Special Feature – Waiting for State-Managed Investment Funds
Already the main source of support for local start-ups, the government must do more and, above all, do it differently, experts suggest
Macau Business | June 2022 | Special report | Start-up in Macau
Calvin Chui, among the Macau lawyers with the most experience serving young entrepreneurs, believes that “the Macau government has supported young innovators and entrepreneurs and urged young people in Macau to explore new career choices and opportunities. outside the traditional career path, thus to think outside the box and thus diversify and revitalize the economic development of Macau.
Mr. Chui, a partner at Letkou law firm, said: “The government has already launched several financial support measures for local entrepreneurs, both young and experienced, to ease the pressure of financing at the start of setting up a business. ”
Emanuel Soares, another (young) lawyer very active in the local start-up ecosystem, believes that more needs to be done. When Macau Business asked him about the main structural problems facing local start-ups, the MdME trainee lawyer put in the first place.
Mr. Soares expands on this: “The fundamental need that all start-ups need to grow and ultimately succeed is access to sufficient funding and strategic partners. This could be done through the private sector or through government support and incentives.
“While several of these types of incentives already exist, it has not been enough to attract and retain large-scale projects with potential for expansion. At this stage of ecosystem development, we would benefit from going further, for example by creating state-run investment funds that invest significantly in the projects of young entrepreneurs.
The MdME lawyer points to “success stories of how these types of funds stimulate the innovation sector” that “can be found in many cities in mainland China, Hong Kong SAR, Singapore and overseas. A good example is the 200 million Matching Fund established by the Portuguese government, which is a national public fund set up to strategically co-invest with private investors in Portuguese start-ups.
Local entrepreneur Marco Duarte Rizzolio agrees that “the government plays a crucial role in developing a start-up ecosystem”, citing as an example that entrepreneurship development is part of Macau’s five-year development plan as defined by the Chinese central government and is under the direction of the Macau Bureau of Economy and Finance.
However, he points out that “the various departments of the Macau government – such as the MGTO [Tourist Office]IPIM [Trade and Investment Promotion Institute]Macau Forum, Marine & Water Bureau, DICJ [Gaming Inspection and Coordination Bureau] and others – will need to strengthen their collaboration in order to guarantee the development of an entrepreneurial ecosystem.
For Mr. Rizzolio, “this is the main challenge: how to develop entrepreneurship when there is a lack of cross-collaboration between government departments; how to break down existing silos and barriers and enable innovation and new sustainable enterprises with the right policies. Many economic sectors have legal constraints limiting the operation of new businesses, (i.e.
The majority of funding in Macau is public. The Fund for Science and Technology (FDCT), the largest for science and technology projects involving innovation, supports start-ups and university doctoral students whose projects use the Internet of Things (with amounts ranging from 500,000 MOP to 2,000,000 MOP).
Since more than a month, Macau Business tried several times to contact the FDCT to try to find out how many projects had been supported over the last decade and with what amounts, but without results.
The Cultural Industries Fund also supports business and association projects.
Another important source of support is the Macau Bureau of Economy and Finance, which promotes the development of SMEs, alleviating their difficulties through several aid schemes that offer interest-free financial assistance (read more about the program help for young entrepreneurs at the end of this article).
“Funding in Macao is much more oriented towards associations than towards companies. Funding mechanisms must therefore also include companies, rather than being limited to associations”, insists Marco D. Rizzolio.
At the end of the previous government, the then chief executive announced his intention to create an investment and development fund, but nothing else has been heard about it since.
Young Entrepreneur Support Program
“The Macao SAR Government has always attached great importance to supporting development and opportunities for local youth. As an office dedicated to promoting youth entrepreneurship, the Macau Economic and Technological Development Bureau (DSEDT) helps local youth explore new options beyond traditional career trends and achieve their entrepreneurial aspirations” , said the DSEDT. Macau Business.
To this end, the Young Entrepreneur Support Program was introduced in 2013, “to provide interest-free assistance to youth in Macau with entrepreneurial aspirations but lacking in resources, to help them ease financial pressure at the start of their their entrepreneurship. Meanwhile, the implementation of the program is giving new impetus to Macau’s economic development.
As of March 31, 2022, a total of 2,507 applications have been received and 1,879 cases have been approved for a total approved funding amount of approximately MOP 408 million. The average age of young entrepreneurs applying for the program is 30 years old. The activities of the beneficiary companies are mainly concentrated in retail trade (45.3%), food and beverages (12.5%) and B2B services (10.2%).
The DSEDT further explains that the program also covers emerging industries supported by the Macau government, including cultural and creative industries, e-commerce and Chinese medicine. “In addition, the implementation of the program has also had a positive effect on the local labor market, creating more than 5,000 job opportunities.”
Under this program, young local entrepreneurs (aged 21 to 44) and limited companies with more than 50% of their capital provided by young local entrepreneurs can apply for interest-free loans of up to 300 000 MOP, with a maximum repayment period of up to eight years.
The aid is intended for the following purpose(s): purchase of equipment necessary for the operation of the commercial enterprise; decoration work carried out in the commercial premises of the commercial enterprise; enter into commercial concession agreements or franchise agreements; acquisition of exclusive rights to use technology or intellectual property rights; conduct advertising and promotional campaigns; and working capital of the business enterprise.
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