Why This Comparison Matters

Many companies invest in innovation — but choose their funding by gut feeling: "a grant sounds better than tax relief". In reality, however, Forschungszulage and Invest BW differ fundamentally in predictability, effort, risk and timing. Understanding this allows you to use funding strategically: Forschungszulage as a stable foundation, Invest BW as an additional lever for particularly large or thematically well-matched projects.

Everything at a Glance

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What Is Invest BW (BW Invest) — Briefly Explained

Invest BW Innovation is a funding programme of the state of Baden-Württemberg. It funds innovation and technology projects as a grant — either as an individual project or collaborative project (e.g. with research institutions). The funding runs in funding calls (partly technology-open, partly mission-oriented) and is competitive: projects compete against other submissions.

Key points from the current funding information:

• Two-stage process: project outline → formal application if positively evaluated
• Deadlines/calls: e.g. outline submission currently until 20 February 2026, 13:00 (mission-oriented call "Mobility and Transport")
• Maximum grants: up to €650,000 (individual project) or €1,300,000 (collaborative; max. €650,000 per partner)
• Funding rates (depending on company size, AGVO): e.g. up to 45% (small companies), 35% (medium), 25% (up to 3,000 employees), 15% (≥ 3,000 employees)
• Important: As a rule, no project start before approval (start generally only after decision; exceptions only under conditions).

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What Is the Forschungszulage — Briefly Explained

The Forschungszulage is a nationwide funding instrument that works through the tax system. It is available to all tax-liable companies — regardless of industry and company size. The decisive factor is that a project meets the substantive criteria (typically: novelty and technical uncertainty) and is properly documented.

The process is two-stage:

1. Substantive review via the BSFZ (Bescheinigungsstelle Forschungszulage): Is the project eligible for funding?
2. Numerical review via the tax office: Which costs are eligible and how high is the allowance?

Particularly important (and frequently underestimated): many projects that internally run under the name product development, software enhancement, digitalisation or process optimisation can fundamentally fall within the scope — provided they meet the criteria and are not merely routine/standard implementation.

What Changes in 2026 for the Forschungszulage?

From 1 January 2026, the Forschungszulage becomes even more attractive:

• Maximum funding per year: up to €4.2M (at 35% on a €12M assessment base)
• Funding rate: 25% (standard case) or 35% for SMEs
• Assessment base rises to €12M annually (for costs from 01.01.2026)
• Overhead cost flat rate: 20% (for projects starting after 31.12.2025)
• Own work: €100 per hour (for activities from 31.12.2025, max. 40h/week)

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Objective Comparison: Invest BW vs. Forschungszulage

1) Predictability & Risk

Invest BW

• Advantage: When successful, a high grant is possible, often "visible" and project-specific.
• Disadvantage: Competition, call deadlines, limited budgets → no entitlement to funding. Also: project cannot start until after approval, which can slow down innovation cycles.

Forschungszulage

• Advantage: High predictability, as there is no classic competitive funding process like with calls. For many companies it is the more reliable foundation funding for continuous innovation.
• Disadvantage: It is not an upfront instant grant but works through the tax route; clean documentation is mandatory.

Assessment: If you treat innovation as an ongoing process (and not just a single flagship project), the Forschungszulage is often strategically superior.

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2) Thematic Focus (Sector-Open vs. Topic-Bound)

Invest BW

• Advantage: Can be a precise thematic fit if your project matches the call exactly (e.g. Mobility/Transport, GreenTech etc.).
• Disadvantage: If your topic does not fall within the call, your chances are limited — regardless of how innovative you are.

Forschungszulage

• Advantage: Open to all sectors and topics — what matters is the level of innovation/uncertainty in the project, not a political focus area.
• Disadvantage: Not everything labelled "innovation" is automatically eligible (e.g. routine updates, pure market launches).

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3) Effort & Bureaucracy

Invest BW

• Advantage: Clear structure via outline/application; manageable with good project organisation.
• Disadvantage: Extensive documentation (outline, milestones, exploitation, team, state of the art etc.), competitive situation, deadline pressure.

Forschungszulage

• Advantage: Standardisable process, easily repeatable across multiple years/projects.
• Disadvantage: The substantive argument (novelty, uncertainty, systematic approach) must be sound; cost delineation requires accuracy.

Practical tip: if you already manage your innovation projects cleanly (goals, risks, tests, iterations), you usually have a clear home advantage with the Forschungszulage.

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4) Who Is Each Suited For?

Invest BW is particularly well-suited if …

• Your project is very large and high grants per project make a decisive difference,
• you are based in Baden-Württemberg and the project fits the call perfectly,
• you can plan the project start so that you can wait for an approval decision.

The Forschungszulage is particularly well-suited if …

• you innovate continuously (product, software, processes) and need a permanent funding logic,
• you want predictable funding rather than "putting everything on one submission deadline",
• you want to check funding eligibility even as a start-up or in years with low profit,
• you want to claim funding for a past project retroactively. This is possible for up to 4 years.

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Practical Recommendation: Forschungszulage as the Foundation — Invest BW as a Booster (but properly combined)

In many cases the best strategy is:

1. Forschungszulage as the foundation for your innovation pipeline (annual, repeatable, predictable).
2. Invest BW selectively for projects with a very large budget, strong flagship character or a perfect call fit.

Important: This is fundamentally possible — but only if you avoid double-funding of the same eligible costs. In concrete terms: you may not have the same personnel, contract or other project costs subsidised simultaneously via Invest BW and also include them in the Forschungszulage. In practice, this is resolved through a clear cost separation (e.g. delineation by work packages, time periods, cost categories or participants) and clean documentation.

Our best-practice setup:

• Forschungszulage as the standard instrument for continuous innovation work (especially if you have several projects running in parallel or recurring annual development strands).
• Invest BW only when (a) your project fits very well into a specific funding call, (b) you take the two-stage outline/application logic and the competition into account, and (c) you can clearly present the cost delineation from the Forschungszulage (including evidence).

This is exactly where we support you: from project classification through to the line of argument for innovation/uncertainty and the application — including a funding strategy to avoid double-funding and robust project documentation.

• Internal guide: Requirements and quick check at dieforschungszulage.de (including practical examples)
• Official entry point for the certification: https://www.bescheinigung-forschungszulage.de/

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Frequently Asked Questions (FAQ)

Check out our guides about applications and funding

What is the biggest difference between Invest BW and the Forschungszulage?

Can I combine Invest BW and the Forschungszulage?

For which innovation projects is the Forschungszulage particularly suitable?

How do Invest BW and the Forschungszulage compare in 2026 regarding funding rate and funding amount?

Do I have to choose between Invest BW (BW Invest) and the Forschungszulage?