While there exist several private initiatives to encourage entrepreneurship in Belgium, including Telenet Idealabs and Startit@KBC, the Federal Government now seeks to support the burgeoning startup scene with tax incentives.
In a recent debate, Amid Faljaoui, Director of Trends-Tendances magazine, described the entrepreneurial ecosystem as a sort of mad house. On the ground floor is the ‘crazy’ entrepreneur with her or his business idea, on the first floor are the ‘crazy’ venture capitalists who provide seed funding, and on the second floor are the ‘crazy’ investors who purchase shares in the company. It’s the top two floors of the mad house – the financing of startups – which the government wants to stimulate. In the program law, the government has proposed introducing a tax reduction for equity investments in startup companies and a tax exemption for loans made through regulated crowdfunding platforms.
(Perhaps illustrative of the funding problem, Belgian technology firms raised only €22.6 million in the past six months, according to Tech.eu Radar, far from the billions raised by companies in the Netherlands, the United Kingdom and Germany.)
The new draft program law also provides a partial payroll tax exemption for startups to decrease their labor costs. These are welcome changes, but for entrepreneurship to truly blossom, Belgium also requires a culture shift, a change of mentality.
One of Silicon Valley’s greatest secrets is that risk – and failure – is an accepted step towards success. The mantra in the US is “Fail fast, fail often, fail cheaply,” as Faljaoui said in that same debate. This is not true for Belgium, where the stigma of failure can haunt entrepreneurs. The country needs to not only provide financial support for startups, but also to encourage the spirit of enterprise and risk-taking.
A startup-friendly environment in Belgium will spur innovation, economic growth and job creation. While the government’s proposed investment incentives should help unblock some financing for startups, Belgium must ensure that the entrepreneurial ideas of today can be translated into the jobs and growth of tomorrow.