Citizens can invest to help businesses survive crisis
Government announces new measures to support local companies with €500 million welfare fund that offers individual investors tax breaks
The government wants to convince individuals to invest in businesses that require extra capital to survive the crisis. Via PMV, the government’s investment vehicle, €240 million has already been paid into the fund. Private individuals who invest in the fund will be given a 2.5% tax break spread over three years up to a maximum of €1,000. A reduction in inheritance tax will be given on money from an inheritance that is invested in the fund.
“We are taking a very clear first step towards economic recovery here,” said Flemish finance minister Matthias Diependaele. “We are giving the signal that we are stepping out of crisis measures and laying the foundation to continue building the Flemish economy.”
Another new way to invest as an individual in an SME, a cooperative or a citizens’ initiative is through “win-win” shares. People can invest up to €75,000 and receive a tax benefit of 2.5% per year for five years. Companies can acquire a maximum of €300,000 in capital via this method.
“Today, tens of billions of euros are parked in savings accounts. With today’s low interest rates, this hardly yields any return,” said employment minister Hilde Crevits. “At the same time, we see that companies – certainly with corona – are desperate for long-term financing in order to implement a well-thought-out and sustainable restart.”
It's all hands on deck for the recovery of our economy. Many additional steps will be required
While there are no concrete conditions regarding sustainability or social responsibility, companies must fulfil certain ethical criteria to benefit from the fund. The government is looking to support start-ups, as well as innovative companies and Flemish branches of international companies that want to become independent.
Flemish chamber of commerce Voka is satisfied with the prospect of additional capital. “We are pleased that the Flemish government is responding to our request for additional solvency measures for companies and that it also provides the necessary funds for support. These are absolutely necessary,” a spokesperson told VRT.
“Our most recent survey of 700 member companies shows that this crisis will last for a long time and there is no light at the end of the tunnel. For example, companies still expect to generate almost a fifth less turnover in 2021. It's therefore all hands on deck for the recovery of our economy. Many additional steps will be required.”
More information about the investment opportunities will be released soon with details on how to invest.
Photo: Getty Images/Pyhnart Studio