Last update 18.10.2018
The Minister of the Economy and the Minister of Finance can grant financial aid to young businesses with strong growth potential, which can already provide at least 2 balance sheets and which have not taken over the activity of another business. The aid granted aims to support the young business in its growth phase. The amount of aid depends on the amount of capital brought by the business ("matching clause").
Who is concerned
Each small business (a business that employs less than 50 persons with an annual turnover not exceeding EUR 50 million or an annual balance sheet total not exceeding EUR 43 million) which:
- is established in Luxembourg;
- is not listed;
- has not been registered for more than 5 years.
- has not distributed any profits yet; and
- does not come from a corporate concentration;
- can already provide 2 annual balance sheets;
- has a strong growth potential.
- the moment the business commences its economic activity;
- the moment it becomes subject to taxation for the economic activity in which it is engaged.
The full application file, dated and signed, together with its annexes must be sent before the commencement of the activity in relation with the project or the activity concerned.
How to proceed
Filing an application
The Ministry of the Economy makes available a sample application template for the project in question.
The completed application and accompanying documents must be dated, signed and submitted to the Ministry of the Economy before starting work on the project by mail or email (see the section Who to contact below).
Applications for aid must include the following information and documents:
- the name and size of the business (any document deemed necessary may be requested for the determination of the size of the business);
- a description of the investment project, including its start and end dates;
- a description of the operating conditions of the investment project and the economic potential;
- the location of the investment project;
- the total project cost;
- a business plan;
- the form and the amount of financial aid required for the investment project;
- any other relevant information which would help the ministers in charge to understand the qualities or the specific aspects of the investment project. ou programme (training, tv), program (IT, only if computer-related) et son Incentive effect.
The business must grant the Minister of the Economy and the Minister of Finance the authority to verify with the Luxembourg Inland Revenue, the Registration Duties, Estates and VAT Authority and the Joint Social Security Centre that the business has not avoided its tax and social obligations. If not, the business must attach the certificates issued by these administrations providing proof that all tax and social charges have been duly paid.
The payment of financial aid must be requested, on pain of ineligibility, within a period of 5 years from the date of payment of the expense for which aid is requested. The beneficiary of the aid can apply for an extension of this deadline on written request to the Minister of the Economy.
Amount of aid
The amount of subsidies granted in the form of a gross subsidy equivalent (amount before tax and other contributions) cannot exceed EUR 400.000. The capital subsidy is based on the "matching" principle, i.e. if the business successfully collects new funds, the Ministry will grant an equal amount up to a maximum of EUR 400,000.
For any investment project, the amount of aid may not be less than EUR 1,000.
The ministers may not grant aid in excess of EUR 100,000 prior to having requested the opinion of a consultative commission The consultative commission can collect any information on the project, the investment or the beneficiary which is deemed useful, it can hear the applicant and demand the presentation of a business plan or equivalent documents, if applicable. It can also seek advice from experts.
Payment of aid
The aid can take the following forms:
- loans whose interest rates are not compliant with the market conditions in force and for a maximum duration of 10 years ;
- guarantees whose premiums are not compliant with the market conditions in force and for a maximum duration of 10 years ;
- subsidies, in particular in the form of equity capital investments or quasi-equity capital investments, or in the form of interest rate reductions and guarantee premiums;
- a recoverable advance payment;
- interest relief. The aid may be paid out by an intermediary, such as a credit institution or a financial establishment under public law.
Capital subsidies and recoverable advances are paid out after completion of the investment project. However, one or more advance payments may be made as the investments are made.
The business and the Minister of the Economy agree together, at the time the aid is granted, on the repayment terms of the recoverable advance payment if the project is successful.
Depending on the general terms and conditions which apply to all types of aid for SMEs, the investment aid:
- may potentially be combined with other types of financial aid;
- may potentially have to be reimbursed and sanctions may be applied.
Forms / Online services
Who to contact
General Directorate - SMEs, Entrepreneurship and the Internal Market (department for support to SMEs)
B.P. 535 - L-2914 Luxembourg
Phone : (+352) 247-84712Fax : (+352) 247-74701