Ministry of the Economy and Innovation has defined start-up concept by law

Date

2019 04 10

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The Government approved amendments proposed by the Ministry of the Economy and Innovation in the Law on the Development of Small and Medium-Sized Enterprises, which define a long-used start-up term which has not been included in the legislation so far. It is determined that start-up shall mean a very small or small enterprise that has a big potential of business development based on innovations that has been operating for less than 5 years.

‘Lithuania has not defined a start-up yet. Although this business model is quite well understood by society, especially business and scientific communities and politicians, the absence of concept in the legal acts was preventing the creation of more favourable business environment for starts-up that is often based on different solutions than those of most traditional enterprises. The statutory definition of start-up will allow to continue strengthening the ecosystem of starts-up, which is one of the underlying areas in our domestic economy’, says Virginijus Sinkevičius, Minister of the Economy and Innovation.

520 start-ups were registered in the database of public body Enterprise Lithuania at the end of 2018. The growing number of start-ups has reached 58 percent recently. Last year, the Lithuanian start-up community achieved the record results and attracted EUR 183 million of investments from foreign and Lithuanian investment funds. The Ministry of the Economy and Innovation has a goal to increase the number of starts-up in Lithuania to 1000 before 2020.

‘The Ministry of the Economy and Innovation distributed  EUR 11 million of the European Union’s investments last year so that they could be used by start-ups. The venture capital funds received EUR 30 million. The appearance of the Acceleration Fund was an especially important step for the ecosystem. It will grant more opportunities to receive financing for start-ups in initial stages. The definition of start-up will help offer more solutions on how to improve business environment,” – said Minister Sinkevičius.

The Ministry of the Economy and Innovation has already submitted proposals for more flexible taxation of options and is going to create ‘Start-up Employee Visa’ procedures with other institutions to help attract foreign talents, preserve and integrate them in Lithuania and to simplify arrival procedures to Lithuania (Start-up Visa). It is also planned to increase help from public body Enterprise Lithuania to start-up creators and in cases when foreign start-ups move to Lithuania.

In addition, the EU investment tool  ‘FinTech Lt’ worth almost EUR 2 million is expected to be introduced this year. With the provision of specialised innovation advisory and support services this tool should help establish 20 new start-ups operating in the area of financial technologies before 2020.