Јавен конкурс за инструмент за поддршка: Ко-финансирани грантови за комерцијализација на иновации

On the basis of Article 25 paragraph 4 of the Law on Innovation Activity (“Official Gazette of the Republic of Macedonia” No. 79/13, 137/13, 41/14, 44/15, 6/16, 53/16, 190/16 and 64/18) and Article 14 of the Rulebook on the Support Instrument - Co-financed grants for commercialization of innovations, No. 01-2572/5 dated 19.07.2021, the Fund for Innovation and Technology Development on 18.08.2021, the Fund for Innovation and Technology Development on 18.08.2021, announces a Public competition for financing under the support instrument “Co-financed grants for commercialization of innovations”.

The purpose of the support instrument for co-financed grants for commercialization of innovations is to encourage increased research and development activities in the private sector, to encourage cooperation between the private sector and higher education institutions and scientific-research institutions, as well as other forms of cooperation for commercialization of innovations.

The instrument is intended for enterprises that want to develop an innovative product, service or process, independently or in cooperation with another enterprise and/or institution that performs higher education activity, i.e. scientific-research activity. The instrument offers financial support to enterprises that are registered in the Republic of North Macedonia in order to enable them to develop and implement innovative solutions, including support for enterprises with high growth potential.

The support through this instrument shall be awarded to projects with a clear commercial purpose that are in the phase of a prototype (or appropriate phase depending on the type of innovative product, service, process) up to the pre-commercial (pre-market) phase.

Through this instrument, the Fund for Innovation and Technology Development provides financial support of a maximum amount of 20.000.000,00 (twenty million) denars, as follows:

  • for enterprises with an average number of employees up to 50 (fifty) employees and whose annual income in the last two years is less than 2.000.000,00 (two million) Euros, financing up to 70% of the total project budget, that is,
  • for enterprises with an average number of employees between 50 (fifty) and 250 (two hundred and fifty) employees and whose annual income in the last two years is more than 2.000.000,00 (two million) Euros, and less than 10.000.000, 00 (ten million) Euros, financing up to 60% of the total project budget.

The amount of realized annual income and the average number of employees shall be determined in accordance with the financial reports for 2020 and 2019.

  • the applicant should be a trade company established in accordance with the Law on Trade Companies and registered in the Central Register of the Republic of North Macedonia;
  • the annual income of the applicant should not exceed 10.000.000 (ten million) Euros, according to the financial reports for the previous two fiscal years;
  • the average number of employees according to the financial reports for the previous two years should not exceed 250 employees;
  • the applicant should not be connected (in accordance with the Company Law) with another enterprise whose annual income exceeds 10.000.000 (ten million) Euros and the average number of employees should not exceed 250 in the previous two fiscal years, except in case of connection with a higher education institution, that is, a scientific-research institution;
  • applicants with more than 3 (three) years of existence until the moment of application should not have suffered a loss in accordance with the financial reports for the last two calendar years, pursuant to Article 14 paragraph 1 indent 5 of the Rulebook and the provisions of the Public competition. Considering the economic crisis in 2020 caused by the Covid-19 pandemic, 2019 shall be considered applicable year for checking the realized loss.
  • the applicant, until the moment of application at the public call, should not have a current (active) project that is financially supported by the Fund on the basis of some of the support instruments;
  • there should be no bankruptcy or litigation proceedings initiated against it;
  • it should have all due liabilities on the basis of public duties and contributions settled;
  • there should be no proceedings for forcible enforcement of overdue monetary claims initiated against it;
  • to meet the requirements of the Law on State Aid Control and the conditions of Article 6 of the Regulation on the conditions and award procedure of horizontal assistance. 

In an event of project proposals submitted by a consortium, the project proposal on behalf of the consortium shall be submitted by the lead applicant. The consortium members may include: companies, higher education institutions and scientific-research institutions from the country and abroad.

Each consortium member should meet the following criteria:

  • the annual revenues should not exceed 10.000.000,00 (ten million) Euros, according to the financial reports for the previous two fiscal years, except in case when the consortium member is a higher education institution, i.e. a scientific-research institution;
  • the average number of employees according to the financial reports for the previous two years should not exceed 250 employees, except in case when the consortium member is a higher education institution, i.e. a scientific-research institution;
  • there should be no bankruptcy or litigation proceedings initiated against it;
  • it should have all due liabilities on the basis of public duties and contributions settled;
  • the consortium member should meet the requirements of the Law on State Aid Control and the requirements of Article 6 of the Decree on the conditions and the procedure for granting horizontal aid.

 

  • research and development activities;
  • Testing activities;
  • Activities related to the protection of intellectual property;
  • Design;
  • Development of pilot lines;
  • activities related to quality assurance;
  • marketing and sales activities (aimed at bringing the innovation to investment readiness and maturity for introduction in the market).
    • gross salaries for the employees of the applicant and the consortium members who will be engaged in the project. The amounts of gross salaries of the employees engaged in the project should correspond to the established practices of the beneficiary before the commencement of the project, reduced by the amount of potential state subsidy received on the basis of salary; procurement and/or rental of equipment and consumables for research and development;
    • subcontracted research and development services (eg. testing, laboratory services, etc.);
    • engagement of research and development experts/advisors;
    • engagement of consultants for other needs that are directly related to the expected project results (expertise related to innovation management, financial management, asset mobilization, business development, marketing, legal affairs, intellectual property protection, etc.);
    • preparation and submission of a patent application, trademark and/or industrial design protection;
    • marketing costs;
    • office and business support (office space rental, overhead costs, bank fees, accounting services, hosting and other types of administrative assistance) in a maximum amount of 10% (ten percent) of the total project budget.

Only costs incurred for activities carried out during the project’s duration and which are in accordance with the approved project budget and rules and procedures of the Fund, are eligible for financing.

  • salary supplements defined in accordance with the Law on Labour Relations;
  • costs for procurement of goods, services and works from domestic public enterprises;
  • repayment of interest or debt to another party;
  • expenses and reservations for past and possible future losses or debts;
  • exchange rate losses and penalties;
  • entertainment and hospitality costs;
  • staff recruitment costs (costs for publishing an advertisement, commissions from employment agencies, costs related to selection of candidates, etc.) and relocation costs;
  • purchase of land or buildings, including renovation;
  • cash payment from the designated project account;
  • annual patent maintenance fees (with the exception of well-justified cases assessed as an allowed cost in the evaluation of the project proposals);
  • costs for consulting services provided by the owner/s of the beneficiary/consortium member;
  • costs for consulting services provided by persons employed by the beneficiary/consortium member;
  • office space rental by a lessor who participates in the project activities or is related to the beneficiary/consortium member;
  • procurement of freight transport vehicles by companies that provide freight road transport for rental or for a fee;
  • procurement of passenger vehicles (with the exception of well-justified cases assessed as an allowable cost in the evaluation of the project proposals);
  • costs for realization of activities that were previously financed by other sources;
  • costs for procurement of used equipment and
  • value added tax (VAT) for all procurements referred to in paragraph 1 of this Article.
  • Degree of innovation;
  • Project quality;
  • capacity of the project team;
  • market potential;
  • impact

The main criteria and sub-criteria for project evaluation are given in the- Evaluation Table.

Each payment of a royalty is made at a rate of 5% of the beneficiary’s annual income realized by selling the product/service resulting from the project, until a return of 100% (one hundred percent) of the amount paid by the Fund or for a period from five years after the completion of the project, depending on the requirement that has been met first.

In case when during the project, and until the approval of the final report by the Fund, the beneficiary submits a proof of an engaged investor who has invested an amount equal to at least 50% of the amount of financial support granted by the Fund to the beneficiary, the beneficiary will be exempt from the obligation to pay royalty. An agreement, current status and proof of payment of the investment shall be considered proof of the investment.

The duration of the project for which funds are awarded under this instrument can be up to 24 (twentyfour) months.

For the purpose of financing projects under this competition for this Instrument, a total budget of 8.000.000,00 (eight million) Euros in denar counter-value has been provided.

You can download all application forms on “Download Application”.

The following documents should be properly filled, signed, and stamped:

  • orderly filled in form for project application;
  • orderly filled in form for the project budget;
  • applicant’s statement on acceptance of the Fund’s requirements;
  • orderly filled in questionnaire regarding the environment and
  • notarized statement on the ownership - founding structure of the applicant.

Documentation provided by the Applicant:

  • short biographies of the persons who are part of the project team engaged in the project (maximum for 5 (five) persons);

The project application, the project budget and the CVs should be submitted in Macedonian and English language (in PDF and Excel format) and should be attached to the application form by clicking the “Apply” button.

Other documentation related to the applicants should be submitted only in Macedonian.

The deadline for application for the public competition for co-financed grants for commercialization of innovations is until 15.10.2021, until 14.00 o’clock.

For all additional information you can:

 

1. Is there a refund for the funds granted via this instrument for project activities?

Yes, refund mechanism is planned via royalty payment in case when the User generates income from the sales as a result of the project. There is 5% liability of the annual income from product/service sales resulting from the project until the realization of 100% (one hundred percent) refund of the amount disbursed by the Fund or for a period of five years after the completion of the project, depending on which condition was first met.

2. Can a company at a loss appear as an applicant?

Considering 2020 economic crisis caused by Covid-19 pandemic, 2019 is the year used as a reference when checking realized loss i.e. the applicant may be at a loss in 2020; however, if the applicant is at a loss in 2019 (year before the crisis) according to the official profit and loss account, such applicant will not be deemed eligible.

3. Can PHI appear as an applicant?

Any trading company established pursuant to the Law on Trading Companies and registered in the Central Registry of Republic of North Macedonia that meets the eligibility criteria may apply for this Public Call. Therefore, this PHI may not appear as an applicant.

4.Can a consortium consisting of two companies appear as an applicant?

Yes, the draft projects can be submitted by a particular applicant or consortium led by the applicant. However, please consider that the consortium member should participate with funds in the entire project and needs to meet the eligibility criteria in accordance with the Rulebook on the instrument.

5. Can a company with particular project from previous call for any of the instruments supported by Innovation and Technology Development Fund (ITDF) and meeting the participation criteria apply for the Public Call?

No. The applicant, up to the moment of applying for the Public Call, may not have current (active) project funded by the Fund based on any of the support instrument.

6. For which two years are annual incomes for the applicants determined?

The amount of the realized annual income and the average headcount for this Call is determined according to 2019 and 2020 Financial Statements as specified in the text of the Public Call.

7. Can an enterprise established by a foreign owner apply for this Public Call?

Yes, it can if the company is established pursuant to the Law on Trading Companies and registered in the Central Registry.

8. Is it acceptable the experts/consultants hired for project realization to be foreigners?

Yes, you may hire external persons, natural persons or legal entities from the country and abroad for the purpose of project realization.

9. Can I secure the necessary own participation via bank credit?

Own participation can be secured from own funds or credit from commercial banks. For more information about ITDF cooperation with some of the commercial banks and the benefits they offer to our customers and potential applicants go to the following link: Additional funding for Users – Fitr. .

The funds obtained from the Fund upon any other basis or any other form of state aid are not acceptable as cofounding by the applicant.

10. Is there a limitation with regards to the country of origin when procuring equipment necessary for development of new product?

 There is no limitation with regards to the country of origin when procuring equipment.

11. In the Rulebook on the instrument, in the part referring to ineligible costs, it is specified that VAT is inacceptable cost. Does this mean that the amounts in the budget are entered without VAT?

VAT is ineligible cost and the amounts in the budget should be without VAT.

12. Should the net amount given to the hired external expert be entered or the gross amount with included Personal Income tax (for national natural person) i.e. does the project cover that part as well?

When hiring external expert (natural person), it should be regulated by means of contract where the net amount + personal income tax should be defined. Considering the aforementioned and according to the former practice, gross amount can be put in the budget (net amount + personal income tax) defined in a contract, and in the course of project realization you will be obliged to pay personal income tax and the net amount. Should you not plan the amount of the personal income tax in the project budget, you will have to pay such cost from your own funds, since we must have a proof of effectuated retainer fee or compensation to natural person and personal income tax.

13. Is there any limitation with regards to the period of existence of the company, i.e. do newly established companies have the right to be applicants? новоосновани компании?

The Rulebook on this instrument does not specify any limitation with regards to the period of existence of the company - applicant i.e. newly established companies may apply as well.

14. Can a company without any employees apply for the announced Public Call?

 According to the Rulebook, there is no limitation with regards to the company headcount; however, there is limitation in the maximum average headcount which may not exceed 250 employees.

15. Should bids for procurement from vendors be submitted for the planned procurement cost within the project?

You are not obliged to submit bids in the application phase.

In case when the project is approved for funding, after the contract signing and before the realization of the procurement, for any procurement planned in the project budget exceeding the amount of MKD 615,000.00 you should submit minimum three bids and brief information on the selected vendor to the Fund.

16. Can we use the same account from the previous call for which we have obtained decision for funding?

 You can use the same account only if the previous project is finished and the account has zero balance.

17. What if any of the employees is replaced throughout the project?

Considering the fact that the project team capacity is one of the criteria for application evaluation, the employee can be replaced by a person with the same or better qualifications, whereby the request for replacement of project team member shall be subject of approval by the Committee for approval of investments.

18. In the event of receiving co-funded grant, how should the funds be used?

The funds are effectuated to special purpose account opened by the User prior to the contract signing for the Fund. The disbursement of the co-funding by the User and by the Fund is done on quarterly basis, prior to the beginning of each quarter. This means that upon the contract signing with the Fund, the User should effectuate the amount of own co-funding for the first quarter, and upon the submission of the account statement (as a proof of effectuated payment) the Fund effectuates its part of the funding for the first quarter.

The procedure is repeated in each quarter, with the difference that with regards to disbursements for each quarter, apart from submitted statement for effectuated payment of own co-funding, the User should also submit report on the previous quarter which the Fund must approve and to have 70% utilization of the funds from the previous quarter.

Otherwise, the amount of the funds per quarter is determined by the User when filling in the budget template, which is one of the mandatory templates when applying for the Public Call. In the course of preparation of the budget, the User determines for which cost the payment will be done in the respective quarter and the total amounts per quarter and the total budget are determined based thereupon.

19. Is the cost for lease of premise deemed as acceptable cost?

Yes, and it can be entered under the item Office and business support in maximum amount of 10% (ten percent) of the total budget for the project.

20. Is there a conflict of interests when leasing the premise?

Business premises cannot be leased from lessor participating in project activities or person connected with the User/consortium member.