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State will give grants to start-ups

THE FINANCE Ministry introduced a concept for supporting innovative ideas with up to €20,000. 

(Source: SITA/AP)

According to the plan, new companies should find a sponsor who will contribute a certain amount to starting their business. The country will subsequently offer them the grants, without claiming a share in the firm. With such a plan the government plans to give a kick to the start-up market as its operation is now only limited, the Hospodárske Noviny daily reported.

One of the reasons is that private investors are not motivated to support innovative projects.

“The reason for a less-developed market with angel investments in Slovakia can be highly-risky investments into start-ups in initial phases of their development,” reads the concept for supporting start-ups prepared by the Ministries of Finance, Economy and Education, as quoted by Hospodárske Noviny.

The plan is to support start-ups with an additional increase in investments offered by private firms. The grant from public resources will amount to 20 percent of the sum provided by an investor. This means that if an investor will, for example, provide the new company with €50,000, the state will offer it a grant of €10,000. The start-up will be able to get more grants, but the total amount should not exceed €20,000, according to Hospodárske Noviny.

To get the grant the investor will have to provide the start-up with at least €5,000.

The idea, however, did not meet with positive responses. The money is not the problem and there are enough grant schemes, said Peter Fusek who came up with the idea of new software to recognise private and business calls. What is lacking are good global ideas, he added.

Aside from grants, the Finance Ministry also proposes to establish the so-called simple joint-stock company for €1, unlike the current condition to have basic capital of at least €25,000. Under the proposed rules it will be possible to divide the €1 capital into 100 shares, with the smallest share costing 1 eurocent, the Sme daily wrote.

Moreover, the whole process of establishing a joint-stock firm will be easier. While currently the firms have to have at least two founders, under the new rules one person will be enough. The same goes for the board of directors, where also one person will be enough. The Ministry also plans to decrease the fee for establishing a firm, Sme reported.

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