In recent months, Digital Serbia Initiative, together with over 30 representatives of the public and private sector within the Government Working Group, has been working on the preparation of the Startup Ecosystem Development Strategy for the period from 2021 to 2025. One of the key measures envisaged by the draft Strategy is the recognition of the role and importance of startups for the development of innovations in the Republic of Serbia.
In accordance with this measure, we have proposed to the Ministry of Education, Science and Technological Development, responsible for innovation activities of the Republic of Serbia, a proposal for appropriate amendments to the Innovation Activities Bill.
Key novelties that are proposed in the Policy paper are to (i) introduce startups and business angels into Serbian law, and to (ii) facilitate startups’ and business angels’ access to government incentives.
We suggests broad definitions of a startup and of a business angel, in line with best practices used in developed startup ecosystems, as follows:
- A startup is a recently established company, or a recently registered sole entrepreneur, which engages in innovation activities and which has a potential for high growth;
- A business angel is an investor in innovation activities that invests financial assets in a startup.
Recognising startups and business angels within the Serbian legal framework will facilitate the introduction of appropriate incentives tailored for them.
With the aim to reduce the administrative burden put on startups and business angels, we propose introducing a method that allows them to submit the documentation proving their eligibility as a startup, or as a business angel, only once. Such documentation should be valid for all subsequent incentive applications.
Project’s proposal is to allow startups and business angels that intend to participate in several incentive programs, which could obligate them to submit the same documents on several occasions, to register just once with the Innovation Activities Fund. When applying for incentives they should be recognised as a startup, or as a business angel, simply on the basis of such registration.
Further suggestions are that the Innovation Activities Bill does not make incentives conditional on the registration with the Innovation Activities Fund. No startup or a business angel should be obligated to register, as registering should be a business decision based on the registration benefits (less administration, more visibility, easier communication between startups and business angels, etc.).
Given the proposed broad definitions of the terms “startup” and “business angel” additional criteria for registration should be established in a bylaw, with the aim to prevent abuses.
As the Public debate on the draft of this Bill has started, we invite all interested parties to join it and point out the opportunities to further improve the text in order to use this opportunity to jointly contribute to Serbia recognizing the importance and role of the startup ecosystem for the economy of knowledge and innovation development.