A subsidy for young technology companies has been announced by the Community of Madrid. Although the regulatory bases have been published, the date of the call is still missing. It is expected to be in October.
The application deadlines and the amounts of the aid are also pending to be published.
Subsidy for young technology companies
Beneficiaries of the subsidy
Depending on the age of the company, there are three types of subsidy lines.
Firstly, for new innovative technology-based SMEs up to 1 year old. These will be eligible for Line 1 subsidies. That is to say, Small Company
Secondly, Young innovative technology-based SMEs with more than 1 year and up to 5 years old. In this case they will be eligible for Line 2 grants for small companies.
Finally, innovative SMEs, more than 5 years old. These may be beneficiaries of Line 3 grants. For SMEs.
Requirements of the subsidy for young technological companies
Based on the three lines described above, the fundamental requirement is to be one of the three types described above. A new small innovative technology-based company, a young innovative technology-based company or an innovative SME more than 5 years old:
Secondly, to have at least one work center in the Community of Madrid.
The third requirement is based on the age of the company:
- Line 1: up to one year
- Line 2: Between 1 year and 5 years
- Line 3: More than 5 years
To be considered an innovative SME, at least one of the following requirements must be met:
Either submit a report certifying that the company will develop in the foreseeable future, new or substantially improved products, services or processes compared to the state of the art in its sector, based on technology and/or developed through technological innovation, which carry an implicit risk of technological or industrial failure. Taking into account that the accrediting external expert must belong to a public research organization.
Or, that the research and development costs represent a minimum of 10% of its total operating costs during at least one of the three years prior to the granting of the aid. In accordance with the certification of an external auditor.
In the case of a new company with no financial history, this condition must be met in the current fiscal year.
Minimum budgets
The budgets to be requested must be of a minimum justifiable amount.
- Line 1: €30,000
- Line 2: 75,000 €.
- Line 3: 200,000 €.
Types of projects eligible for subsidies for young technology companies
Depending on the type of Line (seniority) there are different applications.
Line 1
With an execution period of up to 12 months
- 2-year business plan
- Business feasibility plan
- Technological development plan
- Business development and market development advisory and consulting studies (market test)
- Other technical reports
- The development of the concept, features and basic functionalities of the product, service or process.
- External advice for the development of the project, including research contracts, certifications or audit reports from external experts, including those that may be required in accordance with the provisions of these regulatory bases.
- Personnel expenses
- Acquisition of material and instruments
- Contractual research
- Patents and licenses
- Training linked exclusively to the development of the activities that are the object of the aid.
- Dissemination and marketing activities
- Activities aimed at the start-up of the new company’s activity and the generation and future exploitation of new products, services or processes that require the intensive use of technology and/or technical, scientific and innovation knowledge for their introduction in the market.
Line 2
In this case the execution period is up to 24 months.
- 3-year business plan that enables the development of new products, services or processes for their introduction in the market.
- Technological development plan
- The planning of the incorporation of technical or scientific knowledge and innovation acquired from research and knowledge dissemination organizations, from the company’s own research activity or from the research activity of other companies.
- External advice for the development of the project
- Research contracts
- Certifications or audit reports from external experts, including those that may be required in accordance with the provisions of these terms and conditions.
- Business development and market development advisory and consulting studies (market test)
- Other technical reports
- Concept development
- Characteristics and basic functionalities of the product, service or process.
- Estimates on expected results that support the growth of the company and the development of permanent infrastructures for the company’s own R&D&I development.
- The investment plan and expected revenues, personnel costs, etc.
- Acquisitions of equipment and instruments
- Contractual research, patents and licenses
- Training linked exclusively to the development of the activities supported.
- Dissemination and marketing activities
- Activities aimed at the consolidation of the young company that refer to the exploitation of products or services that require the intensive use of technologies or technical and/or scientific knowledge, which make possible the development of new products, services or processes for their introduction in the market.
Line 3
For the last type, the execution term is up to 24 months.
- Innovative SMEs more than 5 years old that develop competitive R&D&I projects.
- The associated costs of technical feasibility studies.
- Industrial research projects
- Experimental development projects whose business strategy is clearly oriented to the development of original products, services and/or processes or that substantially improve existing ones. Or to the use and generation of marketable knowledge or processes for their introduction in the market, as described below.
Firstly, technical feasibility studies
In addition, industrial research projects are required. Creation of complex system components and may include the construction of prototypes in a laboratory environment or in an environment with simulated interfaces with existing systems, as well as pilot lines, when necessary for industrial research, and in particular, for generic technology validation.
Finally, experimental development projects. This includes prototyping, demonstration, pilot project development, testing and validation of new or improved products, processes or services, environments representative of real operating conditions. Provided that the main objective is to bring technical improvements to products, processes and services that are not substantially established. It may include the development of prototypes or pilot projects that can be used commercially when they are necessarily the final commercial product. And their manufacture is too costly to be used only for demonstration and validation purposes.
Projects aimed at the improvement of existing products or those in which the product developed does not have a degree of novelty to be considered “New Product”, will not be considered as projects for the development of new products.
Eligible Expenses
Eligible expenses are the following.
Firstly, personnel costs. Both researchers and technicians and other auxiliary personnel of the beneficiary entity to the extent that they are dedicated to the project.
It will also be taken into account the autonomous personnel partner of the company that exercises functions of direction, management and provides services for the same one for profit and in a habitual, personal and direct way.
Also the costs of instruments and material. To the extent and during the period in which they are used for the project. With two nuances:
- Line 3. If the instruments and material are not used exclusively for the project, only the amortization costs will be considered eligible.
- Lines 1 and 2. Cost of acquisition of instruments and material and not amortization.
In addition, the costs of contractual research and development, know-how and patents acquired or obtained.
Consultancy costs for acquisition, protection and trade. Industrial and/or intellectual property rights.
The costs of advice and support for innovation and business development. Such as management consulting, technological assistance and innovation support. Business development and market consulting. Including market research and testing.
Also other external services. Such as technical assistance, consultancy or equivalent in legal, economic and financial matters, business management, marketing, diffusion and commercialization.
Reports, certifications and audits carried out by auditors or experts.
Without forgetting other operating expenses. Such as:
- Travel and per diem expenses directly related to the project.
- Costs of economic-financial and industrial audits and project monitoring.
- Fees paid for services provided by incubators, incubators, science parks, and other Start-up hosting entities.
And finally, indirect costs. Up to 15% of personnel.
