MEP proposes licence fee reductions for startups

Proposals include support for women entrepreneurs, the easing of restrictions on access to funding and the creation of a local, regulated crowd-funding platform

(Photo: Insite Malta)
(Photo: Insite Malta)

Labour MEP Miriam Dalli has presented a policy proposal to government on how to support young entrepreneurs’ startup businesses, after a consultation student organization AEGEE-Valletta and the Malta Chamber of Commerce, Enterprise and Industry.

Dalli proposed a number of measures that would help startup businesses find their feet. One such proposal was to completely or partially exempt young businesses from licensing fees, until they generate a fixed income. An exemption from auditing in the business’s early years was also proposed.

Dalli also put forward a proposal on modifying bankruptcy laws, which would ensure that businesses that undergo a real and honest decline are not treated like those that file for bankruptcy fraudulently.

A local crowd-funding platform, along with a regulatory framework to protect investors, was another proposal.

Startup financing was also discussed. On the topic of independent banks, Dalli said that the government should encourage banks, through the necessary incentives, to have more trust in startups, whichever sector they occupy, and remove obstacles to loan applications.

The government, Dalli said, should also incentivize the participation of ‘angel investors’, entities who fund startups. One suggestion was using public funding to target co-investment with these business partners through the possibility of tax incentives.

A national investment program was also proposed, which would allow the government to lend startups seed money that it would recoup once the business is up and running, letting entrepreneurs effectively ‘buy back’ their shares of the business. This would be available to all start-ups following a simple, transparent risk assessment process that would level the playing field for all entrepreneurs.

“There is a stigma towards entrepreneurship because there is a fear of failure,” Dalli said. “The government should consider modifying bankruptcy laws so entrepreneurs, particularly those with innovative business ideas, can recover from previous failures.”

Dalli also called for the introduction of entrepreneurship skills within education, namely by introducing basic financial education in primary school and teaching secondary students the basics on preparing a business plan, balancing accounts and profit-and-loss. A program for on-the-job training for secondary school students could also help.

Measures to provide opportunities for women were proposed, including a national program to promote women entrepreneurs and support services for start-ups run by women. Networking opportunities, through pitch meetings where entrepreneurs could “sell” their ideas, were also proposed.