The European programme Eurostars supports research and development (R&D) projects implemented by small and medium-sized enterprises (SMEs) with a high level of R&D activity. Any company and any private or public research organisation can potentially participate in a Eurostars project, provided the project is taken forward by an SME.

Eurostars involves several European countries, all of which are members of the European intergovernmental programme EUREKA, which manages the Eurostars project. Consortia planning to participate in Eurostars reply to calls for project proposals. Eurostars issues permanent calls for proposals with two annual deadlines. The Luxembourg government has made the commitment to set aside €500,000 per year, complemented by European cofunding, to finance the national participations shortlisted by Eurostars.

To meet the eligibility criteria for Eurostars, projects must:

• involve at least two partners from at least two different Eurostars member countries
• include a research-intensive SME as the main partner, i.e. an SME which invests at least 10% of its turnover (or equivalent full-time human resources) in R&D activities
• feature strong SME involvement: assign at least 50% of the project's R&D activity to SMEs
• be market-driven: the project cannot exceed a duration of three years and the project's outcomes must be introduced to the market within two years from the end of the project
• involve a balanced partnership: individual project partners or member countries may not bear more than 75% of the cost
• fulfil the selection criteria of the EUREKA programme

As Eurostars is a joint European research programme:

• the evaluation of project proposals is centralised (European) 
• the funding is organised at national level (in Luxembourg, through Luxinnovation)

The co-funding model involves funds from the European Commission and financial support granted by the participating member countries.

• In Luxembourg, public co-funding for private-sector entities is implemented in line with the Law of 5 June 2009 relating to the promotion of research, development and innovation (maximum aid intensities: 60% for a small business, 50% for a medium-sized enterprise, 40% for a large company)
• For public research organisations, co-funding can reach a level of 100%

Financial contributions from the European Commission are provided under Article 185 of the Treaty on the Functioning of the European Union.

Prospective applicants preparing project proposals are advised to contact Luxinnovation, the National Contact Point for Eurostars in Luxembourg, for free assistance. Businesses can also apply for financial support for the preparation of a project, through Fit4Europe.

If the project proposal is evaluated favourably by the European experts, the company or research organisation submits a request for financial support to Luxinnovation, which provides guidelines.