The State of Monaco offers support to companies in three primary areas: funding innovation, promoting exports and assisting innovative companies that offer high levels of added value.
The Monaco government is aware of the importance of innovative businesses and the need to support research and development activities within the economy, and so created a dedicated financial mechanism as early as 1998: the Monaco Innovation Fund. In order to allow Monaco companies to benefit from the expertise of OSEO (formerly ANVAR) in setting up innovative projects, the government signed an agreement with OSEO, specifying the supporting role it would play in the context of the Monaco grants that would follow.
A funding tool
From the design and feasibility of a project through to commercial pre-launch of the innovation, the aim of this fund is to assist industrial and tertiary companies in developing procedures or services that are innovative (a genuine technological advance or novelty within the market) and which show concrete commercial potential. The sorts of spending that are funded include preparatory feasibility studies, personnel costs, R&D, instruments and materials, patenting costs, the creation of prototypes and models, preparations for commercial launch, the search for partners and so on… The Fund’s contribution to financing the project is in the form of a grant or advance at 0% interest, which is refunded in line with the technical and commercial success of the project.
Since set-up, 27 proposals have been accepted (benefitting 17 companies) and the State has committed €3.5 million of funding, which is an average of €129,000 for each proposal.
Monaco’s Eureka Fund
A new step was taken when on 1st January 2005 the Principality of Monaco became the 34th member of the European Intergovernmental Eureka initiative.
The aim of this initiative, which now counts 38 members (37 countries and the European Union) is to enable one or more companies, laboratories, research centres, or universities from at least two member countries to set up a cooperative and balanced (ideally 50/50) partnership contract for an innovative project that will be quickly delivered to market, with each participant receiving funds within its own country. To make its membership credible, the Monaco government has paid €2 million into the Monaco Eureka Fund, which will apply the same principles as the Innovation Fund to the same end, again in partnership with OSEO.
Tax credits for Monaco companies
Monaco companies that are subject to tax on their profits can benefit from a tax credit related to research spending during the year.
Finally, since December 2005, Monaco SME-SMIs have been able to take advantage of a free “pre-analysis” service, carried out by an expert from the INPI (Institut National de la Propriété Industrielle - National Patents Institute). This study makes an overall analysis of all aspects of the company relating to patenting: patents, brands, designs and models; and so maps out actions to be taken.
Reinforcing export capacity and supporting companies that export
The trade-fair fund and the market research fund (Assurance Foire and Assurance Prospection) were created by an agreement signed with credit management organisation COFACE in 1998 and allow the state to use Monaco funds to pay for 65% of expenditure by a company taking part either in a trade-fair (outside the Principality) or in a market research exercise of a certain duration in a given geographic area. These insured funds, which are repayable advances, cover specific contracted costs linked either to taking part in a trade-fair, or carrying out market research. A company pays back the money two or three years after the date of the trade-fair, on the basis of its overall export figures, or for the market research at the end of the period guaranteed, on the basis of turnover achieved in the new geographic area researched.
Investing in innovative companies
The Société d’Aide à la Création et au Développement d’Entreprises is a capital risk company which is 100% Monaco state owned and was created to complete and perfect the government’s funding mechanisms. Its role is to provide concrete assistance to innovative companies that offer high levels of added value, contributing equity financing, mostly in the form of capital, to support set up and development.
With an initial fund of €5 million, the SACDE generally becomes involved during a company’s growth phase, co-investing or taking minority share-holdings. The SACDE is a perfect complement to more classic innovation funding tools, meeting a need for reinforced capital structures in developing businesses.
The complementary nature of these tools gives the operating teams analysing funding proposals the opportunity to exploit the synergies that exist across all the mechanisms.
Three examples of companies that have received State support
Les Laboratoires Asepta
Which specialise in designing, creating and distributing cosmetic and skin-care products (including the famous Akiléine), have more than 130 employees, and received finance from the Monaco Eureka Fund in the context of a partnership with a Spanish Laboratory to develop a new molecule.
Atoms
A very specialised SME with 35 employees, leads the market in professional joysticks, manipulators and encoders, its clients including all the big aeronautic and railway companies of the world. In 2008 two of its innovative R&D programmes received support from the Monaco Innovation Fund.
3X Engineering
3X Engineering designs, develops and applies products which repair petroleum, gas and water pipes of all dimensions in all environments, using new materials. The Monaco Innovation Fund provided assistance in creation of their STOPKIT and REINFORCEKIT products.
