Financial aid for a business start-up or takeover

This page was last modified on 10-11-2017

The 'initial investment' aid scheme is designed to support the development of entrepreneurial spirit and encourage the creation and takeover of businesses by providing favourable conditions for those who set up in business for the first time by either creating a new business or taking over an existing business.

Aid is granted in the form of a capital subsidy or interest subsidy.

Applications must be sent to the General Directorate for SMEs and Entrepreneurship.

Forms / Online services

Carry out your procedure:

Who is concerned

Eligible businesses

This aid is intended for those who create or take over small and medium-sized businesses (also SME) where the beneficiary has not previously:

  • carried out an economic activity as a self-employed worker;
  • held a stake of more than 25% in another business.

These conditions must be satisfied by:

  • the actual beneficiary in the case of a natural person;
  • the shareholders or partners with a holding of more than 25% and the person with the professional qualification to carry out the activity concerned in the case of a legal person.

However, businesses carrying out certain well defined activities are not eligible for the aid scheme.

Eligible investments

Eligible investments are:

  • investments in tangible fixed assets: investments in tangible fixed assets relating to the creation of a new business, the extension or modernisation of an existing business or the starting up of an activity that involves fundamental changes to the product or production process of an existing business.
    Taking over a business that has closed down or that would have closed down were it not for the takeover qualifies as an eligible investment but the aid may not be allocated more than once to the same economic entity over a period of 10 years.
  • investments in intangible fixed assets: investments in a technology transfer by acquiring patents, licences, know-how or unpatented knowledge.

Prerequisites

To benefit from the initial investment aid scheme, the business must satisfy the same eligibility conditions as for the investment aid for SMEs, i.e.:

  • be established in Luxembourg;
  • offer sufficient guarantees in terms of viability;
  • have a business permit;
  • be soundly managed, and;
  • actively contribute to and form part of the country's economic structure.

Duration and deadlines

Aid must be requested, on pain of ineligibility, within a period of 2 years from the payment of the expenses for which aid is requested.

How to proceed

Submitting the application

Applicants must submit a duly completed application for financial aid for SMEs (demande d'aide en faveur des classes moyennes), by post to the General Directorate for SMEs and Entrepreneurship.

Aid is paid out after completion of the investment programme and on presentation of the following supporting documents:

  • invoices and proof of payments (e.g. bank statements);
  • in certain cases, a business plan or equivalent documents or measures proving the viability of the project and the reliability of its promoters;
  • where applicable, the loan conditions granted by the credit institution.

Degree of aid

Financial aid granted with respect to a first business is 10% higher than that granted under the investment aid for SMEs scheme, i.e. initial investment aid amounts to a maximum of:

  • 20 % of an SME's eligible expenses in tangible and intangible fixed assets;
  • 30 % of the eligible expenses of a small business for the acquisition of tangible or intangible fixed assets.

Aid is granted in the form of a capital subsidy or interest relief and is in principle paid in a lump sum after completion of the investment programme. However, payments in one or more tranches may be granted in specific cases as the project progresses, in particular where the beneficiary resorts to financing by leasing.

Accumulation rules

As is the case for investment aid for craft or commercial SMEs, aid granted with respect to the first-time business establishment may be combined with a loan from the SNCI, provided that the total rate of financial aid does not exceed the stated maximum limits.

'Initial investment' aid may not be obtained in addition to aid granted by the Ministry of the Economy.

Repayment

Beneficiaries must reimburse all or part of the aid received if they transfer or dispose of the investment financed with said aid within 10 years following the investment.

Who to contact

Ministry of the Economy

B.P. 535 - L-2914 - Luxembourg
Luxembourg
Phone: (+352) 247-84712
Fax: (+352) 247-74701
Email info.aide.pme@eco.etat.lu