COMPARATIVE ANALYSIS OF DEVELOPMENT SUPPORT MECHANISMS FOR START-UPS BY BUSINESS INCUBATORS UNDER THE LEGISLATION OF KAZAKHSTAN AND UKRAINE

Abstract

The article analyzes the Kazakhstan’s and Ukrainian legislation regarding the legal status of a business incubator in the field of entrepreneurship and start-ups support. The article provides for the definitions and main features of business incubators. It has been demonstrated that Kazakhstan’s legislation, unlike Ukrainian legislation, does not differentiate business incubators by type, and a startup company can be organized in any form of a commercial legal entity. The authors prove the necessity of contractual regulation of relations between a business incubator and a start-up. Contractual regulation is necessary due to number of variables of these relations. First, there is a vast variety of types of investments by business incubator at the stage of a prototype, or a business project, which may include money, property, services etc. Second, organizational and legal forms of start-ups may vary. Third, the investments may be done in several modes. One of possible investment modes is entering the charter fund of a legal entity-start-up in order to control and manage it, to participate in the distribution of profit and to obtain first-hand information about the start-up’s activities. Another mode of investing into a start-up is through the contract of loan with suspending condition of purchase of shares of the company. All these variables lead to the necessity of contractual regulation. Moreover, a business incubator, as a subject of these relationships, provides start-ups with premises for rent, provides various kinds of services. This also entails the need to conclude a lease contract and a service contract between the parties. The research demonstrated that, despite the similarity of the reasons for the emergence and development of these mechanisms, their practical application in Ukraine and Kazakhstan is somewhat different. Although the article shows that in both countries business incubators have potential of being an effective support to start-ups, there are still several issues which have to be addressed. Namely, there are concerns about protection of the rights of investors and start-up participants from violations of their intellectual property rights and property interests, such as profit distribution, business interference, the procedure for the election and exit of investors and startup participants and others. Due to these issues the investments to start-ups look risky and lose their attractiveness for investors. Therefore, in the countries in consideration business-incubators cannot exist without significant state support.