Financial aid for research and development projects (R&D)

This page was last modified on 22-02-2018

Financial aid in the form of a subsidy is available for companies and private sector research organisations that carry out research and development (R&D) projects and innovation initiatives. The aid can cover a percentage of the eligible costs, depending on company size and the type of project or initiative.

Applications for financial aid are to be submitted to the Department for Research and Innovation at the Ministry of the Economy. Luxinnovation can provide help to set up your projects.

Forms / Online services

Carry out your procedure:

Who is concerned

Financial aid is available for companies and private research institutes established in Luxembourg in connection with the following activities:

  • experimental development, i.e. acquiring, combining, shaping and using scientific, technological and commercial knowledge and skills with a view to developing new or improved products, processes or services;
  • fundamental research, i.e. experimental or theoretical work undertaken to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any direct practical application or commercial use in view;
  • industrial research, i.e. the planned research or critical investigation aimed at the acquisition of new knowledge and skills for developing new products, processes or services or for significantly improving existing products, processes or services.

Prerequisites

General conditions

The businesses and private research institutes have to meet the general conditions which apply to all types of aid for research, development and innovation.

Eligible costs

 

All costs directly related to the R&D projects or programmes are eligible:

  • payroll expenses: researchers, technicians and other support staff employed for the project or programme;
  • expenses for instruments and equipment, if and for as long as they are being used for the project or programme. If such instruments and equipment are not used for their full life within the framework of the project or programme, only the depreciation costs corresponding to the duration of the project or programme, calculated in accordance with the generally accepted accounting principles, shall be deemed admissible;
  • expenses for land and buildings, if and for as long as they are being used for the project or programme. As far as buildings are concerned, only the depreciation costs corresponding to the duration of the project or programme, calculated in accordance with the generally accepted accounting principles, are deemed admissible. As for land, only the costs of commercial transfer or actually incurred investment costs are eligible;
  • expenses for contract research or research services, the purchase of knowledge and patents or licences from external sources under conditions of full competition as well a costs of consultancy and equivalent services used exclusively for the project or programme;
  • additional overheads and other operating expenses (in particular, cost of materials, office supplies and similar products) incurred directly as a result of the project or programme.

How to proceed

Submitting the application

A standard application file regarding financial aid for R&D projects and programmes has been made available to businesses by the Ministry of the Economy.

The full application file, dated and signed, together with its annexes must be sent before the commencement of the project:

The application for aid must namely include the following information and documents:

  • the name and size of the company;
  • a description of the project or programme, of the activity or the investment, of the related works and its innovative nature, including its start and end dates;
  • a description of the economic valuation methods for the results of the project or programme, for the activity or the investment and the related operations, and its economic potential;
  • the location of the project or programme, activity or investment and related operations;
  • a list with the costs for the project or programme, activity or investment and related operations;
  • the type of aid and the amount of aid necessary for the project or programme, activity or investment and related operations;
  • each relevant element that will allow the competent ministers to evaluate the quality or specificity of the project or programme, activity or investment and related operations plus its incentive effect.
Each business which was established less than 3 years ago is required to provide a business plan.

Maximum amount of financial aid

For each R&D project or programme, the gross amount of aid can not be less than EUR 1,000.

The amount of the aid provided will be calculated on the basis of the eligible costs of the project or initiative, up to the following caps:

 

Large companies or large private research organisations

Medium-sized company*** or medium-sized private research institute

Small business*** or small private research institute

Experimental development

25 %

35 %

45 %

Experimental development + supplement*

40 %

50 %

60 %

Industrial research

50 %

60 %

70 %

Industrial research + supplement*  

65 %

75 %

80 %**

Fundamental research

100%

100%

100%


* The supplement becomes payable if one of the following conditions is met:

  • the project is based on effective collaboration:
    • between 2 businesses where at least one is an SME, or the project is carried out in at least 2 Member States, or in one Member State and in another EEA member country (European Economic Area), and no single business is supporting more than 70 % of the allowable costs on its own; or
    • between one business and one or more research institutes and knowledge dissemination organisations where the latter support at least 10 % of the allowable costs and have the right to publish the results of their own reseach;
  • the results of the project or programme are disseminated through conferences, publications, open access repositories or free or freely accessible software.

** The maximum foreseen financial aid for industrial research, all premiums included.

*** Please see the procedure on General conditions for financial aid for research, development and innovation.

Payment of financial aid

The capital subsidy and repayable advance are paid out after the completion of the project, programme or R&D activity concerned.

However, one or more advance payments may be made as and when the investments are realised.

Who to contact

Ministry of the Economy
19-21, boulevard Royal
L-2449 - Luxembourg
Luxembourg
Phone: (+352) 247-84162
Email loi.environnement@eco.etat.lu

5, avenue des Hauts-Fourneaux
L-4362 - Esch-sur-Alzette
Luxembourg
Phone: (+352) 43 62 63-1
Fax: (+352) 43 81 20
Email info@luxinnovation.lu