Application For Sustainability and R&D Incentives in Zug by 31 May 2026

Based on the referendum vote on the Location Promotion Act last autumn (blog), the Canton of Zug has introduced new incentives for sustainability (reduction of greenhouse gas emissions) as well as for research and development (R&D). Applications can be submitted from now until 31 May 2026. As the application requires a detailed assessment and comprehensive documentation, the application process must start soon.

The Canton of Zug is a vibrant international business region that has attracted leading industry clusters and new technologies over the decades. Zug is also a preferred location for international headquarters and service providers specialising in specific industries. In response to the global minimum tax, the Canton of Zug introduced a new Act on Location Promotion as part of a referendum vote in autumn 2025. This act allows the Finance Department to pay government grants of up to CHF 150 million in total per year to both existing and newly relocated companies, for research and development (R&D) activities and sustainability measures. Last week, the Government Council published an updated ordinance (in German) and provided details on the application process (in German).

Eligibility Criteria

Legal entities that are unlimitedly liable to tax in the Canton of Zug (registered office or place of effective management) or limitedly liable to tax (permanent establishment) are eligible. The Canton of Zug supports activities in the areas of sustainability, research and development (R&D), as well as clinical trials conducted in Switzerland.

Sustainability

Support is provided for reducing the intensity of reported greenhouse gas emissions from purchased goods and services (scope 3 category 1: “purchased goods and services”), provided that at least 50,000 tonnes of CO₂-equivalents have been saved worldwide, no offsets have been used, and the company incurred personnel expenses of at least CHF 1.5 million in the Canton of Zug during the financial year. The government grant amounts to a maximum of CHF 30 per tonne of CO₂-equivalent saved per year compared with the previous year.

Research & Development (R&D)

Expenditure-based innovations are incentivised, including basic research, applied industrial research, experimental development, as well as activities related to the development, acquisition, enhancement, maintenance, protection, and exploitation (DAEMPE) of intangible assets and comparable rights. The calculation is based on the tax-deductible personnel expenses attributable to these activities in the Canton of Zug, plus a flat-rate increase of 35% for infrastructure costs. Based on this increased personnel expense, a government grant of up to 25% is granted. Moreover, clinical trials conducted in Switzerland are incentivised. The government grant amounts to a maximum of 25% of the material costs for conducting the trial and producing the active substances.

Limitation

Government grants are only awarded to a requesting company if the annual amount from sustainability and R&D is at least CHF 7,500. A total of CHF 150 million is available per year. If the total applications from all companies exceed this amount, all applications will be proportionally reduced. According to our understanding, the government grants are paid as a direct payment or granted as a tax credit.

Application

Government grants must be applied for annually with the Finance Department of Zug. The deadline is 31 May 2026 for the 2024 financial year and 31 May 2027 for the 2025 financial year; no extensions are possible. The application must be submitted electronically and in German.

Extensive documentation must be submitted with the application, including ordinarily audited financial statements and KPIs on the CO₂ emissions saved, audited by an audit firm.

Deloitte’s View

With its new incentive scheme, the canton of Zug remains attractive business location for existing and new companies despite the global minimum tax. Applications for government grants can be submitted starting this week, although the deadline of 31 May 2026 is fairly short. Extensive documentation must be submitted along with the application. Deloitte has proven experience in this area and will be happy to assist you with the analysis and application process.