Romania: State Aid - Financing opportunities for all types of investment
State aid is considered one of the most efficient financing tools in Romania and has been available on the market for more than twelve years. The first wave of projects, successfully completed in 2014, consisted of more than 60 investment projects that were registered and approved, had a total value of over €3 billion, and generated more than 25,000 new workplaces.
The second wave, which started in 2015 and is currently ongoing, consists of 51 projects registered and approved by the end of 2019 with a total value of investment of more than €1.5 billion. These projects are creating approximately 10,500 new workplaces. All of these figures show how serious the authorities are about supporting projects that have a major impact on the economy in order to create new workplaces and promote investments which bring added value.
In the last few years, many domestic companies have started to successfully apply for state aid funds, compared to the first period of financing, where mostly foreign companies benefitted from the scheme. Almost all economic sectors are eligible for state aid, but the authorities are especially favourable to some fields such as modern technology, know-how transfer, recycling and innovative products.
During this period, the authorities have made several amendments to the available schemes, based on the current evolution of the global economy and the adoption by the European Commission of several new EU legislative acts.
The Ministry of Public Finances (MoF) considers it of the upmost importance to introduce several changes in order to make access to financing more flexible for economic operators.
The most important new amendment prolongs the schemes until 31 December 2023 instead of 31 December 2020 under the current version. Now, the MoF is permitted to issue financing approvals up to the end of 2023.
Other important amendments to G.D. no. 807/2014, a scheme which finances investments in assets, eliminate the standard cost for construction projects, permit state aid payment requests to be submitted to the MoF at any time during the year, provide an option to extend by two years the deadline for payment of contributions to the state aid budget and eliminate the requirement that applicants present proof of a real right over the investment location or the necessary co-financing on the submission date of the application.
In G.D. no. 332/2014, a scheme for creating new workplaces, the most important amendments are that the wage threshold for each new workplace is eliminated and thus the full cost of the employee is considered an eligible cost, the minimum number of new workplaces to be created is 100, the project can start immediately after submission of the application, and the full submission process is more flexible.
Furthermore, the financing intensities of roughly 50% all around the country remain the same, giving Romania a clear advantage compared to its neighbours, which offer an average of 20-30% in state aid for investment projects.
Practice group: Regulatory & Governmental Affairs