Financing of foreign investments Société Nationale de Crédit et d'Investissement (SNCI) The SNCI loans for financing foreign investment are aimed at co-financing Luxembourg-based companies establishing themselves abroad as part of their development strategy. Beneficiaries The loans are available for any Luxembourg company: that is generally eligible for an intervention by the SNCI whose main place of business has been in Luxembourg for more than 5 years whose annual turnover does not exceed €250 millions A Luxembourg-based mother company has to hold at least 51% of the subsidiary’s share capital, either directly or indirectly over the whole period over which the financing is granted. Subsidiaries have to be incorporated as commercial companies. Eligible investments Eligible investments include production equipment and buildings used for professional purposes, as well as the acquisition of equity stakes done in order to gain control over an existing company are eligible costs. Types of loan The SNCI’s debtors are Luxembourg-based mother companies that use the funds either to finance investments abroad or to acquire foreign subsidiaries. The SNCI may take a share in a Luxembourg-based company in order to provide for said transactions abroad, but it cannot invest directly in a foreign company. There is a double limit for this type of loan: a maximum of €2.5 million par project; and the SNCI’s intervention cannot exceed 50% of the total investment, nor the beneficiary’s part in it. The loan’s duration is being fixed according to the useful life of the investment financed as well as according to the business plan, without exceeding ten years. The SNCI applies market rules to determine applicable interest rates. In principle, repayment is done by quarterly instalments. A grace period of maximum two years on the repayment of the capital may be granted. Interests are payable at the end of each period. In the case of a stake holding, the SNCI may ask the right to sell to the existing shareholders. Application Applications are to be sent directly to SNCI and should include: a detailed description of the planned investment, including its cost a motivation for the project a business plan a financing plan as well as the financial statements of the preceding three years All applications are analysed by the SNCI regarding their national interest as well as their interest for the company. If no general or specific interest for the Luxembourg economy is identified, the application is rejected. The granting of a loan needs approval from the SNCI’s board of directors and of the Ministers of Finance and of the Economy.