The innovation, research and development aid scheme aims to support the investments made by craft and commercial businesses in the area of fundamental and applied research and pre-competitive development activities.
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.
Carry out your procedure:
By downloading a form
- Aide en faveur des classes moyennes
The financial aid is intended for craft and commercial businesses with a business permit granted by the Ministry of the Economy.
It also applies to the following liberal professions: engineers and architects during their first 3 years of business (as of the date of their first Luxembourg or foreign business permit).
However, the activities listed in the Grand-ducal regulation of 9 May 2010 are not eligible to benefit from this financial aid scheme.
Eligible activities and expenses
The following research and development activities are eligible:
- fundamental research that aims to increase scientific and technical knowledge not linked to industrial or commercial objectives;
- applied research that aims to acquire new knowledge in order to develop new products, procedures or services or significantly improve existing products, procedures or services;
- pre-competitive development activity that consists in using the results of the applied research to create a plan, diagram or design of the new, modified or improved products, procedures or services, regardless of whether they are intended for sale or use, including the creation of a prototype that may not be used for commercial purposes.
The following expenses are covered:
- the acquisition or amortisation cost of land, infrastructure, constructions, machinery, plant equipment and fittings, provided that these assets are used exclusively for research or development purposes;
- personnel costs (researchers, technicians, assistants), including the amount representing the social security charges payable by the business;
- consultancy or similar services, including the purchase of patents, user licences, technical knowledge or know-how;
- current expenses (materials, supplies, the use of existing plant and fittings, energy, transport) incurred in carrying out the project;
- additional overheads and expenses incurred directly as a result of the project.
Costs and expenses relating to the launch and marketing of the products, services or procedures developed as well as interest payable on the financing obtained for research projects are excluded.
To benefit from innovation, research and development aid, the business must:
- be established in Luxembourg;
- offer sufficient guarantees in terms of viability;
- hold a business permit granted by the General Directorate for SMEs and Entrepreneurship;
- be soundly managed, and;
- actively contribute to and form part of the country's economic structure.
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.
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.
Degree of aid
Innovation, research and development aid for SMEs may not exceed the following amounts:
- fundamental research: maximum 75 % of eligible expenses;
- applied research: maximum 50 % of eligible expenses;
- pre-competitive development activities: maximum 25 % of eligible expenses.
The following increases may be granted provided that the total degree of aid does not exceed 100 % for fundamental research, 75 % for applied research and 50 % for pre-competitive development activities:
- an increase of 10 % where the beneficiary is an SME;
- an increase of 10 % where the investment or research project involves cross-border collaboration with at least one independent partner from another EU Member State but does not fall within the scope of the objectives of the EU framework programme for research and development;
- an increase of 15 % where the investment or research project involves cross-border collaboration with at least two independent partners from two other EU Member States and where it falls within the scope of the objectives of a project or programme of the EU framework programme for research and development;
- an increase of 25 % where, in addition to meeting the conditions of cross-border research or development, the results of such a project are widely disseminated;
- an increase of 25 % where the aid is granted for the monitoring of technological development or a feasibility study carried out prior to applied research or pre-competitive development activities.
In principle grants are 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.
Interest rate subsidies and interest relief amount to the difference between the market interest rates in force at the time the aid is granted, applicable to the category of operation concerned, and the reduced interest rate effectively paid by the beneficiary.
The interest rate may not be reduced by more than 4 points nor may it be reduced to below 1 %.
Aid may only be allocated once to the same economic entity over a period of 10 years, including in the case of successive takeovers by different natural or legal persons.
Innovation, research and development aid for craft or commercial SMEs may be combined with a loan from the national credit and investment institution, SNCI, provided that the total rate of financial aid does not exceed the stated maximum limits.
SME investment aid may not be obtained in addition to aid granted by the Ministry of the Economy and Foreign Trade.
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.
B.P. 535 - L-2914 - Luxembourg
Fax: (+352) 247-74701