Table 2. Institutional dimension:... | Emerald Publishing

Table 2.

Institutional dimension: regulations – taxes

The UK	The USA	Brazil	India	China	South Korea	Japan
Employee stock options and corporate tax: The UK government is reviewing employee stock options to promote company growth and stock market listings. Firms with certain taxable profits will not face an increase in corporate tax. Starting in 2023, investments in IT infrastructure are eligible for a 130% tax deduction. In addition, there are tax reliefs for capital gains, and a review of R&D tax credits is underway to possibly include deductions for data and cloud services, aimed at supporting digital sector scale-ups	Geographic concentration and taxation: The USA sees a concentration of Knowledge and Technology Intensive (KTI) production in 15 states, which generate over three-quarters of the total KTI value. States attract scale-ups with low taxes and living costs. Effective competition law, favorable tax legislation, and access to skilled labor are identified as crucial elements for supporting scale-ups. Small business support through procurement laws: Since the late 1980s, USA federal agencies have been required by law to procure at least 23% of their goods and services from small domestic businesses	In Brazil, new firms with an annual turnover of less than 0.83 m US dollars can benefit from lower tax rates. This incentive has prompted businesses to avoid scaling up to surpass the critical turnover threshold. In Brazil, the emphasis is more on regulatory changes for start-ups rather than scale-ups. Notably, relief measures have been introduced to facilitate the start-up of small businesses	In India, companies with outstanding payments owed to ‘micro and small’ manufacturing vendors will face higher taxes in the assessment year 2024–25. SMEs in India face significant challenges in achieving tax compliance. Frequent updates and intricate rules make it challenging for SMEs to stay informed. Many lack specialized tax professionals and depend on general accountants for guidance	Tax and regulatory support: China has introduced improved tax policies and financing options to support entrepreneurship and innovation. There is also a focus on better intellectual property rights protection and support for “green development.” In 2021, China granted approximately $0.05 tr in tax and fee reductions to the manufacturing industry and raised the threshold for taxing SMEs	The country offers a variety of tax incentives and exemptions to promote entrepreneurship and attract talents, including guarantees for potential growth firms facing losses	Tax breaks and reforms for scale-ups: Japan offers tax breaks for small businesses involved in R&D and innovative technology, particularly those with less than $0.75 m in capital. Special venture capital funds and financiers can also receive tax benefits. Reforms like the Company-based New Business Exemption Regulatory Reform support individuals in scaling up businesses, and business angels receive favorable tax breaks for investing in and selling scale-ups

The UK	The USA	Brazil	India	China	South Korea	Japan
Employee stock options and corporate tax: The UK government is reviewing employee stock options to promote company growth and stock market listings. Firms with certain taxable profits will not face an increase in corporate tax. Starting in 2023, investments in IT infrastructure are eligible for a 130% tax deduction. In addition, there are tax reliefs for capital gains, and a review of R&D tax credits is underway to possibly include deductions for data and cloud services, aimed at supporting digital sector scale-ups	Geographic concentration and taxation: The USA sees a concentration of Knowledge and Technology Intensive (KTI) production in 15 states, which generate over three-quarters of the total KTI value. States attract scale-ups with low taxes and living costs. Effective competition law, favorable tax legislation, and access to skilled labor are identified as crucial elements for supporting scale-ups. Small business support through procurement laws: Since the late 1980s, USA federal agencies have been required by law to procure at least 23% of their goods and services from small domestic businesses	In Brazil, new firms with an annual turnover of less than 0.83 m US dollars can benefit from lower tax rates. This incentive has prompted businesses to avoid scaling up to surpass the critical turnover threshold. In Brazil, the emphasis is more on regulatory changes for start-ups rather than scale-ups. Notably, relief measures have been introduced to facilitate the start-up of small businesses	In India, companies with outstanding payments owed to ‘micro and small’ manufacturing vendors will face higher taxes in the assessment year 2024–25. SMEs in India face significant challenges in achieving tax compliance. Frequent updates and intricate rules make it challenging for SMEs to stay informed. Many lack specialized tax professionals and depend on general accountants for guidance	Tax and regulatory support: China has introduced improved tax policies and financing options to support entrepreneurship and innovation. There is also a focus on better intellectual property rights protection and support for “green development.” In 2021, China granted approximately $0.05 tr in tax and fee reductions to the manufacturing industry and raised the threshold for taxing SMEs	The country offers a variety of tax incentives and exemptions to promote entrepreneurship and attract talents, including guarantees for potential growth firms facing losses	Tax breaks and reforms for scale-ups: Japan offers tax breaks for small businesses involved in R&D and innovative technology, particularly those with less than $0.75 m in capital. Special venture capital funds and financiers can also receive tax benefits. Reforms like the Company-based New Business Exemption Regulatory Reform support individuals in scaling up businesses, and business angels receive favorable tax breaks for investing in and selling scale-ups

Source(s): Author’s own work