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The three layers: How the Danish grant system is structured
Denmark has one of Europe's most generous ecosystems for supporting businesses. But the system is not built as one big pool — it is three separate layers, each with their own rules, pools, and amount limits.
The three layers can be combined — but only if you know the rules. Most companies use only one layer because they don't know the others exist. The result: you leave 30-40% value on the table.
Layer 1: Direct grants (cash in the account)
The first layer is the <strong>direct grants</strong> — money paid directly to your bank account. This includes programs like Innobooster, SMV:Digital, SMV:Green, and regional schemes.
The most important programs in Layer 1:
Important limitation: Most of these programs count towards your de minimis cap (300,000 EUR over 3 years). If you have used your cap on Covid compensation, you cannot get more.
Layer 2: Tax deductions (lower tax bill)
The second layer is <strong>tax deductions</strong> — deductions that reduce your corporate tax. This includes the R&D deduction (110% deduction) and the tax credit (135% deduction + cash payout).
The most important programs in Layer 2:
Important advantage: Tax deductions do not count as de minimis aid. This means you can use the R&D deduction without consuming your 300,000 EUR cap.
Layer 3: Support schemes (free advisory + competence funds)
The third layer is <strong>support schemes</strong> — programs that don't give cash but cover specific expenses or provide free advisory. This includes competence funds, EIFO guarantees, and Business Houses.
The most important programs in Layer 3:
Important advantage: Layer 3 also does not count as de minimis aid. Competence funds are your own money (you have paid them in), and EIFO guarantees are market-based loans.
💡 Combination 1: Innobooster + R&D deduction (the classic)
This is the most common combination for innovation companies. Innobooster covers 35% of your expenses, and the R&D deduction gives you 110% deduction on the remaining 65%.
Example: 1,000,000 DKK innovation project
💡 Combination 2: SMV:Digital + R&D deduction
SMV:Digital covers 50% of the consultant's hourly rates. The remaining 50% you pay yourself — and if they qualify as R&D, you can get 110% deduction on them.
Example: 100,000 DKK digitalization advisory
💡 Combination 3: Competence fund + R&D deduction
If you send employees on courses, the competence fund can cover 100% of the course fee and wage loss. If the course qualifies as R&D, you can also get R&D deduction on your own hours spent on the project.
Example: 5-day IT course + subsequent implementation
💡 Combination 4: All three layers (the maximum strategy)
The ultimate combination: Innobooster + R&D deduction + competence funds on one project. This requires careful planning, but can give up to 70% coverage.
Example: Large innovation project with employee training
Rules and limitations: What you need to know
Combining the layers gives maximum value — but there are rules. Here are the most important limitations:
You cannot get grants for the same expenses twice. If Innobooster covers 35% of your salary, you can only get R&D deduction for the remaining 65%.
Solution: Divide your expenses into categories: "Covered by Innobooster", "Covered by competence fund", "Self-financing with R&D deduction".
Most direct grants (Innobooster under 1M, SMV:Digital, SMV:Green) count towards your de minimis cap (300,000 EUR over 3 years). If you have used your cap on Covid compensation, you cannot get more.
Solution: Prioritize grants strategically. If you have used your de minimis cap, focus on tax deductions (R&D deduction, tax credit) and competence funds — they do not count towards the cap.
When you combine multiple layers, you must be able to document how each expense is distributed. The Tax Agency and funds can ask to see your breakdown.
Solution: Use an accountant or bookkeeper to create separate accounts for "Innobooster expenses", "Self-payment with R&D deduction" and "Competence fund expenses". Keep timesheets and accounts separated.
Full example: Software company with AI project
Let's look at a concrete example: A software company develops a new AI algorithm to predict customer behavior. They have 5 employees and a collective agreement with HK.
Project budget:
Strategy:
Layer 1: Innobooster
Layer 2: R&D deduction
Layer 3: Competence fund
Total result:
Frequently asked questions about the three-layer strategy
Yes — but only if you divide your expenses correctly and keep the documentation in order. You cannot get grants for the same expenses twice, but you can get grants for some expenses, tax deductions for others, and competence funds for a third.
Then you cannot use competence funds (Layer 3). But you can still combine Layer 1 (grants) and Layer 2 (tax deductions) — that still gives up to 51% coverage.
Use separate accounts in your bookkeeping: "Innobooster expenses", "Self-payment with R&D deduction", "Competence fund expenses". Keep timesheets separated, and document which employees work on what.
Yes — but they must cover different activities. SMV:Digital covers digitalization, SMV:Green covers green transition. If you have both needs, you can apply for both — but the budgets must be separated.
Related guides
Innobooster application 2026
Complete guide to applying for Innobooster — Layer 1 in the strategy.
Read guide →R&D deduction for software companies
What qualifies as R&D — Layer 2 in the strategy.
Read guide →Competence funds: Money you've never used
Get 100% of course expenses covered — Layer 3 in the strategy.
Read guide →Ready to build your three-layer strategy?
Our free CVR scan matches your company against all three layers and shows which combinations you can use. The Action Plan includes a complete combination strategy tailored to your project.