Policy Incentives for Diaspora Angel Investing: Matching Funds, Tax Relief, and Co-Investment that Actually Travel

This chapter examines how public policy can support diaspora angel investing without crowding out private judgment or mistaking symbolic outreach for market development. The focus is on mature instruments rather than speculative proposals. Synthesizing research on business angel policy, diaspora engagement, co-investment funds, and tax incentives, the chapter explains why public intervention is often justified in thin and cross-border early-stage markets and why many incentive schemes disappoint in practice. It shows that matching funds and co-investment vehicles can strengthen the financing chain by leveraging private selection and preserving commercial discipline. It also shows that tax relief can improve downside sharing, but only when rules are simple, credible, and aligned with actual investor behavior. The final section argues for a policy portfolio approach that combines capital instruments with data, regulation, standardized intermediation, and corridor-level infrastructure. The chapter offers a pragmatic guide to policies that help diaspora angel capital scale responsibly rather than rhetorically.