Invented in Hungary: favourable opportunities for Industry 4.0 and R&D projects

The so-called VIP cash grant provided by the Hungarian government from national funds has always been considered an attractive incentive for greenfield investments, capacity expansions and R&D projects.

In line with the “Invented in Hungary” investment promotion strategy, new amendments have been made to the VIP cash grant system (Government Decree No. 210/2014) in favour of Industry 4.0 related technology-intensive investments as well as research and development projects.

Industry 4.0: reduced threshold for technology-intensive investments

The subsidy for technology-intensive investments was previously only available to large enterprises employing more than 250 people in Hungary. In order to widen the incentive possibilities for Industry 4.0 related projects, the subsidy has now been opened to any enterprise employing more than 100 people in Hungary. Another beneficial change in the regulation even allows the joint implementation of a technology-intensive investment by two legal entities.

R&D projects: introduction of a new eligible cost item

The government has recognised the importance of those R&D projects, in which companies cooperate with an independent third party. Therefore, besides the in-house operational project costs (personnel costs of researchers, rental fees, depreciation of equipment and material costs), the applicants can also take into account the costs of contractual research, up to a maximum of 25% of the total project costs constituting the basis of the VIP cash grant.

Extension of the preferred geographical areas

Moreover, in the case of traditional greenfield and capacity expansion projects, the list of preferred geographical areas (the counties Békés in the Southern Great Plain, Nógrád in the Northern Hungary and Szabolcs-Szatmár-Bereg in the Northern Great Plain region), where the subsidy’s threshold is the implementation of a minimum asset investment of EUR 5 million, which results in the creation of at least 50 new jobs, has also been extended to Borsod-Abaúj-Zemplén county in the Northern Hungary region.