and innovative by the Seed Capital Committee set up by Ministry of Employment, Entrepreneurship Development and Business Innovation. 3.4 Applicable Aid Intensity and Maximum Support The maximum value of aid that may be provided is a cash grant of up to SCR 50, 000. Once the project is approved by the Committee, the approval and request for payment shall be forwarded by the Secretary of the Committee to the relevant department at Ministry of Finance whereby the grant shall be disbursed as follows: 3.4.1 Initial Instalment An initial instalment of up to SCR 20,000 shall be paid by the Ministry of Finance. The amount to be paid is subject to the determination of the Committee after taking into consideration the following: 1) the innovative elements of the proposed business; 5|P a g e

2) the employment levels at application stage, and 3) the vision of the promoters on how to further develop their business. 3.4.2 Subsequent Instalments Subsequent instalments shall be paid quarterly after the Committee reviews and endorses that the progress achieved is in line with the business plan as approved or as adjusted to adapt to market requirement. The total payment in any quarter shall not exceed SCR 20, 000. 4. APPLICATION PROCESS Businesses seeking support through this grant should submit to the Seed Capital Committee through the Ministry of Employment, Entrepreneurship Development and Business Innovation the following documentations: a) A complete application form filled in and duly signed. b) Detailed curriculum vitae of: i.

The personnel which are contributing to the start-up project through knowledge and experience, and

ii.

Individuals involved in the business and holding 25% or more of the shares or voting rights of the undertaking.

c) The Memorandum and Articles of association of any undertaking holding 25% or more of the shares or voting rights of the undertaking. d) Certificate of Registration with SEnPA e) List of employees, roles and competencies of the employees engaged with the undertaking. f) Enterprise Size Declaration. g) A Business Plan which should include: •

a clear description of the proposed business venture;



an analysis of the innovative aspects, threats, strengths, weaknesses and opportunities, and



clear business model describing potential revenue streams and operational costs.

The completed application form must be filled in electronically, printed, signed or hand written and submitted to the Ministry of Employment, Entrepreneurship Development and Business Innovation by hand in a sealed envelope or by registered post. The application must be addressed to: 6|P a g e

Seed Capital Committee Department of Entrepreneurship Development and Business Innovation Ministry of Employment, Entrepreneurship Development and Business Innovation 3rd Floor Independence House Annex Victoria For the year 2017 the deadline for submission of all forms shall be the 21st July 2017. The final date for submitting applications for the following years shall be 31st March of each year. The final date for submitting applications for the scheme shall be 31st March 2021. If deemed suitable upon assessment and due diligence, the promoter will be invited to make a presentation to the Committee for final approval.

4.1 Evaluation Applications will be evaluated against the following criteria: a) General Feasibility: the applicant’s business model is based on assumptions that are logical and support the viability of the proposed business; b) Innovation: The innovative nature of the project will be assessed in line with Section 3.3 above; c) Commercially Feasible: The project has a potential to develop products and/or services that address a real gap in the market or that can offer a competitive advantage when compared with other alternatives in the market; d) Financial Feasibility: After considering investment and operational costs the undertaking should, based on any logical assumptions taken, be expected to start generating a return to the promoters after a reasonable timeframe; e) Technologically Feasible: The project is based on sound technical concepts and uses technology to which the promoters have access; f) Knowledge: The promoters have (or have access to) the necessary knowledge and knowhow required to take the project forward; g) Target Clients: The applicant has to identify its market and its business model, locally and internationally. 4.2 Notification of results Successful applicants will be notified in writing of the outcome of their application. Once the support is approved, a certificate will be issued to the successful applicants.

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5. MONITORING & EVALUATION 5.1 Incubation. Monitoring/Business support Applicants will be subject to continuous monitoring to ensure that the project is being or was implemented according to this guidelines. Monitoring will be done by the Committee or through various agencies such as SEnPA, District Administration, Entrepreneurship centre, EDBI who can then report to the Committee. 5.2 Reporting Beneficiaries of the grant under the scheme are requested to compile a quarterly review report on a template provided by the Ministry responsible for Employment, Entrepreneurship Development and Business Innovation. Copies of these reports should be circulated to the committee members for approval. The final report must be submitted to the Ministry by not later than the thirteenth month from the signing of the certificate. 5.3 Request for Initial Payment The applicant shall commit that within eight (8) weeks from the approval of the grant that the proposed business will be duly registered and in line with Section 2.2 and 3.1 above of this guideline and is not in contravention with any laws of Seychelles. 5.4 Changes to Approved Assistance Any modification to an approved business plan should be notified to and be approved by the Committee during the quarterly review. The Committee shall reserve the right to re-evaluate the project on the basis of the proposed amendments and may, pursuant to the outcome of the evaluation, terminate further assistance.

5.5 On-Site Visits The committee may carry out or commission third parties to effect on-site checks during or after the implementation of the investment project. Such visits may entail the verification of the documentation related to the investment project and the confirmation of the works carried out. 5.6 Budget utilisation The total budget for this scheme is SCR 5, 000,000 per year and SCR 25,000,000 until 2021. Maximum grant per successful application is SCR 50,000. Therefore 100 applicants who meet all the criteria in the guidelines will be selected per year and the budget will allocated accordingly until it is fully utilised. Incomplete applications will be rejected and no budgetary provision will be made for such applications.

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5.7 Revocation of Aid If an applicant is found to have breached the terms and conditions set in this guideline, any laws of Seychelles and uses the grant for other purposes other than that for which it was granted, the Committee reserves the right to revoke, suspend or recover any aid awarded.

6. CONTACT DETAILS Further information on the scheme, as well as information and guidance on the filling in of the application form may be obtained by contacting Ministry responsible for Employment, Entrepreneurship Development and Business Innovation and the Ministry responsible for Finance, trade and Economic Planning during office hours. Postal Address:

Seed Capital Committee Department of Entrepreneurship Development and Business Innovation Ministry of Employment, Entrepreneurship Development and Business Innovation 3rd Floor Independence House Annex Victoria

Tel:

00248 4 29 72 00 or 00248 4 38 20 00

Websites:

www.employment.gov.sc or alternatively on www.finance.gov.sc

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