Tax holiday for a new business created to commercialize intellectual property
QC, Canada
Tax credit for commercialization of intellectual property (IP) in Quebec
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateNovember 14, 2019
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Manufacturing
- Information and cultural industries
- Educational services
grant_single|grantors
- Ministère de l'économie, de l'innovation et de l'énergie du Québec (MEIE)
- Gouvernement du Québec
grant_single|status
grant_card_status|open
grant_single_labels|preview
If you create a new business by commercializing intellectual property stemming from a university or public research center, you could be eligible for a tax holiday for up to 10 years.
grant_single_labels|projects
This grant is specific to companies operating in Quebec, Canada as indicated by the focus on supporting innovation derived from Quebec's public research environment.
- Businesses constituted in Canada with operations dedicated to commercializing intellectual property derived from public research conducted in Quebec.
grant_single|admissibleProjectsExample
$1,080,000
Sherbrooke
Introducing blockchain-based financial services leveraging research university students
$1,200,000
Montreal
Launching eco-friendly packaging solutions using university-developed biodegradable materials
$650,000
Toronto
Developing an AI-based health app
$900,000
Vancouver
Commercializing smart home energy solutions based on university-developed IoT technology
$1,600,000
Edmonton
Developing a new pharmaceutical drug based on university level research
$750,000
Hamilton
Creating a virtual reality training program for medical students
grant_single_labels|admissibility
Eligibility for this grant is determined by specific criteria related to the nature and operations of the company.
- The company must be dedicated to the commercialization of intellectual property derived from research conducted in the public sector in Quebec.
- The company must have been incorporated in Canada between March 19, 2009, and April 1, 2014.
- The company must have started operating a commercialization business within twelve months of its incorporation.
- The company's income must be derived entirely or almost entirely from one or more actively operated eligible commercialization businesses.
- The company must have income from the disposition of capital properties that are derived entirely or almost entirely from dispositions occurring in the normal course of business in eligible commercialization businesses.
- The company must not have operated all or part of a business that was previously operated by another entity unless it was operated by that entity for no more than 90 days.
- The company must not be the result of a merger or unification of several companies.
- The company must not have sold all or almost all the assets used in its eligible commercialization business.
- The company must have claimed all applicable deductions, including discretionary deductions, to the extent required to reduce taxable income to zero, if possible.
- The company must not have been a beneficiary of a trust, except for a mutual fund trust.
- The company must not have been part of a joint venture or partnership unless each member of the joint venture or partnership was an eligible institute.
grant_eligibility_criteria|who_can_apply
Eligible entities are companies dedicated to the commercialization of intellectual property derived from research conducted within Quebec's public sector, and incorporated in Canada between March 19, 2009, and April 1, 2014. The company must operate a commercialization business within 12 months of incorporation, derive nearly all income from actively operated eligible commercialization businesses, and meet several specific financial and operational conditions.Additionally, eligible institutions include recognized university entities and public research centers within Quebec, whose research results form the basis for the intellectual property being commercialized.
grant_eligibility_criteria|eligible_expenses
Eligible projects for this grant focus on commercializing intellectual property derived from public research within Quebec. These initiatives are designed to enhance the marketing and development of innovations based on patented technologies or copyrighted works.
- Manufacture and sale of products whose value comes more than 50% from eligible intellectual property.
- Manufacture and sale of products where an essential element is eligible intellectual property.
- Licensing of software programs that are considered eligible intellectual property.
grant_single_labels|criteria
Here is a short summary of the evaluation and selection criteria for the "Congé d'impôt sur le revenu pour une nouvelle société dédiée à la commercialisation d'une propriété intellectuelle" grant:
- Société admissible ayant été constituée au Canada après le 19 mars 2009 et avant le 1er avril 2014.
- L'entreprise de commercialisation admissible doit respecter les conditions définies par le Ministère.
- Les critères spécifiques d'admissibilité sont détaillés dans la Loi concernant les paramètres sectoriels de certaines mesures fiscales.
grant_single_labels|register
Here are the steps to submit an application for this grant:
- Step 1: Prepare Required Documents
- Fill out the application form.
- Prepare the following documents:
- Form 2, completed by the eligible institute.
- A copy of the company's incorporation certificate.
- Financial statements.
- Activity report.
- A copy of the document issued by the Canadian Intellectual Property Office, either:
- Classification certificate (for a patent application filing),
- Patent (for a granted patent),
- Registration certificate (for a copyright).
- A copy of the technology transfer agreement:
- Operating license, or
- Transfer of intellectual property rights.
- Step 2: Submit Application
- Send the completed form and all required documents in one submission to the email address: mesures.fiscales.RD@economie.gouv.qc.ca
Apply to this program
Tax Breaks for Start-ups Commercializing Intellectual Property
This grant provides a significant tax relief opportunity for eligible companies commercializing intellectual property developed from public research in Quebec. Aimed at boosting innovation, entrepreneurship, and the retention of intellectual property within the province, this program offers a provincial income tax holiday for up to ten years.
Understanding the Tax Exemption for Intellectual Property Commercialization
The tax exemption program established by the Government of Quebec is specifically designed to promote the establishment and growth of start-ups that are involved in the commercialization of intellectual property (IP). Companies eligible for this program benefit from a provincial income tax exemption on revenue generated through the commercialization of such intellectual property for a period that can extend up to ten years, starting from the date of incorporation. The program’s primary objectives include fostering the creation of spin-off companies from research conducted within Quebec's public sector, encouraging innovation and entrepreneurship, and enhancing the retention and commercialization of intellectual property within the province. By providing a substantial financial incentive, the program aims to attract business investments in research and development (R&D) and bridge the gap between research outcomes and market-ready products or services, thereby increasing the overall economic impact of publicly funded research.
Eligible companies must be newly incorporated in Canada during a specific timeframe and should demonstrate a focus on commercializing IP that was developed through research conducted in eligible Quebec public institutions, such as universities and public research centers. These companies must have initiated commercial activities within twelve months following their constitution, with much of their revenue derived from the active operation of qualifying commercialization businesses. Additionally, the policy mandates that such entities are not the product of mergers or fusions, thereby supporting truly novel ventures with innovative business models based on cutting-edge technologies.
The type of intellectual property that qualifies under this grant includes patents and copyright-protected software that are considered significant technological advancements. It's crucial that this IP was developed without being contractually obligated to another party and was disclosed promptly to the originating institution, ensuring traceability and compliance with internal intellectual property disclosure policies.
The grant not only aims to stimulate the growth of innovative sectors but also to closely align academic and research institutions with the potential for economic return on their scholarly outputs. Through this integration, the program seeks to facilitate a robust ecosystem where research outcomes can swiftly and effectively transition into viable, market-facing entities. This creates an environment where ideas can be incubated and matured, leveraging the resources of both research institutions and industry partners.
Companies taking advantage of this tax benefit are expected to use it to further invest in their growth and development, ideally increasing their R&D spend, enhancing technological capabilities, and scaling operations to compete both domestically and internationally. With the financial relief provided by the tax exemption, these enterprises can allocate more of their budgets to strategic areas such as innovation investment, expanding production capacities, or entering new markets, thereby reinforcing their competitive edge.
In conclusion, this targeted tax exemption leverages fiscal incentives to nurture the business landscape for intellectual property commercialization in Quebec, amplifying both economic and scientific advancements. For businesses, engaging with this program is not only an opportunity for fiscal savings but also a chance to flourish in a supportive, innovation-driven environment that valorizes the collaborative synergy between academia and industry. Overall, this initiative underscores Quebec's commitment to maintaining a vibrant IP-driven business sector, facilitating sustained growth while contributing to the province's reputation as a leader in research and development.
