Partners and suppliers in innovation projects

On this page, you can find out why partners in innovation projects supported by us must be independent. We also explain why R&D suppliers must be independent from their partners.

Partners must be independent

The term partner is defined in our General terms and conditions for R&D projects:

Actors that, in accordance with the agreement document, are to carry out the project in effective collaboration with the Project Owner and other partners, if any.

Effective collaboration is defined as follows:

Collaboration between at least two independent parties to exchange knowledge or technology or to achieve a common objective based on the division of labour, where the parties jointly define the scope of the collaborative project, contribute to its implementation and share its risks and results. One or more parties may bear all the costs associated with the project and thus exempt other parties from financial risk. Commissioned research and provision of research services are not considered forms of collaboration.

This means that partners must be independent of each other and of the Project Owner.

The requirement for the parties to be independent of each other implies that one cannot have controlling influence over the other. In a consortium with the Project Owner and partners, no one may therefore own more than 50 per cent of the shares in any of the others or otherwise have controlling influence over them.

Mother, subsidiary and sister companies cannot then be partners.

R&D purchases must be made from external sources on arm's length terms

In order for contract research to be a supportable cost, and thus to receive support from us, it is a requirement in Article 25 (3) d) of the EU General Block Exemption Regulation that the purchase is made from external sources on so-called arm's length terms.

The term external sources is not defined in the state aid rules, but the Research Council considers that the same must be applied here as in the understanding of the term independent parties: A party that has controlling influence over the other cannot be regarded as an external source. Procurement of research and development from a parent, subsidiary or sister company is therefore not eligible for support under this article.

In other words, you cannot include a company in the project that you have. controlling influence over or who have controlling influence over you, either as a partner or as an R&D provider. Such an influence is often typical for daughter, parent or sister companies.

It is nevertheless possible for employees of the company in question to contribute to the R&D project. The cost of R&D work performed by employees of the company in question must then be recognised as personnel costs at the parent, subsidiary or sister company that has a role in the project, pursuant to art. 25 (3) a). The costs must be entered in the same way as the company's own personnel costs, in accordance with the Research Council's rules for calculating the hourly rate. In other words, a market price cannot be calculated.

Messages at time of print 30 September 2023, 04:53 CEST

No global messages displayed at time of print.