New Funding Contributions for Zug-Based Companies

Read in German

• As of 2026, new Zug funding contributions are available for sustainability and innovation.
• Submission deadline in 2026: 31 May 2026 (based on the 2024 or 2025 financial year).
• Two instruments: CO₂-effective sustainability measures and expense-based innovation funding.

Executive Summary

As of 1 January 2026, the Canton of Zug will introduce new, sector-neutral funding instruments to further strengthen its attractiveness as an innovation- and sustainability-oriented business location. The location promotion framework comprises impact-oriented sustainability funding to support measurable CO₂ reductions along the supply chain, as well as expense-based innovation funding for qualifying research, development and innovation activities.

Given the submission deadline of 31 May 2026 and the high requirements regarding documentation and governance, timely and structured preparation of applications is essential for interested companies.

New Location Promotion Measures in the Canton of Zug

As of 1 January 2026, companies subject to corporate income tax in the Canton of Zug may apply for new funding contributions for sustainability and innovation. Through these location support measures, the Canton of Zug specifically strengthens its position as an innovation-driven and future-oriented business location.

The new funding instruments are deliberately designed to be sector-neutral and are aimed at Zug-based companies of various sizes and orientations as well as self-employed persons. An early assessment of funding opportunities is recommended, particularly for internationally active companies with an innovation- or sustainability-oriented focus.

The Zug location promotion framework is based on two funding instruments. Companies can apply either for single or multiple grants.

1. Impact-Oriented Sustainability Funding

Under the impact-oriented sustainability funding scheme, the Canton of Zug supports companies that make a substantial and measurable contribution to the reduction of greenhouse gas emissions.

Eligible activities include measures to reduce emissions in the upstream supply chain (Scope 3, Category 1 “Purchased Goods and Services” in accordance with the Greenhouse Gas Protocol).

Key eligibility requirements include in particular:

• a minimum reduction of 50,000 tons of CO₂ equivalents per relevant year,
• an effective reduction of emissions without the use of offsetting or similar instruments,
• minimum annual staff expenditure of CHF 1.5 million in the Canton of Zug, and
• verification of the industry-standard impact metrics by a state-supervised audit firm.

Calculation of the funding contribution:

• CHF 30 per ton of CO₂ equivalent actually reduced

This funding instrument is particularly relevant for companies with global supply and value chains, where substantial emission reductions can be achieved along procurement processes and reliably measured.

2. Expense-Based Innovation Funding

The second pillar of the Zug location support framework is expense-based innovation funding, which is linked to qualifying research, development and innovation activities. Eligible activities include, among others:

• basic research
• applied industrial research
• experimental development
• activities related to the development, acquisition, improvement, maintenance, protection and exploitation of intangible assets and comparable rights
• clinical studies, provided these are conducted in Switzerland

Funding assessment base:

• Tax-deductible staff expenditure for the financial year (excluding any additional R&D deduction)
• Flat-rate surcharge of 35% on staff expenditure to cover infrastructure costs
• For clinical studies, additionally:
  • material and operating expenses for conducting the studies in Switzerland
  • expenses for the manufacture of the required active substances
  • costs for execution by third parties in Switzerland

Innovation funding requires that the activities relevant for funding purposes are organizationally and functionally anchored within the applying company and appropriately documented.

Calculation of the funding contribution:

• 25% of the qualifying assessment base

Key framework conditions and eligibility requirements

The key parameters of the new Zug location promotion measures can be summarized as follows:

• Tax liability in the Canton of Zug
• Availability of duly audited financial statements
• Minimum funding amount: funding contributions of less than CHF 7,500 will not be paid out
• Maximum amount: overall cap of all funding contributions by the cantonal annual budget (CHF 150 million per year for the years 2026 to 2028; proportional reduction if the total amount of applications exceeds the budget)
• One application per company per year, with the assessment period dating back no more than two years
• Submission deadline: based on financial year 2024 or 2025: 31 May 2026; in subsequent years, also end of May
• Payment: generally in the calendar year of submission, either as a direct cash payment or by offset against cantonal corporate income tax liabilities
• Claw-back: if funding is granted based on incorrect information or if the qualifying functions are relocated out of Switzerland within three years after the funding is granted

Assessment and Support by EY

Depending on the individual circumstances, the new location promotion measures of the Canton of Zug may offer substantial financial benefits for companies with a sustainability- or innovation-focused profile. Due to the detailed requirements regarding eligibility, documentation and governance, a structured preparation of the applications is essential.

EY professionals are happy to support you with the:

• assessment of the new funding instruments,
• review of the funding eligibility of your activities,
• structured preparation of the required documentation, and
• to advice you throughout the application and documentation process in 2026.

Our experts from the Central Switzerland Tax team would be pleased to support you in this matter.