Scale Ireland, which represents, supports and advocates on behalf of indigenous tech start-up and scale-up companies, today welcomed the publication of the SME Taskforce Report, which was established by the government. There are currently two thousand tech start-up and scale-up companies in Ireland, employing over 47,000 people.
The report was compiled in collaboration with members of various SME organisations, including Brian Caulfield, the Chair of Scale Ireland. The report was commissioned following an OECD recommendation on the need for a unified strategy for the sector, as well as a Programme for Government commitment to ensure SMEs were central to the recovery efforts.
The chair of Scale Ireland, Brian Caulfield said “As a member of the Task Force, I strongly endorse the report’s recommendations, particularly, in relation to supporting high-potential start-up and scale-up companies which have huge export potential. If many of these recommendations are implemented, it would be a real game-changer for the sector and the country in terms of innovation, employment and entrepreneurship”.
In particular, Scale Ireland welcomes the numerous proposals in the report to reform the Employment Investment Incentive Scheme (EIIS), which it believes would significantly incentivise private investment into indigenous tech start-up and scale-up companies.
During Covid-19, reports from TechIreland and the Irish Venture Capital Association (IVCA) have shown that there has been a significant decline in investment into early-stage tech start-up companies, with many struggling to raise the necessary private capital to invest in innovation and staff to grow and expand. Coupled to this, recent research by TechIreland showed that high potential growth start-up and scale-up companies account for a minority of EIIS investments.
Overall, Scale Ireland welcomes the numerous proposals to reform EIIS, and the proposal to reduce the CGT rate to 20% for founders, private investors, VCs or Angel Investors who invest in non-property SMEs*.
Scale Ireland also welcomes other proposals including:
- Introduction of a clear strategy for high potential growth companies
- Introduction an entrepreneurship module for all third-level courses
- Defining the qualification requirements of the R&D tax credit to include ‘process innovation’ and ‘organisation innovation’.
- Enabling 3,000 Micro and start-up enterprises to become Digital Exporters.
- Establishing a National Entrepreneurship Forum.
Scale Ireland also welcomes the commitment to establish an SME and Entrepreneurship implementation group. The CEO of Scale Ireland, Martina Fitzgerald said “It’s vital that these aspirations are backed by actions. This report needs to be implemented, and we look forward to collaborating with the government on behalf of indigenous start-up and scale-up companies”.
Scale Ireland also welcomes other proposed changes to EIIS including:
- Allow CGT losses for loss-making EIIS investments
- Offer full CGT relief on profits on EIIS investments made for a year
- Change EIIS structure to allow VC investments via Limited Partner