Investment aid aimed at stimulating business investments in the COVID-19 period

Last update 10.11.2020

The Government is granting, under certain conditions, investment aid to encourage companies in financial difficulty, following a significant drop in turnover, to carry out investments that would have been cancelled or postponed as a result of the economic crisis caused by the COVID-19 pandemic.

Who is concerned

Eligible businesses

This investment aid is for businesses that:

  • hold a business permit (autorisation d’établissement) issued before 18 March 2020; and
  • have suffered a drop in turnover of at least 15 % as a result of the COVID-19 pandemic during April, May and June 2020 compared with the same period of the 2019 financial year, or compared with the average monthly turnover for the 2019 financial year. For businesses created during the 2019 and 2020 financial years, the loss of turnover is calculated on the basis of the monthly average of the undertaking's total turnover since its creation. In order to demonstrate its loss of turnover, the business must submit its monthly value added tax return for the months in question, unless it is not subject to this obligation.

Certain businesses are excluded from the aid scheme, such as:

  • businesses that were in difficulty before 1 January 2020 in accordance with Article 2(18) of Regulation (EU) No 651/2014. A "business in difficulty" refers to any undertaking that fulfils at least one of the following conditions:
    • if it is a limited liability company, a public limited-liability company or a partnership limited by shares, other than an SME that has been in existence for less than 3 years, where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the company's own funds) leads to a negative cumulative amount that exceeds half of the subscribed share capital; or
    • if it is a company where at least some members have unlimited liability for the debt of the company (partnerships or limited partnerships) other than an SME that has been in existence for less than 3 years, where more than half of its own capital as shown in the company accounts has been lost due to accumulated losses; or
    • if the business has been subject to collective insolvency proceedings or fulfils the criteria under Luxembourg law for being placed in collective insolvency proceedings at the request of its creditors; or
    • if the business has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan;
  • businesses in the fishery and aquaculture sector as defined in Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013;
A derogation shall be granted to micro or small enterprises which were already in difficulty on 31 December 2019, provided they :
  • are not subject to collective insolvency proceedings under the national law applicable to them; and
  • have not received aid in one of the following forms:
    • rescue aid in the form of a loan not yet repaid; or
    • rescue aid in the form of a guarantee which has not yet been terminated; or
    • restructuring aid under a restructuring plan that is still ongoing.
These conditions shall be assessed at the time the aid is granted.
  • businesses in the primary production of agricultural products sector;
  • businesses in the processing and marketing of agricultural products sector, if:
    • the amount of the aid is fixed on the basis of the price or quantity of products of this type purchased from primary producers or put on the market by the businesses concerned;
    • the aid is conditional on being partly or fully passed on to primary producers;
  • employers who have been convicted at least twice in the past 4 years for illegal work or employing a non-EU illegal resident;
  • businesses that did not hold a business permit before 18 March 2020.

Eligible projects

Given the goal of increasing productivity and competitiveness in the long term, investment projects may relate to:

  • development projects;
  • process and organisational innovation projects;
  • projects involving energy efficiency or going beyond environmental standards.

A development project consists of:

  • the extension of an existing establishment (e.g. increase in production capacity); or
  • the diversification of production or the shifting of an existing establishment to new or additional products or services; or
  • a fundamental transformation of an existing establishment's entire production process or service provision service.

Particular attention will be paid to circular economy development projects that consist of developing circular products and solutions. The scheme applies to any economic activity that makes a substantial contribution to protecting the environment by fulfilling at least one of the following criteria:

  • a more efficient use of natural resources, including sustainably sourced bio-resources and other raw materials for production, including reducing the use of primary raw materials or increasing the use of secondary raw materials;
  • extending the useful life of products and their re-use, including by increasing the durability, repairability, evolutivity or reusability of the products and by re-using, designing for longevity, alternative use, reconditioning, upgrading, repairing and sharing, and by adopting appropriate services and business models;
  • increasing product recyclability, including the possibility of recycling the individual materials contained in the products, inter alia by dismantling and replacement or limiting the use of products and materials that cannot be recycled, particularly in design and manufacturing activities, and by adopting appropriate services and business models;
  • substantially reducing the quantity of substances of very high concern used and replacing them in materials and products throughout their life cycle, including by replacing them by safe alternatives and ensuring traceability;
  • avoiding the production of waste.

An organisational innovation project consists of implementing a new organisational method in the company's business practices, workplace organisation or external relations.

A process innovation project consists of implementing a new or significantly improved production or distribution method (including significant technical, equipment or software changes).

An energy efficiency project consists of increasing energy efficiencies or reducing energy consumption. For example, measures to avoid over-consumption by adapting energy consumption/production to needs, or the implementation of energy-efficient equipment/technologies (i.e. with a higher energy performance than standard equipment/technologies), or the optimisation and valorisation of energy losses.

A project for going beyond environmental standards consists of implementing measures that go beyond the requirements laid down in national standards, with a view to increasing the level of environmental protection. For example, the installation of an additional flue gas treatment unit that reduces the level of pollutant emissions below the imposed thresholds.

Prerequisites

To qualify for aid:

  • the project may only start after the aid has been granted. Work may not commence, orders may not be placed, and no commitments rendering the investment irreversible may be made before the aid is granted, except in the case of the purchase of land and preparations such as obtaining authorisations and carrying out feasibility studies, so that it has an incentive effect;
    In the case of a repurchase of assets, the commencement of works is the moment the assets which are directly related to the acquired establishment are purchased.
  • the investment (allowable costs, excluding taxes) must amount to at least:

Size of the business

Small businesses and micro-enterprises Medium Large
Minimum allowable costs EUR 20,000 EUR 50,000

EUR 250,000

Allowable costs

Allowable costs differ according to the type of investment aid.

Investment aid for a development project

An investment is deemed allowable if it consists of the acquisition of tangible and/or intangible assets in relation with:

  • the expansion of an existing business;
  • the diversification of the production in an existing establishment towards new or additional products;
  • a fundamental transformation of an existing establishment's entire production process or its way of providing a service.

The following are not eligible for aid:‎

  • the creation of a new business;
  • investments in running costs, including the replacement of machinery and equipment;
  • the acquisition of rolling stock;
  • achieving compliance with current legislation, regulations and administrative provisions.

Investment aid for a process and organisational innovation project

Any investment relating to one of the following projects is allowed:

  • a process innovation, i.e. the implementation of a new or significantly improved production or distribution method;
  • an organisational innovation, i.e. the implementation of a new organisational method for business practices, workplace organisation or the company's external relations.

Allowable costs are:

  • payroll expenses;
  • costs relating to the acquisition of tangible and intangible assets;
  • expenses for contractual research or research services, purchase of knowledge and patents or licences from external sources under conditions of full competition;
  • additional overheads and other operating expenses (in particular the cost of materials, office supplies and similar products) incurred directly as a result of the process and organisational innovation project.

The following are excluded:

  • projects aimed only at acquiring tangible and intangible assets exclusively to ensure the implementation of the process and organisational innovation project;
  • changes based on organisational methods already applied in the business;
  • changes in management strategy, mergers and acquisitions;
  • minor changes or improvements;
  • increases in production or service capabilities through the addition of manufacturing or logistical systems which are very similar to those already in use;
  • ceasing to use a process;
  • the mere replacement or extension of equipment;
  • changes resulting solely from variations in factor prices;
  • bespoke production;
  • adaptation to local markets;
  • seasonal, regular and other cyclical changes;
  • trading in new or substantially improved products.

Investment aid for an energy efficiency project or a project for going beyond environmental standards

An investment is deemed allowable if it consists of the acquisition of tangible and/or intangible assets in relation with:

  • investments in energy efficiency measures, i.e. those that reduce energy consumption; or
  • investments allowing the business to go beyond national standards or to increase the level of environmental protection in the absence of such standards.

The following are not eligible for aid:‎

  • the acquisition of rolling stock;
  • achieving compliance with current legislation, regulations and administrative provisions.

Deadlines

Applications, deemed complete, must be sent to the Ministry of the Economy no later than 1 December 2020.

How to proceed

Filing an application

The business, or its representative agent (e.g. a fiduciary) submits its application using an online assistant available in their business eSpace in MyGuichet.lu. The person submitting the application must have a LuxTrust product (e.g. Token, Smartcard or Signing stick) or an electronic identity card (eID).

Prior to the online aid application on MyGuichet.lu, the business must complete the 2 documents "Description projet" and "Synthèse financière" dedicated to the type of project it plans to carry out (see under the heading "Online Services / Forms". These documents are to be added in the attachments at the end of the process on MyGuichet.lu.

The main steps in the process for applying for aid online using MyGuichet, are:

  1. creation of a business eSpace on MyGuichet.lu or use of an already existing business eSpace;
  2. select the "ECO-COVID 19 - Projet d'investissement ICO" procedure;
  3. complete the form;
  4. add the documents "description projet" and "synthèse financière" and the other supporting documents;
  5. transmission of the form and supporting documents.

How to create a business eSpace on MyGuichet.lu?

Two scenarios are possible:

  • The person submitting the application is a new user on MyGuichet.lu and does not yet have a private eSpace:

The creation of the eSpace is done in 2 steps:

1. Registration of a user;

2. Creation of a business eSpace.

A tutorial in video or PDF format is available to guide you.

  • The person submitting the application is a user of MyGuichet.lu and already has a private eSpace: he or she will have to create a new business eSpace.

A tutorial in video or PDF format is available to guide you.

Supporting documents

Applications for aid must include the following information and documents:

  • the name and size of the company;
  • the annual accounts for the 2019 financial year, including proof of a drop in turnover during April, May and June 2020 compared with the same period in 2019, and proof that this drop is connected with the COVID-19 pandemic;
  • a description of the project;
  • the start and end dates of the project;
  • as appropriate, a detailed description of observance of the criteria for a circular economy and the alternative investment, or of the energy balance sheet of the situation before and after the investment project, or going beyond the environmental standards;
  • the location of the project;
  • a list of the costs of the project;
  • the form and the amount of aid required to carry out the project;
  • a financing plan for the investment project.

The aid application may contain any other document deemed useful by the applicant business and allowing the Minister to assess the merits of the application.

Processing the application

If the application is incomplete, the applicant will be informed and must provide the missing documents before 1 December 2020, otherwise the application will be rejected.

The aid will be granted before 31 December 2020.

Amount of aid

The maximum intensity of the aid, expressed as a percentage of allowable costs, depends on the type of investment project and the size of the business:

Size of the business Small businesses and micro-enterprises Medium Large
 Development project 30 %  25 %     20 %
Development project involving the circular economy* 50 % 45 % 40 %
Process and organisational innovation project 50 % 50 % 50 %
Project involving energy efficiency or going beyond environmental standards 50 % 50 % 50 %

* If the state of the technology applicable in the sector in question already meets the criteria regarding the circular economy for the same production or service provision capacity, the increased amount of investment aid for an investment involving the circular economy is not applicable.

The amount of the aid may not exceed EUR 800,000 per single undertaking, i.e. group of businesses.

Payment of aid

This investment aid will be paid in the form of a capital subsidy once the project has been completed.

One or more advance payments may be made while the investments for which the aid has been granted are in hand.

Cumulation of aid

This aid may be cumulated in respect of the same admissible costs with 'de minimis' aid.

Subject to certain conditions, the aid may be cumulated with the other types of aid made available in the context of the COVID-19 pandemic, including:

  • the repayable advances provided for in Article 3 of the Law of 3 April 2020 setting up a scheme of aid for undertakings in temporary financial difficulty, on condition that the cumulation of the 2 types of aid does not exceed the ceiling of EUR 800,000 per single undertaking;
  • any other aid scheme requiring a decision, as provided for in Article 9, on the part of the European Commission based on Section 3.1 of its Communication No 2020/C 91 I/01 of 20 March 2020 on the temporary framework for State aid measures to support the economy in the current Covid-19 outbreak, on condition that the cumulation of the 2 types of aid does not exceed the ceiling of EUR 800,000 per single undertaking;
  • any aid granted on the basis of the Law of 18 April 2020 setting up a guarantee scheme to support the Luxembourg economy in the context of the COVID-19 pandemic.

Disclosure of the aid

The individual aid in excess of EUR 100,000 granted is posted on the European Commission's transparency website within 6 months of being granted, in accordance with Annex III of Commission Regulation (EU) No 651/2014 of 17 June 2014. More specifically, the granting authorities are required to publish the following information with regard to the individual amounts of aid:

  • name of the beneficiary;
  • ID (VAT/identification number) of the beneficiary;
  • company type (SME/large company) at the time of granting (signature of the decision) the financial aid;
  • the beneficiary's region under NUTS II;
  • NACELUX Rev. 2 group activity sector;
  • the aid element, the amount of aid expressed in local currency;
  • financial aid instrument;
  • date on which the aid is granted;
  • purpose of the aid;
  • granting authority.

Obligations

The investment project must be completed within 2 years of the aid being granted.

Completion of the project is noted by the Minister.

Sanctions, repayment and criminal law provisions

Beneficiaries are required to repay the aid if:

  • they obtained the aid on the basis of inaccurate or incomplete information;
  • the aid is found to be incompatible with the law or the European Commission's decision declaring the aid compatible with the internal market;
  • they dispose of the investments for which the aid was granted before the normal depreciation period of the subsidised asset expires or if they don't use the investments or ceases to use them for the intended purposes and subject to the announced conditions, or if they abandon them or pass them on to any third party for no good reason, or if they manage the project inappropriately or not in compliance with generally accepted management rules.
  • they were convicted on at least 2 occasions for contravening provisions prohibiting illegal work or provisions prohibiting the employment of illegally resident third-country nationals during the 4 years preceding the judgement of the competent jurisdiction. The beneficiary is excluded from the aid measure for 3 years from the date of the judgement.

Reimbursement covers the amount of aid paid plus interest at the legal rate applicable at the time of granting, before expiry of a period of 3 months from the date of the ministerial decision on reimbursement, unless the decision provides for a different deadline.

Beneficiaries are not required to repay the aid if the disposal, abandonment, or a change in purpose or conditions outlined above have been approved in advance by the minister, and are the result of force majeure or circumstances beyond the beneficiaries' control.

A beneficiary of aid obtained on the basis of knowingly false or incomplete information shall be liable to a prison term of between 4 months and 5 years and a fine of between EUR 251 and 30,000 in addition to being required to reimburse the aid received.

Appeal

All decisions on granting or refusing aid and all decisions on the reimbursement of aid are administrative in nature. Anyone concerned by such a decision may contest it via the usual means of appeal (non-contentious appeal, judicial appeal), provided the applicable legal deadlines are complied with.

Good to know

Our FAQ on this aid is available under this link.

For questions and information on this aid, you can also contact:

Forms / Online services

COVID 19 - Projet d'investissement ICO

Les informations qui vous concernent recueillies sur ce formulaire font l’objet d’un traitement par l’administration concernée afin de mener à bien votre demande.

Ces informations sont conservées pour la durée nécessaire par l’administration à la réalisation de la finalité du traitement

Les destinataires de vos données sont les administrations compétentes dans le cadre du traitement de votre demande. Veuillez-vous adresser à l’administration concernée par votre demande pour connaître les destinataires des données figurant sur ce formulaire. Conformément au règlement (UE) 2016/679 relatif à la protection des personnes physiques à l'égard du traitement des données à caractère personnel et à la libre circulation de ces données, vous bénéficiez d’un droit d’accès, de rectification et le cas échéant d’effacement des informations vous concernant. Vous disposez également du droit de retirer votre consentement à tout moment.

En outre et excepté le cas où le traitement de vos données présente un caractère obligatoire, vous pouvez, pour des motifs légitimes, vous y opposer.

Si vous souhaitez exercer ces droits et/ou obtenir communication de vos informations, veuillez-vous adresser à l’administration concernée suivant les coordonnées indiquées dans le formulaire. Vous avez également la possibilité d’introduire une réclamation auprès de la Commission nationale pour la protection des données ayant son siège à 15, boulevard du Jazz L-4370 Belvaux.

En poursuivant votre démarche, vous acceptez que vos données personnelles soient traitées dans le cadre de votre demande.

ANNEXE - Projet d’innovation de procédé et d’organisation

Les informations qui vous concernent recueillies sur ce formulaire font l’objet d’un traitement par l’administration concernée afin de mener à bien votre demande.

Ces informations sont conservées pour la durée nécessaire par l’administration à la réalisation de la finalité du traitement

Les destinataires de vos données sont les administrations compétentes dans le cadre du traitement de votre demande. Veuillez-vous adresser à l’administration concernée par votre demande pour connaître les destinataires des données figurant sur ce formulaire. Conformément au règlement (UE) 2016/679 relatif à la protection des personnes physiques à l'égard du traitement des données à caractère personnel et à la libre circulation de ces données, vous bénéficiez d’un droit d’accès, de rectification et le cas échéant d’effacement des informations vous concernant. Vous disposez également du droit de retirer votre consentement à tout moment.

En outre et excepté le cas où le traitement de vos données présente un caractère obligatoire, vous pouvez, pour des motifs légitimes, vous y opposer.

Si vous souhaitez exercer ces droits et/ou obtenir communication de vos informations, veuillez-vous adresser à l’administration concernée suivant les coordonnées indiquées dans le formulaire. Vous avez également la possibilité d’introduire une réclamation auprès de la Commission nationale pour la protection des données ayant son siège à 15, boulevard du Jazz L-4370 Belvaux.

En poursuivant votre démarche, vous acceptez que vos données personnelles soient traitées dans le cadre de votre demande.

ANNEXE - Projet d’efficacité énergétique ou de dépassement des normes

Les informations qui vous concernent recueillies sur ce formulaire font l’objet d’un traitement par l’administration concernée afin de mener à bien votre demande.

Ces informations sont conservées pour la durée nécessaire par l’administration à la réalisation de la finalité du traitement

Les destinataires de vos données sont les administrations compétentes dans le cadre du traitement de votre demande. Veuillez-vous adresser à l’administration concernée par votre demande pour connaître les destinataires des données figurant sur ce formulaire. Conformément au règlement (UE) 2016/679 relatif à la protection des personnes physiques à l'égard du traitement des données à caractère personnel et à la libre circulation de ces données, vous bénéficiez d’un droit d’accès, de rectification et le cas échéant d’effacement des informations vous concernant. Vous disposez également du droit de retirer votre consentement à tout moment.

En outre et excepté le cas où le traitement de vos données présente un caractère obligatoire, vous pouvez, pour des motifs légitimes, vous y opposer.

Si vous souhaitez exercer ces droits et/ou obtenir communication de vos informations, veuillez-vous adresser à l’administration concernée suivant les coordonnées indiquées dans le formulaire. Vous avez également la possibilité d’introduire une réclamation auprès de la Commission nationale pour la protection des données ayant son siège à 15, boulevard du Jazz L-4370 Belvaux.

En poursuivant votre démarche, vous acceptez que vos données personnelles soient traitées dans le cadre de votre demande.

ANNEXE - Projet de développement

Les informations qui vous concernent recueillies sur ce formulaire font l’objet d’un traitement par l’administration concernée afin de mener à bien votre demande.

Ces informations sont conservées pour la durée nécessaire par l’administration à la réalisation de la finalité du traitement

Les destinataires de vos données sont les administrations compétentes dans le cadre du traitement de votre demande. Veuillez-vous adresser à l’administration concernée par votre demande pour connaître les destinataires des données figurant sur ce formulaire. Conformément au règlement (UE) 2016/679 relatif à la protection des personnes physiques à l'égard du traitement des données à caractère personnel et à la libre circulation de ces données, vous bénéficiez d’un droit d’accès, de rectification et le cas échéant d’effacement des informations vous concernant. Vous disposez également du droit de retirer votre consentement à tout moment.

En outre et excepté le cas où le traitement de vos données présente un caractère obligatoire, vous pouvez, pour des motifs légitimes, vous y opposer.

Si vous souhaitez exercer ces droits et/ou obtenir communication de vos informations, veuillez-vous adresser à l’administration concernée suivant les coordonnées indiquées dans le formulaire. Vous avez également la possibilité d’introduire une réclamation auprès de la Commission nationale pour la protection des données ayant son siège à 15, boulevard du Jazz L-4370 Belvaux.

En poursuivant votre démarche, vous acceptez que vos données personnelles soient traitées dans le cadre de votre demande.

Who to contact

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