Ministry acknowledges need to improve startup visa scheme

Ministry acknowledges need to improve startup visa scheme

Deputy Minister of Research Nicodemos Damianou recently addressed two investment incentives launched at the Deputy Ministry of Research, Innovation and Digital Policy, acknowledging that there is room for improvement.

These initiatives include a tax exemption for innovative businesses and a startup visa scheme, amidst ambitions to attract investment and nurture the startup ecosystem.

The first of these initiatives, the innovation certificate, offers a 50 per cent tax exemption for investments in innovative businesses. A total of 38 certificates were granted to qualifying applicants last year.

The second incentive, the Cyprus startup visa scheme, is tailored to foster innovative startups. In 2023, 51 applications were submitted, but only four were approved.

While Damianou acknowledged the relatively low application numbers, he stressed the need to continually develop these tools to attract investment, particularly in high-growth potential sectors like technology.

“Startups are a multidimensional issue involving policy measures and strategic planning,” he said, emphasising the ambition to develop the Cyprus startup scene in an “evolutionary” manner that would transition it from a “growing stage to a more mature one”.

Damianou further connected attracting investment to the development of the startup sector, pointing out that Cyprus aspires to become a hub for technology and innovation through well-directed government policies. The startup plan is projected to run until May 2024, with a potential capacity to approve up to 150 applications.

Stelios Chimonas, the general manager of the Deputy Ministry of Innovation and Digital Policy, highlighted the significance of research and innovation strategies that encourage the next generation of scientists to remain in Cyprus. He stressed the necessity of linking research centres with the market to retain talent.

On the topic of the Horizon Europe programme, Chimonas revealed that Cyprus has already utilized €210 million from a €500 million allocation. The programme is about halfway through, with a funding drawdown rate of 3.96 per cent from 2021.

He also pointed out that the Horizon 2020 target had been raised from €320 million, noting that Cyprus had recently secured its first ERC Advanced Grant in 11 years, which, according to Chimonas, is “proof of global scientific excellence.

In terms of institutional funding, the Deputy Minister highlighted that research institution funding is expected to rise from €17.5m last year to €25m in 2024.

The Research and Innovation Foundation (RIF) receives an additional €21m annually to back competitive funding calls and ecosystem services in Cyprus. From March 2023 to March this year, €64m in funding opportunities were introduced.

Moreover, the RIF secured an additional €10m via the RepowerEU initiative to bolster the energy sector and promote a green transition.

Despite facing staffing challenges, the ministry has laid out plans to face this by revamping the IT Department and hiring more personnel, including management positions by mid-2024.

Despite these hurdles, the ministry is set to proceed with major projects, including the government cloud architecture, alongside a change in the ministry’s structure. cyprus-mail

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