The Luxembourg Business Angel Network is calling on the government to further enhance incentives for investments in startups. “LBAN welcomes the proposed reduced tax rate for SMEs, which will benefit many early-stage startups. The proposed measure should, however, be complemented by tax breaks for investments in innovative startups,” said Marc Molitor, LBAN’s president.
Startups rarely make any profits during their first years in operation, as they have to finance R&D, as well as the marketing of their new products and services. This means that startups do not really benefit from the tax incentives proposed.
Given the relatively high risk of such ventures, startups rely on upfront capital investments by private investors, since banks will step in only at a later stage when the company is profitable. “To drive growth of entrepreneurial ventures and creation of new business, it is important to implement a different type of tax incentive – one that would enhance the ability for these early-stage companies to access capital,” argued Molitor.
[…] the government should introduce tax breaks for investments in innovative companies.
In order to help Luxembourg become a “startup nation,” lead the third – or fourth – industrial revolution and be at the forefront of the digital economy, the government should introduce tax breaks for investments in innovative companies. Such tax breaks will act as a magnet to attract entrepreneurs to launch their new ventures, particularly in the FinTech sector, in – and from – Luxembourg. The positive effects of such fiscal measures have been demonstrated for many years in neighboring countries, including the UK, France, Belgium and Germany, to name a few.
LBAN has submitted to the government a scheme through which investments into startups would be granted a fiscal incentive.
LBAN has submitted to the government a scheme through which investments into startups would be granted a fiscal incentive. The non-profit association, which unlocks the potential of private investors in Luxembourg, endorses all initiatives by its respective stakeholders to further increase the attractiveness of Luxembourg for launching startups. LBAN’s mission remains to give the appropriate tools to private investors in order to help them feel more comfortable in making investments. To date, LBAN counts nearly 50 Luxembourg-based members.