Taiwan offers helping hand to startups affected by coronavirus
Amid lockdowns, falling global demand, and investor caution, the island of Taiwan is offering more support options to struggling local startups.
From April 6, the National Development Council (NDC) will begin accepting applications from Taiwanese startups that have been seriously affected by COVID-19 to be part of a special investment scheme.
Under the investment scheme, the NDC will offer six to twelve months of funding in exchange for preferred stock.
Applicants must explain why they qualify as a "startup", how they are affected, how funds will be used if awarded, and provide their stock issuance conditions, price, conversion, and redemption methods.
They will have six months to submit applications.
A spokesperson for the NDC told ZDNet that it does not have a formal definition of what a startup is.
Startups affected by the coronavirus pandemic could be in the travel, transportation, manufacturing, services sectors, among others, he said. The short-term scheme has no limitation on industries -- applicants just cannot be "traditional" businesses.
The spokesperson added that there will be no cap on the number of applicants or available funds for this scheme.
Taiwan has also announced a wide range of support options available to businesses of all sizes.
Chun-Hao Yueh, manager of Taiwan's government-sponsored Industrial Technology Research Institute's Industry, Science and Technology International Strategy Center, told ZDNet the various relief packages are meant to help individuals, families, and businesses overcome difficulties together.
Besides providing favourable interest rates and subsidies, raising credit guarantees, extending old loans, reducing utility burdens, and substantive assistance, they are also assisting mid-to-longterm industrial transformations and business development such as R&D (research and development), Yueh said.
Despite COVID-19 sweeping the planet, Taiwan's government has also continued to take advantage of the US-China trade conflict by encouraging more Taiwanese companies to invest back home by providing them with preferential policies, Pan Chien-Kuang, an analyst at government think tank and IT research institute Market Intelligence & Consulting Institute told ZDNet.
Alex Wen, industry liaison manager at National Taiwan University, told ZDNet that smaller firms and startups have had the most difficulty during the COVID-19 pandemic due to their limited financial resources. This is because most government support for COVID-19 has mainly prioritised large companies, with small firms previously not necessarily getting much assistance, he added.
The new NDC investment scheme will be helpful, he said.