Promised venture capital still in the air

Karl Schembri

The Lm900,000 venture capital fund promised in the last budget six months ago to small enterprises and industry has not been set up yet, The Malta Financial and Business Times has learnt.
Prime Minister Lawrence Gonzi had promised that government would invest Lm900,000 in a venture capital fund over three years through which investors would be given tax credit on capital invested and partial exemptions on capital gains tax.
But this has not materialised so far despite the prime minister’s pledge to push this initiative aggressively. In fact, the Investments Ministry is still thinking about setting up a company to manage the venture capital fund independently of Malta Enterprise.

“A complete overhaul of Venture Capital is being carried out by the Ministry that is being provided advice by the MFSA,” a ministry spokesman told The Malta Financial and Business Times. “A fund is being set up which may involve setting up of a company to manage these funds independently of Malta Enterprise. This is in line with what was announced in the 2005 budget. This involves changes in various regulations which are currently in drafting stage.”
In the budget speech Gonzi had said that he wanted to open access to risk capital “to those who have good ideas”, and that Malta’s economy would not grow as long as entrepreneurs will be bound with guaranteeing their bank loans with property.
He had said that government would be pushing this initiative aggressively because he believed it was “crucial to have a new source of financing for our enterprises”.

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