Vlada Republike Srbije Sekretarijat za Javne politike The World Bank

Eligibility – who can apply?

Can an entrepreneur apply for the Matching Grants Program?

No, an entrepreneur cannot apply for this program. The Applicant for the Matching Grants Program must be a legal business entity in accordance with the active Serbian Company Law, which stipulates four (4) types of companies: general partnership, limited partnership, limited liability company and joint stock company.

Can one person own 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 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 have majority private ownership (more than 51%), be founded in Serbia and it cannot have generated revenue over EUR 50,000,000 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 50,000,000 in any of the prior two years.

Is it possible for the ownership of the company 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 who has to have majority ownership in such a case?

It is sufficient for the company to have majority private ownership. This means that the company has to be at least 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 Confidentiality Policy and Prevention of Conflict of Interest Policy of the Innovation Fund, as well as long as 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 phase of program implementation nor during the undertaking of any action by the Innovation Fund.

What are the criteria that have 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, but a company cannot apply for both Programs with the same project proposal.

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 (available at http://www.innovationfund.rs/apply/), 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.

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 apply for additional financing under the Fund’s programs in case that the company is already implementing a project with the Fund?

Companies that are currently implementing a project under Mini Grants program, Matching Grants program or CGS program (In the capacity of the Lead Applicant) must fully complete the project implementation and sign a Final Settlement with the Fund before they apply for the financing under any of the Fund’s grant scheme programs. Applications coming from companies already implementing a project with the IF will not be taken into consideration.

The exception is the Innovation Voucher program where companies can apply at any time.

Does a company which does not get approved for financing have the right to apply again with the same project?

Yes, a company which was rejected for financing has the right to apply again with the same project. However, a company can resubmit the same Application only once. Any Application which is fundamentally the same as any other two Applications (i.e. based on essentially the same innovative technology, product or service and business plan) previously submitted by the company to the IF in any of the previous calls will not be taken into consideration for financing.

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 or the IF Portal and its maximum size and number of slides are predefined. It is not possible to provide a different format of the presentation besides the one found on the Fund’s official website.

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.

Eligible expenses

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., but these items must be directly related to the needs of the project for which financing was awarded.

Can the project funds be used for the business development and marketing costs?

Direct marketing costs are not allowed due to the State Aid rules. However, certain costs of business development services incurred directly as a result of research activities can be financed, for example market research, project cycle management, business strategy development services, etc. It is up to the company to provide enough evidence within the application why this costs are directly related to the R&D activities of Project Proposal.

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.

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 Approved Project Budget (40% if the Applicant is a medium enterprise) have to be secured by the Applicant from other, private sources independent from the IF, exclusively in cash contribution. These funds can come from existing or potential own capital, private equity or venture capital sources, private sector debt financing and other private sector cash contributions. 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 because these funds will be disbursed once the project begins implementation. However, it is required to provide evidence in the business plan template on how and from what sources 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?

Considering 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, taking into account the peer-review results and the results of the live pitch event held before the Investment Committee, 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 direct sales and marketing?

No. Direct expenses related to sales and marketing are treated as ineligible within the Matching Grants Program due to the rules on awarding state aid funds.

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, but this procedure is to be executed only in the moment of signing of 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, and up to 60% for medium-sized companies), 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 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.

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.

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.

Intellectual Property (IP)

Is it required to have a registered patent, 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 to the company or is it enough for it to receive right of use?

The Applicant is required to present information regarding IP and know-how rights in the Business Plan, and to own or have 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. license 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.


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

Technical aspects of the Project Proposals are initially reviewed by the independent international peer-reviewers, who provide their expert opinions on the quality of the project, but do not have any decision-making authority. After that, the independent Investment Committee will make a preselection decision for the Matching Grants Program via consensus, based on the results of their own evaluation of the complete Application and the results of the independent peer–review. The final decision on financing is also made by the Investment Committee via consensus, at the end of the live pitch project presentation phase in which all previously preselected projects participate.

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

1) After the Application is submitted, the Innovation Fund’s staff will do a desk review of the eligibility and completeness of the submitted Application, including initial screening of the submitted documents in order to ensure their technical and administrative compliance.

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 Investment Committee’s own analysis of each complete Application, the independent Investment Committee pre-selects Applications for further consideration for financing under the Matching Grants Program.

4) The independent Investment Committee makes the final decision pertaining to financing under the Matching Grants Program via consensus, at the end of the live pitch presentation phase.

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.

If a project is preselected, is the live pitch presentation before the Investment Committee done using the PowerPoint presentation originally submitted within the Application?

No. After an Applicant has been notified that their project was preselected, they need to submit a new presentation which is suited to the format of the final pitch event – it is necessary to present the project within a 10 minute time frame, while the remaining time will be reserved for questions raised by the Investment Committee. The aforementioned presentation needs to be delivered to the IF in PowerPoint format by the date requested by the IF and at least 7 days before the scheduled date of the presentation.

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

Yes, all Applicants will receive comments on their 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 Investment Committee 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.

Environmental and Social requirements

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 and Social Management Framework (ESMF). 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 and Social Management Framework (ESMF), 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 ESMF 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 Plan (EMP) screening procedures and supervision will be implemented.