As part of an effort to provide support for startups, the introduction of the National Startup Registry and new tax incentives the government is implementing to attract Angel Investors aim to bolster research in science and technology through new investments and support of the national economy in general.
National Startup Registry
The National Startup Registry was formed within the General Secretariat for Research and Technology (GSRT) by a joint ministerial decision published in the Government Gazette (decision no. 85490 – GovGaz B/3668/02.09.2020). The Registry is an electronic platform set up to map, monitor, and analyze the specific area of entrepreneurship and then to develop it with a view to attracting capital from domestic and foreign investors by providing tax incentives and facilitations.
The decision sets out the following:
- A startup enterprise is any enterprise that fulfills the criteria for innovation and scalability and is registered in the National Startup Registry.
- The National Startup Registry is maintained by the GSRT and will remain in effect indefinitely.
- Enterprises with legal forms described below are eligible to register by applying and then receiving a positive recommendation from a GSRT evaluation committee.
- Enterprises with the legal entity form of private companies (PC), limited liability companies (LLC), sociétés anonymes (SA), or equivalent legal forms from other countries with offices in Greece are eligible to register.
- Single-member PCs and single-member LLCs are not eligible.
- Another condition for an enterprise to register on the electronic platform is that it cannot have been in business more than 8 full years since its establishment on the date of applying for inclusion in the Startup Registry.
- Every company included in the Registry can maintain a public profile aimed at familiarising potential investors with its activities.
About Angel Investors
Along with government subsidies for enterprises entered into the new Registry, effective 1 September 2020 a 100% tax deduction applies to expenditures realized by investors who are natural persons (and not venture capital investors) for research and development projects and programs.
Specifically, a new article in Law 4172/2013 has been added to the provisions of Article 49 (Tax incentives for Angel Investors) which allows for a deduction from the taxable income as a rate of the capital contributed by natural persons to enterprises on the National Startup Registry and stipulates the following:
- In the event that the taxpayer (natural person – Angel Investor) contributes capital to a company on the National Startup Registry of the Ministry of Development and Investments General Secretariat for Research, that taxpayer is entitled to a tax deduction equal to 50% of the contribution, depending on the tax bracket of the declared income, for the tax year within which the contribution was made.
- The deduction applies to the funding of up to €300,000 per year – for up to 3 startups; in other words, for Angel Investors who contribute up to €100,000 to up to 3 startups per year.