CONTACT Magazine (Vol.19 No. 3 — September 2019)

Table 1: Comparison of global angel investing incentives
Structure
Value
deductible
Conditions
China Malaysia USA
An investor or investment
firm that picks up a stake in
a tech start-up at the seed or
early stage, and stays invested
for two or more years, can
deduct a portion of their
investment from their taxable
income
The investee company first
applies to the governing body
for angel investments to be
qualified for investment under
the Angel Tax Incentive.
It can then obtain a letter
to present to the accredited
angel investors
The Small Business Stock
Gains Exclusion Act provides
for the capital gains from
investment in select small
business stock to be excluded
from federal tax
70% 100% 100% (up to gains of US$10
million)
1. The new start-up must be
in the tech industry
2. The new start-up must be
located in a specified area
of the country
1. The angel investor may
only file for the tax rebate
two years after the point
of investment
2. The investee company
must be at least 51% locally
owned
3. Investment into a
start-up must be at least
US$1,207.00 and must not
exceed US$120,702.50 per
annum
1. The investment must be
held for a minimum of
five years
2. The investee company
must not have more than
US$50 million in assets
before the investment or
immediately afterwards
3. The business may not be in
certain industries: services,
farming, finance, mining,
extraction, restaurant,
hospitality, real estate
UK (Enterprise Investment
Scheme)
Under this scheme, angel investors
can gain both income
tax and capital gains tax relief
on investments for eligible
shares in small unquoted
companies that qualify under
the scheme
i. 30% (on income tax up to
£1 million)
ii. 100% (on capital gains from
selling)
1. The angel investor must
retain the shares for a
minimum of three years
2. Investors must not have
been previously connected
to the investee company
3. Only ordinary shares
qualify
UK (Seed Enterprise
Investment Scheme)
This scheme, unlike the Enterprise
Investment Scheme,
seeks to incentivise investments
in very small businesses
with growth potential that
are at a very early seed or
start-up stage, have only just
started trading, and may have
little or no revenues and very
few assets
i. 50% (on income tax up to
£100,000)
ii. 50% (on capital gains from
selling)
1. The investee company
must have fewer than 25
employees
2. The investee company
must have fewer than
£200,000 in assets at time
of investment
3. Investee companies can
only receive investment
capital totalling £150,000,
which must be used within
three years
• Business Insights series, which provides B2B training
via live and on-demand webinars
• Promotion of an Angel Investor Programme to
support the entrepreneurship ecosystem. This will
bring MSMEs and investors together, increase the
capability and capacity-building of MSMEs as
competitive companies, and increase employment,
taxable revenue, and even foreign exchange earnings.
To supplement these initiatives, the Chamber would
welcome the government’s support in creating an enabling
environment for their success. This can be done by:
• Improving inter-agency and ministry linkages to
shorten and simplify the business registration process
• Re-establishing the FairShare Programme as an
incentive for entrepreneurs to bid for substantial
projects
• Providing incentives for angel investors. We have
reviewed some international examples (see Table 1).
3. A modern and effective law enforcement system
With an estimated TT$3.876 billion allocated to the
Ministry of National Security for the financial year
2018/2019, it can be said that a significant proportion of
T&T’s GDP is tied up in our protective services and is not
being used for economic development.
A fairly recent IMF Regional Economic Outlook Report
states that Trinidad and Tobago’s GDP growth rate would
increase by 0.3% should our crime rate match the global
average. This is a clear indication that more effective
measures need to be implemented and enforced when
dealing with the country’s high crime rate. To address this
A fairly recent IMF Regional Economic Outlook
Report states that Trinidad and Tobago’s GDP
growth rate would increase by 0.3% should our
crime rate match the global average
concern, the Chamber recommends the following to reduce
the burden on the court system:
• Establish night and petty courts to clear the backlog
in the judicial system. Video conferencing should
be used between the jails and the courts, to reduce
the cost of transporting prisoners and to boost the
efficiency of the judicial system
• Improve the existing system by allowing persons with
minor convictions (possession of small amounts of
marijuana, cursing, etc.), who have completed their
sentences, to have the charges struck off their record
automatically, rather than make them apply to have
the charges struck off
• Remove minor vehicular and traffic offences (tickets
and small accidents) from the existing court docket.
Establish a separate court to deal with these matters
• Implement an improved traffic ticket system that
would allow for payment of fines at District Revenue
Offices, Post Offices and Police Stations, instead of at
the District Court where the offence was committed.
The current labour relations climate remains a challenging
one. We are working with an Industrial Relations Act that
is over 46 years old. This needs to be overhauled urgently
to align with global best practice.
chamber.org.tt
SEPT 2019 23