The Government is planning to assist the development of start-ups with HUF 140bn of EU resources, of which the larger part, some HUF 110bn, will be provided in the form of financial instruments, Minister of State Zoltán Cséfalvay said at a professional conference in Budapest.

Speaking at the conference with the title Venture Capital Summit, Zoltán Cséfalvay stressed that in Hungary the share of venture capital investment is high: the country is the first within Europe if this amount is calculated as percentage of GDP, and we are among the global top ten.

He emphasised that due to the Jeremie Programmes venture capital investment has been increasing since 2010, and the amount held in such funds already totals HUF 130bn, but the two-thirds of this has not been hitherto invested.

As Zoltán Cséfalvay pointed out the Government intends to turn Hungary into the start-up centre of Central and Eastern Europe by 2020.

The Minister of State said that to this end the Government will introduce tax incentives for start-ups, innovative small enterprises as well as investors.

He reiterated that in the 2014-2020 EU fiscal period 60 percent of funding will be disbursed for economic development, while the Government intends to spend HUF 800bn on traditional R&D activities.

He emphasised that 10 percent of funding will be made avaialable through financial instruments. This figure, he added, is the largest in the region. The Government aims to allocate altogether some HUF 200bn for R&D&I.

On the other hand, the Government does not want to assume the role which markets are playing in start-up financing, but it aims to underpin the organic development of these enterprises, Zoltán Cséfalvay said.

The Minister of State pointed out that venture capital firms should change their “banker mentality” and rather adopt a technological investor attitude. In addition to that, he continued, budding enterprises would also badly need mentoring, support and efficient coaching, while the transparency of start-ups should also be improved.

(Ministry for National Economy)