FUNDING OPPORTUNITIES FOR R&D IN AUSTRIAABA's Virtual Open Day Reloaded

BDO Consulting – Petra Lahofer, MBA01.10.2020

2

TAXIn order to be successful in the market, an alongside consultant who will

provide solutions for complex challenges and acts as a future oriented guide,

is essential. Many years of experience and professional expertise ensure you to

receive a thorough perspective on all national and international tax issues and

guarantee the seamless development of your tax affairs.

AUDITGenerating added value and the creation of trust, distinguish our company.

The focus of our work as auditors lies with personal support and reliability, as

well as the highest international auditing and quality standards.

CONSULTINGWe shape businesses permanently into top form. With the help of our on

of tools and

increase the

multidisciplinary based know-how and our vast spectrum

methods, we offer individual and innovative solutions to

performance of your company.

CORPORATE FINANCEAs things go faster and faster in our world, it is more important than ever to

be able to count on specialists with extensive expertise. We offer advise

concerning all questions about transactions and financing. Further, we conduct

due diligence investigations as well as company valuations, in order for you to

be able to make well informed corporate finance decisions.

BUSINESS SERVICES & OUTSOURCINGWe are here for you. So you can continue to focus on your core competency,

we support you with the execution of all your finance processes and provide

reliable data for your entrepreneurial decisions.

WELL - ROUNDED FIVE INDUSTRIAL

APPLICATIONS

WE ENABLE COMPLETE GEAR SOLUTIONS THROUGH OUR EXTENSIVE PORTFOLIO

CONSULTING

Management Consulting

Risk Advisory

Digital

People & Organisation

3 CHANGE HAPPENS, INNOVATION LEADS.

Information Technology

Funding

Portfolio Overview

Innovation, transformation

and security need the best

minds - BDO Consulting has

them.

We manage complex scopes

with a wide range of

innovative solutions, state-

of-the-art tools and

extensive know-how - from

the first analysis through to

the final implementation, on

a national and international

level.

Our goal is your lasting

success!

Change happens,

Innovation leads.

WE ACCOMPANY INNOVATIVE COMPANIES IN THE PROJECT DEVELOPMENT AND PROMOTION OF R&D PROJECTSExtract of our consulting service portfolio

Funding

Funding screening & Conception

Overview of strategic topics & investments (roadmap)

Individual clarification of the eligibility for fundingof

individual projects & plans

Screening of funding programs (regional, national, EU

level) & concept development

State-aid law

Funding controlling & Project management

Coordination of project teams/consortia in project

management

Ongoing monitoring of project progress & budget

Reporting & communication with the funding agency

Preparation of funding applications & Partner

search / Consortium

Topic sharpening & project structuring

Integration of relevant departments & collection of

project information

Information preparation, budget preparation, project

planning, document preparation and submission

Preparation of the project consortium & coordination

of partners

Research Bonus

Survey of all R&D projects, activities & costs

Structuring into R&D main points

Preparation of technical project descriptions &

calculation bases

4 CHANGE HAPPENS, INNOVATION LEADS.

THE LOGIC OF R&D&I

FUNDING IN AUSTRIA

5

MAIN DIRECT FUNDING INSTRUMENTS AND CONDITIONSAn excerpt

Grants

Traceable grant/cash grant (e.g. foundation premiums, pre-seed, FFG subsidy)

Loans / Credits

Low-interest loans (e.g. ERP credits, FFG loans)

Garantuees

Credit protection through the adoptionof liability by the funding agency (e.g. aws liability)

Company headquarters in Austria (already established or in the process of being established)

Most of the R&D costs must be incurred at the location in Austria

Strong focus on the development of R&D competencies (employees, know-how, infrastructure) in Austria

R&D activities and results must:

▪ exhibit technical risk and uncertainties of outcome,

▪ have a high novelty content (above the state ofthe art) and

▪ demonstrate high market and location potential (regional and national)

Companies must be able to prove the ability to finance the non-funded part

Beyond that one achieves plus points through:

▪ Cooperation with Austrian universities andresearch institutions

▪ high potential for patents and licenses

▪ Investments in infrastructure and location

Main conditions for R&D&I fundingMain direct funding instruments

THE PRONOUNCED FUNDING LANDSCAPE OFFERS SUPPORT IN ALL PHASES – DIRECT FUNDING FOR PROJECTS (GRANTS)Company and technology life cycle

Foundation Phase Expansion-/Growth Phase

▪ Business idea

▪ Business model development

▪ Team finding

▪ Conception

aws PreSeed aws Seedfinancing

time

aws Double Equity

FFG AT:net

FFG thematic programmes

H2020 FET

H2020 SME Acellerator, P2 / FTI

H2020 IAs

FFG BasisprogrammeFFG Bridge

AWS Creative Impact

AWS IP Market

H2020 RIAs

H2020 ERC

FFG Feasibility

AWS guarantees and ERP loans

WKO go intern.

PreSeed-Phase Seed-Phase

▪ Company foundation

▪ Product development

▪ Market research

▪ Prototyping

Expansion Phase

▪ Expansion strategy

▪ Product development

▪ National market penetration

▪ Proof of concept, first revenues

Growth Phase

▪ Sustainable growth

▪ Diversification

▪ Expansion into foreign

markets

Nati

onalPro

gra

mm

es

EU

Pro

g.

TRL 1-6 (7): Basic research up to tested prototypes TRL 7-9: Finalising and market introduction

THE GREATER YOUR R&D RISK, THE HIGHER YOUR FUNDINGThe bigger the company, the smaller the grant (Exception: EU H2020)

Nationally, the closer to the market (TRL 7-9), the less subsidy is granted

De-minimis rule applies here (partially - e.g. AT:net, WKO go international)

€

Risk

Grants for large enterprises 19- 25% + loan up to 50%, Start-ups up to

70% financing (grant + loan) – TRL 4-6/7

Grants for large enterprises 35-55%, SME 50-80% - TRL 3-6/7

Grant for all enterprises 25-35% - TRL 7-9

H2020

EICAccelerator

FFG Thematic Programmes

FFG Basis

FFGAT:net

Grant for SMEs 70% - TRL 6-9

Grant for all enterprises 70 - 100% - TRL 3-6/7

IN ADDITION, FOR ALL R&D EXPENSES WITHIN A YEAR, LESS THE ALREADY RECEIVED GRANTS, A TAX CREDIT CAN BEGRANTEDA tax credit as indirect R&D funding instrument

Foundation Phase Expansion-/Growth Phase

PreSeed-Phase Seed-Phase Expansion Phase Growth Phase

▪ Business idea ▪ Company foundation ▪ Expansion strategy ▪ Sustainable growth

▪ Business model development ▪ Product development ▪ Product development ▪ Diversification

▪ Team finding ▪ Market research ▪ National market penetration ▪ Expansion into foreign

▪ Conception ▪ Prototyping ▪ Proof of concept, first revenues markets

aws PreSeed aws Seedfinancing aws Double Equity

TRL 1-6 (7): Basic research up to tested prototypes TRL 7-9: Finalising and market introduction

mmesAWS Impulse XS AWS Impulse XL AWS guarantees and ERP loans r

rP

FFG Feasibility FFG thematic programmes WKO go intern. l

FFG Bridge FFG Basisprogramme FFG AT:net AWS IP Market

H2020 ERC H2020 SME Instrument, P2 / FTI g.or PU

H2020 FET H2020 RIAs H2020 IAs

Zeit

14%* Research Premium (tax incentive)*from financial year

The research premium will be granted for…

… for in-house research and experimental development

within a domestic company or domestic business premises and

…. contract research

The research premium is….

… a credit on your tax account of 14%

(for in-house R&D “uncapped”, for contract research is the tax bases capped with EUR 1 Mio.)

… regardless of your taxable profit

R&D&I ACTIVITIES ELIGIBLE FOR FUNDING – CRITERIAS TOBE FULFILLEDTwo forms of funding for R&D&I – direct (project grants) and indirect (tax incentive)

Direct R&D funding (mainly non-repayable grants)

Indirect funding (research premium; tax incentive)

Innovative

Technological risks &

methodical approaches to

find solutions

Novelty

Comparison of eligibilty criteria

=

Uncertainty

Systematic procedure

Transferability &

pepeatability

R&D costs at Austrian location R&D costs at Austrian location

=

=

The criteria to be fulfilled for direct R&D funding (i.e. grants) and indirect research

premium are nearly the same!

OPTIMISED R&D FINANCING VIA DIRECT AND INDIRECTFUNDSScenario Start-up (SME) vs. large enterprise – Example calculation

R&D & foundation costsMEUR 1.2 costs for foundation and growthMEUR 1 R&D costs until prototype (thereof

KEUR 800 submitted for FFG Basisprogrammfunding)

Total MEUR 2.2 / thereof MEUR 1 R&D

Scenario I – Start-up

Potential financing

Preseed grant (<KEUR 200)

Seedfinancing repayable grant (<KEUR 800)

FFG Basisprogramm (<MEUR 3; <70% financing:

grant 31% + low-interest loan 39%)

Research Premium 14%

Plus Double Equity Option

Scenario II – Large Enterprise

Potential financing

FFG Basisprogramm (<MEUR 3; <50%

financing: grant 19% + low-interest loan 31%)

Research Premium 14%Scenario I - Start-up

Financing for R&D and foundation/growth costs >70% possible.

Share

not

covere

d b

y

public d

irect

funds

R&

D a

nd c

ost

for

foundati

on/g

row

th

Fin

ancin

g v

iaAW

S

&FFG

Rese

arc

h p

rem

ium

14%

Share

not

publicly

financed

(dir

ect

&in

dir

ect)

2.200.000

640.000

-1.560.000534.720

-105.280

-1.665.280(-76%) in € in €

Cost basis

(assumption)

MEUR 1 = all

R&D costs

reduced by

received

funds

R&

D a

nd c

ost

sfo

r

foundati

on /

gro

wth

Share

not

covere

d b

y

public d

irect

funds

Fin

ancin

g v

iaFFG

Rese

arc

h p

rem

ium

14%

1.800.000

Share

not

publicly

financed (

dir

ect

&in

dir

ect)

2.200.000

-518.720(-24%)

-400.000 1.681.280

-118.720

Cost basis

(assumption)

MEUR 1 = all

R&D costs

reduced by

received

funds

Scenario II – LE

Financing for R&D and foundation / growth costs >20 % possible potential for increase, depending on no. of suitable topics & projects to be funded.

CHANGE HAPPENS, INNOVATION LEADS.12

IN CASE YOU

HAVE ANY

QUESTIONS

PETRA

LAHOFER

Senior Manager

Head of Team Funding

+43 1 537 37 - 736

petra.lahofer@bdo.at