Which enterprises and projects are eligible for the Development Project subsidy?
The European Union has imposed strict requirements for financial support to companies, depending on the type of support involved. Specifically, a company looking to secure funding for a development project must show that it will acquire sufficient novel knowledge and that there are sufficient challenges and risks related to the project, more than a traditional engineering project. In addition, Flanders Innovation & Entrepreneurship aims to select only those projects that will have a positive impact on Flanders, while ensuring the funding is used and managed with due care.Please keep in mind that, in the context of a development project, VLAIO can only fund activities that fall within the scope of Research & Development, according to EU regulations.
Who is eligible?
The subsidy applies to SMEs and large companies on the one hand and non-profit and public organisations on the other hand. They should carry out an acceptable main activity (NACE code) in the Flemish Region (or at least a serious attempt at achieving this can be observed).
Companies are not allowed to have any debts in arrears with the National Social Security Office (‘Rijksdienst voor Sociale Zekerheid’, RSZ) or to be a party to a court case based on European or national law as part of which financial support that has been awarded is being reclaimed.
Which projects are eligible?
For a project to be eligible, enterprises must request at least €25,000 and at most 3 million euro subsidy and submit the application form filled in in such a way that VLAIO can easily evaluate it. In this application form:
- the business case must be thoroughly substantiated;
- the project as well as its expected impact must be briefly described.
- The amount of pages that can be used to do so is strictly limited to:
- 30 pages + 5 pages extra per additional business partner (subcontractors excluded) if the requested amount of subsidy is limited to €500,000.
- 40 pages + 5 pages extra per additional business partner (subcontractors excluded) if the requested amount of subsidy exceeds €500,000.
- In general, only projects that can be terminated within 24 months are eligible, unless entrepreneurs can thoroughly motivate why they might need more time.
- The project has not started before the first day of the month following the submission of the application form.
- The application form must be written in one of the following two languages: Dutch or English.
- Only applicants that have not been allocated more than a total of 8 million euro support during the current calendar year are eligible (In case the project is the result of a cooperation with SMEs or in case of an international cooperation, this amount is raised to a maximum of 12 million euro.).
Eligibility: Climate plan
For projects submitted from 1 October 2022, an outline of the climate plan must be attached to the subsidy application if the (co-) applicant:
- is a large enterprise according to the European SME definition
- is an energy-intensive enterprise, i.e. has a final energy consumption of more than 0.1 PJ (petajoule) at the site level. This will consider the location in Flanders where most of the valorisation of the requested subsidy will take place. Final energy consumption is the final net amount of energy delivered to the site without taking into account conversion and transport losses (power plants, refineries, etc.) as defined in Annex 1 of the Energy Policy Agreements for the period 2023-2026. For your information: 0.1 PJ final energy consumption corresponds to 27.8 GWh of electricity, gas, fuel oil, diesel, heat, etc.
The outline of the climate plan is an eligibility requirement.
Which criteria does your business case have to meet?
Entrepreneurs must be able to show that they have considered all factors that could (both positively and negatively) impact their project:
- they must have performed market research;
- they must show why their customers will benefit from their innovation and in which way their innovative project will strengthen the company’s market position in the short term;
- they must show they have thought about the potential financial loss they could face after the product has been launched;
- they must be able to show the possible positive economic (jobs & investments created by the project) and the social impact (social savings and/ or gains) their project will have for Flanders;
Other questions (non-exhaustive list) with regard to the business case that entrepreneurs should ask themselves and that they should be able to answer when meeting a VLAIO project advisor:
- Do you have any existing products or services that will become less profitable due to the launch of your new idea? Can you quantify this loss of profitability?
- What resources and expertise will you need to be able to continue to offer your product or service after launch?
- Are there any other companies that will provide services or goods to your company that are needed for your new service or product in the first five years after the end of the project?
- Will you continue to collaborate with certain companies or research institutes as a result of this project?
- If you expect to continue collaborating with business partners, research institutes or large subcontractors: what are the basic tenets of the agreements made with regard to ownership of the project’s results and user rights for the project’s results and necessary background knowledge?
- Will the business case have any social benefits e.g. by benefiting the environment, contributing to the circular economy or by helping to tackle the aging problem?
Which criteria does your development project have to meet?
You have to be able to prove why the product, process, service or concept you want to develop is entirely new or significantly innovative for the company and the industry as well as why the development process is sufficiently challenging enough to be eligible for the Development Project subsidy. Specifically, your development should deviate from your day-to-day business and help you acquire novel knowledge and insights for your industry. This means that your objectives should be clear and verifiable. You must also demonstrate that there is a market for your new development and that it will enable you to occupy a distinct position in the market. In addition, your approach to realising this development must be adequate and you must know which resources (staff, infrastructure, funding) will be necessary to carry out the project successfully, which of those resources you already have at your disposal and how you plan to accommodate shortages in expertise and resources.
Other questions (non-exhaustive list) with regard to the project that entrepreneurs should be able to answer when meeting a VLAIO project advisor:
- How will you verify that you have effectively achieved the objectives?
- Do you expect the project to result in IP rights (Intellectual Property rights) and have the necessary steps been taken or planned to deal with these rights?
- Demonstrate that the intended development is new to your company, indicating how new the development is for your industry as well.
- How will you make sure to retain the knowledge and skills gained during the project?
- Do the people working on the project have the capacity to do so?
Make an appointment with one of our Flanders Innovation & Entrepreneurship business advisors. They will support and advise you in realising your plans, growth ambitions or business transformation.