LBAN, the Luxembourg Business Angel Network, has welcomed the proposed reduced tax rate for SMEs, which will benefit many early stage start-ups; the proposed measure should, however, be complemented by tax breaks for investments into innovative start-ups.
Start-ups rarely make any profit in the first years of operations, as they have to finance R&D, as well as marketing of their new products and services. This means that starts-ups do not really benefit from the tax incentives proposed in itself.
Given the relatively high risk of such ventures, start-ups 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 capacity for these early stage companies to access capital.
In order for Luxembourg to become a “Start-up Nation”, lead the third (or fourth..) industrial revolution and be at the fore-front of a Digital Economy, the introduction of tax breaks for investments in innovative companies will act as a magnet to attract entrepreneurs to launch their new ventures in (and from) Luxembourg, notably in the FinTech area. The positive effects of such fiscal measures have been demonstrated for many years in the neighboring countries (UK, France, Belgium, Germany,..).
LBAN has submitted to the government a scheme through which investments into start-ups would be granted a fiscal incentive. LBAN endorses all initiatives by the respective stakeholders to further increase the attractiveness of Luxembourg for launching start-ups.
LBAN, the Luxembourg Business Angel Network, is a non-profit association unlocking the potential of private investors in Luxembourg. LBAN’s mission is to give the appropriate tools to private investors in order to be more comfortable in doing investments. To date, LBAN counts nearly 50 Luxembourg-based members.
