Vlada Republike Srbije Sekretarijat za Javne politike The World Bank


What is meant by technological innovation?

Technological innovation is the development and successful placement into widespread use of new and improved products, services and processes from all fields of science and technology.

What is a start-up, and what a spin-off company?

The term start-up company is generally associated with a newly founded company (in the context of the Mini Grants Program, it represents an enterprise no older than 3 years at the time of its application for the Program). A spin-off is a company that was founded inside a parent company and has subsequently separated into an independent company which is often (but not always) connected with its parent organization via ownership structure.

What is meant by micro and small enterprises?

Micro and small enterprises are defined in accordance with the current Law on Accounting of the Republic of Serbia.

Eligibility – who can apply?

Can an entrepreneur apply for the Mini Grants Program?

Individuals registered as entrepreneurs cannot apply for this Program. The Applicant for the Mini Grants Program must be a legal business entity (a company) founded 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 a person be an owner of more than one company that has applied for funds from the Mini Grants Program?

Yes, they can. The only relevant issue is for the company that has applied for the Mini Grants Program is to fulfill all the conditions as stipulated in the Eligibility section 1.5 of the Mini Grants Manual.

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

The company has to be in majority private Serbian ownership (more than 51%). The company cannot be in majority ownership of a parent or holding company that has: (1) raised/received EUR 500,000 or more in total financing (equity, debt, grant or combination thereof) from public or private sources, or (2) has revenue, or is part of a group that had revenue over EUR 2,500,000 in any of the prior years.

Is it possible for the ownership of the company that is applying for the Mini 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 be in majority private Serbian ownership. This means that a minimum of 51% of the company’s equity has to be in private Serbian ownership for it to be eligible for the Mini Grants Program. If the above condition is met, the owner of the minority part can be a University, a City and 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.

Is it possible for a foreign company’s branch to apply for the Mini Grant Program?

No, a foreign company’s branch cannot apply, since the branch is not a legal entity and in the organizational and functional terms a branch depends on the company to which it belongs. The same ineligibility exists for subsidiaries and affiliated companies of foreign companies, and representative offices of foreign companies, or any other form which is not independent, majority owned private Serbian company.

Does the financing limit of EUR 500,000 raised by a company, which makes it ineligible for the Mini Grant Program, relate solely to financial funds?

The Applicant is not eligible for the Mini Grants Program if the company has raised EUR 500,000 or more from different public or private financing sources (equity, debt or grant). Yes, it pertains only to the financial funds.

What are the criteria that has to be met concerning the time frame for founding/incorporating a company?

The Applicant’s company cannot be incorporated for longer than three (3) years at the time of applying for the Mini Grants Program.

Can a company that is in majority ownership of another company (founded in Serbia), which is controlled by a foreign entity or person apply for the Mini Grants program?

A company with such structure is not eligible to apply for the Mini Grants program.

The Application

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

In order to apply for the Mini Grants Program, a company has to register on the Innovation Fund’s application Portal (available via 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.

Is it possible to apply more than one project or innovative technology by the same company?

The company that is applying for the Mini Grants Program can apply only one project proposal per public call. If the company is awarded funds for the proposed project, these funds must be used exclusively for that particular project, without the possibility of using the funds for other purposes or other projects.

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” within the Project Proposal?

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 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 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 Mini Grants Program have to be repaid (are the funds free)?

The funds received from the Mini Grants Program do not have to be repaid, as long as they are spent in accordance with the rules dictated in the Program Grant Manual.

At which point does the company have to secure the 15% minimum of funds and for which activities can the funds be used?

At least 15% of the funds have to be secured by the Applicant, exclusively in cash contribution. These funds can come from existing or potential sources of the Applicant’s own resources, other private equity or venture capital sources, private sector debt financing and other private sector cash contributions (other cash 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 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 1.7 and 1.8 of the Mini 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 Mini Grants program is made by the independent Investment Committee based on the complete and eligible application, and also considering the technical peer-review results and the results of the live pitch presentation in front of the Investment Committee, the process itself takes time. After the Application submission deadline, it takes approximately 10 weeks for a company which is selected for financing to be notified.

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 Mini Grants Awardees to open a special, dedicated account, but this procedure is to take place only in the phase of signing the Financing Agreement.

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

The funds for the Project will be paid to the Awardee’s dedicated bank account on a quarterly basis, specifically at the beginning of every quarter for the current quarter. Before the Fund disburses payment (which covers up to 85% of the quarterly Approved Project Budget), the Awardee is obligated to submit to the Fund the bank statement from the dedicated account which shows the Awardee’s co-financing payment (minimum of 15% 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.

What happens in case of ineligible expenses?

In case of ineligible expenses (based on the criteria listed in the Mini 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.

Is it necessary to hire the Project employees in advance or is it enough to make some type of conditional agreement which specifies that the mentioned employees will be hired upon financing approval? At which point is it necessary to sign contracts with people who will be employed on the project?

It is not required to hire the key proposed personnel (and other individuals which are to be employed through the project) in advance or during the Application submission process. At the time of the Application submission it is required to provide short biographies of the key personnel that will be working on the Project. Prior to the signing of the Financing Agreement, the Awardee is required to submit employment contracts/other contracts with individuals engaged on the project.

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 or patent application at the time of Application submission is not an eligibility requirement, but one of the criteria of Project evaluation is the potential for creating new intellectual property. The Applicant is required to present information about IP and know-how rights within the Business Plan, and to own or have rights to the technology being developed and the finished product or service. The “Review Guidelines” document describes the evaluation process in greater detail.

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

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 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 Mini Grants Program via consensus, based on the results of their own evaluation of the complete Application and taking into account 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 is exactly meant by a technical peer-review?

The peer review represents the first stage of evaluation of the Application for the Mini Grants Program and includes a technical peer-review conducted by independent international peer reviewers, assessing the projects on each defined evaluation criterion. The “Review Guidelines” document describes the evaluation process and criteria in greater detail.

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 the peer–review and the Investment Committee’s own analysis of each complete Application, the independent Investment Committee preselects Applications for further consideration for financing.

4) The independent Investment Committee makes the final decision pertaining to financing under the Mini 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 based on several grounds, in different phases of the evaluation process:

1)    Eligibility review – the projects of those Applicants which are not eligible to apply for the Mini Grants Program and whose Applications are incomplete 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 decision of projects by the independent Investment Committee. Applicants whose projects were not preselected are notified about the decision at this time.

3)    Final financing decision – After the completion of the live pitch presentation phase, the final decision for financing is made by the Investment Committee and all Applicants are notified at this time, about either the positive or negative financing decisions.

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 Mini Grants Program receive some advice or recommendation from the Innovation Fund 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 Mini 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 when 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 Mini 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 ESMF, 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