What is Business Partnership Support?

Business Partnership Support is financial support for the planning, training, piloting and development of local business phases of projects involving developing countries. Finnish companies or other operators are eligible to apply for the support for starting business activities that aim to establish long-term, commercial cooperation that is profitable, including the research and training phases for importing. Projects are to aim to establish long-term business and partnership in the target country. Projects that primarily aim to export or identify distributors are not eligible for support. Read more in the ‘eligible project types’ section.

Business Partnership Support is a part of the Finnish Government’s official development aid, which is paid to support recipients against realized, approved costs. The aim of Business Partnership Support is to increase commercial joint-projects between Finnish operators and those in developing countries and achieve positive development impacts with the projects.

Acceptable applicants are

• A company registered in Finland (e.g. joint-stock company, general partnership, limited partnership, sole proprietor), OR
• a company registered abroad that has a significant tie to Finland through ownership (at least 20 % Finnish ownership)
• A public institution registered in Finland or a public sector institution operating under public institution principles
• A research institution, university, cooperative, chamber of commerce or similar organisation that operates in Finland
• NGO or association registered in Finland
• a consortium of the aforementioned operators.

The support applicant must be the implementer of the project (e.g. company seeking to become established elsewhere or importer from developing countries) and the project must be significant to its operations. Applicants cannot be only in the role of a consultant in the project. Applicants are to have sufficient experience and commercial expertise in the industry associated with the project. In addition, the applicant must have sufficient financial and personnel resources to implement the plan. Every member of the consortium needss to apply for the support with an independent application and project budget. The decision on the governmental aid will be given to each member of the consortium separately.

Support can be granted for projects that aim to accomplish one of the following:

1. Long-term business partnership

An eligible business partnership is a joint activity between Finnish organizations and target country organizations in one or several of the following ways:

• establishing a joint-venture in a developing country with a local operator

• establishing a subsidiary

• importing to Finland and also potentially to other countries

• subcontracting, service, franchise or licensing agreement
  • The licencing/franchising agreement must be associated with long-term cooperation with a local partner including partner training, contractual support or co-development of product/service

• development of existing business in the target country
  • The studies and personnel training that are supported during the project phase must be related to one of the following: a. expansion of a product portfolio, b. finding new suppliers and c. subcontracting and similar partners, d. development of activities so they are easier to scale, e.  determining investment needs and their funding, f. improvement/development of working conditions, g. development activities so they are more responsible.

2. Piloting with an ODA eligible international organisation

Business Partnership Support can be granted to a pilot and/or demonstration project related to a commercial technology of solution that is carried out as part of an ODA-eligible international organisation (E.g. the EU, UN organisations, international funding institutes, international civil society organisations), activities, which, if successful, can be expected to lead to the more extensive deployment of a solution that produces added value for development policy.

• Check the list of eligible international organizations from the terms and conditions of Business Partnership Support
• A precondition for the project to be supportable is a Letter of Intent about the pilot signed with the international organization. The Letter of Intent needs to be attached to the application form.
• The piloting of one product/solution can only be supported once in a specific target country with the same international organization. The support may only be granted for one pilot with an international organization at a time. Support for piloting with an international organization may be granted to the same recipient max. two times during Finnpartnership programme period 2022-2024.

3. Feasibility study for an investment project

The support can be granted to feasibility study for an investment project that is eligible for the Ministry for Foreign Affairs Public Investment Facility funding. Projects considered eligible for PIF funding are those whose concept the Ministry for Foreign Affairs has given a favourable statement on. Support can also be granted at discretion to other feasibility studies of investment projects carried out in LDCs or LMICs aiming at other similar development impacts. In this case, the condition for granting support is that the value of the investment project is at least EUR 1 million and the applicant has signed a letter of intent with the project financier or another document proving that the applicant may take part in the project.

• Applicants can only apply for support for one feasibility study at a time and the previous plan must be ready before new support can be granted
• Applicants can apply for support for at most two feasibility studies every three years. During the following three year period, an applicant can only be granted support for a feasibility study, if the applicant is able to prove that at least one of their previous projects for which a feasibility study has been drawn up will move on to implementation and towards producing development impacts in accordance with a productive/existing plan.

4. Support function project

The support can be granted for joint projects between civil society organisations/educational institutions/research institutes and companies related directly to companies’ Finnpartnership business partnership support projects or for projects under the Business Finland-administrated Developing Markets Platform Programme (DevPlat), so that the organisation or other operator is not seeking a business partnership that will produce a profit. An NGO/educational institution that is seeking to establish business for itself is not a support project. Instead, the project must have one of the other aforementioned goals. A support project is intended to develop the local community and must also be directly related to the project of the company seeking business partnership support or DevPlat’s support in, for example, the following ways:

• increasing capacity of stakeholders (incl. corporate responsibility and human rights issues-related training and occupational, technical and commercial training of teachers/coaches/pilot groups), developing cooperation networks, piloting products and services
• developing cooperation and innovation platforms, and
• organising seminars and workshops related to business partnership projects as a part of general awareness raising and influencing efforts.

Business Partnership Support can not be granted for industries that are on the exclusion list.

If as part of the project there will be exporting of a dual-use item (items that have both commercial and military applications) abroad, please take a look at the Ministry for Foreign Affairs’ Export control guidelines on dual-use items for companies.

Depending on the project type Business Partnership Support can be granted for different phases of a project. In the project type Long-term business partnership, support can be granted for project phases 1-7, in project type Piloting with an ODA eligible international organisation support can be granted for project phases 1-5 and in project type Feasibility study for an investment project support can be granted for project phases 2 and 4. Support function projects do not comprise different project phases.

Project phases include:

1. partner identification (one or more business partners)
2. feasibility study
3. business plan
4. environmental and social impact assessment
5. piloting of technology and solutions or proof of concept projects, also when incorporated in the activities of international organisations *
6. training of local staff
7. development of existing business in the target country**

The project budget in the Business Partnership Support application is drafted by dividing the project costs into one or more of the aforementioned project phases.

* Piloting refers to the testing of an existing technology/solution in a project country. A demonstration refers to the presentation of the effective functioning of a unit or similar.

• Long-term business partnership project type: The piloting of one product/solution can be supported in a project country one time. Companies can only apply for one grant at a time. In addition, support can be granted to the same recipient at most for two pilots related to a long-term business partnership during the Finnpartnership programme period 2022-2024. A pilot/demonstration must always create a foundation for a decision on initiating long-term business.
• Piloting with an international organisation project type: The piloting of one product/solution can be supported in a country of operation only once per international organisation. Companies can only apply for one grant at a time. In addition, support can be granted to the same recipient at most for two pilots carried out in collaboration with an international organisation during the Finnpartnership programme period 2022-2024.

** The studies and personnel training that are supported during the project phase must be related to one of the following: a. expansion of a product portfolio, b. finding new suppliers and c. subcontracting and similar partners, d. development of activities so they are easier to scale, e.  determining investment needs and their funding, f. improvement/development of working conditions, g. development activities so they are more responsible.

Target countries for business partnership support are the developing countries listed by OECD’s Development Assistance Committee (DAC). The applicant is to verify any potential restrictive measures imposed by the EU and/or UN on the countries. Information on the restrictive measures is located on the Ministry for Foreign Affairs website and the EU’s Restrictive measures in force document.. The amount of business partnership support to be granted is either 30, 50, 70 or 85 % of the total costs of the approved project’s budget. The support percentage depends on the level of development in the target country and the size of the applicant company (SME/large enterprise). The size classification is based on the current definition of a SME issued by the European Commission. Note! Ownership may also affect how a company is classified.

* Includes least developed countries (LDCs), low income countries (LICs) and countries listed as “Extremely Fragile” (incl. Jordan and Ukraine) on the OECD States of Fragility list, which are Afghanistan, Burundi, Central African Republic, Chad, Democratic Republic of Congo, Republic of Congo, Equatorial Guinea, Eritrea, Haiti, Iraq, Somalia, South Sudan, Sudan, Syrian Arab Republic, and Yemen. ** Includes lower middle income countries (LMICs). *** Includes  upper middle income countries (UMICs). Projects in UMICs can only be supported if they have direct development impacts.

The support percentages of the most common project types can be found here.

NOTE! A project that the State supports by over 50 % is a public procurement bound by the Act on Public Procurement. The applicant is to examine how the aforementioned may affect implementation of the project. If so desired, the applicant can also select 50 % support.

If the project is to be implemented in countries with two different support percentages, the lower percentage is applied to the project. The applicant may apply for support with two separate application is the project involves countries with different support percentages.

Please note that Palau and Antigua and Barbuda have been removed from OECD’s DAC list of eligible countries for development support at the start of 2022.

The minimum sum of the support to be granted is EUR 15,000 per project application. The maximum sum of support to be granted, if the support is not granted on de minimis condition, is EUR 400,000 per project in other project types, except for the feasibility studies for investment projects, where the maximum amount of support to be granted is EUR 150,000. The project may consist of several project applications, in which case the total sum of separate project grants related to the same project cannot exceed the maximum amount of support granted.

What is a de minimis restriction and what types of projects does it apply to?

Business partnership support granted by the Ministry for Foreign Affairs is primarily subject to de minimis regulations . De minimis support is subject to Commission Regulation (EC) No 1407/2016, EU operational Treaty Articles 107 and 108 on applying low-value aid. According to this provision, companies and the groups they form can receive a maximum of EUR 200,000 of de minimis support during the current and previous two tax years.

Differing from the main restriction, de minimis support is subject to further restrictions with lower maximums for the following industries:

• fishing and aquaculture (de minimis limit EUR 30,000)

• agricultural primary production (de minimis limit EUR 15,000)

• road transport of goods for others (de minimis limit EUR 100,000).

In addition, differing from the main provisions, de minimis support cannot be granted at all to the coal industry, for export support or for favouring domestic products at the expense of importing. EU state support and competition regulations limit and regulate the state support granted by member countries. The support is subject to such regulations if it fulfills all of the following conditions in accordance with Article 87.1 of the EC Treaty:

1. Public funds are channelled to public or private companies,

2. The company does not gain a financial benefit from the support,

3. The benefit is selective, it is only for specific companies and

4. The activity may distort competition in the trade between member states. The de minimis provision gives member states the possibility to grant low-value support amounts to companies, especially SMB companies, with reduced administrative procedures quickly and without reporting the support to the Commission. The regulation mandates that support activities that are not to exceed EUR 200,000 per group during any three consecutive tax years are not deemed government support subject to regulation.

A company applying for support is to report all de minimis support it has received over the current and two previous tax years from ministries, officials under ministry governance, ELY Centres, Business Finland, Finnvera Oyj, municipalities or municipality consortiums on the application form. The recipient of the support is responsible for ensuring that the total amount of de minimis support granted/paid by different actors does not exceed the aforementioned maximum amounts.

What action should an applicant take if they feel that their project is not subject to the de minimis restriction?

In principle, a project that has a target market for the business partnership entirely outside of the EEA does not distort competition within the EEA. If the company determines that the goods or services to be produced are intended only outside of the EEA and that the support cannot affect trade and competition between member states, the company is to sign a statement that provides the grounds for this perspective. The Ministry for Foreign Affairs makes the final decision on applying the de minimis provisions. For example, business partnership support projects that aim to begin importing to the EEA are subject to the de minimis restriction.   If there is any uncertainty with your situation, Finnpartnership will gladly provide additional information on de minimis restrictions.

Applications for business partnership support can be applied for year-round. Finnpartnership processes the applications and provides the Ministry for Foreign affairs statements to support their decision-making. The Ministry delivers the discretionary government grant decisions on granting the support to the online service. The applicant will receive the decision in approximately 3-5 months. 

Allow for sufficient time for submitting the application. The electronic registration of an application using the online service takes at least 1-2 business days.   Once the application has been submitted, the applicant is to actively monitor the online service. Messages or requests for additional information in the Ministry’s online service are not sent to the applicant by email. Detailed application instructions and forms are available on our website.

Projects are evaluated on commercial, social and environmental criteria when analysing a project’s eligibility to receive the support. Finnpartnership aims to ensure that the supported projects are sustainable based on these evaluation criteria.   Projects are evaluated using the following criteria:

Commercial viability of the project

• The feasibility of the project to achieve the set objectives and the realistic nature of the project schedule and budget in terms of the objectives and implementation as well as the applicant’s capacity. See Eligible project types in the corresponding section above.
• The applicant’s business experience and sufficient competence in the project sector in relation to the nature and scope of the project.
• The applicant’s sufficient financial and human resources for the implementation of the plan financed with the Business Partnership Support. The applicant must be able to implement the project with self-financing, as the support is paid retroactively on the basis of approved, actual, paid and audited costs in one or two instalments.
• The positive development impacts, such as jobs, technology and knowledge transfer, diversification of production in the target country of operation, gender equality, etc., if the project succeeds.
• The project is at least at a human rights sensitive level in accordance with the definition given in the guideline titled A Human Rights-based Approach to Development (2015).
• The project’s environmental and social impacts, and risk and their consideration and management*

The identification and management of the project’s risks have been taken into account comprehensively enough in relation to the size of the planned project.

• Compliance with the Tax responsibility principles in Finland’s development cooperation funding to the private sector.

In addition to the above criteria, overall consideration is used in the assessment. Overall consideration takes into account any verifiable experiences and assessments of the applicant’s previous activities carried out under the financing of the Ministry for Foreign Affairs.

*Environmental matters and social responsibility Projects aided by business partnership support are to adhere to internationally accepted environmental and social responsibility standards and local legislation. The basis of the projects’ environmental and social responsibility evaluation are the World Bank and IFC (International Financial Corporation) standards that govern environmental and social impact and their management and are accepted by international financing institutions (further information IFC Performance Standards and World Bank Group EHS Guidelines). Considering and managing the environmental and social impacts and risks are important to the company already very early on when preparing the project. Business partnership support can be applied for in order to complete environmental and social impact studies as a part of the project. Finnpartnership supports the fulfilment of environmental and social responsibility by offering advisory services at application workshops. Upon evaluating the projects, a Finnpartnership environmental expert will classify the projects based on their expected environmental and social impacts. The projects are classified to either Environmental Class A, B or C. Based on the observations, the expert will provide requirements or recommendations that the applicant must comply with when implementing the project. You can read more about the classification here.

The support is paid retroactively against realised costs. The costs must be in accordance with the terms and approved cost budget. Project costs must be audited. Written authorisation must be requested before implementing changes to the cost budget. Reimbursement can be requested in one or two installments. The last payment request must be submitted to the Ministry’s online service no later than on the date the support expires (24 months from the date of governmental aid decision). Read more on reimbursements.

The recipient of the support commits to adhering to the general terms and conditions of Business Partnership Support.  The support can only be used to cover costs in accordance with the terms and conditions. The recipient of business partnership support commits to adhering to international standards pertaining to the environment, social responsibility, occupational safety, human rights and employee rights and to operate in compliance with local laws.

The Act on Discretionary Government Grants (2001/688) is applied to business partnership support. The recipient of the support is required to provide reporting. A progress report must be delivered with each payment request. In addition, the recipient of the support is required to respond to two follow-up surveys, which are sent during the two following years after the support expires. Read more on the reporting required for business partnership support.

Due to the public nature of Business Partnership Support, the names of the organisations that submitted the application for support as well as the names, business IDs, size, sector, region and funding models of those receiving Business Partnership Support and the date they were granted the support and the amount of granted and paid support are all considered public information. In addition, public information includes the statistical data on the project listed on the application form, the name of the project and the project country.

Finnpartnership organizes monthly application workshops that offer a comprehensive practical information package on the ways to make use of business partnership support and the application process. The workshops are free of charge. The workshops also offer training on environmental and social matters and evaluating environmental impacts.

The application instructions of business partnership support describe the application process and provides information regarding submitting an application. You will also find the application forms on the same page.

Also review the frequently asked questions.

You can also contact Finnpartnership experts by email at fp@finnpartnership.fi or by telephone by calling +358 (0)9 348 434.