Frequently Asked Questions
1. Why does development cooperation promote the business operations of European companies in developing countries?
Businesses from developed countries that invest in or obtain goods from developing countries can make a substantial contribution to national development: They mobilise capital and know-how, establish supply chains, create jobs and ultimately help to improve the conditions of life of poor people. The Austrian Development Agency supports and promotes enterprises that make particular efforts to achieve and maximise these effects and secure their impact in the long term.
2. In which countries can business partnerships be conducted?
Business partnerships are possible in all nations classified as developing countries by the Organisation for Economic Cooperation and Development (OECD). Precedence is accorded applications for projects in the priority countries of Austrian Development Cooperation.
3. In what sectors can business partnerships be conducted?
Business partnerships can generally be carried out in all sectors of economic life, except for projects directly or indirectly involving the production or proliferation of weapons or other war material. Also ineligible are projects for the purpose of producing or trading hazardous goods or pollutants.
4. Who is entitled to apply?
Besides companies or business consortiums, intermediary organisations in the private sector can also apply, such as chambers or interest groups. A company must have been in existence for several years and the applicant must have a good credit standing. You can find details on funding requirements here.
5. Can businesses from developing countries submit applications?
No. Only enterprises or associations domiciled in the European Economic Area (EU, Norway, Liechtenstein or Iceland) and Switzerland can apply.
6. Are there set dates or deadlines for applications?
No. Applications for feasibility studies and business partnerships can be submitted at any time.
7. How is an application submitted?
- Contact by telephone with the Private Sector and Development Team at the Austrian Development Agency (ADA): A personal discussion can quickly establish whether a business partnership is worth considering. Ideally, a basic outline of the future project can already be drawn up during this meeting.
- Using a form provided by ADA, the applicant prepares a brief project outline. If this indicates that the project is eligible for funding, the firm will be asked to submit a longer project concept. Alternatively, it can also submit an application for a feasibility study.
- A detailed application for a business partnership grant is then prepared. ADA staff assists the applicants in detailing the project idea and translating it into a project document eligible for funding.
8. When can a feasibility study grant be applied for?
Funding is made available for a feasibility study whenever it helps to assess the policy, economic, legal or also technical feasibility of a project. In addition, it can be used for preparing a subsequent business partnership and business plan. The application for a feasibility study must already include an outline of the future business model and package of measures that will form the basis for submitting a subsequent business partnership application. The applicant must make a plausible case that the business partnership can commence straight after the study, if the findings are favourable. Purely technical or preliminary studies are not eligible for funding..
9. What kind of business activity must the applicant company operate in the developing country?
The company must operate a plausible, sustainable business model in the developing country that can be expected to generate turnover and profits in the foreseeable future.
Purely charitable or humanitarian projects with no relation to the company’s commercial interests or professional capabilities are not eligible for assistance.
10. Is assistance confined to certain types of Project?
Almost all commercial projects in developing countries are generally conceivable as business partnerships. Two types of projects have, however, proved to be particularly effective:
- Measures to establish a value chain: A company is looking to obtain certain goods (raw materials, semi-finished goods or finished products) from a developing country. Business partnerships aimed at strengthening the know-how and capacities of suppliers to assure product quality and secure shipment quantities are especially effective and sustainable.
- Measures in the business environment: To be commercially successful in a developing country, it is often essential to create an enabling environment. Measures are promoted to strengthen local small and medium-sized enterprises (supply, distribution or maintenance firms), improve public administration or basic public services, maintain the health of the population and conserve the environment and natural resources.
11. Is the applicant company required to enter into specific relations with local partner enterprises?
Business relations with local partners can be regulated as the enterprise sees fit: All arrangements are suitable for a business partnership, from a simple supply contract to a joint venture to the establishment of its own subsidiary firm.
12. Which measures can be funded?
There are hardly any restrictions on eligible costs: Anything that is necessary and expedient to achieve the objective of a business partnership can be funded. A business partnership typically includes measures for qualifying the company’s own or external personnel, strengthening public institutions (building capacities and know-how or raising awareness), educating the public, obtaining certificates (ISO, Bio, Fairtrade…), improving the environment or maximising the marketing potential in the respective sales market (in the developing country itself or in developed markets). The final package of measures depends on the business and the needs of the partner country. Companies and ADA work together to find the best possible approach.
13. What is the grant amount?
A feasibility study can be funded with up to EUR 20,000, a business partnership with up to EUR 200,000. In both cases, ADA bears up to 50 per cent of project-related costs.
14. Is the assistance a loanor a non-repayable grant?
Business partnerships are funded with a non-repayable grant.
15. Can a business partnership be combined withother assistance?
In general, yes, but in the form of de minimis aid. Under EU law, a company can avail itself of altogether EUR 200,000 in state aid in a period of three years. ADA must therefore be notified of all relevant assistance on application submission and this will be deducted from the maximum funding amount of EUR 200,000.
16. Which costs are eligible for assistance?
The Calculation form distinguishes among staff, travel, material and other costs: The work input of own, external or local staff and travel costs can be budgeted on the one hand and capital investments for project implementation can be funded under material costs on the other. Where the investment remains the property of the grant recipient, only depreciation costs are eligible for funding. Information on the estimated, expected useful life of a fixed asset is available in the depreciation table issued by the Federal Ministry of Finance. Operating costs, such as rent, telecommunications, office material, translation, etc. can be itemised as other costs. The costs for the requisite auditor in accounting can also be budgeted.
17. What counts as the company’s own contribution?
All services provided by the company or its personnel count as own contributions.
18. How much of the applicant firm’s own contributions can be itemised in the budget?
The work performed by the firm’s own personnel or capital goods provided from the company’s inventory or production are budgeted solely as prime costs. All other costs, such as fees for external service providers, can be budgeted and funded at market prices.
19. Are exports of goods to developing countries eligible for funding?
A grant cannot be allocated to subsidise the shipment of goods or the provision of services to a developing country. If, however, the local business activity of the applicant company goes well beyond a simple delivery transaction, flanking measures can be funded under a business partnership, provided all the other relevant criteria have been met.
20. Can simple advisory, training or planning services be funded?
Advisory, training or planning services cannot be funded, if they are only provided once or temporarily by advisers, trainers or planners from Europe.
Projects that involve setting up, developing or strengthening independent, local service firms are of course eligible for funding, provided they deliver their services primarily through local specialists.
21. How are funding accounts settled?
On completion of a feasibility study, the following documents must be submitted to settle accounts: statement of expenditure, original bills or receipts or auditor’s report and the completed study. For a business partnership, an activity report and a statement of expenditure must be submitted every six months and an auditor’s report every year.
22. How is the grant amount disbursed?
The grant amount is always disbursed retroactively after submission of a financial report documenting the expenditure up to the respective settlement date.
23. Who executes the project?
As soon as the contract for assistance has been concluded between the company and ADA, the company bears responsibility for project implementation. It may assign its own staff, but also draw on third parties to provide project-related services on behalf and on the responsibility of the grant recipient.