SME Diversification & Innovation Grant Scheme


Scheme is aimed to encourage investment in the innovation and diversification to ensure that enterprises react timely to operations challenges such as market saturation.

The scheme is administered by the Measures and Support Division within the Ministry for European Affairs and Implementation of the Electoral Manifesto.

Total scheme budget

 €8 million (annual indicative thresholds of €1.6m).

Maximum grant

€200,000 being 50% part-financing of eligible expenditure. Expenditure financed should be implemented within 24 months from the date of grant agreement.

Duration of scheme

Operational until 31st December 2020 (subject to availability of funds)

Eligible enterprises

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An enterprise should be of any legal form (including self-employed & family run businesses), however it should be engaged in an economic activity.

Excluded enterprises

  • Undertakings subject to collective insolvency proceedings;
  • Undertakings that have not honored their obligations further to issued recovery order in terms of Co-funded Cohesion Policy 2007-2013, 2014-2020;
  • Agriculture, Forestry and fishing activities. It includes the processing and marketing;
  • Manufacturing, processing and marketing of tobacco and tobacco products.
  • Public entities;
  • Energy generation, distribution and infrastructure;
  • Steel and coal sectors;
  • Shipbuilding sector;
  • Transport sector;
  • Synthetic fibers sector;
  • Financial and insurance activities;
  • Real Estate activities;
  • Gambling and betting activities;
  • Training and mentoring activities;
  • Engaging in an illegal economic activity. 

Eligible Actions

Investment in tangible & intangible assets in relation for the following implementation:

  • Development of new products & services that were not previously produced;
  • Implementation of a fundamental change in the existing production process;
  • New economic activity resulting from diversification of activity. The new activity performed should not be same or similar to the activity previously performed.
  • Adoption of solutions that lead to development of a significant improved product or service;
  • Acquisition and integration into the business operations, new or significant advanced solutions than those currently in use.

Actions from diversification of activities should result in the beneficiaries engaging in one of the following activities:

  • Production, manufacture, improvement, assembly, preservation, processing of goods, materials, commodities, equipment, plant machinery;
  • Biotechnology, pharmaceuticals and life sciences;
  • Repair, overhaul or maintenance of pleasure crafts, yachts having less than 100gt, aircraft, engines or equipment incorporated or used in such vessel or aircraft;
  • ICT development activities, software development;
  • Creation of tourism products and/or services resulting from networks between traditional tourism and the crafts/artisan sector;
  • Tourism products and/or services related to emerging niche markets;
  • Tourism products and/or services related to promotion of natural and cultural heritage;
  • Tourism products and/or services related to social tourism especially senior, accessible and active ageing tourism;
  • Development of innovative concepts, products and or services offered by Boutique Hotels and Palazzini;
  • E-health solutions;
  • Products and/or services promoting healthy living, active ageing, child-day care;
  • Creation of crafts and artisan products;
  • Retail activities by self-employed and family businesses engaged in craft;
  • Introduction of products/services that can be marketed and distributed internationally and which are typically more advances than those prevailing in their respective industry in terms of technology, know-how and skills.

Eligible cost

  • Leasing/rental of privately owned operational premise. These should not exceed the 10% of total eligible project cost. Lease or rental agreement must continue for at least 3 years after completion of project.
  • Construction/up-grading costs. These should not exceed the 10% of total eligible project cost.
  • Purchasing of new equipment, machinery and/or plant. These should remain operational for at least 3 years after investment completion.
  • Patents and licenses. These should not exceed the 10% of total eligible project cost.
  • Wage costs related to the wage of a Change Manager employed specifically through the project to drive the necessary change within the enterprise through the diversification or a fundamental change initiative. The Change Manager needs to be a new employee filling a newly created position. The person cannot be a director, shareholder in the undertaking or has been an existing employee in the prior 12 months from submission of application.

Maximum support is €30,000 over a 24 months period. If the period of implementation is less, aid is calculated prorata.

Ineligible costs include

  • Shipping cost, insurance for equipment, plant, machinery;
  • Maintenance and repair;
  • Tax including VAT and other duties;
  • Training;
  • In kind contributions;
  • Service charges arising from finance leases, hire purchase and credit arrangements.
  • Litigation cost resulting from claims for damages and fines;
  • Statutory fines and penalties;
  • Payments of gifts and donations;
  • Entertainment (including catering, receptions);
  • Foreign exchange and bank charges costs;
  • Overheads;
  • Commissions.

Documents required at application submission

  • Online application submission;
  • Detailed business plan (sections indicated in guidelines) showing the financial visibility of the project;
  • De Minimis declaration form;
  • Vat, income tax SSC & FSS compliance certificate;
  • Audited financial statements and/or management accounts of the two fiscal years prior to the year of submission;
  • Copies of necessary permits;
  • Other supporting documentation may be requesting by the Intermediate Body.

Assessment and selection of beneficiaries

Applications will be firstly assessed against Gateway (eligibility) requirements. These involve:

  1. 1.Complete application form;
  2. 2.Eligible Undertaking;
  3. 3.Eligible action;
  4. 4.Match financing

Successful applications will be assessed for the below selection criteria:

  1. 1.Risk assessment;
  2. 2.Excellence;
  3. 3.Impact and sustainability;
  4. 4.Quality and efficiency of implementation

Those applications that at least score 50% of the total selection criteria shall be approved for funding on a first-come-first served basis subject on budget availability

Some other important compliance requirements

  • Evidence  at application stage as to the capability for private match financing for the project;
  • Expenditure of eligible funding incurred after date of grant agreement;
  • Undertaking should ensure compliance in terms of public procurement, state aid requirements, and equal opportunities. Sustainable development.
  • Investment must be operating for at least 3 years after completion;
  • Maintenance of Capital Assets Register;
  • Eligible expenditure must be procured from external sources;
  • Submission of interim implementation report every 6 calendar quarters. Final report should be submitted at completion stage;
  • Documentation should be kept at least 10 years from completion date;