“The aim is to provide more support for start-ups and the innovation ecosystem. The idea is not necessarily to say that today we have 650 and in three years we want 1,000, but rather to keep the start-ups that are there and of course to welcome new ones under good conditions", explained the minister for the economy, SMEs, energy and tourism, (DP), on Monday 24 March.

Together with finance minister (CSV), they presented a ten-point joint action plan for the development of start-ups, scale-ups and the innovation ecosystem. "We have public research centres that work very well, but often don't communicate with companies, so we are encouraging the development of spin-offs. This is a Luxembourg issue, but also a European one, because we see a lot of start-ups or scale-ups that, once they reach a certain level, leave Europe and go to the United States or Asia to develop. So we need these innovations for Luxembourg," continued Delles.

Encouraging investment in start-ups

According to the minister for the economy, these start-ups are leaving due to a lack of access to finance, or talent. The target sectors are strategic sectors such as cybersecurity, deeptech, sustainable development (cleantech, greentech), fintech, healthtech and the space sector. The measures identified in the action plan presented on Monday are structured around three areas: support for the creation of start-ups; support for scale-ups; and the overall development of the ecosystem.

"To encourage the emergence of young innovative companies by encouraging private investment, a bill for a tax credit for investment in a young innovative company by individual taxpayers will be introduced, while new financial aid will be introduced from May 2025 to facilitate the creation and funding of spin-offs", added Roth. This aid, up to an investment of €200,000, will correspond to public co-financing of up to 80% while the remaining 20% will have to be private funding.

Another financial lever, the ministers took advantage of the press conference to announce that the National Credit and Investment Institution (SNCI) will devote an additional €300m over a five-year period to financing start-ups and innovation in Luxembourg, over and above the Luxembourg Future Fund 2. "In practice, the SNCI will offer various instruments/combinations of instruments to facilitate access to finance for young innovative Luxembourg companies, such as loans, subordinated loans, direct aid, capital investments, all the tools available to the SNCI", explained the finance minister. The €300m will be added in particular to the €280m deployed by the SNCI under the Luxembourg Future Fund 1 and 2.

A national talent desk

In addition to the specific tax regime for highly qualified workers already in place, "it will be proposed to introduce a tax-friendly regime for stock option plans granted to employees of start-ups", explained Roth. Delles added, "To encourage innovation and growth in scale-ups and start-ups, access to skilled talent is crucial. And, although Luxembourg is training more and more professionals, it must also attract international talent to meet the needs of the labour market.

This is why a national 'talent desk' concept will be developed by the ministry of the economy, in close collaboration with Luxinnovation, the Chamber of Commerce and the Chamber of Trades. This 'talent desk' should serve as a central point of contact to support and guide foreign talent wishing to join companies in Luxembourg, thereby facilitating their integration into the local economy. This measure will also form an integral part of the efforts to attract, retain and develop talent that are being coordinated by the ministry of economic affairs."

This article was originally published in .