Public Funding Framework
A large part of incentives are funded through the financial resources provided by the European Union (EU). The German government and the federal states also provide own funds.
The amount of the financial resources provided for European wide distribution is set by the EU for several years in funding periods in line with uniformly implemented regulations in accordance with European competition rules. The EU also defines structural and thematic priority areas that may receive funding.
Incentive Allocation in Germany
The main portion of the available incentives funds is administered independently by the EU member states receiving the funds.
In Germany, incentive allocation is organized at the federal and federal state level through incentives institutions. They are in charge of administering EU as well as German government funds.
Only a small portion of incentive funds is managed by the European Commission in Brussels. Incentives funds centrally administered by the European Commission must be applied for at the commission’s executing agencies. In Germany, so-called “national contact points” offer application support, especially when it comes to EU R&D funds applications.
Germany Trade & Invest’s incentives experts will assist you in identifying the appropriate incentives institution.
EU Criteria Determining Company Size
The size of a company is an important criteria to determine the possible incentives level a company may receive. Most incentives programs offer the highest incentives rates to small and medium-sized enterprises (SMEs). Some programs may even specifically target SMEs (this is very often the case with R&D programs).
Company size is generally determined according to an EU-wide classification system in which companies are categorized as being small, medium-sized or large according to their employee numbers, annual turnover and/or annual balance sheet total.
| Enterprise Category | Employee Numbers | Annual Turnover | Annual Balance Sheet Total | |
| Small Enterprise (SE) | < 50 | ≤ EUR 10 million | or | ≤ EUR 10 million |
| Medium-Sized Enterprise (ME) | < 250 | ≤ EUR 50 million | or | ≤ EUR 43 million |
| Large Enterprise (LE) | ≥ 250 | > EUR 50 million | or | > EUR 43 million |
The criterion concerning the headcount is compulsory. In addition, either of the annual turnover or the balance sheet criteria must also apply. Please refer to the explanation of the European Commission for more information.
