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R&D innovation support for companies in Ireland
By: Damien
24 Aug, 2022
Ireland is renowned for its innovative business culture and there is plenty of support for research and development. This article discusses some of the support available.
Ireland has established a reputation over many years as a hub for innovative businesses in a variety of sectors. Indeed, one of the reasons overseas businesses choose Ireland as a European base is because of the volume and quality of research and development (R&D) that is carried out here.
The government has consistently provided backing for innovative companies, and there are many ways that R&D and innovation is supported in Ireland. For instance, there are numerous routes to funding – domestic and EU – along with tax credits and collaboration opportunities with academia and research organisations.
The government has always sought to foster innovative companies in Ireland and to that end it launched Impact 2030: Ireland’s Research and Innovation Strategy in May, which aims to position research and innovation at the heart of addressing Ireland’s societal, economic and environmental challenges.
According to the government, Impact 2030 aims to maximise the impact of research and innovation on many national priorities.
One of the plans of Impact 2030 is to establish a competitive research and innovation funding agency through a research bill. It is intended this will bring together the functions and activities of the Irish Research Council and Science Foundation Ireland to support research within a variety of sectors and help to develop interdisciplinary research activity.
But there is also plenty of existing support available. Enterprise Ireland, the government’s organisation responsible for developing and growing Irish enterprises in world markets, has a range of options to provide R&D innovation support to businesses in Ireland.
For projects at the development stage there is the Exploring Innovation Grant, which is used to determine if a project is possible – in that it is legal, achievable and financially viable. It also helps to determine where a project is strong and weak, the resources required to deliver the project, and whether other organisations can be brought in to work it.
Other options are more sector specific. For those businesses with rapid design cycles, the Agile Innovation Fund may be the best route to explore. Here businesses can receive up to 50% of the funding for their project – where the total project cost is less than €300,000 – and applications can be made online and it has a fast-track approval process.
A part of the Agile Innovation fund is designated for Business Innovation projects, which aims to develop new service delivery models or production methods, or to reform the company’s business model.
But if the Business Innovation project is part of a bigger project, it will also be eligible under the Research and Development Fund.
The Research and Development Fund is aimed at larger – and therefore costlier – projects. This supports businesses developing new or improved products, services or processes that are looking for funding in excess of €150,000, where the overall cost of the project is more than €300,000.
Or, for businesses looking to manage and exploit their IP – such as patents, copyrights and designs – there is the Intellectual Property Strategy that will provide funds towards developing a strategy for this.
But it should be noted that not all businesses or projects are eligible for funding. Enterprise Ireland recommends that before making an application, entrepreneurs and business owners should contact a development adviser or client relationship team to talk about the proposed project.
As mentioned earlier, there is also significant amount of collaboration between industry and research organisations in Ireland, such as universities, institutes of technology and state-based researchers, with the aim of commercialising the research and helping businesses to innovate.
The central body for this is Knowledge Transfer Ireland. Its works with business, investors and research funders to help bring them together to work on commercial projects. Working with research organisations can help with many aspects of a business, such as product or process development and improvement.
Research organisations can also help with access to specialist equipment, licencing existing knowledge, collaborative research and consultancy and knowledge transfer partnerships – where people from academia are seconded to a business or vice versa.
Businesses in Ireland can also claim a tax credit on their R&D expenditure of 25%. This credit is additional to the usual 12.5% revenue deduction that can be claimed for R&D costs – giving an effective 37.5% benefit. However, it only applies to R&D expenditure by businesses that have not yet begun trading. The claim for a tax credit must be made in the year after the end of the accounting period in which the business starts trading.
In addition, businesses can claim a tax credit on the cost of construction or refurbishing a qualifying building. But to qualify for this, at least 35% of the building is to be used for R&D activities over a four-year period. This is most often used by manufacturing businesses.
There are plans to introduce an R&D tax credit of 30% for businesses with fewer than 50 employees and a turnover of less than €10 million, but this has not yet been passed by government ministers.
Another support for R&D that businesses in Ireland can access comes from the European Union. As part of the EU, Irish businesses can apply for funding from a variety of places, such as its Horizon Europe research and innovation programme. This is aimed at helping businesses with scientific research and has a budget of €95.5 billion and runs until 2027.
Horizon Europe’s main objectives are to accelerate the green and digital ‘twin transition’, strengthen resilience and crisis preparedness among EU member countries and support Europe’s global competitiveness.
There are plenty of other EU R&D funds that can be applied for across the spectrum of business sectors. Funds go from seed capital, right through to substantial funds for large projects. For instance, there is EUREKA, which is a public network for international cooperation in R&D and innovation, open to businesses – large and small – universities and research organisations.
EUREKA enables partners to create consortia and decide the technological focus for international R&D projects. Businesses with close interests can partner up, and the EUREKA network can help them to find potential partners, develop project plans and offer advice on funding rules in differing countries.
As this article shows, there are plenty of supports available for R&D for businesses in Ireland. However, finding which is the right support for your business can be complex, as can be the application process. So getting advice from experts in business and finance such as Malone & Co can be crucial. At Malone & Co, our financial experts have in-depth knowledge of how to apply for R&D support, and what support may be right for your business’ circumstances.
Malone & Co Accountants https://www.maloneaccountants.ie/ can assist on all the relevant aspects of raising funding, including the risks involved, as well as anything from setting up a company and ensuring it is as tax efficient as possible to providing diligence services as part of an M&A deal or funding round in the sector. We can also provide in-depth information to ensure any deal achieves the value hoped for at the outset.
Ireland has established a reputation over many years as a hub for innovative businesses in a variety of sectors. Indeed, one of the reasons overseas businesses choose Ireland as a European base is because of the volume and quality of research and development (R&D) that is carried out here.
The government has consistently provided backing for innovative companies, and there are many ways that R&D and innovation is supported in Ireland. For instance, there are numerous routes to funding – domestic and EU – along with tax credits and collaboration opportunities with academia and research organisations.
Impact 2030
The government has always sought to foster innovative companies in Ireland and to that end it launched Impact 2030: Ireland’s Research and Innovation Strategy in May, which aims to position research and innovation at the heart of addressing Ireland’s societal, economic and environmental challenges.
According to the government, Impact 2030 aims to maximise the impact of research and innovation on many national priorities.
One of the plans of Impact 2030 is to establish a competitive research and innovation funding agency through a research bill. It is intended this will bring together the functions and activities of the Irish Research Council and Science Foundation Ireland to support research within a variety of sectors and help to develop interdisciplinary research activity.
R&D support
But there is also plenty of existing support available. Enterprise Ireland, the government’s organisation responsible for developing and growing Irish enterprises in world markets, has a range of options to provide R&D innovation support to businesses in Ireland.
For projects at the development stage there is the Exploring Innovation Grant, which is used to determine if a project is possible – in that it is legal, achievable and financially viable. It also helps to determine where a project is strong and weak, the resources required to deliver the project, and whether other organisations can be brought in to work it.
Other options are more sector specific. For those businesses with rapid design cycles, the Agile Innovation Fund may be the best route to explore. Here businesses can receive up to 50% of the funding for their project – where the total project cost is less than €300,000 – and applications can be made online and it has a fast-track approval process.
A part of the Agile Innovation fund is designated for Business Innovation projects, which aims to develop new service delivery models or production methods, or to reform the company’s business model.
But if the Business Innovation project is part of a bigger project, it will also be eligible under the Research and Development Fund.
The Research and Development Fund is aimed at larger – and therefore costlier – projects. This supports businesses developing new or improved products, services or processes that are looking for funding in excess of €150,000, where the overall cost of the project is more than €300,000.
Or, for businesses looking to manage and exploit their IP – such as patents, copyrights and designs – there is the Intellectual Property Strategy that will provide funds towards developing a strategy for this.
But it should be noted that not all businesses or projects are eligible for funding. Enterprise Ireland recommends that before making an application, entrepreneurs and business owners should contact a development adviser or client relationship team to talk about the proposed project.
Knowledge transfer
As mentioned earlier, there is also significant amount of collaboration between industry and research organisations in Ireland, such as universities, institutes of technology and state-based researchers, with the aim of commercialising the research and helping businesses to innovate.
The central body for this is Knowledge Transfer Ireland. Its works with business, investors and research funders to help bring them together to work on commercial projects. Working with research organisations can help with many aspects of a business, such as product or process development and improvement.
Research organisations can also help with access to specialist equipment, licencing existing knowledge, collaborative research and consultancy and knowledge transfer partnerships – where people from academia are seconded to a business or vice versa.
R&D tax credit scheme
Businesses in Ireland can also claim a tax credit on their R&D expenditure of 25%. This credit is additional to the usual 12.5% revenue deduction that can be claimed for R&D costs – giving an effective 37.5% benefit. However, it only applies to R&D expenditure by businesses that have not yet begun trading. The claim for a tax credit must be made in the year after the end of the accounting period in which the business starts trading.
In addition, businesses can claim a tax credit on the cost of construction or refurbishing a qualifying building. But to qualify for this, at least 35% of the building is to be used for R&D activities over a four-year period. This is most often used by manufacturing businesses.
There are plans to introduce an R&D tax credit of 30% for businesses with fewer than 50 employees and a turnover of less than €10 million, but this has not yet been passed by government ministers.
EU funding
Another support for R&D that businesses in Ireland can access comes from the European Union. As part of the EU, Irish businesses can apply for funding from a variety of places, such as its Horizon Europe research and innovation programme. This is aimed at helping businesses with scientific research and has a budget of €95.5 billion and runs until 2027.
Horizon Europe’s main objectives are to accelerate the green and digital ‘twin transition’, strengthen resilience and crisis preparedness among EU member countries and support Europe’s global competitiveness.
There are plenty of other EU R&D funds that can be applied for across the spectrum of business sectors. Funds go from seed capital, right through to substantial funds for large projects. For instance, there is EUREKA, which is a public network for international cooperation in R&D and innovation, open to businesses – large and small – universities and research organisations.
EUREKA enables partners to create consortia and decide the technological focus for international R&D projects. Businesses with close interests can partner up, and the EUREKA network can help them to find potential partners, develop project plans and offer advice on funding rules in differing countries.
Get advice
As this article shows, there are plenty of supports available for R&D for businesses in Ireland. However, finding which is the right support for your business can be complex, as can be the application process. So getting advice from experts in business and finance such as Malone & Co can be crucial. At Malone & Co, our financial experts have in-depth knowledge of how to apply for R&D support, and what support may be right for your business’ circumstances.
Malone & Co Accountants https://www.maloneaccountants.ie/ can assist on all the relevant aspects of raising funding, including the risks involved, as well as anything from setting up a company and ensuring it is as tax efficient as possible to providing diligence services as part of an M&A deal or funding round in the sector. We can also provide in-depth information to ensure any deal achieves the value hoped for at the outset.
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