What is Business Partnership Support?

Apply for support for business activities that also have a positive development impact.

Finnish organisations can apply for financial Business Partnership Support for a profitable business venture that has a positive development impact in developing countries. This is the simple idea of Business Partnership Support.

What may the support be granted for?

Finnish companies or other operators are eligible to apply for the support. Support may be granted for starting business activities that aim to establish long-term, commercial cooperation that is profitable. Business Partnership Support is intended for the research and training phases of this type of a project. The projects to be supported are to have a positive development impact in the target country.

In principle, Business Partnership Support is de minimis support. Exceptions can be made, however, in certain situations.

Business Partnership Support is applied for using specific application forms and its appendices.

Due to the public nature of Business Partnership Support, the name, industry and amount of support are public information.

Finnpartnership’s application workshops provide training on everything you need to know about Business Partnership Support and applying for it. Sign up to a worskhop now!

N.B. Finnpartnership’s funding situation has changed due to increase in demand, which is why the processing period of the applications registered after May 1st, 2018 can become longer.

Read below for more information on business partnership support. You will obtain additional information by accessing the dropdown menu.

What is Business Partnership Support?

Business Partnership Support is financial support for the planning, development, training and pilot 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.

Who may apply for Business Partnership Support?

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
  • 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.

If the applicant consists of a consortium of several operators, one of the consortium members must be the applicant with primary responsibility. Every member of the consortium is 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. Consortium members can utilise shared expertise and reporting in their project.

Eligible project types

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

 

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

 

  • establish a subsidiary in a developing country

 

  • importing from developing countries to Finland and also potentially to other countries

 

  • subcontracting, service, franchise or licencing 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

 

  • pilot or demonstration project that aims to achieve long-term cooperation
    • If successful, the pilot or demonstration project is to lead to starting long-term business operations. Both technical pilots and commercial demonstrations can be considered pilot projects.
    • The self-funding share required by international organisations (EU, UN organisations, international financial institutions) is also eligible for support.
    • Business partnership support cannot be granted for one company for pilot and demonstration projects in more than three different countries.

 

  • Support projects implemented by NGOs and institutions that are directly related to business partnership support projects of companies. In this project type, the NGO/educational institution itself is not seeking to establish commercial activities. If the NGO/educational institution is seeking to establish business for itself, this is not a support project. Instead, the project must have one of the other aforementioned goals. A support project is to develop the local community and it is also to be directly related to the project of the company seeking business partnership support in the following ways, for example:
    • increasing capacity of stakeholders (incl. corporate responsibility and human rights issues and occupational, technical and commercial education), developing cooperation networks, piloting products and services,
    • developing cooperation and innovation platforms, and
    • organising seminars and workshops.

 

  • Developing vocational education or starting a new form of education, such as a study programme. The purpose of the education to be launched in this project type is to create occupational expertise that promotes the applicant’s business partnership support project in the target country. Operators that aim to engage in education business must fulfil the requirement of seeking to become established in the target country, meaning it is to either establish a company or licence an educational product in the target country.

 

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

Project phases eligible for support

Support may be granted for the following project phases:

• identifying a partner or partners
• preliminary project study,
• project study
• drafting a business plan
• assessing environmental and social impacts
• piloting technology and solutions and demonstration projects
• training of personnel of company in developing country or the personnel of another approved operator
• use of experts to develop the operational segment of a company or partner in a developing country
• vocational education and support for local educational activities.

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.

 

Target countries and support percentage for support

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 the countries of the “Harmonized List of Fragile Situations 2018” list, which have a CPIA of ≤ 3.0 or undefined, and Jordan.
In 2018, the highly fragile countries are: Afghanistan, Chad, Eritrea, South Sudan, Gambia, Guinea-Bissau, Haiti, Iraq, Yemen, Jordan, Central African Republic, Kiribati, Comoros, Lebanon, Libya, Marshall Islands, Micronesia, Palestine regions, Papua New Guinea, Somalia, Sudan, Syria, Tuvalu and Zimbabwe.
** Includes the least developed countries, other low income countries and developing countries with lower average incomes.
*** Includes developing countries and regions with higher average incomes.

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.

Projects in countries with higher average incomes can only be supported if they have direct development impacts.

Please note that Chile, Uruguay, Antigua and Barbuda have been removed from OECD’s DAC list of eligible countries for development support at the start of 2017.

Maximum support amounts and de minimis restrictions

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 fulfils 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, Tekes, 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, business partnership support is subject to the de minimis restriction, but support can also be granted where it is not subject to de minimis restrictions.

In the event that the Ministry for Foreign Affairs determines that the project in question is not subject to the de minimis restrictions, a maximum of EUR 400,000 can be granted per project and the granted support is not considered to count toward the company’s de minimis quota.

If the applicant does not consider the support to be subject to the de minimis restriction, the applicant is to submit the de minimis commitment form as an attachment to the business partnership support application. You will find the form on the application instructions and forms page. 

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.

Applying for support and the decision-making process

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 government aid 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.

 

NOTE:  Finnpartnership’s funding situation has changed due to increase in demand. The processing of  applications registered after May 1st 2018 may be delayed.

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.

Evaluation criteria of applications

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:

An aim that conforms to the terms of business partnership support

The project must have a goal that complies with the terms. Read more on acceptable goals in Eligible project types.

 

Commercial profitability and viability

The applicant must demonstrate having experience and sufficient commercial expertise in the project’s industry in the application. In addition, the applicant must have sufficient financial and personnel resources to implement the project plan. The applicant must demonstrate that the project can be commercially profitable.

 

Development impacts

Finnpartnership’s aim is to increase the commercial cooperation of operators in Finland and developing countries in a manner that the projects would have a positive development impact in the target countries. The eligibility of projects to be supported are thus also evaluated from the perspective of development impacts In addition, the environmental impacts of the projects are also evaluated in accordance with the evaluation principles pertaining to environmental matters and social responsibility.

The project’s potential direct and indirect impacts on the following factors, among others:

• creating national income (additional value, such as wages, lease income, interest and profits that remain in the country)
• employment in target country
• diversifying production in target country
• state tax and other similar income in target country
• technology and knowledge transfer
• increasing the expertise of workers in the target country (education)
• working conditions and social benefits of the company and its environment (adhering to ILO provisions, occupational safety, wage levels, housing/health and other benefits)
• especially positive environmental impact (e.g. renewable energy or another production method that supports sustainable development)
• gender equality
• improvements in the general infrastructure of target country
• currency reserves of target country.

The applicant is to define the project’s most significant development impacts for the target country in the business partnership support application. Finnpartnership experts evaluate the development impacts of the projects and provide advisory services to the applicant on development impacts. You can read more about the development impacts here.

 

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.

 

Payment of support

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.

What does an organisation that receives business partnership support commit to?

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 list of eligible expenses.

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 Transfers (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 name of the organisation and support recipient’s name, industry, the name of the project and amount of support are public information.

Where can I obtain further information?

In 2018, Finnpartnership is organising 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 and they can also be attended via video conference. 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.

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