The State should double down on supports for entrepreneurs in the forthcoming budget, a new lobby group has said.
Scale Ireland, which is backed by many leading figures in the start-up community, has called for targeted measures to make it easier for entrepreneurs to establish and scale businesses in the Republic.
The organisation's call comes as Dublin Chamber yesterday urged the Government to provide greater incentives for Irish companies in Budget 2020 rather than simply relying on foreign direct investment (FDI) to fuel economic growth.
Announcing its pre-budget submission, Scale Ireland chairman Brian Caulfield said backing start-ups was particularly critical right now given global economic uncertainty. He also said it would also help to "rebalance the economy" given the current over-reliance on FDI.
Mr Caulfield previously co-founded Exceptis Technologies and Similarity Systems and until last year led Dublin- and London-listed venture capital firm Draper Esprit in Ireland.
Scale Ireland, which has been founded to represent “innovation-driven enterprises”, has called for a number of measures to be introduced in Budget 2020 to aid entrepreneurs. These include revamping the key employee engagement programme (Keep) and making improvements to capital gains tax (CGT) entrepreneur relief. It also wants to see the research and development tax credit simplified and the employment and investment incentive scheme (EIIS) overhauled.
“Innovation-driven enterprises share a special set of problems because they run huge negative cashflow early on as they invest in research, product development and even in some cases the introduction of a new business model. That gives them a set of problems that are unique relative to small firms generally and it requires a specific policy response,” he said.
Separately, Dublin Chamber chief executive Mary Rose Burke said on Tuesday that while the State must take steps to remain attractive to international investors, more should be done to bolster Irish companies.
Appearing before an Oireachtas committee on budgetary spending, Ms Burke said the Government should show it is serious about competing with the UK, whose tax regime for entrepreneurs has greatly improved in recent years.
“FDI is vital to the Irish economy, but as the global environment changes so our business model must adapt, remaining attractive to international investors while also avoiding excessive reliance on a small number of highly mobile firms.”
Dublin Chamber has called for the raising of the lifetime cap on qualifying gain for CGT to be raised from €1 million to €15 million to send a “strong signal” that Ireland intends to compete with the UK ahead of Brexit.
“It is time for a step change in terms of what the Government is doing to encourage and support indigenous enterprise and entrepreneurs. Irish entrepreneurs have had to look on enviously over the past decade as the UK has rolled out the red carpet for burgeoning business, with consistent tweaks and improvements to their tax regime,” Ms Burke said.