Hungary: Covid-19 Crisis Subsidy
The European Commission stated on 12 March 2020, that the Covid-19 outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. In line with the above, the European Commission communicated the so called “Temporary Framework” on 19 March 2020 which enables the Member States to introduce new state aid measures in order to ease the economic impacts of the Covid-19.
Consequently, the Hungarian Government announced the introduction of a new, non-refundable Subsidy Scheme to Improve Competitiveness in the maximum amount of EUR 800,000 per beneficiary as follows:
- The subsidy may be granted to medium or large enterprises operating in the manufacturing or service industry.
- The applicant shall certify suffering losses due to Covid-19 with a causal link between the outbreak and the losses or financial difficulties.
- The beneficiary shall certify a minimum 25% drop in sales revenue or in order volume that the company was unable to avoid and it has no insurance covering the losses.
- The beneficiary was not considered as an undertaking in difficulty on 31 December 2019.
- The applicant commits to implementing a minimum EUR 150,000 investment in tangible and/or intangible assets until 30 June 2021.
- The beneficiary shall maintain its average headcount of 12 months prior to the application until the end of the investment period.
- The aid intensity depends on the volume of the investment:
- 30% EUR 150,000 < investment volume < EUR 300,001
- 40% EUR 300,000 < investment volume < EUR 500,001
- 50% investment volume > EUR 500,000
- The subsidy is disbursed 100% as an advance payment.
- The subsidy has no geographical restriction, it is available in all regions of Hungary, including Budapest.
- The subsidy can also be granted in case of relocating activities from other Member States.
- The applicants shall submit only authorization letters for collection from the domestic bank accounts as collateral.
- The total budget of the subsidy is HUF 50 billion only available until 31 December 2020.
- The application period is expected to start in the middle of April 2020.
Any questions? Please contact: Dr. Ádám György Bodor and Marcell Tatai-Szabó
Practice group: Regulatory & Governmental Affairs