Great news for startups from the Austrian Federal Government which passed a special startup program aimed to encourage entrepreneurship. The value of the program is about EUR 185 million.
“We want to more strongly support people with courage, innovative strength and an entrepreneurial spirit. This package of measures provides added impetus to the country’s startup scene”, said Reinhold Mitterlehner, Federal Minister of Science, Research and Economy, and State Secretary Harald Mahrer, commenting on the effects of their initiative.
The main specific measures are:
– The startup is relieved of the burden of having to pay auxiliary wage costs for the first three employees of innovative startups during a period of three years.
– Seed financing of Austria Wirtschaftsservice (aws) will be increased by EUR 20 million in order to strengthen knowledge-oriented and technology-oriented startups in building up their companies.
– New funding sources will be made available to the aws Business Angel Fund. Together with funds provided by private investors and the EU, an additional EUR 20 million will be put at the disposal of startups.
– New risk capital premium for investors: this measure is designed to promote investors acquiring equity stakes in innovative startups. Accumulated investments of up to EUR 250,000 per year are supported, in which case a maximum of 20% of the investment amount is reimbursed.
– New legal entity i.e. the “Mittelstandsfinanzierungsgesellschaft (MiFiG)“ (financing company for SMEs): this measure aims to stimulate investors into providing risk capital for small and medium-sized companies. Tax exemptions will apply for up to EUR 15,000 in dividends for investors in a MiFiG.
– Digital one-stop-shop for founders: The founding process will become quicker and less expensive. The company founders can enter the required data online via the Unternehmensserviceportal (USP – Corporate Service Portal). The linking of public authorities and registers will enable them to avoid a lot of official red tape.
– Founding fellowships for academic spin-offs: along the lines of the Swiss Federal Institute of Technology in Zurich (ETH), scientists and students with innovative ideas should be supported in their efforts to establish their own companies. The fellowship can ensure the financing of salary costs and access to the academic infrastructure. The fellowships will be granted within the context of a competition via the knowledge transfer centers. This measure is funded to the amount of EUR 5 million per year. Some 50 founders will be supported in teams up to the year 2018.
– New startup visa within the framework of the Red-White-Red Card: the existing rules for self-employed key workers will be extended to startups. Accordingly, the applicant is given a residence and work permit for self-employed work in Austria for a period of one year, with the option of extending it for an additional year. A further extension will be linked to a specified annual revenue or funding and creation of jobs.
– Secure specialized staff: the additional need for programmers will be shown in the list of understaffed professions in different business areas.
– 24 hour quick check for funding applications requests of the Austrian Research Promotion Agency FFG and aws.
With this program, Austria continues previous efforts and improves it’s attractiveness for people with an entrepreneurship mindset and along with the Polish and Czech authorities, seem to be aware of the importance of startups in creating added value and jobs in the economy of the future. It would be great to see such a cohesive startup program being planned in other CEE countries as well.