3.9 Start-up funding for young entrepreneurs
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Access to information
The top-level policy measures implemented to ensure that young people know about funding opportunities to create a start-up, programmes and service providers devoted to the funding of start-up, and specific professional guidance are the following:
The Youth Board of Cyprus is responsible to promote the Scheme for the development of New Business activity (“Σχέδιο Ενίσχυσης Νέας Επιχειρηματικής Δραστηριότητας”) which was announced in May 2021 by the Ministry of Energy, Commerce and Industry (Industry and Technology Service).
More specifically, the Youth Board of Cyprus is responsible for:
- The promotion of the program and the distribution of relevant information to young people,
- The organization of seminars to present the program,
- The provision of technical assistance and other consultation to interested people,
- The enhancement of the cooperation among young entrepreneurs participating to the program.
Access to capital
The grant-based schemes for young entrepreneurs specific for start-up creation are the following:
- The Scheme for the development of New Business activity ("Σχέδιο ενίσχυσης νέας επιχειρηματικής δραστηριότητας") under the umbrella of the Ministry of Energy, Commerce and Industry. The program aims to develop, support and promote entrepreneurship, by focusing on specific target groups, such as young people and women who wish to do business in any economic activity, utilizing their knowledge, experience and talents. Beneficiaries are unemployed or employed, (a) young people aged 18-29, (b) men aged 30-50 and (c) women aged 30-55. Young people aged 18-29 are entitled up to 70% of funding.
- The Cyprus Entrepreneurship Fund (CYPEF). As mentioned in the National Reform Programme 2022, the Cyprus Entrepreneurship Fund supports both working capital and investment loans to Small-Medium Enterprises.
- Tax relief for investments in innovative SMEs: As mentioned in the National Reform Programme 2022, the first tax scheme for investing in start-ups and innovative companies was operated since 2017 and was valid until 30/6/2021. It provided 50% tax relief, up to €150,000 per year, for private investors investing in innovative companies, certified by the Deputy Ministry of Research, Innovation and Digital Policy. An extension period was announced until the 30/6/2024.
Lastly, it has to be underlined the fact that a new law regarding the establishment of Social Enterprises has been voted by the Parliament (December 2020) (ο περί Κοινωνικών Επιχειρήσεων Νόμος του 2010 (Ν.207(Ι)/2020), which creates a positive environment for the creation of new business endeavor for young people. However, due to lack of financial incentives by the government, the Law is still ineffective.