Luxembourg’s commitment as a start-up nation stands firm, also during the coronavirus pandemic. A number of initiatives are being launched to help start-ups continue their activity and use their innovation capacities to help alleviate and overcome the health and economic crisis. The start-up ecosystem in Luxembourg has expanded rapidly over the past years, and now includes some 350 dynamic young companies in various sectors. Many of them are impacted by the economic slow-down fostered by the measures taken to limit the propagation of the coronavirus. Making sure that the start-up community remains in good shape has become a national priority. “The government is well aware of how the current situation impacts start-ups,” ensures Frédéric Becker, Advisor for financial technology at the Ministry of the Economy. “We have had a massive number of contacts with entrepreneurs over the last three weeks. Measures to support them are already in place, and additional ones are being developed as we speak.”
Start-ups can benefit from a range of measures included in the economic stabilization program launched by the Luxembourg government on 25 March and considerably expanded since. They include, among many others, non-repayable emergency grants to micro companies and the self-employed, state guarantees for bank loans, the deferment of tax-related payments and social security contributions, and short-term employment support where the state covers 80% of salary costs for staff in companies whose activity has been temporarily interrupted by law. Mr Becker also draws attention to the capital grant advance of up to €500,000 that is available for all companies, including early-stage start-ups, to help them cover operational costs. “The advance requires no guarantees and offers a flexible reimbursement model,” he underlines.
As the country relies heavily on cross-border workers, agreements have been made with the Belgian, French and German authorities to temporarily wave the maximum number of days cross-border commuters can work remotely without being taxed in their country of origin. Visas and residence permits of third-country nationals (i.e. non-EU citizens) that are reaching their expiration date remain valid during the crisis.
The government is not alone in having reacted to the crisis. Several banks offer reimbursement moratoria for existing loans, for example, and incubators such as Technoport and the House of Startups have waived a month of rent to help their tenants.