Eligibility criteria for national R&D and innovation funding

Principles of the financial aids

The financial aids offered by the Ministry of the Economy are based on the following principles:

Subsidies to encourage companies to carry out R&D and innovation activities in Luxembourg
“Bottom-up” principle: all thematic areas are eligible – any project that meets the admission criteria can benefit from co-financing. Thematic “top-down” calls for projects are also regularly launched
The innovation fund budget is adapted to the needs of the projects (instead of distributing a budget to the best projects)

Luxinnovation provides support services to help companies meet the admission criteria.

Eligibility

Please note that companies considered as “undertakings in difficulty” are ineligible. Companies are considered as being in difficulty in the following situations:

For all companies (excluding SME < 3 years of existence): more than half of subscribed share capital (share premium included) has been lost as a result of accumulated losses
Large enterprises, if within the last 2 years:
o Book debt to equity ratio > 7.5
o EBITDA interest coverage ratio < 1.0
If restructuring (following a rescue or restructuring aid), subject to collective insolvency proceedings or an outstanding recovery order of a State aid.

Main criteria to benefit from financial aid

Co-financing capacity: Equity / capital increase, bank loans, free cash flow

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Economic impact: Substance, exploitation of assets resulting from the project activities

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Innovation: Competitive advantage on the market, new or improved product, process, service, new marketing method/ New organisational method

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Generic criteria: Incentive effect, undertaking not in difficulty, SME analysis

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Scheme-specific criteria: Technological challenges (industrial research and experimental development), risk of failure (process and organisation innovation), scoping of R&D activities (feasibility studies)

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Examples of eligible costs for project-driven aid schemes

Personnel costs directly related to the R&D and innovation project
Gross salary (on a 12-month basis excluding premiums and benefits) directly related to the R&D and innovation project on the basis of 173 working hours per month
Utilisation costs (depreciation over the project’s duration)
For instruments, equipment, machines, tooling, installations, land and buildings used to the extent and for the duration of the R&D and innovation project
Material costs et other consumables directly related to the R&D and innovation project
Operating costs (materials, energy, transport, supplies and similar products)
Special costs directly related to the R&D and innovation project
Technical know-how, user licenses for software & patents, consulting services used for the R&D and innovation activity, contribution paid to a research organisation, etc.
General costs (25% of personnel costs)
Total of costs which cannot be directly allocated to the project (management costs, secretariat, travel costs, energy supply costs)

Typically non eligible costs for project-driven aid schemes

The operational activities related to the “daily business”
Fees and expenses for commercialisation of the R&D and innovation project results, e.g. marketing costs
Managements costs (CEO, CAO, accounting, etc.), leave time and transport costs cannot be allocated to the project. They are taken into account as a lump sum.
Bank interests related to the financing of the project

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