The July Stimulus Package – Did Santa come early or is this still the Summer of discontent for Start-ups?

Linda Kelleher Thursday 30 July 2020

By Susan Moore and Marie Jennings
30 July, 2020

On 23 July 2020, the Irish government announced its July Stimulus package (the “Stimulus”) to assist Ireland to get back on the road to economic recovery by introducing a wide range of supports for Irish businesses and consumers alike. The Stimulus introduces and expands on a number of fiscal measures for start-ups.

Supports available to start-ups

Seed and Venture Capital Scheme 2019-2024

As part of the government’s commitment to innovation driven enterprises, the government has increased this scheme by €10 million and a leveraging a combined additional pool of €55 million. The intention of this scheme is to increase the availability of risk capital for start-ups so that economic growth is supported through the continued development of the Irish Seed and Venture Capital industry. This scheme endeavours to provide support to growth strategies of Enterprise Ireland’s sectors with capital and expertise as well as encouraging private sector investment into areas (and stages of development) that find it difficult to secure appropriate funding.

Enterprise Ireland is seeking Expressions of Interest from Fund Managers with innovative investment strategies that can show;

• An innovative fund strategy for early-stage investing;
• An ability to secure additional private sector/industrial capital;
• A strong track-record of working with high growth companies emerging from third level research-orientated institutions.

See more information here.

Online Trading Voucher Scheme

The Online Trading Voucher, granted through Enterprise Ireland, offers financial assistance of up to €2,500 coupled with training and advice to help businesses to trade online. The government has expanded this scheme by €20 million under the Package. This Scheme is available to small businesses which have:

• limited or no e-commerce presence;
• up to 10 employees;
• a turnover of less than 2 million;
• the applicant business must be trading for at least 6 months; and
• the applicant business must be located in the area covered by the LEO to whom they wish to make their application.

See more information here.

Green Enterprise Fund

A new €10 million Green Enterprise Fund aiming to support enterprises engaging in green research, development and innovation, capital investment and capacity building. In order to avail of the Fund, all businesses applying for the fund must demonstrate that they have not been in receipt of more than €200,000 in state aid in the last three years including any funding applied for as part of this Fund.

The EPA are accepting proposals in the following thematic areas:

• Construction & demolition;
• Food;
• Plastics; and
• Resources and raw materials including electrical and electronic equipment, textiles and furniture.

See more information here.

The Employment Wage Support Scheme

The Temporary Wage Subsidy Scheme (the “TWSS”) will be replaced by the Employment Wage Support Scheme (the “EWSS”).The EWSS expands upon the TWSS and now includes seasonal staff, new employees and new firms operating in affected sectors. In order to qualify for the Scheme, the employer must demonstrate that they are operating with a 30% or more decline in turnover. Qualifying employers will receive a subsidy of €203 per week, per employee.  

JobsPlus Scheme

JobPlus is an employer incentive which encourages and financially rewards employers who employ someone under the age of 30 who is on the live register or in receipt of the pandemic unemployment payment. This scheme provides for subsidies of up to €7,500 over a two year period.

The main eligibility criteria are:

• the job must be full-time employment of over 30 hours per week, at least four days per week;
• employers must be compliant with Irish tax and employment laws; and
• eligible jobs must not displace any other employee.

See more information here.

Waivers

The government also announced that, with limited exceptions, all businesses will be granted a waiver of commercial rates for the six months to end-September 2020.

The Government is also due to pass legislation making provision of the warehousing of tax liabilities, the interest rate applying to agreed repayments of all tax debt, where an agreement has been reached prior to 30 September 2020, will be reduced to 3%.

Future Developments

It is worth noting that the government is set to introduce a package of liquidity and enterprise investment measures worth €55 million to support small and micro companies through additional resources for MicroFinance Ireland and the Local Enterprise Office including lower interest rates and grants equivalent to 0% interest on the first year of SBCI and MFI loans. 

Conclusion

The Stimulus introduced and expanded many fiscal supports to assist Irish start-ups to combat the economic effects of Covid-19.

See overview of the July Stimulus Package here.

For more information about the content of this insight contact:
Susan Moore, Solicitor | E: susan.moore@rdj.ie | T: +353 21 2332834