Serbian Government European Commission The World Bank

Eligibility – who can apply?

Can an entrepreneur apply for the Matching Grants Program?

The Applicant for the Matching Grants Program must be a legal business entity in accordance with the Serbian Company Law of 2011 (“Official Gazette” no 36/2011 and 99/2011), which stipulates four (4) types of companies: general partnership, limited partnership, limited liability company and joint stock company. Thus, if a company is founded as one of the above mentioned four types, it is eligible to apply for the Matching Grants Program. Therefore, individuals who are registered as entrepreneurs do not fulfill eligibility requirements.

Can a person be an owner of more than one company that has applied for funds from the Matching Grants Program?

Yes, they can. The only relevant issue for a company that has applied for the Matching Grants Program is that it must fulfill all the conditions as stipulated in the Eligibility section 1.6 of the Matching Grants Manual.

What are the ownership limitations of the company that is applying to the Matching Grants Program?

The Company must be founded in Serbia and it cannot have generated revenue over EUR 10,000,000 in any of the prior two years from the moment of Application. The Company also cannot be in majority ownership of a parent or holding company that has revenue, or is part of the group that had revenue over EUR 10,000,000 in any of the prior two years.

Is it possible for the ownership of the Company that is applying for the Matching Grants Program to be mixed – both private and state owned (e.g. co-owner is a University or a City) and in such a case who has to have majority ownership?

It is sufficient for the Company to have majority private ownership. This means that the Company has to be at minimum 51% in private ownership for it to be eligible for the Matching Grants Program. If the above condition is met, the owner of the minority part can be a University, a City and/or such.

Are the founders, either as individuals or legal business entities allowed to participate in the project in an advisory role for R&D, partner/subcontractor (office space and operational support), or does this qualify as a conflict of interest?

Founders are allowed to participate on projects as subcontractors, R&D advisors/consultants operational support, etc. as long as there is no conflict of interest based on the following documents:

  1. Confidentiality Policy and Prevention of Conflict of Interest Policy of the Innovation Fund
  2. World Bank’s “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated January 2011 (Anti-Corruption Guidelines)
  3. World Bank’s “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011 (Consultant Guidelines)
  4. World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011 (Procurement Guidelines)

and there is unquestionable arm’s length in that transaction (for legal entities). Arm’s length means that the two entities must be financially and operationally independent from each other and that all the proposed transactions between them are fair transactions (made with respect to commercial practice and market conditions).

Note: This answer does not imply any liability towards the Innovation Fund in any of the phases of program realization nor during the undertaking of any action by the Innovation Fund within the Innovation Serbia Project.What is the criterion that has to be met concerning the time frame for founding/incorporating a company?

There are no limitations regarding the founding date of a company applying for the Matching Grants Program.

Can one company apply for both the Mini Grants Program and the Matching Grants Program at the same time?

Applying for one Program does not prevent the company from also applying for the other Program.

The Application

What is the application process by a company for the Matching Grants Program?

In order to apply for the Matching Grants Program, a company has to register on the website of the Innovation Fund, and to fill out the Company registration request application form which includes basic data about the company (among others: tax ID, legal type, company headquarters and contact person info). The application documents must be submitted before the application submission deadline. It is the Applicant’s responsibility to ensure the timely submission of the information/documents.

Within the application regarding financial documentation, it is stated that the Company has to provide “Audited financial statements for the last 2 years, where applicable”. Is this mandatory for all Applicants?

This request is being applied in accordance with the Law on accounting and auditing, which defines what type of companies are obligated by Law to have their financial statements audited. Therefore, it is only necessary to provide audited financial statements if the Applicant is legally obligated to have their financial statements audited, or conducts regular audit due to its own free will.

Within the Application, there is necessary documentation concerning “Certificate from Serbian business registration agency (SBRA) that there are no liquidation or bankruptcy cases against the Applicant” as well as “Certificates from the Commercial and Magistrates court that the Applicant has not been banned, permanently and temporarily, from running its business operations”. What are the appropriate institutions from which to obtain the abovementioned certificates?

The following Certificates are required as part of the Matching Grants Program Application process (the Fund reserves the right to request additional certificates, if necessary):

1) Certificate issued by Serbian Business Registers Agency (SBRA) that there are no liquidation or bankruptcy cases against the Applicant;

2) Certificate from the Commercial court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations;

3) Certificate from the Magistrates court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations;

Does the document “Financial Forecast” have to be filled out so the first year of the forecast starts with the moment of the project’s start, or from the moment of project’s completion?

This document is supposed to provide a projection of future revenues and other financial indicators, starting from the moment of Application submission. The goal is to utilize this document to create a forecast of the newly developed product/service/technology’s impact on the company’s future course of business and profitability.

Is it possible to provide documentation in hard copy after the project submission deadline has expired?

Documentation in hard copy can arrive at the Fund’s address after the deadline, but the mail parcel has to be clearly postmarked before the submission deadline.

Can the following hard copy certificates be sent out subsequently, i.e. can they be delivered after other Application documentation has been sent to the Fund?

No documents can be subsequently provided after the final application deadline including  the following certificates:

  • Business Registration Form issued by Serbian Business Registers Agency (SBRA), not older than six (6) months at the time of submission of the Application
  • Certificate issued by Serbian Business Registers Agency (SBRA) that there are no liquidation or bankruptcy cases against the Applicant
  • Certificate from the Commercial court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations
  • Certificate from the Magistrates court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations
  • Certificate issued by the competent tax authority to have all due taxes, contributions and other levies paid for current year in conformity with national regulations

Is the number of slides and file size (in MB) limited for the PowerPoint document “Company and Project Presentation”?

The document “Company and Project Presentation” is to be downloaded from the Fund’s official website and its maximum size and number of slides is predefined. It is not possible to provide a different format of the presentation besides the one found on the Fund’s official website.

Can costs related to direct presentations of a product/service to potential buyers be planned in the budget category titled “VII Sales and marketing cost”?

Costs related to direct presentations, as well as similar forms of marketing (for example: participation in fairs, exhibits and demonstrations) all fall under eligible expenses of “VII Sales and marketing cost” category.

What can be considered an eligible expense under the “Offices and business support” category? Can utilities be listed in this category?

Some of the items that fall under eligible expenses in the category “Offices and business support” are office/workshop space renting, internet and telephone bills, electricity and heating (utilities in general), office supplies and stationery, accountant/legal fees, etc.

Can an already uploaded document on the Portal be changed until the end of the submission deadline, i.e. can new/improved versions of an already uploaded document be subsequently provided?

A document that has already been uploaded can be freely changed before the submission deadline. When the Applicant has uploaded the final version of all the required documents for the Application, they have to hit the “Submit” button in order for the Application to be sent and be valid.

Financing and co-financing

Do the funds received from the Matching Grants Program have to be repaid (are the funds free)?

If the project is successful (generates revenue), the Applicant will be required to pay royalties in the maximum amount of 120% of the received Matching Grant funds. This will be done either by paying the Fund 5% of annual revenue generated by the newly developed product/service (15% if the company is licensing it to a third party) for the next 5 years after project completion, or by repaying 120% of the grant, whichever comes first. In case of unsuccessful commercialization of the product/service, the Fund will share the risk with the Applicant and no royalty payments are required.

Is EUR 300,000 the total amount of financing for a project – including the company’s co-financing, or can the project’s total budget exceed EUR 300,000?

The project’s total budget can exceed EUR 300,000. This figure represents the maximum amount up to which the Fund can finance a project.

Does the 30% co-financing refer to the amount which is obtained when EUR 8,000 for training is deducted from the total project budget?

The total Project Budget includes EUR 8,000 for mandatory training. The Applicant is obligated to participate in the co-financing of this item with at least 30% of the total Project Budget for the Matching Grants Program.

At which point does the Company have to secure the 30% minimum of funds and for which activities can the funds be used?

At least 30% of the funds have to be secured by the Applicant, by means of own resources in cash contribution, existing or potential private equity or venture capital sources, private sector debt financing and other private sector cash contributions (other sources may be taken into consideration). The Applicant’s co-financing must be absolutely independent from the Fund. Since the disbursement for the project is made quarterly, it is not necessary to be in possession of the co-financing funds at the time of the application. However, it is required to provide evidence that the funds will be secured for the purpose of the project upon its start. Eligible and ineligible expenses for which total funds can be used are defined in section 1.8 and 1.9 of the Matching Grants Program manual.

At what time will the Company be notified that it has received financing?

Taking into consideration that the final decision pertaining to financing under the Matching Grants program is made by the independent Investment Committee based on the complete and eligible application, peer-reviewer results and on-site visits results, the process itself takes time. After the Application submission deadline it takes approximately 10 weeks for the Company which is selected for financing to be notified.

Does the Matching Grants program allow for expenses related to sales and marketing?

Yes. Unlike with the Mini Grants Program, expenses related to sales and marketing are treated as eligible within the Matching Grants Program.

Does the Company which does not get approved for financing have the right to apply again?

Yes, the Company that was denied financing has the right to apply again.

Does the Company which has been approved for financing have to open a dedicated account in a bank, or can it continue using its existing account?

It is necessary for the Matching Grants Awardees to open a special, dedicated account during the application phase, or in the moment of signing the Financing Agreement.

When and how will the funds be disbursed to the Awardee?

The funds for the Project will be disbursed to the Awardee’s dedicated bank account on quarterly basis, specifically at the beginning of every quarter for the current quarter. Before the Fund disburses payment (which covers up to 70% of the quarterly Approved Project Budget), the Awardee is obligated to submit to the Fund: the bank’s dedicated account statement showing the Awardee’s co-financing payment (minimum of 30% of the quarterly Approved Project Budget) for the particular quarter, as well as quarterly Progress Report and quarterly Financial Report, along with other required Project-related documentation. Upon review and approval of the reports by the Fund and positive outcome of the monitoring visit (when applicable) the project financing for the next quarter will be disbursed.

To what extent is it important to follow the suggested budget structure?

In the Matching Grants manual there is a section that recommends an organization of expenses, but it is up to the Applicant to decide how they will organize the expenses of the Project, in accordance with the Project needs and its implementation.

Is there a limit when it comes to Project duration? Is it the same as with the Mini Grants Program – 12 months?

The Project and its budget have to be designed for completion within a maximum of 24 months. Continuation of financing for the second year is confirmed by the independent Investment Committee, as described in section 4.3 of the Matching Grants Manual.

Is there an extra round of evaluation after the first year of project implementation?

The confirmation for continued financing for the second year under the Matching Grants Program is made by the Fund’s independent Investment Committee. The Awardee is obligated to provide the following two (2) documents for the purpose of evaluation by the independent Investment Committee’s: Project Progress and Development Plan for the Second Year and Project Budget for the Second Year. The Awardees whose applications for continued financing for the second year are confirmed by the independent Investment Committee will be eligible for continued financing under the Matching Grants Program.

What happens in case of ineligible expenses?

In case of ineligible expenses (based on the criteria listed in the Matching Grants Manual, but not limited to those instances), the Innovation Fund has the right to deduct the amount treated as “ineligible expenses” from its next quarterly disbursement, but also to demand the Awardee to pay back all or any part of the amount of the financing disbursed in the quarter, in the event that the Awardee fails to perform any of its obligations under the Financing Agreement.

Also, is it possible to transfer unspent funds from one quarter to the next?

Unspent funds from one quarter can be transferred and spent in the next one, but drastic under-spending compared to the Approved Project Budget may raise the issue of the Project’s progress, adequacy of the budget and development activities.


How is the training organized for the Awardees and what fields will the training include?

The mandatory training of Awardees is previously approved by the Fund based on input from Awardees and the Fund’s consultants. Training expenses of EUR 8,000 are paid from the Approved Project Budget and are intended to be used for training the Company’s key personnel on issues facing entrepreneurs in early stage technology development and commercialization. Awardees will be asked to propose the specific training topics which are suitable for their businesses. Training cost, such as travel, tuition, fees, subsidence and other training-related costs will be paid from the Approved Project Budget.

Intellectual Property (IP)

Is the patent registration required, or more precisely does the technology have to have patent potential or is it sufficient that there is a possibility of commercialization?

Having a registered patent at the time of applying is not an eligibility criterion. Patent application, fees and certifications is an eligible expense within the Matching Grants Program.

Is it necessary to transfer copyright ownership on software specifications or is it enough to receive right of use?

The Applicant is required to show  proof of IP and know-how rights, including but not limited to licensing agreements, in-kind contribution agreements, options or commitments, if any, and other agreements confirming that the Applicant owns or has rights to the technology being developed and the finished product or service. Thus, it is not required for the copyrights to be in the Applicant’s ownership, but an agreement (e.g. licensing agreement) on the right to the technology / product or service is required.  All new intellectual property and know-how, which may be created during the Project implementation, must belong to the Applicant. It is the Applicant’s obligation to secure intellectual property rights and know-how for contracts with third-parties.

What is the acceptable proof of Intellectual Property (IP) which needs to be submitted as part of the Application, in case the Company develops its own software product?

Taking into consideration the specific nature of the software product, it is up to the Applicant to decide what documentation will optimally prove IP rights (e.g. Statement of IP rights belonging to the Applicant signed by the authorized representative of the Applicant).

Employment requirements

Are there any specific requests in regards to the number of employees and their qualification?

In accordance with the Matching Grants Manual, no employment requirements are defined. It is up to the Applicant to determine how many employees will be hired for the purpose of the project and its implementation. However, one of the evaluation criteria is the management and key staff qualification, as well as the Company’s ability to deliver the project. The “Review Guidelines” document describes the evaluation process in greater detail.


Who evaluates the Company’s Project Proposal and makes the financing decision?

Technical aspects of the Project Proposals are initially reviewed by the independent international peer-reviewers. Based on the results of the peer–review, the complete Application, and results of the on-site visits (of the pre-selected Applications) the independent Investment Committee makes the final decision for financing under the Matching Grants Program.

What are the steps in the evaluation process of the Project Proposals?

1) After the Application is submitted, the Innovation Fund’s Program Managers will do a desk review of the eligibility and completeness of the submitted Application, including initial screening of the submitted documents.

2) The pre-evaluation of the Applications includes a technical peer-review by independent international reviewers.

3)  Based on the results of peer–review and the complete Application, the independent Investment Committee pre-selects Applications for further consideration for financing.

4)  The pre-selected Applicants will be visited by the Innovation Fund’s Program Managers to meet with the Applicant companies’ management and executives.

5)  Upon completion and taking into consideration results from all of the above mentioned steps, the independent Investment Committee makes the final decision pertaining to financing under the Matching Grants Program.

At what part of the evaluation process is the Company informed that it did not receive financing?

Applicants may be rejected for financing in different phases of the evaluation process:

1)     Eligibility review – Applicants which are not eligible to apply for the Matching Grants Program, as well as incomplete Applications will not be considered for further evaluation. Ineligible Applicants will be contacted after the conclusion of this phase.

2)     Pre-evaluation of Applications – Applications are initially peer-reviewed by the independent international reviewers, followed by a review and pre-selection of Applicants by the independent Investment Committee. Pre-selected Applicants are notified of the decision at this time.

3)     Financing decision – After the completion of the evaluation process, the final decision for financing is made by the Investment Committee. The Applicants which do not receive financing are notified at this time.

Will the Applicant which does not receive financing under the Matching Grants Program, receive some advice or recommendation on how to improve their project in the future?

Yes, both the Peer-Reviewers and the independent Investment Committee will provide comments on the submitted Project Proposals. These comments and recommendations are aimed at helping the Applicant improve their Project Proposal. Following the independent Investment Committee’s final decision for financing under the Matching Grants Program, all eligible Applicants that were not selected for financing will receive the above mentioned comments.

How will the Innovation Fund protect Applicants from any misuses of the Company’s project ideas by the personnel included in the evaluation?

All peer-reviewers, independent experts, members of the independent Investment Committee and the employees of the Innovation Fund have signed and accepted all the terms of the Confidentiality Policy and Prevention of Conflict of Interest Policy.

What is the basis of the Environmental Screening Questionnaire review and at what time are the review results announced to the Applicants?

All Applicants are required to submit a completed Environmental Screening Questionnaire (ESQ) as part of the Application for the Matching Grants Program. An independent environmental expert engaged by the Innovation Fund is responsible for the assessment and evaluation of the ESQ. Environmental assessment procedure is described in detail in the Environmental Management Framework (EMF). Evaluated activities of the Project Proposal are classified in accordance with the following three screening categories:

1)     Category I – Project related activities which are not expected to have an effect on the environment. Activities that fall into this category are not subject to further environmental impact assessment.

2)     Category II – Project related activities which do have an impact on the environment. Environmental Management Plan (EMP) will be needed to be done.

3)     Category III – Not suitable for financing.

Only pre-selected Applicants will be notified about the results of the ESQ if their Project related activities are deemed to fall under Category II and an EMP will be needed.

In the Environmental Management Framework (EMF), under the section of EXCLUSIONS, that states which kind of projects will not be financed, the last bullet states: “Any construction and rehabilitation activities, including very small, refurbishment or renovation activities or any scope of civil works”.  Are potential Applications from the field of construction – new materials which, among other, includes construction of a prototype, contrary to the EMF regulations?

Construction of a prototype in order to test new construction material(s) or innovation in the construction sector is acceptable as long as it is experimental, and is not a construction as defined in the EMF, provided that this prototype is located on the Applicant’s property (no change of land use or additional land purchase). Standard Environmental Management Framework (EMF) screening procedures and supervision will be implemented.